Agricultural Propane Price Per Gallon

Farms buy propane for grain drying, livestock barns, greenhouses and field equipment. Nobody publishes a farm propane price, so this page gives the nearest published anchor, shows how to work out drying gallons from a published rate, and explains why the autumn harvest can move retail prices for everyone.

Grain drying: working out the gallons

Corn harvested above safe storage moisture has the excess driven off in a dryer, and in much of the Corn Belt that dryer burns propane. North Dakota State University Extension's rule of thumb is that a high-temperature dryer uses about 0.02 gallons of propane per bushel per point of moisture removed; its grain-drying specialist puts it as "multiply the propane price per gallon by 0.02" to get the drying cost per bushel per point (NDSU Extension, October 2017). Actual use varies with dryer type, air temperature and weather.

Worked example: corn coming off the combine at 24% moisture and dried to 15% loses 9 points. At 0.02 gallons per point that is 0.18 gallons a bushel, or about 36 gallons an acre on a 200-bushel crop. A wetter harvest raises every line in proportion, which is why drying demand swings so much from one year to the next.

Other farm uses

Poultry, hog and dairy buildings are commonly propane-heated where natural gas is not available, and their use follows the weather and the number of animals housed. Greenhouses use propane for heat, and some use the combustion for CO2 enrichment. Flame weeders, irrigation engines and orchard heaters add smaller volumes. No public source gives a typical consumption figure for any of these, so the useful number is your own: the BTU-per-hour rating on the heater, divided by the heat in a gallon (see BTU per gallon of propane), times the hours it runs.

Why farm accounts are priced below residential

Farm propane buyers are priced as commercial accounts, and the one published figure for that is EIA's State Energy Data System: in 2024 the US commercial sector paid 33.7% less per Btu than the residential sector, with the state figures ranging from 3.2% to 62.6% below. No source breaks out a farm rate inside that, so what follows is why farm accounts sit on the commercial side of the line rather than a discount to expect: larger volumes delivered in fewer, fuller drops; one stop rather than a residential route; and, often, a signed contract with a named price formula. The commercial vs residential page has the figure for every state.

The autumn harvest demand pull

Crop drying lands in October and November, just before heating demand begins, and in a late, wet harvest it can be large enough to drain regional supply. EIA's account of 2013 is the clearest case: propane demand in the top five corn-producing states rose in October to levels that rivalled the normal January peak, and Midwest inventories were drawn down by 4.1 million barrels that month, the largest October stock draw since 1985 (EIA Today in Energy, 2 October 2014). EIA names three drivers of drying demand: the weather, which sets both crop moisture and when the crop matures; how much farmers leave corn to dry in the field; and corn prices, which decide whether it goes to market straight away.

That winter ended in the 2014 polar vortex, when the EIA weekly residential survey reached $4.010 per gallon in the week ending 27 January 2014, still the record. For homeowners the lesson is about timing: a tank filled before harvest is not exposed to an autumn drying squeeze. The summer buying page and seasonal patterns page walk through it, and the by-state pagesshow the Midwest states' weekly prices.

Watching the harvest

USDA NASS publishes a weekly Crop Progress report through the growing and harvest season, including the share of the corn crop harvested by state, and the Crop Production reports give planted area and expected yield. A late harvest of a wet crop is the combination EIA describes behind the 2013 squeeze.

Contract structures for agricultural buyers

Dealers do not publish what each structure costs relative to the others, so the useful thing to know is who carries the price risk and what to ask.

Pre-buy

The farm commits to a volume at a fixed price for the coming season and pays up front. Ask what happens to gallons you do not use, and whether the price covers delivery.

Fixed price, paid on delivery

A volume committed at a fixed price but paid as it is delivered. The dealer carries the inventory and the price risk, and prices that in. Ask for the pre-buy and the pay-on-delivery price side by side.

Capped

The price follows the market but cannot rise above a ceiling. Ask for the cap fee as a separate figure so you can compare it with a straight fixed price, and ask whether the cap covers all your gallons or only a committed volume.

Storage matters as much as the contract. Tank capacity decides how much you can buy ahead of the harvest pull and the winter, so size it against your own drying and heating gallons from the calculations above.

Related

• Commercial vs residential propane price per gallon
• Forklift propane price per gallon
• Restaurant propane price per gallon
• Propane pre-buy programs
• Winter propane price per gallon

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