Jimmy Woodall’s industry has hit rock bottom.
“It’s rough,” the Kentucky dairy farmer says. “I’ve never seen the economy this bad. It’s trickling down, and it’s starting to hit home.”
Woodall has owned Woodall Dairy Farms in Lewisburg, Ky., since 1972, when he graduated from college and bought the farm from his parents. He can’t remember the dairy industry taking such a beating.
But the global recession disrupted supply and demand. That, combined with high production costs and low milk prices, has dairy farmers making decisions about the fate of their farms.
“We have a product you can’t store; milk has got to be fresh,” Woodall says. “It’s the type of production you can’t raise and lower with demand. Once you’re in the cycle, you have to produce and you can’t tweak it up and down.”
According to the 2007 Census of Agriculture, farmers’ production expenses have risen 39 percent since 2002 – to $241 billion. These numbers describe the environment in which a farmer works, says Mark Leitman, director of agriculture programs for the Propane Education & Research Council (PERC).
“Production expenses have risen dramatically in the past few years,” he says. “During some of those years, prices for commodities were up substantially, but overall production expenses have risen to wipe that out.”
While Woodall deals with the daily distresses of the economy, he looks for an edge on his 700-cow farm by using propane. At the beginning of this year, he installed four Rinnai propane tankless water heaters, which he uses to clean milking equipment. The daily cleanings require a lot of water at extremely high temperatures.
“It’s a quick deal because we have so much stainless steel equipment to wash and we have so much of an area to cover that it doesn’t take much to cool down,” Woodall says. “It’s very urgent that you have that much hot water quickly, and you keep it hot.”
Efficiency was compromised in the heaters Woodall used previously. Hard water caused calcium and lime buildup in the heaters, and they couldn’t be cleaned. Woodall was forced to replace them about every two years. The tankless water heaters, however, are different.
“You are able to clean the tankless water heaters and keep them functioning to full capacity, and that makes them more feasible,” says Woodall, adding that Southern States Cooperative, his propane supplier, provided background information on the units.
Woodall has been running his four tankless water heaters hard – three times a day for the milking equipment and once a day for his 6,000-gallon holding tank. He hopes to add two more units when funds become available.
“But these four are doing the job,” he says. “You better believe, when you turn it on, you better be ready for hot water because it will burn. Propane will get you more hot water for the dollar, even at the prices propane is today.”
Woodall estimates burning 7,500 to 10,000 gallons of propane per year. He also uses propane on the farm to heat buildings as well as forklifts and tractors – and expressed interest in converting his 25 to 30 farm vehicles to propane.
Unhappy hour
Like Woodall, Craig Carpenter has experienced challenging times with his operation – a 1,500-acre hop farm in Washington’s Yakima Valley. He sold a couple hundred acres of Carpenter Ranches LLC two years ago just to stay in business. His problem is similar to Woodall’s – oversupply dropped hop prices below production prices.
“We’ve really had to look at efficiencies,” says Carpenter, a sixth-generation hop grower. “Propane is one of the efficiencies we’ve looked at.”
For years Carpenter used raw oil and diesel to fuel his hop kilns, but those burns created traces of residue on the product during the drying process. Because brewers have the option to reject hops, Carpenter wanted to make his product as clean as possible.
“For years we were a direct dealer with Anheuser-Busch [InBev], and they wanted their product clean,” Carpenter says. “We crossed over to propane around 1988, and that gave us the ability for zero residue on the product. Propane has such a cleaner burn that you don’t have to worry about a brewer calling back and saying they have a different aroma from the residuals.”
The hop harvest has a small window, running from mid-August until October. Carpenter’s harvest has lasted a minimum of 33 days up to 52 days. The company sells between 5,500 and 10,000 bales per year – at 200 pounds each.
“We push a lot of hops through our facilities – probably the most hops in the world for a small facility like ours,” Carpenter says.
With 36,000 gallons of propane storage on his farm, Carpenter also fuels his forklifts. He’s run propane trucks in the past – but has since switched back to gasoline and diesel when propane prices fluctuated.
Carpenter burns about 250,000 gallons of propane per year, getting his supply from Bleyhl Farm Service Inc., an independent farmers’ cooperative in Grandview, Wash.
Agriculture hotbed
Bleyhl Farm Service is located in agriculture country, the Yakima Valley, in south central Washington. It sells about 3 million gallons of propane per year, about 40 percent in agriculture, and is a good example of the many uses for propane on the farm. Most of the propane in the area goes toward orchard heating. Propane fuels wind machines and smudge pots, which keep frost from forming on tree buds.
Orchard heating is most critical from the end of February through the middle of May, says Claude Zehnder, petroleum division manager for Bleyhl. That short window of time has farmers and propane suppliers hustling – keeping the machines running and the tanks full.
“Last year was phenomenal for orchard heating. It got cold and it stayed cold,” Zehnder says. “It’s tough on the farmer, but it’s good for the propane industry.”
In addition to orchard heating applications, Bleyhl Farm Service supplies propane in the Yakima Valley for vineyard heating, grain drying, weed control, tractors, harvesters and forklifts as well as for other commercial and residential services.
“It’s up and down every year,” Zehnder says of the propane business. “You never know what the spring is going to bring. Last spring was gangbusters, and this spring was nothing. That’s just part of the business.”
Zehnder is a member of PERC’s Agriculture Advisory Committee, which works to develop new and innovative uses for propane. Zehnder praises thermal weed control machines, poultry house sanitizers and the continued development of propane irrigation engines.
“It used to be people didn’t understand the property of propane and were a little more fearful of it,” Zehnder says. “In our environment, the way things have changed, people are more apt to use it. In our area, propane’s uses are more prevalent than in the past.”
Data collection
As director of agriculture programs for PERC, Leitman cultivates that way of thinking and helps grow the propane load through the development of efficient technology. More than 1 billion gallons of propane – 10 percent of the odorized total – is pumped into the agriculture market each year.
One of the latest tools available to the industry is the 2007 Census of Agriculture, which was released in February by the U.S. Department of Agriculture. The comprehensive data, compiled every five years, helps PERC quantify market potential of new technology and guide its investment decisions.
Some notable points from the census relating to propane, according to Leitman:
• Organic farms, with their reliance on cleaner and greener methods, are becoming a bigger target market for the propane industry. Organic crops cover 1 million acres of farmland in the United States and continue to increase. That equates to 15 million potential gallons of propane.
• The census identifies about 1.3 million acres of cropland ripe for thermal weed control applications, which could provide 15 million gallons of summer load. The propane industry’s focus is on improving versions of equipment that already exist.
• Irrigation acreage increased from 55.3 million in 2002 to 56.6 million in 2007, giving propane another good summer application. The standard propane engine will be used for 1,000 hours in an irrigation season. It will use about 7-8 gallons of propane per hour, or 7,000-8,000 gallons per season. Irrigation engines are available, and PERC is working to certify more.
“Farmers are pumping more money into the propane they’re using on their operation,” Leitman says. “That’s why it’s so important as an industry to continue to develop efficient technology so farmers continue to be propane customers and get more for their energy dollar and more for their Btu.” LPG
