Auburn, July 9---Four years ago, several Franklin County poultry producers paid a visit to their local Extension agent, Dr. Tim Reed, to find out what could be done to reduce propane costs.

Propane, a staple of the poultry industry, is used to heat poultry houses throughout the cooler months of autumn and winter.

Working with Art Atkinson, an economist with the Alabama Farmers Federation, Reed undertook a study to determine the times of year when propane prices were the highest.

As it turned out, prices tend to peak during the time of year when poultry farmers need it most: wintertime.

For Reed, the solution was simple: Poultry producers needed some form of price protection.

Working with a large gas supplier in northwest Alabama, Reed helped establish a contracting system whereby poultry producers could lock in their prices over a 12-month period.

The first year yielded lackluster results. In the winter of 1998, local producers locked in propane prices at 52 cents a gallon. However, the average price for propane that year turned out to be 49 cents a gallon, resulting in a cumulative loss of $13,000 for producers participating in the program.

However, by the following year, the program produced dramatic results. That year, producers booked gas for 50 cents a gallon. Shortly thereafter, propane gases spiked.

As a result, producers who didn’t take part in the program took a huge hit, paying 23 cents a gallon more for propane. By contrast, the 42 producers who participated in the program saved about $206,000 in fuel costs.

Despite sharp rises in propane prices the following year, producers who signed up with the program still managed to save an additional $123,000 in fuel costs.

In fact, during the first three years of operation, the program has saved producers more than $300,000 in fuel costs.

In recognition of his efforts, Reed is the national winner of the National Association of County Agricultural Agents (NACAA) Search for Excellence in Farm and Ranch Financial Management Award.

The award, presented annually by the NACAA, recognizes Extension agents who have enabled farm and ranch clientele to make significant savings in operating costs.

Word of Reed’s program has spread. Recently, poultry producers in Georgia, working with a national propane supplier, organized a similar program and saved more than $300,000 in fuel costs.

Reed, a native of Lawrence County, received his bachelor’s and master’s degrees from Auburn University and his doctorate in entomology from Clemson University.

He began his Extension career working as an area pest-management specialist in Southwest Alabama. Since then, he has served as county Extension coordinator in Covington and Franklin counties.

(Source: Dr. Tim Reed, agent-coordinator, Franklin County Cooperative Extension System, 334-844-5686)