CENTRAL ILLINOIS (WCIA) — With late planting and slow growth, corn will be maturing later than usual this year. That may require a lot of corn drying, a process that will require propane.

Scott Wilson, manager of customer risk management in GROWMARK’s Energy Division, suggested farmers manage their propane price risk with contracts if they expect to run corn through the dryer this fall.

“We started this year with the lowest inventory number we’ve seen since 2014, so that kind of scared me a little bit at the beginning here, but we’ve had some great build,” Wilson said. “We’ve had, I think its been 11 straight weeks of build of propane for inventory. We are now ahead of where we were at last year’s pace by about 3 million barrels and we are just behind the five-year average by about 3 million barrels.”

“At one point we were behind the 5-year average by about 17 million barrels. We are doing good, we are making up ground so that’s fantastic because, like you said, we are going to need that this year,” Wilson continued. “There’s a lot of uncertainty still with the Ukraine situation going on, so prices are elevated because of that and also because of the inventory levels that we’ve seen and the supply-demand picture.”

“So we’re currently probably 50 to 60 cents above were we are typically at, but as we continue to build, crude prices continue to keep rising and propane is not going with it, Wilson continued. “It’s kind of stair-stepping higher, but it’s not running up with crude. So propane as a percent of crude this morning was around 43 percent, which is the lowest level we’ve seen in about two years. It just shows you that relative to crude, propane is relatively cheap, which is incredible since we are 50 or 60 cents higher than we’re traditionally at.”

So what is the best way for a farmer to book propane now for use this fall if he is expecting a wet harvest?

“One of the best ways to do that is with a fixed forward contract if that is an option they have,” Wilson responded. “A lot of times, the local co-ops will be able to retail that and sell that to a farmer. They usually purchase from us and that allows them time to go in and use those gallons however they need to during the dryer seasons. That’s probably the best way so that you’re not relying 100 percent on the spot market when you are going to pull those gallons. You have a little bit of risk mitigated there.”