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Propane Supply & Pricing
Propane Inventories Setting Record High Marks
Current propane supply numbers show record high inventories across the country. The Midwest propane inventory is currently at 26.9 million barrels which is 5.4 million above the number from just two years ago on this date (1 barrel = 42 gallons of propane). Weather forecasters are talking about strong El Nino conditions which typically give us a milder winter here in the upper Midwest. These two condition sappear to be setting us up for a wellsupplied and lower priced winter. However several “wild cards” can still impact this winter’s price and supply levels.
Growers use propane to dry down their crops which reduces the moisture content and allows for safe storage. The wetter the crop the more propane is required to dry it. The USDA stimates that we have excess moisture in nearly 50% of the nation’s crops. A wet June combined with below normal temperatures have impacted two-thirds of the corn belt. The upper Midwest has been
the least affected by this abundance of rain and cooler temperatures. Experts are predicting a high, but not off the charts grain drying season nationally. The upper Midwest is estimated to have a normal draw of propane for crop production. However, if other areas in the corn belt use unexpectedly large amounts of propane, that short term high demand can have an effect on our local supply and pricing.
Refineries, Terminals and Pipeline Issues
These important parts of the propane supply chain can have operational shutdowns as well as routine maintenance interruptions. In cold weather wholesale Propane is supplied on a daily basis seven days a week. A short slowdown or untimely shutdown of a pipeline or terminal can have immediate effects on propane supply and pricing. As we move from summer to fall, your propane supply team will be filling our storage tanks, contracting at the best possible prices, working closely with our vendors, getting our trucks and trailers ready and doing everything we can to assure you have a steady supply of economically priced propane.