With automated deliveries and scheduled pre-buys, getting the propane you need seems more effortless than ever. For end users, it really is that easy. But for propane suppliers facing winter cold snaps and global propane supply demands, planning can be a more complex process, beginning as much as a year before deliveries reach propane consumers. For those of you who have wondered how the right amount of propane gets exactly where it’s needed, let’s break down the process.
How it works
Propane supply planning is all about alignment – from the supplier to the dealer and finally to the end user. Typically, the process starts early in the new calendar year, with suppliers building a rough outline of the propane needs for the coming year. Suppliers work closely with your local propane retailers to forecast needs for the next supply year based on the following factors:
- Supply resources: Establish which regional propane terminals will serve as primary and secondary supply points to best serve the retailer’s customer base.
- Demand ratios: Identify the retailer demand ratios based on customer use and time of the year. This allows propane supplier and retailers to balance demand with resources.
- Market influencers: In a global marketplace, propane exports will have a greater impact on overall supply inventories. Price spread between the U.S. marketplace and foreign markets will require suppliers and retailers to closely watch exports as an influence on propane inventory. With this influence, the supplier may recommend an alternative source for the propane retailer and ultimately your needs.
Checking distribution
Equally as important as propane supply is ensuring propane is available where it’s needed. After assessing propane supply, the next step in the process is having the supplier representative reach out to retailers to gauge supply requirements. Knowing what each customer needs is a key component in fine-tuning the plan and determining where propane should be stored.
What does this mean for you?
Propane supply planning is truly a partnership. Sharing your changing business heating needs or home improvements will assist the entire supply chain to collectively be successful. For example, homeowners adding a propane appliance or a farmer adding a confinement barn or grain drying equipment will impact the need for more propane. Or, a commercial building could have been added onto a facility and more square footage will need to be heated. Any changes in propane usage is critical for the propane retailer to best align the added demand they will have in months where the overall demand is higher and supplies may be tight.
CHS is committed to supplying customers with the safe and reliable propane deliveries they need throughout the year. If you have questions or want to discuss your 2022 propane supply, get in touch with your LOCAL PROPANE DEALER.