November 21, 2019

Looking for a Year-End Tax Deduction?

20140513_maxyield_106 (1024x681)It sounded crazy at first. A year ago, the National Propane Gas Association recommended having an 8- to 10-day supply of liquid propane (LP) on hand. This now seems pretty logical.

“It’s even time to think about adding enough LP storage to dry an entire crop,” said Chad Besch, MaxYield Cooperative’s energy team leader. “I know that may sound absurd, but it’s becoming the new reality.”

It’s not all that different from trends that have reshaped the diesel fuel market. In the past 10 years, on-farm diesel storage capacity has expanded exponentially, due to increased harvest speed and other factors. Some farmers now have enough storage capacity on the farm to buy and store enough diesel fuel for an entire year, Besch noted.

Changing dynamics in the market are also making it more important to have enough LP storage so you have the LP you need, when you need it. “But I can hear you saying, ‘I don’t know how much LP to contract,’” Besch said. “The solution? Invest in a new tank.”

Once you buy the tank, you can fill your storage rather than contract. What you don’t use stays in the tank until next year. Even if you don’t use all your LP right away, that’s no problem. LP never goes bad, Besch noted.

Lease or purchase—it’s your choice
Maybe you’re wondering why MaxYield doesn’t just worry about the LP situation and figure out a different solution. “It’s physically impossible for us to bring in enough propane if everyone needs it all at once,” Besch said. “There aren’t enough transport trucks to bring it in fast enough in high-demand times.”

Also, it’s very costly for MaxYield to invest in large LP storage units. “We can only do so much so fast,” said Besch, who noted that MaxYield is adding another trailer this year to help out. “Even if we add more storage, it may not help you, especially if the storage facility is on the opposite side of the trade territory.”

That’s why investing in your own tank is one of the best solutions available. MaxYield offers a 10-year, lease-to-own program on 1,000-gallon tanks for $200 a year. You can also purchase a tank outright for $2,100, said Besch, who noted that these tanks work well for corn dryers and hog buildings. A tank can also make a good year-end tax deduction.

“The LP supply challenge isn’t something that’s going to go away,” Besch said. “You can invest in a tank at any time, so I encourage you to look at your options.”

For more information, contact MaxYield’s energy solutions specialists, including Mark Collins (641-425-5184) and Doug Shirk (515-320-5629), or call Energy Central at 515-887-7282.

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