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Those Grain Farmers Have Done It Again

N

nybadlybent

Member
Just look what has happened o the price of propane gas..doubled in price in just a few days. "Why?," you ask? It was all those grain farmers drying their corn and soybeans that's why.

Now, don't blow a fuse, I grow some grain crops and I am just repeating the reasoning that the press is giving for the great propane shortage of 2014. I heard on the TV that there is plenty of propane but it is all down in Texas at the plant that makes it. They just need to get it shipped to the west and mid-west.

To me the blame is not with the farmers but the companies that distribute the gas. I wouldn't be surprised that it was a planned shortage just to push up the price. I think it might have gotten out of control when mother nature shoved all that cold weather down on us and spiked the usage.

Whom do you blame?
 
I would think most of the propane usage for grain drying would be in late Sept, October and November. At this time of year you are just tryinig to watch temperatures and making sure the grain doesn't go out of condition. Wouldn't think much propane is being used for that. Just air.

Gene
 
I don't lay the blame anywhere,but I'm sure the wack job environmentalists who rail against the monoculture of corn and soybeans are using the exact argument that you used blaming grain farmers.
 
Two tidbits I've gleaned from internet news stories the last few days; two pipelines feeding the Midwest have reversed their flows. One now takes gas to Alberta tar sands to cook out crude oil. The other to take gas across Texas to the gulf coast for export. The takeaway is that supply is never coming back, adjust to the new reality of high propane prices. Those export and pipeline decisions were approved by our federal government. Should give a big boost to solar companies.
 
Agreed Gene, think the farm propane use is way behind us for drying crops, but for heating homes, they are really hurting rural family's.
 
Here in Illinois I was told that the U.S. is shipping a lot of LP to China Or Japan because after the Tsunami there they are not using their nuclear plants. My LP guy said shorty he can only deliver 200 gal per customer.
 
I blame myself for not contracting last August/September when it was offered to me by my local supplier. BTW, I just purchased 500 gallon about a week ago for $1.89/gallon. As he's a good friend of mine, I'm going to call the delivery guy tomorrow morning to see how much it has gone up since.
I have always said that if propane goes up too high, they will price themselves out of the market. Considering that propane used to be a waste product that the refineries finally found a use for, I wonder if this is the last straw.
 
Actually one of the St Louis new casts made a statement last week that the main reasons for the price increase were demand,export, and big crops.

I say it's because in the Great GWs rain he deregulated all energy.Imagine that considering he 's an oil baron.
 
This is a cold snap that has hit most of the country at the same time. This has not been normal weather for the last twenty years and people have changed the way they do business, they will change back.
 

the root cause of the problem is our "just in time" supply and lean and mean on inventories for US companies.

Any one issue like the cold or the wet crops would have cosed problems and when both hit then the propane distributors were not prepared. Therefore by the business rule of supply and demand they are financially rewarded for their shortsighted business management.
 
Pure economics when one type of energy gets cheaper than the rest everybody and his brother signs onto the cheap energy.The result is lots more demand and the price goes up to the level of other energy.If its a conspiracy its the Laws of Economics conspiring.
 
(quoted from post at 14:12:32 01/26/14) Pure economics when one type of energy gets cheaper than the rest everybody and his brother signs onto the cheap energy.The result is lots more demand and the price goes up to the level of other energy.If its a conspiracy its the Laws of Economics conspiring.
Click to expand...

Yep. Remember when diesel was lots cheaper than gasoline?
Then demand went up partially from people buying diesel pickups.
Now look at the price of diesel.
 
Haven't had propane the last dozen years but back in the day the price went crazy every winter and it got worse the colder the winter. You could say they know they have you over a barrel, or it could be the law of supply and demand. Seems like the jump the gun a little on demand some years though.
 
The requirement for ULS diesel was the main cause of diesel prices going above gasoline prices. If the environmentalists have their way, the same requirement will come down on gasoline even though gasoline has a lot less sulfur in it. They just won't let up in their zeal to "clean the planet". I'm beginning to think the left coast webmistress is not going to like this. (;>))
 
Yes us silly farmers are at fault. After all we planted a crop in less than ideal conditions here in NE Iowa, Southern MN and Wisc. Mother nature handed us the wettest spring I ever dreamed of. Much of our corn was planted in June and then an exceptionally cool fall did not allow for much infield drying. I personally harvested more corn over 32% than under 28%. Some reached 40%. Low test weights and hard drying with cold air.

One local terminal was still drying corn this past week. Zero degree air is a challenge. Others had to run the corn thru twice to get it down. It seemed to get to 17 -18% and stop, Now farmers are finding bins full of corn going out of condition. So where was the mistake made? It was those farmers that have it bred into them to plant a crop and see it though. The mega operations just abandoned the crop acres and took prevented planting. They didn't add to this propane shortage after all. If more of us would of have taken the prevented planting we may have those 7$ corn prices here yet. After all you can't get yield out of late planted grain or the abandoned acres,can you.

Just a note on the yields, corn planted on the sixth of June in good conditions, no-tilled 36 inch rows yielded 275/bu/ac. of dry corn. Very wet at 36%. The biggest challenge was getting that 6 row wide head on a 7720 to go slow enough to handle that wet grain. 1.4 mph
 
JMO I blame greed from the oil barons. I'm thinking if anyone really dug deep and seen who, and when, bought LARGE amounts futures in propane something wont smell right.
I don't think that kind of digging will ever be done
 
(quoted from post at 14:38:29 01/26/14) The media lies.
And/Or is too ignorant/lazy/unmotivated to delve into the true causes of issues.
Click to expand...

Truth has had no place in the media for at least a decade.
the media is financially motivated to not look too deeply into issues.
And some even intentionally skew the truth for political or financial gain.
Just give the masses their Enquireristic trash. Is the head dead yet?
 
yes harvest is done we have been done for just about 3 months .called propene company friday price WAS 4.23 ive heard about exporting , why if we are short here. alsonow the companies are charging a delivery charge 10$. neighbor that pre bought said the company they bought from is not honnering the price contract by charging a 175$ delivery charge. i would think they should have RECOVERED BY NOW.not honering the contracts is like when corn whent from 4$ to 7$ plus and not delivering
 
Propane is a by-product of crude oil and natural gas, on average about 50% from each.

It is important to understand that the by-product nature of propane production means that the volume made available from natural gas processing and oil refining cannot be adjusted when prices and/or demand for propane fluctuate.
 
In this part of NWIA a majority of the corn is dried with natural gas at the elevators. Some farmers do dry at home with LP too but a majority of the bins are air dry only. Jim
 
(quoted from post at 20:16:21 01/26/14) In this part of NWIA a majority of the corn is dried with natural gas at the elevators. Some farmers do dry at home with LP too but a majority of the bins are air dry only. Jim
Click to expand...

True, but what I have heard said that 5 times the normal amount of propane was used for drying crops this past year.
 
(quoted from post at 14:54:56 01/26/14) The requirement for ULS diesel was the main cause of diesel prices going above gasoline prices. If the environmentalists have their way, the same requirement will come down on gasoline even though gasoline has a lot less sulfur in it. They just won't let up in their zeal to "clean the planet". I'm beginning to think the left coast webmistress is not going to like this. (;>))
Click to expand...

ULSD was required in 2007 however diesel prices were around gas prices long before that. Do some googling.
 
(quoted from post at 20:07:21 01/26/14) Propane is a by-product of crude oil and natural gas, on average about 50% from each.

It is important to understand that the by-product nature of propane production means that the volume made available from natural gas processing and oil refining cannot be adjusted when prices and/or demand for propane fluctuate.
Click to expand...

So you are saying that the industry cannot make enough propane to supply the demand?
 
I was just talking about my neck of the woods. Most of the corn harvested in this area was in the mid-20 percent range early in the harvest to 17-18 percent later in the harvest. We had a dry summer. Jim
 
That is what it was here in SW MN as well. It isnt like we were drying all the corn at 25 percent.
 
I did notice one thing in the article...they kept mentioning imports to offset demand...and we are exporting?... (Rollie, how do you post a link? Ive always wondered)
 
We used to pick corn when it was dry enough to crib, now the BTO's have to shell it at 20+%. But bigger seems to be better in the good old USA!
 
(quoted from post at 10:08:47 01/26/14) Just look what has happened o the price of propane gas..doubled in price in just a few days. "Why?," you ask? It was all those grain farmers drying their corn and soybeans that's why.

Now, don't blow a fuse, I grow some grain crops and I am just repeating the reasoning that the press is giving for the great propane shortage of 2014. I heard on the TV that there is plenty of propane but it is all down in Texas at the plant that makes it. They just need to get it shipped to the west and mid-west.

To me the blame is not with the farmers but the companies that distribute the gas. I wouldn't be surprised that it was a planned shortage just to push up the price. I think it might have gotten out of control when mother nature shoved all that cold weather down on us and spiked the usage.

Whom do you blame?
Click to expand...

This is the same news that tells us Beghazi was caused by a You Tube video no one ever saw, that gun control works, that unemployment is actually down and that more taxes are a good thing.

Use your head when listening to the "news".
 
IH2444 is the most right. Just-in-time inventory. Only have on hand what you anticipate selling. Don't have one gallon more than you're going to sell. Maximize profits to shareholders. This is a great innovation if you're a shareholder, but it doesn't allow much wiggle room if an emergency pops up. How many here only put in their gas tank what they expect to use on the trip they're taking that day?

Simple solution to propane, diesel fuel, natural gas shortages (of which there surely will be more) - Heat with wood if you got it.

This house had a wood furnace until the mid 90's. Then the previous owner replaced the dual fuel burner with a fuel oil only furnace. He saw diesel was under $1 a gallon and expected it to always be there. And he hated cutting wood. Very short sighted on a farm that has 90 acres of woods. I installed an OWB in February 2011. As long as I keep my own woodpile up, I'll never be in a panic about my house freezing.
 
Let's see:

Freon from $1.69 a can to $6.99
Anti freeze from $1.99 to $7.99
Gasoline
Lube oil
Tires
Ammunition
On and on
"But we don't have any inflation!" Gubberment said so therefore it must be true.

Mark
 
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