Best pellet price Ever, Even I was Amazed $8.90 / Bag

Jim Kelt, above....too verbose to cut-and-paste

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Exactly! The price of ANY energy source is subject to supply and demand! Heck, if wind power got popular, the guys making the turbines and associated accessories would likely charge more as well.....oil, gas, coal, and yes, even cordwood could also follow suit with similar arguments.

Jim brought up a great point thats starting to worry me tho:

The pricing of pellets in my opinion is also very tightly tied to supply and demand. Let’s face it, if pellet manufacturers, and dealers hadn’t pulled East so much fuel from the West coast (Canada), the price in New England would be o.k. and we probably wouldn’t be sitting on so much excess, and likewise, the west coast wouldn’t be having shortages with escalating prices… I know the pellet guys spend a lot of time talking about getting fuel where it is needed and how, but other than a crystal ball I don’t think they have the magic formula yet…

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There is certainly a surplus of pellets here in New England right now. We are seeing prices fall for two reasons....one being the warm winter with lackluster pellet sales, and two, the great surplus that currently exists from several suppliers bringing in product from the West Coast. What does this portend for the pellet supply in the winter of '07-'08? Bad news, I fear. Since I see here that the guys on the west coast seem to have shortages, and we have alot of excess pellets right now (not so much me, but the suppliers of pellets), I think next year, the west coasties will "stock up" on product, creating a supply-heavy market there, and less pellets will come here to the NE. Also, since the suppliers are getting crushed with their inventory here in NE, they will either export it to Europe, or not stock anywhere near as much for next season. I see this creating a void of pellets in the NE, which will again cause shortages like we had in '05-'06. Not all grim, because there is opportunity here for folks who might think Im right....and trust me, Im not always right, except where politics come in !....Anyhow, look for pellets in the mid-spring to come down considerably in NE, and take that opportunity to buy them at possibly a discount! If Im right, and there is another scarcity of pellets this fall, the price will again skyrocket, and Ill have to sit here trying to defend the price-gougers in pellets while having to listen to the wood scroungers rant more! Except I will have one consolation! I will have the "I-told-you-so" consolation.....which I will point to at the appropriate time, unless Craig cleans house and deletes it again.

As for the magic formula for pellet supply, i havent figured it out yet. Weve spent years in the bidness, and every year, EVERY SINGLE YEAR, its a different business. Last year, it was how can I get enough pellets to supply my customers, this year, Im worrying about whether my suppliers can weather the storm (or lack thereof!)....For example, on a rising market, how much to make on the pellets so you are being fair, but still have enough capital left after the sale to buy new, higher-priced product. Certainly an interesting bidness, isnt it?

Pellets and wood both have there pros and cons, but you cannot compare the two. Wood will always be cheaper to heat with, that is until you start finding huge heaps of pellets on the side of the road for your scrounging pleasure.

BeGreen said:

Harry, you hit the nail on the head. Supply and demand impacts fuel prices. Always has. And now there is a lot more global competition for heating fuels to support a rapidly growing worldwide population.

There is increased concern about the large amount of farms and acreage that are switching to growing corn for ethanol production. This is already showing signs of impacting other farm production, in particular, soybeans. It's also very likely to directly impact the cost of food at the market as the price of corn rises and affects everything from Fritos to beef. The impact on soybeans is important because that impacts biodiesel which is growing rapidly in this area.

Keep a stick on the ice... We're all in this together.

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Got to agree you on with this one. All winter we've commented about the new pellet plants coming on line, new types of raw material for bio-mass burners, new stove technology to utilize the new fuels. Even wood burners are going high tech. Soon even the average wood burner will plug into an outlet.

If demand were high for stoves this month Lowe's wouldn't have their below cost stove blow-out sale. On the other hand, pellets have been doing OK, so there's no break in price. Reducing cost of production by bringing plants closer to the users will help with the costs for transportation. Manufacturers may lose some accounts to local producers, thus freeing up product for those areas on allocation, or shortages. I think with the amount of production in the West and North West. we will never see a glut of pellets, but should see the price come down. Midwest should see cheaper prices for corn, Central and North Central states will see bio-mass bloom. North East will still be cheaper for cord wood.

So, pick your region, pick your poison.

BrotherBart said:

Driz said:

Gee. And to think I Started this brawl by simply pointing out a single case of overpricing and it degrades into a brawl. I offer a partial explaination for this. One thing that stands out to me is that when people are stressed in some way it just acts in a contageous manner and everyone joins in. Post 911 was the same way. Although the vast majority of us were actually completely unaffected everyone got stressed and it really showed. I noticed it for a long time afterwards. See, we aren't any different than the lab rats and chimps after all. In this case I just mention someone being a ripoff and everyone gets stressed. Hell, maby it isn't even true after all. All I did was call and the girl who answered looked it up, ( I could tell by the time lapse in the answer). Mabe she read the wrong line, who knows. I didn't care enough to go look obviously. The lesson here is when someone points out some unhappy remark no matter how generic try not to let it drag you down. There, Soc 401 class dismissed. Everyone should drink more beer and have a good time......................................

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Could have been a lot worse. You could have dissed PE Summits or mentioned convection vs. radiant heat. Or set off the Army of One and took a shot at VC stoves!

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****************** :lol: *********************

WHAT!?!?!?

o'....... ok , My PE Summit radar went off but everything checks out alright here , carry on .

[quote

Could have been a lot worse. You could have dissed PE Summits or mentioned convection vs. radiant heat. Or set off the Army of One and took a shot at VC stoves![/quote]



lmao

BeGreen said:

Mike, that's a somewhat provincial reply. Cordwood vs pellet prices vary dramatically around the country. Same for the quality of cordwood. In our neck of the woods pellets are reasonably priced and softwood cordwood is going for $200/cord. Pellets at $139-180/ton are a good deal here, especially in an urban environment where the air quality when there's lots of wood burning degrades rapidly.

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I'd agree with BeGreen on this point - cleaner. I also think the calculator would come a lot closer to backing him up that financially, it is a much closer case when you can get pellets for $139/ton, and you're paying $200/cord for SOFTwood.

I'm indeed making an argument based on the New England market w/bountiful hardwood and expensive pellets. And in this market, it can do a disservice for someone struggling financially to be led to believe they will save a ton of money with a pellet stove, unless they have a really high cost energy source. At $2.20/gallon, oil is not high cost when compared to $250/ton pellets.

I promise not to argue with anyone who says buy a pellet stove because it's easy, cheaper than New England electric/propane, or simply a statement against big oil.

:lol:

-Colin

Well I dont know about the industry screwing us is that far off from the truth.

Around here in the Canadian Maritimes there are three pellet factories.

One of them only sells minimum 5 tons of pellets and their prices seem to be okay as they have a waiting list for several years ahead.

The other two are in separate provinces.
One is Confy cozy in New Brunswick and the other Shaw is in Nova Scotia.

And they are both available at different stores.
One is available at Kent's and the other Home Depot.

Guess what their price difference is?
...
Do you need some more time??
...

Thats right! No difference.

They are the same price, and right now they are at $4.99/bag (Canadian dollars)

What does this tell you?

Two different factories, two different retailers, two provinces, same price??
Can someone explain supply and demand again please?

And yes at $4.99/bag all other energy sources are cheaper except for electric baseboard.

Hammerjoe said:

Well I dont know about the industry screwing us is that far off from the truth.

Around here in the Canadian Maritimes there are three pellet factories.

One of them only sells minimum 5 tons of pellets and their prices seem to be okay as they have a waiting list for several years ahead.

The other two are in separate provinces.
One is Confy cozy in New Brunswick and the other Shaw is in Nova Scotia.

And they are both available at different stores.
One is available at Kent's and the other Home Depot.

Guess what their price difference is?
...
Do you need some more time??
...

Thats right! No difference.

They are the same price, and right now they are at $4.99/bag (Canadian dollars)

What does this tell you?

Two different factories, two different retailers, two provinces, same price??
Can someone explain supply and demand again please?

And yes at $4.99/bag all other energy sources are cheaper except for electric baseboard.

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Who's setting the price? The retailer determines what you are charged, unless you are buying directly from the maker.

Are your prices based on buying direct, if so what would the 5 tons cost? Why not form a co-op and several people buy a truck load or two.

I have two pellet operations close, one 30 miles away, one 75 miles. Both make good pellets, but not premium. I can buy pellets from retailers, locally for within $10. per ton without having to drive the round trip. A slightly better price from a maker 140 miles away, but the fuel cost eats up the savings.

The local makers want to keep their direct sales at their retailers level. By not undercutting the retail price they can sell by the truckload, not the bag.

Still, we are less than $200.00 per ton.

Who's setting the price? The retailer determines what you are charged, unless you are buying directly from the maker.

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I dont know who is setting the price, I am just a consumer, not an insider.
I find it odd that two pellet makers, both hundreds of miles apart, both with different retailers for their product and yet in my city they both sell for the same price!
I cant understand this.

Are your prices based on buying direct, if so what would the 5 tons cost? Why not form a co-op and several people buy a truck load or two.

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Its not the fact that its a minimum of buyng five tons, but you actually have to wait years to be able to get them.
That's what I've heard, I haven't really looked into it.

I have two pellet operations close, one 30 miles away, one 75 miles. Both make good pellets, but not premium. I can buy pellets from retailers, locally for within $10. per ton without having to drive the round trip. A slightly better price from a maker 140 miles away, but the fuel cost eats up the savings.

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Yes, but do they cost the same?

Hammerjoe said:

Who's setting the price? The retailer determines what you are charged, unless you are buying directly from the maker.

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I dont know who is setting the price, I am just a consumer, not an insider.
I find it odd that two pellet makers, both hundreds of miles apart, both with different retailers for their product and yet in my city they both sell for the same price!
I cant understand this.

Are your prices based on buying direct, if so what would the 5 tons cost? Why not form a co-op and several people buy a truck load or two.

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Its not the fact that its a minimum of buyng five tons, but you actually have to wait years to be able to get them.
That's what I've heard, I haven't really looked into it.

I have two pellet operations close, one 30 miles away, one 75 miles. Both make good pellets, but not premium. I can buy pellets from retailers, locally for within $10. per ton without having to drive the round trip. A slightly better price from a maker 140 miles away, but the fuel cost eats up the savings.

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Yes, but do they cost the same?

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Hammerjoe:
1. Retailers set the price. No supplier can dictate the asking price, there is the manufacturers recommended price, but they can not dictate the price. So if you are buying retail, ask the store if they consulted other store for their price. If they agreed pon a price it's called "price fixing" and is against the law in Canada as well as the USA.
2.Check the price yourself before saying you have to wait and you don't know how much. We went through this on the forum with the mysterious burning down of a major pellet plant. It didn't happen.
3.Prices are within $10. per ton, pallet loads, you pick up at their facility. I can buy Lignetics or Eureka from a retailer locally for the same amount and only drive two miles. My one ton van that can hall a full pallet of 2,000 lbs. gets 12 mpg. You can figure the added cost.

How times have changed. This time last year, a local hearth shop could only get in a couple of tons of high-ash pellets per week, and they were sold out immediately. Now, with a warm winter and pellet prices through the roof ($300.00 per ton), he has a massive inventory of pellets that no one is buying. I don't begrudge the guy from making a living, and would gladly buy from him if his prices were reasonable. The guy wants $40.00 for a 12-inch section of dura vent. Cans of stove paint are $17.50. He wants $3600.00 for a Harman Accentra that everyone else has for $2800.00. I want to support the local guy, but will take my business elsewhere.

$3.58 a bag this last weekend at Menards in the Twins, MN, Lignetics which is a good pellet IMHO. Picked up my last ton for the year!

$3.58?? Wow that is really a good price, and imo a fair price as well.

UNCLERICH: The price is the same, and of course they will tell me that they didnt contact the other retailer. This is a classic example of competition here in Canada. "hmm the other store is selling brand X for $4.99, ours is $4.29, lets increase the price to the same and gouge customers a little bit more" kinda competition.

Truth is, pellets above $4.00 are overpriced imo. We are talking about waste wood here. When added all the costs involved I dont think a bag comes close to $3.00.
March last year pellets were $3.25/bag around here. What the heck happened in the wood industry to have pellets increase more almost 100%??

Hammerjoe:

Good points. Seems retailers do raise prices to what the market will bear. But when those sellers are sitting on tons of unsold pallets, they will re-think and say, "Gee, if we drop the price $.20 per bag we might sell some of these. Look what's happened with our Lowe's, dead merchandise, all seasonal heating. 50% off and out the door. Went by the local store yesterday and they were almost cleaned out. Pellets are still at $4.39.

I paid an average of $3.30 this year, but I have enough to last the season. I will likely buy for next year on this years close out sales, even if they are at the $3.00 price. I don't want to get caught by the spiked price anticipating greater demand at the start of next years season. My regular supplier has had a constant price since early December, but I know they are sitting on 30 tons. Unless we stay as cold as we are, they will have them in March.

Hammerjoe said:

$3.58?? Wow that is really a good price, and imo a fair price as well.

UNCLERICH: The price is the same, and of course they will tell me that they didnt contact the other retailer. This is a classic example of competition here in Canada. "hmm the other store is selling brand X for $4.99, ours is $4.29, lets increase the price to the same and gouge customers a little bit more" kinda competition.

Truth is, pellets above $4.00 are overpriced imo. We are talking about waste wood here. When added all the costs involved I dont think a bag comes close to $3.00.
March last year pellets were $3.25/bag around here. What the heck happened in the wood industry to have pellets increase more almost 100%??

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I have not raised my price since last summer
I’m selling my pellets for $265 per ton. At this time I have the only supplier that is getting truck loads(S) in every week. I still have not raised my price.
we taking advance orders for pellets we are about a week behind.

As far as heating cost
I don’t think the calculator is accurate ether.

I look at the hard #'s and the convenience of each type of heat.

In our Mild to cooler climate winter Oct through April Average temp Lows 35 high 60
But we do Drop down lowers a few days a week.
Except the past two weeks every day has been lows 8 and high 40.

Most homes in my area are 1600 -3500 sq feet

My wood stove customer’s use 3 – 5 cords a year in a NEW EPA clean burning stove.
If they buy their wood the local cost is Cost $600 - $1,000 per season.
If they cut their own I say the cost is around $100 plus TIME ( I don’t have)

If you bought your wood or cut it your self you still have to split and stack and keep dry kindling.
Fill the stove every 3 – 6 hours
Most people don’t keep a stove going or a home a constant regulated temp like a Pellet stove or Gas heat.
Clean out a stove every day or so.

Most of my pellet customer’s burn 100 -150 bags per year.
That’s $600 to $900 per season Delivered for burning the stove for a main heat leaving the stove on most of the time and keeping your home at a requlated tempature.
Pellets you have to keep the pellets On hand and DRY
Fill the stove once a day.
Clean the stove out once a week or so

My customers that have Gas stoves that tend to be more frugal and only have the stove on when they are in the room or need the heat spend $150 - $300 per MONTH for LPG.
Not much maintinance

I have a 1900 sq foot ranch home
We use 150 bags of pellets per year and keep the living area 72+ deg 24 hours a day.

I have a 500 gal LPG tank I have it filled once a year and cost about $1000 to fill
I use the LPG for Cooking, Dryer, and hot water. We use a pellet stove for heat but my Furnace does come on once or twice a night for a few minutes to help get the back rooms warm just before bed. I have a 2 year old now and have to keep her room warmer.

If I kept our home this warm with just the LPG furnace I would spend over $300 per month in LPG and still feel cold for you don’t have down to the bone warmth with a forced air system nor does it heat the objects or floors in the room.

This is what most people tell me that come in looking for a wood or pellet stove that have the same KIND of home I have. They say they spend $300 + per month to keep there home around 65 – 68 only when they are home.


For the Convenience, Temperature Regulation and warmth my opinion is you still cant beat a pellet stove.

hearthtools said:

I have not raised my price since last summer
I’m selling my pellets for $265 per ton. At this time I have the only supplier that is getting truck loads(S) in every week. I still have not raised my price.
we taking advance orders for pellets we are about a week behind.

As far as heating cost
I don’t think the calculator is accurate ether.

I look at the hard #'s and the convenience of each type of heat.

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Be careful... calculator doesn't look at convenience... only dollars. No argument here that it's easier to dump pellets than haul wood. But it's easier still to flip the oil burner switch though, so that cost comparison is also interesting when you weigh convenience.

My wood stove customer’s use 3 – 5 cords a year in a NEW EPA clean burning stove.
If they buy their wood the local cost is Cost $600 - $1,000 per season.
If they cut their own I say the cost is around $100 plus TIME ( I don’t have)

If you bought your wood or cut it your self you still have to split and stack and keep dry kindling.
Fill the stove every 3 – 6 hours
Most people don’t keep a stove going or a home a constant regulated temp like a Pellet stove or Gas heat.
Clean out a stove every day or so.

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This I would question... my impression is a significant fraction of hearth.com users do achieve regular 8-12 hour burn intervals, and run their stoves 24x7. Maybe different attitudes or climate out west?

Most of my pellet customer’s burn 100 -150 bags per year.
That’s $600 to $900 per season Delivered for burning the stove for a main heat leaving the stove on most of the time and keeping your home at a requlated tempature.
Pellets you have to keep the pellets On hand and DRY
Fill the stove once a day.
Clean the stove out once a week or so

My customers that have Gas stoves that tend to be more frugal and only have the stove on when they are in the room or need the heat spend $150 - $300 per MONTH for LPG.

If I kept our home this warm with just the LPG furnace I would spend over $300 per month in LPG and still feel cold for you don’t have down to the bone warmth with a forced air system nor does it heat the objects or floors in the room.

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No argument there - in fact, LPG does generally show up as a more expensive option in the calculator, even when compared to high pellet prices.

For the Convenience, Temperature Regulation and warmth my opinion is you still cant beat a pellet stove.

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I think this thread is actually hitting some very good points. Once again, a west coast poster clearly suggests a very different market and cost tradeoff compared to New England. Let's run some numbers thorugh the calculator:

East Coast -

Oil at 2.25 / Pellets at $250 per ton / Hardwood at $150 per cord (NY market; similar for Mass too I think)

Oil = $20.60 per million BTU
Pellets = 22.14 per million BTU
Hardwood = $8.57 per million BTU

West Coast -

LPG seems more common than oil. Assume 1.90 default / Pellets at $150 per ton / Softwood at $200 per cord

LPG = $27.04 per million BTU
Pellets = $13.29 per million BTU
Softwood = $17.71 per million BTU

So on the west coast, using rough numbers from BeGreen, Pellets indeed win on cost. Yet on the east coast, they lose in a landslide to wood, and even come up short against oil in the current market. This goes a long way towards explaining the often violent arguments on hearth.com!

I also think the calculator just did a good job of backing up Hearthtool's and BeGreen's arguments - even if pellet prices go quite a bit higher on the west coast. And it might be fair to say that a casual one burn at a time user will not achieve 70% efficiencies burning wood. For that individual, you could lower the expected efficiency on the wood stove application to reflect that. Believe it or not, the calculator is not fundamentally biased against pellets - it's actually a useful tool to evaluate your current local market condition. If oil is up at $2.75/gallon like last season, or pellets drop back below $200 a ton, things start to turn around again for pellets on the east coast. This is why for informed consumers, the pellet supply chain and pricing is such an important consideration to weigh carefully when making a major investment in a pellet stove. This really highlights how wildly different things can be depending on where you live and current market conditions.

-Colin

That was my point
I look at The LOCAL hard #'s

The largest reason for Pellets price is Shipping cost.
Shipping cost us more that the pellet fuels itself.

LPG prices are from $1.95 - $2.20 Bulk Commercial rate to $2.10-3.00 for residential tank fill and meter rate.
you also have to look at the $65 to $95 year tank rental. To buy a tank is around $1500

Local wood is mostly Hard wood Oak or Fruit/nut wood from The California Valley Farms.
Del price Im seeing in the Paper is $165 -$190soft wood
$240-$265 hard wood.

Pellets are $200 to $275 per ton.

We live in the mountains and have millions of acres of National forrest to cut on with a permit.
BUT my time is $$ and I rather spend the ONE day or 1/2 day off a week with my family then cutting wood.

Yes people do get a 9- 12 hours burn but that is most of the time banked down low burn for night.
When people are home they tend to the fire more and load more often if they are sitting infront of it.
You know like camping people love to poke at the fire.
But look how many people come home to a cold house and have to start a fire.
Or they have the house to hot and have windows open.

and YES most people Burn 24 hours but a lot of people LIKE MYSELF are not home for 10-14 hours a day
(work half days 6am -6 or 7pm)
NO ONE HOME TO STOKE THE FIRE. Pellet stove is automatic.

I set my stat for my pellet stove for 72 deg and leave it.
Burn my bag of fuel a day.
No cutting,No spliting, No digging in the post office trash for News papers, No stacking, no smoke in the house, No bugs from the wood in the house.
No burnt rugs, Black ceiling.

The best way to beat this Price hike and NOT RUN OUT is to shop around in the OFF season and STOCK up for the full year.
People do this with wood why cant they do this with pellets?

Just about everyone's outcome for the cost comparison will be different. The when, how much, and from who impacting each one. People in my area who did early buy this year got fuel for about $230 a ton, or Cost per million BTU=$16.12, while oil at (probably very short term price drop) $2.25 a gallon is Cost per million BTU=$20.38, not to mention what the oil early buy was last spring at $2.69 a gallon- or Cost per million BTU=$24.37.
I would like to also mention that it is not always the dealerthat is raising the price (because he can or for any other reason). The manufacturers have raised the price. We have actually cut our margin on the pellets to ease the price increase for our customers. There are many reasons for raised prices, including transport costs-like bringing fuel in from western canada to new england, and raw material cost many pellet man's now find themselves competing for. It is still one of the more stable fuels price-wise in my opinion. Like I said in an earlier post supply and demand will take care if the price swings too far in either direction(unless you bring up the whole losing our fuel to Europe thing, but I don't want to beat a dead horse).

I don't burn pellets, I burn rice coal. But in Europe, they deliver bulk pellets in a truck that pumps them (via air) into bulk storage bins in your home, much like I do with my coal. Maybe some pressure on the industry to get with the european model on this. They've got to be much cheaper that way. Am I dreaming?

coalkirk said:

I don't burn pellets, I burn rice coal. But in Europe, they deliver bulk pellets in a truck that pumps them (via air) into bulk storage bins in your home, much like I do with my coal. Maybe some pressure on the industry to get with the european model on this. They've got to be much cheaper that way. Am I dreaming?

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New England Pellet delivers like that but not many people in the city would want a silo next to the house.