Propane prices have skyrocketed under the influence of high demand for both home heat and agricultural uses. We observed the annual low in July '13 at a regional average of $1.32. This week's regional average price is $2.05, but word has come in from more than a few readers that propane is quickly moving much higher in the Midwest.
A report today from Minnesota has prices there jumping from $2.99 to $3.79 with plenty of upside risk ahead. Missouri reports they have seen prices balloon from $2.60 to $3.50, just today. Deliveries east of the Rocky Mountains are problematic at best and experts expect more of the same, possibly for the rest of the winter.
As prices in New England and other markets increase, Midwestern producers will look to capture a higher spot price suggesting Corn Belt prices will remain high in order to compete with other markets.
We wrote yesterday, don't but any propane, but do not run out. We noted a 3 1/4 cent drop in LP pricing region wide last week, and given fresh upside price risk ahead, we recommend you capture a two dollar handle on LP while you can.
Prices in New England now range from $2.30 to $4.87/gallon and as the Polar Vortex settles back in over the United States, demand will increase, and prices will run higher. Northern parts of the Midwest have already been advised to begin rationing propane, and our suggestion today is to get out in front of what have been some strong increases in local propane pricing. Have a conversation with your preferred retailer today and lock in today's price before prices in your area follow the nationwide trend of viciously higher propane.