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Agriculture - Propane Education and Research Council · 2020-02-18 · Mobile Agriculture Equipment...
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Transcript of Agriculture - Propane Education and Research Council · 2020-02-18 · Mobile Agriculture Equipment...
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Agriculture Overview Agriculture is a major facet of the United States economy and is expected to remain highly productive over the long run. The United States is one of the largest producers of corn and soybeans in the world. Crop prices are expected to gradually rise throughout the next decade, though lower than they have been over the last ten years. Total crop output is expected to increase on the back of increasing yields and innovation within the agricultural sector. This creates an opportunity for propane to be utilized in increasingly essential ways, including in mobile agricultural equipment. In addition, small-scale agriculture in the form of grow operations, particularly on the West Coast, presents another exciting opportunity for propane. Mainly indoors, these small agricultural sites make propane an ideal fuel for greenhouse and irrigation needs. Presently 33 states allow for the growth of medicinal cannabis while 11 others allow growth for recreational purposes. Driven by popular support and the need for increased tax revenue, state legislatures are moving quickly to expand grow operation permissions within their states. Getting into the nascent cannabis growing space could provide a foothold for propane as the crop is expected to become more common, potentially even becoming a common row crop, requiring large-scale irrigation and harvesting equipment.
Demand In agriculture, fuel demand has been generally flat between 2012 and 2017 and is expected to decline by 2030. Diesel has the largest market share, at almost half.
Total Agriculture Demand
Source: Propane Education & Research Council
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Propane Market Share of Agriculture Demand
Irrigation Engines Over the past 10-15 years, electric irrigation engines have gained market share at the expense of natural gas, propane, and diesel. Propane has maintained a 2% market share of irrigation engines over the past 10 years, while electricity has seen a 5% increase. Electricity maintains an almost three-quarter share of all US irrigation pumps (See chart below).
United States: Power Source Market Share of On Farm Pumps for Irrigation (2018)
2%
74%
17%
5%
2%
LP Gas, Propane, Butane Electricity Diesel Natural Gas Gasoline
Source: USDA Census of Agriculture
Source: Propane Education & Research Council
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Irrigation Engine Pumps by Energy Source and Year
Greenhouses/Building Heat In the US, there is over 1.4 billion square feet housed under glass protection or greenhouses. The top 10 states for square footage house three-quarters of that footage.
Top States for Square Feet under Glass
Cannabis Market With US sales of cannabis expecting to quintuple from $8 billion in 2018 to $41 billion by 2025, the market has become a major opportunity for propane retailers. In Northern California alone, the total area under cultivation increased by 91% and the number of farms increased by 85% from 2012 to 2016. The majority of cannabis facilities are located in the west, followed by the south (see map below).
Source: USDA Census of Agriculture
Source: USDA Census of Agriculture
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Survey Participants’ Indication of Grow Sites
With the rise in sales has also come an increase in the cannabis production square footage. According to a study by the Cannabis Business Times, growers have indicated an overall increase in production square footage. From 2016 to 2019, production square footage of at least 50k has increased 13%, while production under 10k has decreased 16%.
Cannabis Production Square Footage
Size 2016 2017 2018 2019 CHANGE from 2016 to 2019)
80,000 sq. ft. or more 7% 7% 17% 15% ↑8% 50,000-79,999 sq. ft. 3% 5% 5% 8% ↑5% 25,000-49,999 sq. ft 12% 13% 10% 13% ↑1% 10,000-24,999 sq. ft. 15% 21% 15% 21% ↑6% 5,000-9,999 sq. ft. 24% 20% 19% 14% ↓10% Less than 5,000 sq. ft. 34% 32% 33% 28% ↓6% Note: Data based on a survey conducted by the Cannabis Business Times
Source: Cannabis Business Times
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Mobile Agriculture Equipment Mobile agriculture equipment consumes a large amount of energy, making it the perfect opportunity for propane. The following charts on tractors and other mobile agriculture equipment are meant to provide an understanding of yearly sales and engines used in each application, as well as stimulate conversation. For a list of agriculture equipment definitions, see Appendix.
2-Wheel Drive Tractors (Diesel): Sales Quantity of Units
4WD Articulated Ag Tractors (Diesel): Sales Quantity of Units
Source: Power Systems Research
Source: Power Systems Research
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MFWD Tractors (Diesel): Sales Quantity of Units
MFWD tractors do include gasoline engines at the 0-50HP range, although only comprise less than 2% of 0-50HP.
Tracked Ag Tractors (Diesel): Sales Quantity of Units
Source: Power Systems Research
Source: Power Systems Research
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Combines (Diesel): Sales Quantity of Units
Harvesters (Diesel): Sales Quantity of Units
Source: Power Systems Research
Source: Power Systems Research
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Other Ag Equipment Self Propelled (Diesel): Sales Quantity of Units
This application also includes gasoline 0-50HP. Although gasoline makes up around 11-13% of 0-50HP for this application, it is only about 2% of all other self-propelled agricultural equipment.
Other Ag Equipment Stationary: Sales Quantity of Units
Source: Power Systems Research
Source: Power Systems Research
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Specialty Cultivating Equipment: Sales Quantity of Units
Backyard Sprayers: Sales Quantity of Units
Source: Power Systems Research
Source: Power Systems Research
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Self-Propelled Sprayers: Sales Quantity of Units
Skid Mounted Sprayers: Sales Quantity of Units
Source: Power Systems Research
Source: Power Systems Research
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Towable/Tractor Mounted Sprayers: Sales Quantity of Units
Windrowers (Diesel): Sales Quantity of Units
Source: Power Systems Research
Source: Power Systems Research
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Appendix Mobile Agriculture Equipment Definitions:
2-Wheel Tractors Also known as a walking tractor, which is a single-axle tractor. These are self-powered and self-propelled and are used to power and pull farm implements such as trailers, cultivators and plows. The operator usually walks behind this tractor.
4WD Articulated Ag Tractors
Farm tractors built with an articulated chassis very similar to the design used for articulated wheel loaders. Each ‘element’ of the articulated chassis has a rigid drive axle and the front and rear elements are connected by a pivoting/ articulating joint. Note that this design uses rigid (i.e. non-steering) drive axles and is typically used for large, high-HP tractors.
MFWD Tractors (Mechanical Front Wheel Drive)
Farm tractors which feature a rigid chassis with steerable front-drive axles. This designation applies to both full-time 4WD and front-assist-drive configuration tractors across a broad HP range. Both configurations are produced in significantly greater volume than the 4WD Articulated type tractors.
Tracked Ag Tractors
Steerable multitrack tractors with powered rubber tracks instead of wheels to move the vehicle. The crawler-type tracks are flexible and reinforced with steel. They are usually powered by hydrostatic or completely hydraulic driving mechanisms. They can be articulated or nonarticulated.
Combines A farm machine that harvests grain crops. Combines can reap, thresh and winnow crops into a single process. Crops include wheat, oats, rye, barley, corn, etc.
Harvesters The combine harvester, often simply called a combine, is a machine that harvests grain crops. The name derives from its combining three separate operations comprising harvesting—reaping, threshing, and winnowing—into a single process. The waste straw left behind on the field is the remaining dried stems and leaves of the crop with limited nutrients. This waste straw is either chopped and spread on the field or baled for feed and bedding for livestock.
Other Ag Equipment (Self Propelled)
This is a specialized niche market that may include the production of tenders (fertilizers), tree shakers and carriers.
Other Ag Equipment (Stationary)
This is a specialized niche market that includes items such as bedding choppers, bale wrappers and wind machines.
Specialty Cultivating Equipment
This is a specialized niche market that may include the production of dredging equipment and pruning towers.
Backpack Sprayers An agricultural sprayer is a piece of equipment that uses spray nozzles to apply herbicides, pesticides, and fertilizers to agricultural crops. Backpack sprayers are portable units with an attached spray gun.
Self Propelled Sprayers
An agricultural sprayer is a piece of equipment that uses spray nozzles to apply herbicides, pesticides, and fertilizers to agricultural crops. Sprayers can be self-propelled units similar to tractors with boom mounts of 60–151 feet in length.
Skid Mounted Sprayers
An agricultural sprayer is a piece of equipment that uses spray nozzles to apply herbicides, pesticides, and fertilizers to agricultural crops. Sprayers that are skid
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mounted are usually connected to a base and are not considered to be a self-propelled unit.
Towable/Tractor Mounted Sprayers
In agriculture, a sprayer is a piece of equipment that uses spray nozzles to apply herbicides, pesticides, and fertilizers to agricultural crops. Sprayers range in size from small portable units (typically backpacks with spray guns) to trailed sprayers that are connected to a tractor.
Windrowers Also known as a swather. It is a farm implement that cuts hay or small grain crops and forms them into a windrow. A windrower uses a sickle bar to cut the stems off the crop. A reel helps the cut crop fall neatly onto an auger conveyor which moves it and deposits it into a windrow, with all stems oriented in the same direction.
Source: Power Systems Research
