Planning for propane: Now is the best time to evaluate on-farm storage

Protect your operation from demand peaks. 

Forget the polar vortex. When it comes to propane, a nasty autumn can be the real record-breaker. Fall 2019 proved that point.

Three issues caused the historic spike in propane demand in late 2019:

First, grain harvest normally happens gradually from south to north. But due to wet spring planting and delayed harvest, fuel to power grain dryers was needed across a larger geography all at once.

Second, the late harvest meant high-moisture corn was coming out of fields across the Midwest. By early November, only 52 percent of corn was harvested. That was 23 percent behind the five-year average, according to a USDA report. The wet crop required more propane to dry it sufficiently for storage.

And the third blow to propane supply: A colder-than-normal November caused an early start to the home-heating season.

The high demand for propane was felt by Midwest farmers, and many cooperatives and propane marketers were forced to prioritize meeting needs for heating over drying during the busiest weeks in November and December.

Propane demand typically peaks during harvest and home-heating seasons, but 2019 showed how the demand can spike when there is a wet crop and home-heating needs call for more propane at the same time.

There was no propane shortage — the issue was getting propane to the right place at the right time, says Adam DeLawyer, vice president, CHS Propane. “There’s more than enough propane being produced in this country. What we saw in fall 2019 was that U.S. infrastructure for moving propane from one place to another was not built to meet the historic levels of demand.”

On-Farm Storage Is One Solution

One farmer who didn’t feel propane pain in late 2019 was Eric Zell, who farms corn and soybeans and raises beef cattle near Huron, S.D., with his wife, Windy. After a wet season about 10 years ago, he put up grain bins and a large dryer system so he could handle crop storage on-site.

Zell didn’t want to deal with propane tanks that needed to be filled frequently, so he worked with Joel Kemnitz, certified energy specialist at CHS Farmers Alliance to buy a used transport-delivery-sized propane tank.

“It’s important for producers to think about their harvest capability, the number of combines they have and the capacity of their dryer. This helps determine if their operation should have more on-farm storage,” says Kemnitz.

Zell reports the benefits are threefold: He only has to fill his propane tank about twice a year; he can fill when prices are low; and he has enough storage on-site to handle harvest seasons like 2019.

“As we were drying corn, my tank started to get low and Joel told me the crunch was coming, so I filled my tank and that got me through harvest with no problems,” says Zell.

South Dakota farmer Eric Zell dries his corn and soybeans using a transport-delivery-sized propane tank (12,000 gallons). Throughout harvest 2019, he only needed the tank filled once. 

The on-farm storage setup also allows him to harvest and dry corn early in the season, then harvest soybeans and work his way back to corn that’s been drying in the field. “I get more out of my acres and get the most yield,” says Zell.

As Zell grows his operation, he’s now evaluating propane storage on his newly built house. “I have seen the benefits of having a large amount of propane on-site and I want that for my house to run my appliances and my generator and to heat my home.”

Reevaluate Over Time

Changes to any farm operation mean gauging and adjusting propane storage. For years, South Dakota corn and soybean farmer Terry Marshall let nature do the work in drying his crop, but he knew 2019 would be different. Right before fall 2019, he set up a new grain-drying system for his five bins and added four 1,000-gallon propane tanks.

To evaluate his needs with a new dryer system, Marshall, who farms with his wife, Dawn, and sons, Taylor and Dan, worked with Kemnitz to see how much propane he’d need on the farm. “Joel and I looked at the dryer specs and the grain volume we would be handling per hour and contracted the season’s supply accordingly,” says Marshall, who says he is considering larger storage options for the future.

“The biggest thing a producer can do to prevent supply issues any time of year is have the right amount of propane storage on the farm,” says DeLawyer. “Work with your propane supplier to make sure your tank capacity fits your operation’s needs.”