Written on: June 28, 2022
An afternoon of discussing industry issues was hosted Monday, June 27 by PERC President and CEO Tucker Perkins and Senior Vice President, Industry Relations Bridget Kidd. Attendees from several Midwest States including Missouri, Kansas, Oklahoma and Arkansas sat down to talk about a wide variety of topics for several hours and then had dinner that evening. The event was held in Olathe, KS a day prior to the start of the Midstates Management Forum.
Key highlights of topics discussed included:
It was agreed that with propane inventory at the bottom of five-year averages and crops planted late, there are legitimate concerns about supply for winter 2022-23. In addition, with caverns shut down on short notice recently in the Midwest, attendees expressed concern about availability of propane supply as some may start to pull from alternate sources creating a ripple effect of bottlenecks.
With Conway, KS inventory near the five-year low, Perkins encouraged attendees to continually monitor weekly crops reports and a PERC tool which monitors agriculture data and predicts moisture levels at harvest time. He also encouraged marketers to work on getting customers to fill tanks this summer. One attendee noted her company was having success with an offering of 2020 propane prices for those filling bottles. Many agreed that propane near $2.00 looks more attractive next to motor gas at $5.00 and diesel at $6.00.
While acknowledging no magic bullet had been found, Perkins asked for thoughts on what was working in the area of recruiting propane industry employees. Vets2Techs and Generation Next were discussed by representatives Jesse Lord and Michelle Wilson. In addition, Kidd discussed successes of NC-TEC, the North Carolina Technical Education Center. Other Trade Schools including the Lenoir Community College were also discussed.
MARKET SEGMENT PRIORITIES
Perkins noted that every region of the country is different and therefore PERC approaches each area of the country differently. For instance, while many retail propane companies in North Carolina sell propane appliances, most in Missouri do not. Segments attendees noted were low priority for them included RV’s, schools, grain drying and chicken facilities. Autogas was mentioned as a market segment becoming higher priority, especially with demand for propane school buses.
In response to the question, “Who are you most concerned about losing residential propane business to?” responses included the geothermal heat pump, competition from other retailers and wood.
Some attendees said they have good relationships with builders. Water heaters and backup generators are popular products attendees work with builders on the most. Marketers said they work with builders to try to encourage more propane use in new construction. Perkins discussed incentives that are currently available through PERC for multiple propane uses. He noted growth in the manufactured housing category.
In discussion of forklifts, attendees were not seeing dramatic migration to or away from propane powered forklifts lately. Perkins noted progress being made in ports and sub-ports. There was discussion of the new Cummins 6.7 engine which runs on propane replacing diesel and providing more horsepower. Continued concerns and issues with the Freightliner S2G were discussed by marketers who had had ongoing problems.
“There are zero reasons to buy a diesel bus,” Perkins said as the discussion turned to school buses, noting that a propane bus can run for less than 2/3rds of the cost of a diesel bus. The group discussed paratransit buses which have great potential in the current fuel pricing environment.
Participants were encouraged to learn about the National Star Route Mail Contractors Association which has the web address nsrmca.org. The organization is very interested in and passionate about moving to propane and the Cummins 6.7 engine.