Does a bigger opportunity exist to supply greenhouse growers?

October 3, 2013 By    

Pinpointing exactly how much propane the greenhouse industry consumes is a difficult task. The American Petroleum Institute tracks gallon consumption in agriculture. But greenhouse-specific use is lopped into that category, creating an unknown as it relates to propane’s use in the greenhouse industry.

Propane certainly doesn’t dominate greenhouse heating, by any means. Randy Mich, regional sales manager at Modine Manufacturing Co., estimates somewhere between 20 and 25 percent of growers across the United States heat their greenhouses with propane. The majority of growers rely on natural gas, he says.

“I was at a major distributor’s show in Minneapolis in the last week,” says Mich, whose company makes greenhouse heaters, among other heating applications. “I would say that 20 to 25 percent of the growers coming into our booth were talking LP [gas]. A lot of these growers were from Iowa, the Dakotas.

“But if you go into Michigan, for example, I doubt in the Kalamazoo, [Mich.], area that there’s any propane usage because the [natural gas] pipelines were laid a long time ago.”

Like many markets, Mich says propane is more prominent in some regions versus others. The Southwest is a good example of a region that’s more propane focused, he says.

Still, a question remains: Does an opportunity exist to serve the greenhouse industry further?

“It’s certainly an area that we’ve seen growth in,” says Mark Leitman, director of agriculture programs at the Propane Education & Research Council (PERC). “It’s been a growth industry for 20 or 30 years.”

One retailer’s story

One propane retailer serving a grower is Sharp Propane, which is headquartered in Bastrop, Texas. Sharp Propane serves Plant Odyssey, a Kyle, Texas-based grower with 350,000 square feet of production space.

According to Steve McKay, CEO of Sharp Propane, Plant Odyssey has an 18,000-gallon storage tank and a smaller tank that’s used to heat an office space. Sharp Propane also fills cylinders for Plant Odyssey’s forklifts.

“Plant Odyssey came to us via an acquisition,” McKay says. “They’ve been steadily growing, adding greenhouses.”

Plant Odyssey’s growth means increased opportunities for Sharp Propane. Recently, Sharp Propane installed a monitoring system on Plant Odyssey’s 18,000-gallon tank to ensure it produces healthy plants and maintains delivery schedules.

Using a remote satellite system, Sharp Propane monitors Plant Odyssey’s tank around the clock. The monitoring system alerts both Sharp Propane and Plant Odyssey owner Kent Collum every morning via text message and email of the state of the 18,000-gallon tank.

“You get alerts as it happens,” McKay says. “It might read 40 percent in the morning, but you might have a 10 percent drop. You’ll get those alerts as they occur. It’s a comfort level to Kent to get those readings and know that’s one less thing he’s got to worry about.”

Propane versus natural gas

One company that plans to focus more on propane is Modine. Ray Schaffart, the company’s marketing and sales support manager, says Modine has talked internally about propane as a market opportunity for its high-efficiency heaters – for both the greenhouse industry and general industry.

Modine sees an opportunity, Schaffart says, because the payback for using one of its high-efficiency propane heaters is a greater one than the payback its high-efficiency natural gas heaters offers.

Natural gas is still attractive to users because of the price compared to propane, he adds. Propane is attractive for a different reason.

“In Ohio, you’re going to save about $700 per year with a [93 percent] high-efficiency [natural gas] unit heater versus an 80 percent one,” he says, noting that users will save more with propane units because the fuel costs more than natural gas. “If you’re running propane, you’re going to save $1,400 a year. We’re wanting to promote both.”

About the Author:

Kevin Yanik was a senior editor at LP Gas Magazine.

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