Probably every propane dealer knows a veteran industry colleague who has converted a standard farm tractor to run on propane. Or perhaps you’ve even done this work yourself.
Steadily since the late 1930s, gasoline, diesel and other fuels have managed to encroach on propane’s place on the American farm. But nowadays the entire agricultural marketplace appears ripe for picking by the propane industry. Rising production costs for both crops and livestock, coupled with more strident public concerns over air pollution and pesticide runoff issues, are once again positioning propane as a highly viable farm fuel.
“A propane tractor was once very popular on the farm. We’ll be rebuilding something that was in vogue 35 years ago,” observes John Emmitte, staff liaison for the Propane Education and Research Council’s Agricultural Advisory Committee. PERC is among several entities – including the Texas Railroad Commission’s Alternative Fuels Education and Research Program – hoping to harvest a bountiful agricultural market for propane. By rule, 5 percent of PERC’s funds are earmarked for agricultural applications.
“If we get the technology and products in place a lot of people will go back to it,” Emmitte believes.
Agricultural applications account for 8 to 9 percent of the country’s propane use, serving more than 660,000 farms – about half of the country’s agricultural operations. In the year 2000, American farmers used 1.4 billion gallons of propane, compared to diesel usage rates ranging from 3.1 million gallons to 4 billion gallons.
“There is a huge opportunity for propane’s market share to grow,” declares Paul Culver, chairman of PERC’s Agriculture Advisory Committee. He sees it climbing at least to 10 percent, with more on the way. “There are a lot of niche markets out there; we even talked about catfish farming – heat and pumps for the ponds.”
The signature smell and black smoke of diesel irrigation pump engines in the smoggy San Joaquin Valley is giving way to clean-burning propane. – Propane already is a staple on some 660,000 U.S. farms, accounting for 7 percent of total domestic LPG consumption.
Of course, there remains the chicken and egg thing, and we’re not discussing poultry production here. The products need to be available from the manufacturers, yet it is the propane dealers who must plant and nurture the seeds to get this segment growing.
“We’ll have to define the market for them,” Emmitte points out. “They’re not going to retool to make propane engines if there is no market for them.”
“You want to see a return on investment before you put more money out,” concurs Calvin Thorn, general manager of Jasper Alternate Fuels, a division of Jasper Engines and Transmissions of Jasper Ind.
Propane making hay
In addition to fueling trucks and tractors, propane already is powering irrigation pump engines, running electrical generators, flaming away weeds and harmful insects, heating henhouses and pig sties, cleansing manure residues of disease, ginning cotton and drying grain crops for delivery to market.
Propane’s portability, high energy output and clean-burning properties are among the qualities being cited for its agronomic efficiency. As the widespread use of pesticides continues to lose favor with both the public and government regulators, marketers can push propane as an environmentally safe alternative that supplies excellent weed and insect control without leaving any residues.
With the proper kind of customer communication, propane dealers can also pursue residential clients with an interest in organic gardening, as even backyard gardeners can make use of homeowner-sized weed flamers for cultivating that prized additive-free tomato, according to Dr. Dudley Smith, a professor with the Department of Soil and Crop Sciences at Texas A&M University.
Uses of propane
“There is a very definite niche in that industry,” says Smith. And consumers who lack green thumbs but still covet organic produce are willing to spend more for that option at the checkout counter. To meet that demand, organic-oriented farm operations are increasing their yields.
Culver, who also is vice president of propane operations for Minnesota’s Cenex Propane Partners (ranked No. 3 among LP Gas magazine’s Top 50 Retailers), reports that the $8 billion organic farming marketplace is up 20 percent over the last two years.
The prices paid farmers for organic, non-chemically treated harvests are typically 50 percent to 100 percent higher than those paid for traditionally grown foodstuffs.
“While the production of organic crops is minuscule relative to total production, the use of non-chemical pest control and alternative production methods continues to grow,” Smith notes. “Many astute agribusiness people are capitalizing on these opportunities to provide unique products at profitable prices.”
Weed control is their biggest problem, and Smith thinks propane presents the best solution. In his studies of the issue, “the use of flame cultivation provided an improvement in net returns to growers, since hoe time was reduced.”
Tractor-mounted flamers have been used since 1938. “Just about every fruit, vegetable and row crop has been flamed,” says to Tim Morse, marketing manager of Flame Engineering of LaCrosse, Kan. “It just depends on how you do it.”
The company’s product line ranges from a compact homeowner model to huge behemoths capable of weeding several rows at a time over acres of rolling farmland.
“There’s a great deal of interest, and it increases every year. In the past five years we’ve seen a great surge,” he says.
Logically, this market is growing as government pollution regulators, consumers and agribusiness executives become aware of propane’s agronomic and environmental benefits. “We’re still in the education stage,” Morse says.
Getting to the root of prospective customers requires that propane marketers make their presence known to these folks, who traditionally tend to appreciate direct communication, says Smith. Much agricultural propane is used in the spring, summer and fall months – typically the slow season for LPG marketers with a focus on winter heating.
The propane dealer would also be well-served by thinking creatively about creating products or byproducts, such as producing fertilizer from manure or packaging seeds for retail sale.
“Markets can open up! What if you can dry that stuff and sell it to Wal-Mart? (Local merchants may also be a source of potential buyers, too.) We used to call that stuff wastes; we now call them byproducts,” Smith observes.
Getting to know you
The farm community needs to be made aware that the local propane dealer is there to help them with advice and service in addition to supplying propane, Smith emphasizes.
“Make sure that you know them and they know you,” he says. “Getting to know the county extension agent becomes very important. You can act as an information broker. It’s important to have that two-way conversation. They can’t buy from you unless they know you and what products you have and what services you can provide.”
Dave Hast agrees. As general manager of Alto Gas‘ three locations in Michigan, he’s smack dab in the middle of an agricultural area that accounts for 15 percent of Alto’s business. Corn drying is big in the fall, and one customer roasts soybeans throughout the year – annually using 15,000 to 20,000 gallons of propane.
Another customer has a 30,000-gallon tank to store enough propane to ensure that his turkeys get the proper amount of heat. “If they don’t keep warm they’ll smother themselves trying to get warm,” Hast explains.
The supply of propane to these customers is critical, and communication remains the key, Hast points out. “For somebody like that you try to make it an open relationship.”
Providing propane to producers of corn and hogs makes up almost half of the propane business at Watonwan Farm Service in Truman, Minn. Of that amount, 30 percent goes for corn and 70 percent toward hogs, according to Randy Cole, petroleum manager. The pigs need to keep warm in winter and the corn needs drying according to the temperament of the season’s weather.
Cole says WFS is big on staying in close contact with its farming clientele. “We have a monthly newsletter and our drivers communicate with them. And when we come to the season we send them a letter” reminding the customers of what WFS can provide in the way of sales, service and advice.