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Logistical issues with propane gas for area farmers, suppliers


Fri, Nov 27th, 2009
Posted in Agriculture

Mike Schwarz and Jason Schwartz, a father and son team residing in rural Fountain, farm about 2,000 acres of corn and soybeans. The Schwarz' are standing in front of their dryer, which has been running non-stop during these past few weeks -- consuming an exceptional amount of propane gas during this very wet and late harvest.

A person doesn't have to be very old to look back on life and remember defining moments in time. For one generation it might be the Armistice Day storm of 1940 quickly followed by Pearl Harbor in 1941. Years later another generation will never forget the Halloween blizzard of 1991 or the tragedy of 911 ten years later. This year across the entire Midwest, farmers from Minnesota and Iowa to Ohio, Indiana, Illinois, Nebraska and Kansas will all agree: this has been, without a doubt, the worst year most can remember in terms of a wet fall and late harvest season.

In a recent interview Jason Schwarz, in partnership with his dad, Mike Schwarz, commented that he has "never seen anything quite like this" in all his years of farming, and his dad, who has been farming for 35 years, would agree with him. Together, they farm about 2,000 acres of corn and soybeans. Because of the cooler than normal summer, Jason said they have been behind 10 to 15 days all summer and, of course, October was an extremely wet month, which put them even farther behind. Right now the corn is at about 22 to 26 percent moisture level, which for this year is pretty good according to Schwarz.

One of the biggest problems facing area farmers is their having to spend more time drying the corn, resulting in a shortage of propane gas that has put the drying process at a stand still for many. Schwarz Farms was fortunate in the sense that they were only shut down for one day and were able to obtain propane from other suppliers. "We have our own tank so that helped," Jason explained. "If we were using a supplier's tank, another supplier wouldn't put their gas in someone else's tank." This fall Jason said they were using about 2,000 gallons of gas a day to dry their corn and that translates into about $3,000 a day. "The one benefit to this is that we are seeing a pretty good yield," Schwarz commented.

One of the biggest reasons for the shortage of propane is the widespread wet season that has really hit the entire corn belt. However, Jason said he is optimistic that the gas supply is looking better as farmers from all over are finishing up their corn harvest. He and his dad still have about 400-500 acres left, but he is hopeful they will finish shortly after Thanksgiving.

Matt Litwiller, manager of Ostrander Farmer's Coop, agreed with Jason that this has been one of the worst years he can remember in terms of not only a late harvest, but it is also one of the biggest corn crops he has seen, with the corn coming in wet and needing to be dried. "We don't have a shortage of propane," he remarked. "The problem is that the pipeline was built back in the 40's and 50's and there isn't a lot of storage for it. Basically, the problem is getting the propane from point A to point B," he explained.

Because of the pipline situation, Litwiller says he has run into allocation problems, meaning he has not been able to get as much propane as he wants. For example, he said he could typically use about 12 loads of propane a day and instead is getting only about three loads. As a result, the company has had to travel to areas as close as Hampton, Iowa, and as far as Cincinnati, Ohio, where propane has not been allocated. None of his customers, however, have gone totally without propane. He and his dedicated crew have worked hard to spread the propane around so everyone gets a share. It's been an unusual year, according to Litwiller, because rarely does the whole system fail. Not only is it a late crop, but it is also such a wet crop that has to be dried and it has been difficult for them to keep up with supplying propane for the dryers.

Going into December, Litwiller said he is trying to make sure there is enough propane for farmers to finish up their crop before he has to start supplying customers with heat for their homes. Although it has been a challenging fall, he did explain, "Every year we run into some kind of problem, and we always get it taken care of, so this is not totally unusual for us." He went on to add, "My people work really hard to make sure our customers get taken care of and right now they are going above and beyond the call of duty to take care of our customers. My workers have taken on extra responsibilities, which has really helped relieve the stress, and our drivers are often working 20 hours a day trying to take care of customer needs."

Todd Kruegel, a third generation owner of Kuregel's Propane in Spring Valley, agrees there is not a shortage of propane, but rather the problems facing area farmers this fall have been in distribution since, as he pointed out, "The problem has been a bottleneck in the pipeline because everyone from Missouri to Minnesota has experienced a late, wet harvest and is drying their corn." He also echoed the idea that there is plenty of propane, but the problem is getting it from storage to the farmer. However, he feels they have been able to stay ahead of the situation and have been able to meet the needs of their customers.

Kruegel feels this is really a short-term corn dryer and distribution problem that will gradually go away once the farmers finish their harvest. He was emphatic that people not be nervous about a shortage of propane this winter. "There is plenty of propane for the winter months," Todd said. Admittedly, last year at this time there were very few dryers still running compared to this year, but he does see a light at the end of the tunnel and wants to assure folks that the problem is not one of supply, but again it is one of distribution that should soon disappear with the end of the harvest season.

Preston area farmer Arlen Kiehne said he has seen other years that have been been pretty tough, but he admitted in recent years this harvest season has been one of the worst to hit all area farmers. "We've been spoiled," he remarked, "because the last five or six years have been pretty dry."

The cooler than usual summer, followed by a wet October, has been a challenge for Keihne, who finished his harvest a few days before Thanksgiving. He had about 400 acres in corn that had to be dried, but because he booked his propane early, he said he never did have to wait for propane during the three-week drying process. During that time, Arlen said some days he used a little over 1,000 gallons a day and as little as 600 gallons other days. In the end, he commented, "I used about twice as much propane this year as last year." However, his supplier was good about checking with him so he was able to stay ahead of rising demands and never did have to shut down because he lacked propane.

Because of the wetness, one of the problems he had to deal with was some mold on one of the varieties of his corn. Again, drying helped get rid of that and he was able to sell a semi load without any problems. There is usually always a rainbow in every crisis situation, and Arlen agreed with others that while farmers had to spend more money on propane to dry their corn this year, the yield was good (in spite of the late season) and prices have "stayed up pretty good" as well he remarked.

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