Audio Clip
Propane is an important energy source for farmers and ranchers to heat homes and buildings, dry crops and even power equipment. Global and U.S. propane market shifts are changing how buyers should think about contracting and storing propane.
In this episode of It Takes a Co-op™, Tyler Kelly discusses propane supply and demand trends. He also describes actions CHS has taken to remain a reliable propane supplier for owners and customers. Kelly leads propane commodity trading for CHS.
Increasing production and exports
U.S. propane production has more than doubled in the past decade, reaching 2.65 million barrels per day in 2024. Propane exports are also rapidly increasing, accounting for 52% of production in 2022 and 65% of production in 2024.
“With more and more U.S. propane making its way to global markets, we’ve seen our pricing and supply reliability be impacted,” Kelly says. “Thanks to a great team of traders and analysts, we’re able to ingest a lot of data and turn it into actionable insights for our customers.”
Act now
Kelly encourages farmers and ranchers to consult with their propane retailers to prepare for the grain drying and heating seasons.
“A great place to start is looking back at the last three to five years of propane consumption, so you’ve got the amount of propane you generally need on contract,” he recommends. “Then discuss contracting options and a pricing structure that makes sense for your needs.”
Kelly encourages propane users to take these steps before demand ramps up:
- Complete preventive maintenance and conduct safety checks on storage tanks and heating and grain drying units.
- Ensure there’s enough storage capacity for six to 10 days of peak consumption.
- Top off propane storage tanks.
- Communicate with your propane supplier about your expected needs and put a contracting plan in place.
Customers first
CHS has invested in an extensive propane supply network across the U.S., including bulk terminals, storage caverns, pipelines and rail facilities, Kelly explains. Relationships with about 130 third-party suppliers provide additional sourcing options.
“We’ve got propane supply positioned where our customers need it the most.”
Each month on It Takes a Co-op, we introduce you to people working in agriculture and energy, inside and outside of CHS, whose ideas and insights will help you, and your cooperative, succeed.
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