Liquid Propane (LP) prices in the U.S. could be heading higher based on current supply/demand factors. A Successful Farming article says that could mean higher corn drying costs for farmers this fall.
Looking ahead to the LP market environment for grain drying in the fall, analysts are said to be using descriptions like “train wreck” and “tug-of-war.”
The rising LP prices domestically are being driven by rising global demand. The Oil Price Information Service says the prices are likely to stay high because the overseas demand is strong enough and that can keep the overseas markets even higher.
In a release, the Information Service says, “China’s end-users of LP can already afford to pay these high prices, so there’s no reason for prices to go lower. If U.S. LP producers can make more money overseas than they can domestically, their first option will be to sell their product on the export market.”
LP stocks in the U.S. have also dropped recently. As of last week, the total LP stocks in the U.S. were at 66.76 million barrels, compared with 89.3 million barrels a year ago. The Energy Information Administration says that’s a 35 percent reduction in stocks year-over-year.