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Deep Freeze Stresses Propane Market

DES MOINES, Iowa (UPI) — Frigid winter temperatures are putting pressure on the propane industry, as prices have soared and some U.S. regions have had supply shortages.

The Transportation Department has suspended delivery restrictions in the South, the Northeast and the Midwest, citing shortages that can be mitigated by allowing delivery drivers to stay on the road for longer hours.

The Wall Street Journal reported Saturday that one energy supplier in north-central Iowa has pushed his retail price to $4.24 per gallon for liquified propane gas, nearly twice the previous record price K & H Cooperative Oil Co. has charged.

“Demand has just been unprecedented,” said the company’s operations and risk manager Eldon Meyers.

Heating bills for the region soared 35 percent in December compared to December 2012, Meyers said.

“It’s hard on people,” he told the Journal. “We don’t like to see our customers go through this.”

Farmers in the Midwest are taxing supplies, given the need to keep livestock warm and the need to dry feed that was put into storage after a particularly wet harvest season.

“I’m going to make sure my animals are warm even if I have to forgo something else. That’s my income,” said Ringsted, Iowa, farmer Jim Boyer, who raises 16,000 hogs each year and keeps eight livestock buildings at 82 degrees Fahrenheit.

Boyer estimated the budget for the year will come up $9,000 short due to the high price of propane.

During the week, Senator Chuck Grassley (R-Iowa) asked the Federal Trade Commission “to prevent possible anti-competitive behavior or illegal manipulation,” of the stressed propane market.

The commission confirmed it is reviewing Grassley’s request.

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