On Aug. 24, I wrote an article detailing the propane outlook for the fall crop drying/winter heating season. The story was posted right before Hurricane Harvey pummeled the area around Houston. (http://bit.ly/…).
At the time, the outlook was that with a normal-sized crop to dry, prices shouldn't climb too much because supply should be adequate. This was despite some analysts having "some concerns" about more propane supplies heading into the global export market.
I did add in the story that a major hurricane could affect propane prices, because Houston is major player in energy markets.
Now, fast forward a couple weeks: Hurricane Irma is bearing down and forecast to strike Florida hard over the weekend.
What effect, if any, are these major tropical storms having on the propane market?
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From talking to DTN analyst Todd Hultman right after Hurricane Harvey, it didn't yet appear to have any affect. Propane prices were not moving much, up a few cents on the U.S. rack average but nothing major, he pointed out to me.
This week, in the days leading up to Hurricane Irma, we check again on propane prices and it finally does appear these storms may be having an effect on the propane price.
The U.S. rack average was at 88.6 cents/gallon on Friday, up 00.56 from Thursday. While this may not seem like a large increase, it was the highest price since last Feb., Hultman said.
These rising prices may affect farmers deciding to book propane for their needs this fall and winter. However, in a continuing DTN poll, maybe the answer is not as obvious as it might seem.
On our website, we asked the following poll question: "As spring-planted crops progress, some farmers will be thinking about their propane needs for upcoming crop drying and heating. What is your plan for propane this fall?"
While the poll is incomplete, since people are still voting on it, a look at the results as of noon Friday showed an overwhelming number of respondents -- 49% -- said they were not going to book propane at all.
"Will book propane in August" was the second highest response with 40% selecting this choice. "Will book propane in September" was next, at 9%, while "Will book propane in October" had 1%.
It would be interesting to know if these hurricanes changed some farmers' minds about booking propane. According to the results of this unscientific poll, maybe not. If prices keep rising, maybe they'll think twice.
Russ Quinn can be reached at email@example.com
Follow Russ Quinn on Twitter @russquinnDTN
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