Agriculture Margins Are Tight — Farm Propane Can Help

Across America, farmers are finding a troubling picture on their balance sheets. Input costs are rising out of control, especially for fertilizer and fuel. 

Nearly 60% report their finances are getting worse, according to a recent Farm Bureau survey, and only 6% say their finances have improved over the last year. Between February and mid-April alone, farm diesel prices increased 46%. And that’s on top of spiking fertilizer costs: Across commodities, most farmers report they can’t afford all the fertilizer they need. 

Farmers need solutions now to lower input costs without compromising on productivity or efficiency. Propane can be part of the solution. 

Lower Costs Farmers Can Count On 

While gas and diesel prices have risen to or near record levels in many states, propane prices have remained more stable and affordable for farmers. 

Since the fuel is domestically sourced and stable, it’s not subject to the same supply shocks as other fuels, making its longstanding cost advantage even more noticeable in times like these. 

Even before the latest fuel price spikes, propane offered a clear advantage for farmers’ balance sheets. Lance Shebelut, a producer in California’s Central Valley, saw the cost difference almost immediately after installing a propane-powered irrigation engine. 

For 10 days, Shebelut ran irrigation engines on three wells. One was powered by electricity, one by diesel and one by propane. During that time, he spent: 

• $22,000 on electricity 
• $14,000 on diesel 
• $8,000 on propane 

Another California producer, Ned Harris of H&H Farms, also saw substantial savings after installing his propane engine, expecting “a savings in fuel alone of probably between 35% and 40% overall.” 

Energy prices remain uncertain, and even if diesel and gas volatility calms, prices could remain elevated for the rest of the year or beyond, as gas prices are quick to rise and slow to come back down. 

Even beyond fuel costs, this equipment can help farmers’ balance sheets in other ways. For one thing, propane engines are typically more affordable to maintain. Since propane is cleaner at the point of combustion, there’s less engine wear. That means less frequent maintenance, less downtime and greater efficiency, with none of the aftercare required of diesel engines. Equipment is ready to use during the narrow weather windows when it matters most. 

Propane is also harder to steal than diesel. Because of the way it’s stored, propane can’t be siphoned from a tank, so nonmobile ag equipment — like an irrigation engine — doesn’t need around-the-clock surveillance. 

Keeping the Heat On, Affordably & Reliably 

However, when farmers consider the cost-effectiveness of propane equipment, they shouldn’t just look at upfront costs and per-gallon fuel prices. They should also consider how energy reliability will impact the quality of their crops and livestock. 

By giving farmers independence from an electric grid that’s growing increasingly unstable, propane-powered equipment can keep operations running even during prolonged outages. 

Facilities that use propane for standby and prime power generation can keep the lights on when the grid can’t, and compared to diesel, propane is safer to store on-site and not prone to degradation over time. 

These benefits can be especially meaningful for livestock operations, reliably providing the heat that plants and animals need. Poultry brooders are one example: Propane infrared poultry heaters reduce fuel use by about 15% compared to forced-air furnaces. 

Meanwhile, propane-powered building heating systems can lower operational costs and improve the farm’s bottom line for producers planning new facility builds or expanding existing footprints. In a hog operation, for instance, pigs’ health depends on consistent warm temperatures in the nursery, and propane is just the fuel for that job. 

Greenhouses are another use case where propane can provide valuable reliability. Iowa’s Swift Greenhouses uses a range of propane-powered heating systems, from forced-air furnaces to bottom-heat boilers, to maintain consistent temperatures. This investment pays off with higher-quality, healthier plants: Propane-fueled boilers equipped with a carbon dioxide (CO2) condenser can provide both heat and CO2 supplementation to greenhouses, increasing plant growth rates. 

In short, propane can be the difference between keeping engines running during a blackout or having the systems go offline and potentially losing crops and animals. 

800,000 Farmers & Counting 

Many farmers already trust propane. More than 800,000 use it in their farm operations, and about half use it as an energy source in their homes. They already know propane offers clear advantages over the alternatives: It consistently costs less and avoids the price fluctuations associated with diesel, and they’ve seen its ease of use and consistency. 

This past experience can make producers more likely to consider propane for new uses, as well. In 2024, California’s Crain Orchards purchased a 22-liter, propane-powered irrigation engine after having positive experiences with propane in other areas of its operations in the past. 

“We needed something reliable that could scale with us and reduce our maintenance overhead,” said a Crain Orchards representative. “Propane was already working well for our other equipment, and with [funding from the Propane Education & Research Council (PERC)], it made financial sense to invest further.” 

Know Your Farm Propane Programs 

Given today’s tight agricultural economy, some farmers are hesitant to make big-ticket equipment purchases. However, targeted upgrades can still make excellent financial sense. 

There are also programs that can offset up-front equipment costs. For example, through PERC’s Propane Farm Research Program (PFRP), producers can receive up to $10,000 toward qualifying propane-powered equipment they purchase as compensation for reporting performance data to PERC. Eligible equipment includes industrial engines for irrigation, power generators, water and building heating systems, poultry house sanitization equipment and flame weed control systems. 

In all, this compensation can help offset up to 25% of up-front equipment costs, which are already often lower than those for electric and diesel options. 

One Nebraska producer, Randy Vana, described his experience with the program: “It makes the propane engine very economical in comparison to what a diesel would cost you. It’s really simple to do.” 

Long-Term Affordability 

Today’s conditions are placing serious strain on farm finances, and propane-powered equipment can provide short-term relief while also helping insulate producers from future price shocks. 

By showing farmers how propane can help in both the short term (consistent, affordable pricing, with research programs like the PFRP to help offset up-front costs) and the long term (reliable heat and power, with a dependable, long-term supply), we can help farmers’ balance sheets today and tomorrow.