Despite the brutal cold weather and a sharp increase in demand from farmers and homeowners, liquid propane prices are not bounding in Iowa, according to Paul Ovrom, an ag marketer at the Iowa Department of Agriculture.
“The average price for the state right now is coming out at $1.49 a gallon,” Ovrom says. “That is just two cents higher than a week prior to that.” While two pennies a gallon is a very small rise, he says it’s typical to see price spikes during the wintertime.
“The cold snap that we’re having hasn’t influenced the prices too much yet, but I wouldn’t be surprised if that changes within the next week or two,” Ovrom says. “Sometimes there’s a lag in the pricing.” Propane prices are up substantially from a year ago, about 27% higher. Ovrom says several factors may be coming into play.
Ovrum says LP prices often bounce between October and March as that’s when much of the product is exported to nations like China. “Propane is tied to crude oil,” Ovrom says. “Crude oil production, a byproduct of that is propane and as crude oil prices go up or fluctuate, that impacts the price of propane.” Even with the cold weather, he does not expect the record demand Iowa saw in 2013 when then-Governor Terry Branstad declared an energy emergency as propane prices averaged as high as $4.71 a gallon.
(Thanks to Pat Powers, KQWC, Webster City)