U.S. propane bottlenecks not affecting Canada

MarketsFarm — Despite ongoing shortfalls of propane in some areas of the U.S. Midwest, the situation doesn’t appear to be adversely affecting Canada, according to the Canadian Propane Association.

The late harvest in the Midwest has been further hampered by wet conditions, forcing farmers to dry their grain before putting it in the bin. As many dryers use propane, there has been an increased demand.

Media reports stated the infrastructure system to move propane around the region has been largely at fault. The system of pipelines, rail and trucks has been unable to keep up with the unusually high demand.

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Further exacerbating the situation has been increased demand for home and commercial heating. Some Midwest states have temporarily lifted transportation restrictions on propane in hopes of improving the supply.

For farmers in the U.S. Midwest, propane is primarily sourced from Kansas, Texas and Western Canada, according to the U.S. National Propane Gas Association (NPGA), which emphasized the issue is not a shortage of the fuel itself.

Instead, the challenge is getting propane to the right place at the right time, the NPGA said, adding the supply issues are caused by “limits on the safe transportation of propane from supply points, as well as limits on pipeline capacity.”

In Canada such supply bottlenecks haven’t been an issue, according to Nathalie St-Pierre, CEO of the Canadian Propane Association (CPA).

“With the challenging wet and cold weather, propane demand for crop drying has been strong and steady this fall. CPA members say that although it was one of the busier years for propane demand, it was less than it was last year,” she said.

“Snow and freezing rain has all but shut down harvest in the country at this time, so demand is transitioning to construction heaters and home heating.

“Our industry anticipates demand for propane to be strong during the winter and is ready to serve their customers’ needs,” she added.

Preventing future issues in the U.S. Midwest will mean taking a closer look at propane storage needs, CHS Propane vice-president Adam DeLawyer said in a release Monday from that company.

“Continued expansion of retailer storage and on-farm storage will be critical to meet the farmer’s ability to harvest crops at today’s increased yields and rates.”

— Glen Hallick reports for MarketsFarm, a Glacier FarmMedia division specializing in grain and commodity market analysis and reporting. Includes files from GFM Network staff.

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