Plenty of propane

by Annette Bertelsen, CHS Contributing Writer

Jun 23, 2017

David Loberg knows what it’s like to run low on propane for crop drying, and he wouldn’t want to experience that kind of supply crunch again.
“In 2009, it was so wet that we had to dry our whole crop. We needed propane delivered nearly every day to keep up with harvest,” says Loberg. He recalls that was the season his family started thinking about upgrading propane storage on the Carroll, Neb., farm.

A few years later, the Lobergs had a 12,000-gallon propane tank installed. Now they only need about three propane deliveries a year to run their tower dryer and heat the shop.

“We plant a lot of full-season hybrids. We start combining at around 23 percent moisture, and we dry down to 14 percent moisture so we don’t have to run the fans during the winter,” says Loberg. “We see about a 13- to 15-bushel yield increase with the longer-season hybrids, which more than justifies the cost of drying.”

Having adequate propane storage has paid off, he says. “When propane prices were close to $5 a gallon, the bigger tank carried us through the higher-price period and we had no supply worries.”

Loberg relies on experts at Farmers Pride Cooperative in Battle Creek, Neb., for help capturing potential savings associated with having on-farm storage. “I book one or two future loads for the fall season. My co-op shares market insights with me that help me time those purchases,” he says. “Summer fill is never an exact science, but my co-op will give me a heads-up on timing [for discounted off-season rates].”



Be Prepared

Farmers are working more acres than in the past, a trend that points to the need to rightsize on-site propane supply tanks. “Propane terminals can have a difficult time keeping up with the huge demand created by the speed of today’s combines and crop dryers in such a short period of time,” says Jim Cote, account manager for CHS Energy Equipment.

In theory, the supply crunch experienced four years ago could happen again. “Crop drying is notoriously difficult to predict,” says Cote. “With the 2013–2014 season, for example, experts forecasted low crop drying needs until right before harvest. Even last winter, there was a bit of a supply pinch in Minnesota and the Dakotas. And when there’s a tight supply in one region, ripple effects can be felt in other states.”

Supply confidence is the main reason to consider bulk storage, he says. “Let’s assume you use 60,000 gallons for grain drying. If you have 30,000 gallons of storage, you’ve got 50 percent of the propane you need on hand, versus only 2 percent with a 1,000-gallon tank.”

Farmers using more than 10,000 to 15,000 gallons per season should consider bulk storage, according to Cote. “It’s never been more affordable. If you’re considering adding more storage, act soon before steel prices rise and tank prices go up.”

Consider Tank Size

“Work with your propane supplier to properly size your tank,” recommends Brian Schwartz, certified energy specialist, Farmers Pride Cooperative. “Transport loads are the wave of the future. If you want to take advantage of transport prices, think about getting at least an 18,000-gallon tank. If you go with a 12,000-gallon tank, it pretty much has to be bone dry before a transport can deliver to you, which creates logistical challenges.”

Financial considerations drove Marcus Baier of Wayne, Neb., to choose an 18,000-gallon propane tank when building a set of poultry barns in 2015.

“I really want to maximize my ROI [return on investment]. I use 45,000 gallons a year, so the cheaper I can acquire propane, the better,” says Baier. “With this tank size, there’s some flexibility on deliveries. Even if I have 20 to 30 percent left in the tank, I can still take a semi load, which saves money.”

Peace of mind and convenience were other factors. “We produce 104,000 broilers every 60 days. Chicks can’t regulate their body temperature, so we have to provide a 90-degree Fahrenheit environment for them,” says Baier. “Running out of propane is not an option. I didn’t want to be checking tanks and ordering propane all the time.”

Baier’s bulk tank sports a sensor that makes it easy for Farmers Pride to remotely check propane levels. Working with the CHS Energy Distribution Solutions (EDS) team, the co-op adopted an advanced system that integrates intelligent weather forecasting, optimized routing, automated billing and rightsizing for maximum delivery efficiency.

Premier Cooperative in Mt. Horeb, Wis., embraced similar tools after an Energy Delivery Dialed-in (EDDi) Study by the EDS experts revealed its drivers were making some deliveries of less than 100 gallons. “Our goal now is to make about three deliveries to a propane customer a year,” says Tim Lease, energy division manager. “We have to keep up with technology. We can’t be losing money on deliveries.”

Check out the full C Magazine with this article and more.


CHS Propane

Pulse on propane

Pulse on propane

The grain-drying and home-heating season of 2013-2014 lives in infamy for those who follow the propane industry. The wet fall caused growers to use large amounts of propane to dry corn and was

Learn More


Dealing durum

Dealing durum

How two companies forged a grain trading bond that spans generations.

Learn More


Ahead of the curve

Ahead of the curve

As recently as 20 years ago, the fertilizer business operated on predictable production and buying calendars, with little concern about shortages or carryover from one season to the next. But in the past decade, international and political changes, industry consolidations, environmental concerns, and increasing market pressures have transformed the crop nutrients industry — like many other supply-chain markets — into a complex, global business with tighter margins and higher levels of supply and price risk.

Learn More