But propane price drop is a boost

Gas price slide little help to Eastern Ontario farmers

By Brandy Harrison

KEMPTVILLE — Crossing their fingers that diesel will take a similar dive, farmers aren’t getting worked up over jaw-dropping prices for regular unleaded gasoline at the pump — which dipped below 80 cents per litre in January.

“Compared to diesel and fertilizer prices, it’s pocket change,” says Picton crop farmer Lloyd Crowe, who runs Reynolds Farms with his uncle, Larry Reynolds. He may only fill off-farm vehicles once a week, but every little bit helps, he says.

Unleaded gasoline averaged 87.8 cents per litre in Ottawa by the second week of January, nearly a 40-cent drop over the same time last year, according to MJ Ervin & Associates, which conducts a weekly survey of prices for gasoline, diesel, propane, and furnace fuel.

Gas prices could sink lower and won’t recover right away, but might start to increase in the second half of the year, according to a report last month by the International Energy Agency, which represents 29 Western countries and provides global energy statistics and analysis.

“If diesel drops the same percentage, we’d be a lot happier,” says Douglas crop farmer Scott Dick, who only uses 400 to 500 litres of gasoline per month.

The wholesale rack price for diesel in Ottawa has levelled off, shedding nearly 34 cents since last January, but it’s been gradual. Coloured diesel follows the pump price but is exempt from the 14.3-cents-per-litre provincial fuel tax for farm equipment.

Propane has been the bright side, says Dick, who estimates the agricultural rate for propane may be as low as half to one-third the price of what it was last year in his area.

“That really helped us out this year. We had to dry everything. We have maybe five per cent of the crop that didn’t get dried,” he says.

Propane prices spiked last winter when a cold spell and a wet U.S. harvest drove up demand at the same time weather disrupted delivery and U.S. exports reduced supply. Retail prices were back to under $1 per litre by last April, according to the Ontario Ministry of Energy.