Firewood, propane users already dealing with high demand

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When the price of a commodity goes up dramatically in the face of a shortage, people usually look for an alternative. But when the substitute product is also facing a supply shortage?

MPR reports some rural Minnesotans rely on one of two types of fuel for winter heating: propane or firewood. And right now, neither is looking like an affordable, easy-to-get option.

As a reaction to propane costing up to an arm, a leg (and whatever other appendage you have to give) last winter, many residents are now wary of another sudden price spike this winter – and are stocking up on firewood as a precaution, MPR says.

That proactive behavior is part of what's made firewood highly sought-after right now, leading to a significant shortage of the suddenly hot product.

Though that increased demand isn't the only reason.

Last month, the Duluth News Tribune reported a significant shortage of firewood is on the horizon, brought on by a wet summer that prevented loggers from getting into the woods to fell trees. The newspaper reported some Twin Ports firewood companies are telling customers they are so far behind they can’t take any additional orders, while others aren’t even bothering to answer their phones.

In an unusual twist, KARE 11 reported Stillwater-based Pinnacle Firewood is trucking logs to homeowners in Duluth and other points up north. Typically, the log trucks travel in the opposite direction, with wood from the northern forests traveling to customers in the metro area. That could mean higher wood prices for northern Minnesota customers.

Propane problems also present

Sticking with propane? Like firewood, getting some may end up being tricky.

ABC 6 News reports farmers – needing the fuel to dry the surplus corn crops – are already experiencing long wait times in order to get the fuel, just a few days into the corn harvest.

The station spoke with Randy Stephenson, an employee with Dexter Elevator and Liquid Propane, who said trucks are sitting in line for as many as 12 hours just to get one load of liquid propane. And he expects them to keep lining up for the foreseeable future, as the state's farmers deal with a record corn crop.

That could ultimately affect the price of propane for homeowners, ABC 6 says.

A September report from the Joint Economic Committee outlined how a propane price uptick can impact the economy,

The report cited a few reasons for last winter' price spike: Damp fall weather that caused farmers to need more for drying corn, leading to a shortage; and the shutdown of an oft-used transportation network, which forced propane shippers to use different routes, leading to delays.

The result was a doubling in the cost of propane, up to more than $4 per gallon in the region.

The report found Minnesota spent an extra $70,905,941 on propane than if prices had stayed the average of the previous five years. That was the second-most in the Midwest, with Michiganders spending about $1 million more.

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Around the time that report was issued, the propane industry urged people to buy propane early, in hopes of avoiding a similar price spike to what Minnesotans saw last winter.

This past spring, the Legislature considered some changes to help prevent another spike – but the Pioneer Press reported none of the solutions bandied about would serve as a long-term fix.

Propane production is up across the country to 1.5 million barrels a day, but Minnesota has been impacted by the loss of the Cochin Pipeline from Canada, which had delivered about 40 percent of Minnesota’s propane.

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