November 28, 2020

Top 3 Reasons to Fill Your Propane Tanks Now

As we head into harvest, do you find yourself thinking back to the propane shortages that hit parts of the Midwest last fall? Could this happen again?

“With the uncertainty that COVID-19 brought us, propane is still the biggest wildcard,” said Chad Besch, energy team leader at MaxYield Cooperative.

Uncertainty has driven the energy markets in this era of COVID-19. While the gasoline and diesel markets collapsed this spring, the propane market declined a little but didn’t crash.

Slightly less than half of American propane production in this country comes from crude-oil refining. When crude-oil refining slowed this spring, that also slowed down propane refining. Also, propane production had been declining since 2019.

What about demand? People aren’t driving as much as they did before the COVID-19 pandemic, lowering gasoline demand. There’s still demand, however, for propane. Exports of propane have remained strong. “Buyers are having to pay up to keep propane here in this country,” Besch said.

 

PROPANE OFFERS GOOD VALUE

So, the question remains—will there be enough propane in MaxYield’s trade territory this fall? “I’m not saying we’re going to run out of propane,” Besch said. “It’s important to note that the propane shortages in some parts of Iowa and beyond last fall weren’t a supply issue; they were a distribution issue.”

 

HERE ARE THREE THINGS TO KNOW ABOUT THE PROPANE MARKET IN THE WEEKS AHEAD:

Propane supplies are adequate. “There’s still a large amount of propane in America,” Besch said.

  1. The 2020 crop was planted in a more timely fashion than the 2019 crop, thanks to cooperation from Mother Nature. “This should help prevent this year’s harvest from turning into a repeat of the challenges of 2019, including propane distribution issues,” Besch said.
  2. Propane still offers a good value. “Prices are cheaper than the five-year average,” Besch said. “If you haven’t filled your propane tanks, it’s in your best interest to do it now.”
  3. MaxYield’s energy team will continue to monitor the energy markets, including propane, to provide the solutions clients need, when they need them. Contact your local MaxYield energy specialist or Energy Central for more details. We appreciate your business.

To schedule your fill, call the MaxYield team at 515-200-5115.

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