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Kyle Potter, Published October 29 2013

Propane shortage forces farmers to put harvests on pause

ARTHUR, N.D. – As the cold weather creeps in each year, Kevin Skunes usually pumps about 2,500 gallons of propane a day into the machine that dries corn and soybeans from his farmland here.

His propane supply dried up last week and he couldn’t get his hands on more – every supplier was out. He started to make contingency plans in case the propane drought held out, putting moist corns in bins and crossing his fingers that it would keep through next spring.

“I sat around and fretted a lot and made quite a few calls,” Skunes said.

Those calls eventually panned out for Skunes, but other farmers throughout North Dakota, Minnesota and much of the Midwest are struggling through a propane shortage that industry insiders say is the worst in recent memory. Combined with the late start to the season, the shortage of propane – the fuel most farmers use to dry out corn, soybeans, sunflowers and other crops in hopes of selling at better prices – has put harvests on pause.

Just 33 percent of North Dakota’s corn was harvested as of this week, according to U.S. Department of Agriculture estimates, compared to 94 percent at the same time last year. Minnesota corn growers have harvested 48 percent of their crops, compared to 98 percent in 2012.

If the shortage continues, it may force many farmers to pick between two ugly options. Do they put their haul in storage, adding labor costs and running the risk of wet corn going bad? Or do they leave their crops in the field, hoping more propane comes in before the freeze?

“You don’t know what another week or two will do as far as weather goes,” said Ken Hellevang, an agricultural engineer with the North Dakota State University Extension. “The number of harvest days is always a big unknown. Many of these farmers need to utilize every good harvest they can.”

Large use in a short time

Dry seasons the past two years meant farmers needed little, if any, propane to dry their crops, said Tom Lilja, executive director of the North Dakota Corn Growers Association. Lilja said a number of factors are behind the current shortage, which he said is much worse than shortages in 2009 and 2010.

A delayed start to the planting season, combined with September and October rains, increased propane demand that local suppliers weren’t prepared to meet. The big pipeline that pumps propane into Carrington and across the Midwest wasn’t delivering as much of the fuel as usual.

And Lilja said industry experts, citing potential price drops, told farmers earlier this year not to lock into propane contracts that may have kept them well-stocked.

Add in a million additional acres of corn planted in North Dakota since 2009, and Lilja said it’s created a perfect storm of problems for corn farmers.

“The problem with grain drying is that we have a large use over a relatively short time,” Hellevang said. “It really does put some pressure on having propane delivered on a timely basis.”

Corn farmers generally aim for 15 percent moisture in their corn harvest. Lilja said the corn being harvested now is between 18 and 22 percent moisture, if not higher.

Though corn farmers are suffering the most, Hellevang said there have also been problems with soybeans and sunflowers. Both crops are behind last year’s schedule in Minnesota and North Dakota, according to the USDA.

Previous shortages were a big reason Maple River Grain and Agronomy upgraded its dryer in 2010 to run on natural gas as well as propane. The switch was expensive for the Casselton-based company, but it has been able to run dryers around the clock this harvest.

“It’s been a big advantage for us to have put that in,” grain manager Alex Richard said.

Hellevang said he’s been fielding calls from farmers in the region wondering what they can do to get through the shortage. Other than storing crops and running fans, there’s not much they can do.

“Their options are quite limited,” he said.

A regional issue

In a good year, the peak harvesting times will be staggered throughout the Midwest, moving north as the fall progresses. But it hit the region at once this year, said Matt Kumm of CHS Inc., a major propane distributor in the Midwest.

“The infrastructure is not built to handle that extreme of a demand over such a short time period,” said Kumm, the company’s propane marketing manager.

Kumm said CHS is bringing in truckers from the East Coast, the Pacific Coast “and everywhere in between” to try to tackle the shortage. Governors from states across the Midwest, including Minnesota and North Dakota, signed executive orders last week to extend operating hours for propane truckers.

Kinder Morgan owns and operates the Cochin Pipeline, which pumps propane from Canada down to Carrington and three other Midwest stops. The pipeline carried just 204,000 barrels of propane in September, according to company records. Through Monday, its October output was more than 770,000 barrels.

Kumm said he expects the extra efforts to get propane distribution back to normal in North Dakota by mid-November.

Skunes laughed when he heard that projection.

“We’ll be done harvesting by then,” he said.

Readers can reach Forum reporter

Kyle Potter at (701) 241-5502