As we are hopefully seeing the worst heat of summer wane, contract poultry growers should be concerned about fuel prices going into this winter. Propane prices have maintained at a high level through the summer. Looking ahead, evaluating the world market demand for energy and current U.S. inventories suggests that prices could be increasing drastically. According to an analysis by Propane Resources LLC, a leading U.S. propane marketing company, growers should expect a very volatile 6 to 9 months in propane prices. Much of this will be driven by a very active European market with much instability being caused by the Ukrainian conflict, which is stifling natural gas trading. To help fill that void, sellers of liquid natural gas that would normally be sending it to Asia are rerouting that LNG to a European market. That LNG will likely be replaced in Asia by propane.

As supply and demand for propane becomes an even more global market, a look at the current and projected U.S. propane inventory for 2022-2023 does not give one a good feeling for the upcoming winter’s prices, or even into next spring. The current peak projected inventory for the U.S. comes in at about 3.25 billion gallons, and drops off from there—staying at or below the historical monthly minimum inventory from the last 5 years. This simply means that the supply of propane does not look to be ample for the next several months. For poultry growers, this means the time to secure future pricing is now. Do not expect any price drops before the end of the summer. Waiting will likely mean you will be paying more, not less, for your propane this winter.

Total U.S. projected propane inventory for 2022-2023 in billions of gallons.