Wake up propane retailers!

Wake up propane retailers! Your pricing yourself out of business. When electricity is cheaper than propane to use. When $1.07 wholesale propane is sold for $2.30 retail. A customer would have to be a fool to mess with the danger a greed of propane.

A lot or all retailers had it locked in at a higher price before the price drop.

That system has workerd for several years to lock in the summer price. Not this year.

They cannot sell for a big loss. A small loss maybe.

A lot of customers prepaid for the high price also. Retailers cannot hardly refund them when it is already in the retailers supply tank. Or customers tank.

The pricing is messed up right now and will take a few months to straighten out.

Most guys that farm go thru the same thing every time we sell grain. We understand the problem.

We may sell one day for $3.00 next day it is 3.25. So we wish we would not have sold the day before.

Or we sell for $3.00 and the next day it goes to $2.75. We wish we would have sold more the day before.

Us farmers live with pricing everyday and learn to not look back. We do what we think is right at the time and live with our decissions.

Gary

As of earlier this week, my pre-pay was still 30 cents less than going rate. Hopefully I won"t loose too much on this over the heating seson.

Going to be some mega bucks to be made by some and lost by others this year if the price stays like it is now.

What gets me though is if a home owner was smart enough not to lock in his price he will still be forced to pay the higher price because his supplier made a bad choice and locked in the higher price.
This very fact is going to get a lot of people outrate because if the situation was reversed it would be a totaly differant story.

How many people honestly thought that gas was going to drop as far and as quick as it did?

Last year the wholesale price of LP went up all winter. But most suppliers held the same price all winter cause he had it bought.

Wholsale was around 2.10 at the high and he was still selling for 2.08.

Did you thank your supplier then?

By the way I am a farmer not a LP retailer.

Gary

I guess the key words in your whole post are....
"most suppliers"

Trouble is the supplier I use to have was not included in "most".

This is the biggest reason I am not a LP user any more. I never did use enough per year to justify a large mega tank or a pre buy contract but I use even less now.
Installed a heat pump; told them to come get there 150 gal tank; and never looked back.

Like you the farmer.... I believe if I buy/sell something today and the price changes tomarrow; I just learn to live with it. But do not expect me to feel sorry for you if you treat me one way this year and next year the tables are turned.

Will not get into the propane pricing but electricity at 10 times less than propane would not flow. You can have heat with no power lines up with propane but when the power lines go down with electricity you are out of luck. Also can cook with propane when the power is off.

Wood heat, I love it.

Last night after work I cut up and stacked another 1/4 cord before it got dark. Great stress reliever.

I too can cook when powe goes out... Pull out the Coleman Camp Stove.

A supplier here recently made the evening news for charging a customer a couple hundred bucks for NOT ordering ANY propane this year! The guy trying to save money had been careful with his gas and using wood. Supplier told the news reporters that the charge was for the use of the tank since they didn't make anything on the non sale of propane.

They are not the only ones. Same thing is going on here. The gas supplier that is notorious for the most expensive gas in the area is doing the same thing. Friend of mine put in a wood boiler but is keeping his propance furnance because he goes to Florida for a week or so in the winter. He wants to just turn the furnance on and not have to have someone feed the stove. His supplier sent him a bill for not filling their tank which he pays rent on. Explain to me how that works. You can't buy your own tank because no suppliers here will fill anyones tank except their own. They say its because of insurance reasons and state laws about the safety of propane tanks. They are responsible for accidents if they should occur even if they don't own the tank because they filled it. I'll give them one thing, they are creative!

Gonna be 60 up here today. I'll let the fire die out today, clean out the ashes and re-light it tonight. Gorgeous day!

Well, kind of Gary, but not the same. If farming were like propane, your local elevator would call you and say, "I'd like to buy some grain." You'd say "Ok, I need $X a bushel, but, what are you going to keep it in?" They'd say, "Our bin". To which you would reply "Oh, well you only get that price if you store it in a bin you rent from me." They say "Ok, sounds good" Next year the elevator calls you back and says "I'd like to buy 2 years of grain from you for $X." You say "No can do. I need $X.XX." They say "Ok, still sounds good." Then you send a letter to them saying "Since you haven't gotten all of the grain from me that you purchased for $X.XX yet, I'm going to have to charge you $.XX more when I deliver it. If you don't want it anymore, I'll glady refund your original $X.XX." Farming is really the only business where the producer is also the customer and has no control over the cost of raw materials or finished product.

The thing you have to realize is your local propane distributor buys propane on a 90? day contract, so when spot prices drop, he already has bought it a higher price. So, he has no choice but to sell it a higher price to keep from going out of business. I know last year when prices were spiking, my supplier was selling propane at close to the "posted wholesale" price for the same reason. We/my family has dealt with this supplier for over 40 years, so I don't think he has a reason to lie to me about it.
Jim

if a 90 day contract why does the price typically go up more often than at 90 day intervals in the winter ?

That I cannot answer, but if he sold gas today that he bough 90 days ago, what he sells next week, he also bought 90 dyas ago, be it higher or lower. don't know, not in the propane business. But gasoline is the same way, until recently, gasoline went "UP" with the price of crude and dropped like cold molasses when crude prices dropped. Not trying to defend, just trying, like the rest of us, to figure it all out.
jim

Most furnaces and all boilers use fans or pumps and electric controls and won't work in a power outage. A propane stove will work but need to be started with matches if pilotless ignition. I keep a 30 lb. tank of propane with a triple infrared burner that I could use to stay warm but I haven't needed it.......yet.

Amen,
Pellets too.

propane today 144.9 central WI.from L&L propane Waupaca WI.

All I need to do is get out the turkey fryer and put the skillet on it ,but then again just plug in the generator that runs on natural gas and ignore the outage

There sure are alot of misconceptions of how the propane industry works. I work for a fairly large propane-oil company and we own a fleet of tractor trailer transports. So with that said and not going into numbers I can tell you that it cost alot more money than people think just to have the business. We only make a small profit on a averge winter.
As far as prebuy goes we can't prebuy in the same sensce as we offer our customers. We can only buy 50% of the gas that we think we will need. The other 50% (or more if we guessed wrong) is at the current rack price the second the transport hits the load button at the loading rack. So when we offer our prebuy the customers have all winter to pay us. We have 10 days to pay in cash. SO with every prebuy cust. we are sticking our company on the line. What if gas went to $4 or $5? We still have to buy the other 50% at that price and the prebuy cust. will stay at $2.50 (or what ever there company lock them in at). We also offer a capped price which is .20 more than prebuy because that is what it cost us. But the capped price goes with the market. If gas goes down so does there price
If gas goes up they will not go over the cap which would be $2.70.
So our comapany anyway lets our customers make the choice of what gamble they want to take. We are very honest about pricing and let our customers make there own decissions about what they think the market will do.
I hope this helps some people understand a little better and I really can't get into specific numbers about the cost of doing business, but how much of a markup over wholesale price do you folks think is reasonable?