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Help for the Harvest

September 1, 2007 By    

Mike Clark enjoyed the outdoors too much to pursue a career in law, so he became a farmer. He doesn’t regret the decision one bushel.

“I’m doing everything at 62 that I did when I played in the sandbox at 6,” Clark says. “To me, it’s not really work. It’s something I’ve always done, and I like being outside. If you don’t see the sunrise and the sunset, you’ve missed the day.”

 Photo courtesy of The Propane Education & Research Council
Photo courtesy of The Propane Education & Research Council

Clark, owner of Mike Farm Enterprises Inc., spends his days farming nearly 6,000 acres of land across four counties in southwest Ohio. During the harvest season, he uses a propane-powered Grain Systems (GSI) stack dryer to prepare his crops for market or storage, contracting with a local propane retailer to provide his fuel.

Prior to the 1970s, few farms in Clark’s region used machines to dry grain and instead allowed it to dry naturally, he recalls.

Even before the 1950s and ’60s, whole corn ears were harvested and stored in open-air corncribs, also allowing for air-drying, according to GSI. With the invention of combines, which could separate grains from the husk, storage shifted to closed bins, and drying capability was needed.

“Older dryers were extremely slow and cumbersome,” Clark says.

That’s not the case with Clark’s newest model, which will begin its third season in the fall. The dryer can handle between 800 and 1,000 bushels an hour, depending on the amount of moisture that needs removed, he says.

“The biggest difference is the newer dryers can handle moisture control better,” says Clark, who mostly runs corn through his machine. “Temperature sensors can either slow the dryer or speed the dryer. The new systems are totally automated.

Photo courtesy of The Propane Education & Research Council
Photo courtesy of The Propane Education & Research Council

“Basically, once the dryer fires up, there’s very little you have to do.”

To fuel the dryer, Clark says he buys 30,000 to 35,000 gallons of propane each year from Collett Propane, which operates three locations in southwest Ohio.

Guessing game

Just as farmers use dryers to control their grain profits, propane retailers are challenged in supplying fuel for the equipment. Many times, questions seem to outnumber the answers.

How much propane will farmers need to dry grain? How much should be kept in storage? If demand is high, will propane be available as needed? How wet is the fall season expected to be?

With the grain-drying season approaching, the Propane Education & Research Council (PERC) offers a message to propane retailers who manage these accounts: Keep the lines of communication with farmers open.

“We want to facilitate communication between propane dealers and farmers on supply and equipment upkeep,” says Mark Leitman, PERC’s director of agricultural programs.

“We encourage the dealer to work with farmers to maintain equipment used to dry grains,” he says. “If it’s not safe or operable, it will lead to more problems. Farmers won’t be able to consume propane and they will waste money.”

The grain-drying season can be unpredictable for propane retailers because the weather – and the crop’s moisture content – influences a farmer’s decision on when to harvest. An earlier harvest increases the likelihood that the grain will need to be dried.

“Farmers must consider the fall weather, and it’s a gamble,” Leitman says. “Farmers must ask, ‘Do I start harvesting on Oct. 1 and spend money to dry or wait a few more days and risk some of that crop being lost?’ If a farmer waits, the crop might be dryer, but pests might damage it.

HEADS OF THE HARVEST
HEADS OF THE HARVEST

“It’s a decision they have to make each day,” Leitman says of farmers. “They weigh the risk of costs associated with early harvest and spending more on fuel to dry versus the risk of leaving the crop in the field and susceptible to Mother Nature.”

For those reasons, Leitman advises farmers not to count on the weather.

“Farmers aim to avoid grain drying because of costs, but perfect conditions are not realistic,” Leitman says. “Propane facilitates an earlier harvest at a cost-effective price.”

According to PERC, nearly 1.5 billion gallons of propane are used annually in the agricultural sector, most of which goes to heating and drying grain. A 2002 PERC survey found that 81 percent of people who own grain dryers use propane as the energy source.

Grains such as corn, wheat and soybeans contain moisture that must be removed before storage to prevent spoilage and mold. Corn is the grain most often harvested with high moisture content.

Continuous flow and batch dryers are commonly used. With continuous flow models, wet grain is fed into the dryer in a steady stream, while batch models dry grain in batches of 80 to 1,000 bushels, according to the Nebraska Propane Gas Association (NPGA). Fans and heaters also can be attached to storage bins.

Moisture, air temperature and grain depth all factor into the amount of time and heat needed to effectively dry the crop.

Propane-powered drying gives farmers the flexibility to manage and market grain so they can earn the best price possible. If the market is unfavorable, they are able to store dried grain until it improves. In addition, drying helps farmers avoid dockage at an elevator, where they can be penalized by the bushel if the crop harvest is too wet.

Propane preparation

One propane retailer heavily involved in drying grain follows the rule of communication. Cooperative Energy Co. of Sibley, Iowa, entered the propane business in 1969 primarily to offer service for drying grain. Of the 5 million gallons it sold in 2006, about 1.4 million were used for drying grain among some 400 accounts in Iowa and Minnesota.

Eighty-one percent of people who own grain dryers use propane as the energy source.
Eighty-one percent of people who own grain dryers use propane as the energy source.

“We keep in contact with farmers to see how the crops are doing and what the harvest is going to look like,” General Manager Brian Dreessen says. “We fill tanks prior to the harvesting season to avoid any supply problems come fall. And we work hand-in-hand with our supplier. Cenex has always been a supplier of ours, and the company has always been there when demand is needed.”

Kevin Devereaux, general manager of Chandler Co-op in Chandler, Minn., knows how the grain-drying business can fluctuate. His company has sold from 400,000 gallons of propane in a down year to 2.2 million gallons during a busy time.

“You don’t want to buy 2 million gallons for corn drying and end up using 400,000 gallons, because somebody is going to eat that,” Devereaux says.

“So we have to be pretty cautious with how much you dare purchase because the markets swing pretty violently,” he says. “You don’t want to be on the wrong side of 1.5 million gallons.”

In addition to pre-buying propane, Chandler often waits until August to contract with farmers for a season that peaks in October. The company has about 500 grain-drying accounts in Minnesota.

“We do that as late as possible,” says Devereaux, whose company uses CHS as its supplier and runs six bobtails during the grain-drying season. “You’re only 60 days away from harvest, and by that time farmers have a general idea of their needs.”

Although its annual volumes may fluctuate between 1 million and 1.5 million gallons, Chandler Co-op always finds a need for its propane.

“We have a pretty large heating volume in the wintertime, so if we don’t use our propane supply for crop drying in the fall, we’re able to use those gallons in home heating,” says Devereaux, whose company sold 3.1 million gallons of propane in 2006 – 1.25 million of which went toward drying grain.

“We’ve always been able to use our gallons, but that doesn’t mean that some year we won’t get burned.”

Chandler also owns part of a transport company, so supply is a challenge in years of high demand, Devereaux says.

The company normally pulls propane from a pipeline terminal in Sanborn, Iowa. In years when the supply is low there, it relies on sources in Kansas or Nebraska.

“The pipeline hasn’t changed in 25 years, but farmers are now harvesting corn with 12-row corn heads and have dryers that can handle thousands of bushels an hour,” he says. “Farming has changed so drastically in the last 15 to 20 years. Grain drying now hits in a two-week period; everybody is going, and they all have big equipment.”

GSI's Network Series models monitor safety controls and dryer functions as the grain flows through the machine.
GSI’s Network Series models monitor safety controls and dryer functions as the grain flows through the machine.

For propane retailers facing supply challenges, PERC recommends collaboration with suppliers to assure needs are met in times of high demand.

Smaller grain-drying operations such as Collett Propane, whose farming customers comprise about 8 percent of its business, have enough fuel to handle the load and often don’t face supply problems.

“We have the availability to handle the amount of gas needed for grain-drying accounts,” says Brent Krajicek, Collett’s operations manager, whose company sold about 286,000 gallons for grain drying in 2006 and about 5 million gallons overall.

“We’re already preparing for our busy time by putting gas in storage for winter and getting early fill-ups out of the way,” he says. “We do take grain-drying gallons into account, but I can handle that pretty easily.”

To help retailers and farmers determine the amount of propane needed for a project, PERC has developed an agriculture cost calculator, which is available online at www.agpropane.com. Many marketers offer payment plans to help growers mitigate the risk of rising prices.

Because of grain drying’s up-and-down cycle, Cooperative Energy and Chandler don’t even factor that segment into their budgets.

“It’s so much off-and-on of a seasonal commodity that we can’t count on it anymore,” Dreessen says. “One year we have 1.5 million gallons, the next year we have 500,000 gallons. It’s something we don’t count on to be consistent from year to year.”

Devereaux adds, “We put together our budgets without corn drying in there. If it happens, it’s a bonus.”

Corn boom

The U.S. Department of Agriculture’s National Agricultural Statistics Service says farmers have planted almost 93 million acres of corn this year – a 19 percent bump from 2006. Anticipation of the largest corn crop in 60 years has created a healthy forecast for propane retailers.

“With more corn to harvest, farmers may have to start a few days early, so corn could have a higher moisture content than other years,” Leitman says.

“Plus, the market price for corn is better than farmers have seen in the past. Theoretically, they have more cash available and could afford to dry more than in the past. All those factors lead to the potential for a better grain-drying year for propane retailers.”

A rise in ethanol production – pushed by President Bush’s backing of alternative fuels – increased the need for corn, Leitman says. Farmers also took advantage of a price surge that reached $4 a bushel, nearly doubling what it had been.

According to the Renewable Fuels Association, 124 ethanol plants exist in the United States with 83 under construction or expanding.

“The ethanol boom happened last fall, and corn prices went up during the harvest,” Leitman says. “That created interest in producing more corn this year. Most farmers took a look at prices at $4 a bushel and decided it was more economical to divert more acreage to corn.”

While ethanol gives farmers another reason to plant corn and use propane to dry grain, this summer’s conditions in some regions of the country are a reminder that the weather remains in control.

“If I look out of the window right now and consider the heat we’re having, I would say corn drying for northwest Iowa and southwest Minnesota looks like a small year for the current conditions,” Dreessen said in July. Torrential rains and flooding followed in August.

Devereaux adds, “We had the biggest corn crop we ever had last year. This year, because of the drought, the corn crop could be quite a bit smaller.

“In our territory, there has been a 20 percent increase in corn acres planted,” he says. “If there was not a drought, it potentially could be a monster year for crop drying.”

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