This year’s long drought may contain a hidden benefit for some Nebraska homeowners.
Ag analyst Harold Hommes says farmers are likely to use much less liquid propane to dry their crops for storage this fall.
He says that means more LP is available for home heating this winter and lower demand should mean lower prices.
“Farmers don’t want to spend money on propane if they don’t have to, so if they can get around it by (leaving) their crop in the field a little bit longer, let Mother Nature do it, that’s what they’ll do. We’re not expecting much this year to be spent on propane,” Hommes explains.
There are large supplies of propane in North Dakota in what’s called the Bokon formation and plentiful supplies have led to some of the lowest prices in decades.
“The whole liquid gas price complex has really come down. We had decade-low prices on natural gas, propane is the same way. We’re starting to fall back to more traditional and very competitive prices in that dollar mark and under,” Hommes says.
High demand from farmers does make an impact on propane prices. Propane topped two-dollars-a-gallon in many parts of the country in 2007 during a wet fall harvest.