When will the price of pellets crash?

SXIPro said:

LOL. I just checked CL for giggles. Check out this little gem of a sentence:

condition: new
Are Pellets Stove Broke down that why need to sell pellet $5.00 A Bag ( I Have 42 Bags)
English as a second language, apparently.

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I'd be willing to wager that taxpayers already bought the stove, had it installed, and had the pellets delivered ................. stove is already sold for drug money, pellets are just in the way ...............

bogieb said:

There are very few things that a retailer will take a loss on for long term.
I also find it hard to believe they are paying $7 a bag and selling them for $4.98..

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I don't recall anyone suggesting they are spending 7 bucks a bag..
But I do know that they are not getting rich by any means, selling them
for the price they do.. The Lowes guy himself told me he hates pellets,
because they are such a PITA, and they lose money on them...
There is no huge markup on pellets, trust me.

Dan

Pete Zahria said:

I don't recall anyone suggesting they are spending 7 bucks a bag..
But I do know that they are not getting rich by any means, selling them
for the price they do.. The Lowes guy himself told me he hates pellets,
because they are such a PITA, and they lose money on them...
There is no huge markup on pellets, trust me.

Dan

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Apparently you've forgotten last winter's posts with people paying up to $15 a bag and you must not have seen a post where someone admitted to paying $440 delivered for 1 ton. Several this year have paid at LEAST $350 a ton for the Super Duper Platinum Pristine Pellets. That's 7 bucks a bag.

Lowes guy hates pellets because his fork truck drivers are idiots and take delight in spearing the bags. One Lowes guy took out the rear lights on my trailer two years ago. The manager refused to pay for them saying it was the risk I took picking them up.

If the pellet people weren't making a profit, the plants would be closed. They aren't owned by any charity that I know of.

I paid $345 per ton but these are top shelf pellets.

TimfromMA said:

I paid $345 per ton but these are top shelf pellets.

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My $250 a ton 'bar brand' pellets work fine for me. Old Granddad tastes just as good as Maker's Mark in my old mouth. (well, not really ) For the $95 a ton savings, I can buy 3 liters of Maker's Mark and then won't give a crap how much ash I get.

I was looking to install a pellet boiler, but with pellet prices what they are now it just doesn't make sense. If we decide to put another unit in it will probably end up being a coal burner and I'll burn either wood or coal in that and have it set up with storage. 1 ton of coal is less than the cost of 1 ton of pellets in our area. Most of the restrictions on coal are for the industrial grades of coal and not anthracite. I like having options. If I cant get wood for free like I do now, coal is currently cheaper than the cost of buying wood in my area, especially if the prices stay the same as they have for the past few years.

tjnamtiw said:

Old Granddad tastes.....

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No comment.

simple.serf said:

I was looking to install a pellet boiler, but with pellet prices what they are now it just doesn't make sense. If we decide to put another unit in it will probably end up being a coal burner and I'll burn either wood or coal in that and have it set up with storage. 1 ton of coal is less than the cost of 1 ton of pellets in our area. Most of the restrictions on coal are for the industrial grades of coal and not anthracite. I like having options. If I cant get wood for free like I do now, coal is currently cheaper than the cost of buying wood in my area, especially if the prices stay the same as they have for the past few years.

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i burned coal for more than 30 years and it has advantages and disadvantages. The rage now and rightfully so is the stoker stove. If you go with a hand fired stove I personally would not suggest dual fuel. A true dedicated coal stove that burns coal properly and long lived fires won't burn wood worth a crap ( good for the kindling that gets the coal fire going and that's about it). And a proper wood stove won't burn coal at all. Two completely different animals, the air ways are all together different between the two.. Unless things have severely changed in traditional coal stoves anyway ( stokers aside).

xSpecBx said:

Im sure the big box stores would rather run out early than get stuck selling stock for a discount in april

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I really don't get where this comes from. Lol. No retailer I have ever been in that still has pellets in April discounts them to get rid of them. With online shopping increasing every year retailers are protecting what makes them money... MARGIN. I hear it every single day at work. No discounts of any kind unless absolutely necessary and if we do give a discount we have to inform a manager why

bogieb said:

There are very few things that a retailer will take a loss on for long term. And when they do, it is called a loss leader to bring in customers that will find other things to buy. I wouldn't think of pellets would fit that category. I also find it hard to believe they are paying $7 a bag and selling them for $4.98.

Now, if you were shown "retail price", then that is the suggested price to sell it for, and the one that they will sell to individuals for - not the true cost, nor the price sold to retailers for. The mfg usually will not undercut their retailers as that is bad business for them, so they jack up the retail cost to be a good deal above what the retailers sell it for. And, it makes people think they are getting a good deal when they are shown the MSRP versus the "discount price" that the dealer will give it to them for.

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I am well aware of the differences. I have worked at a big box for 9 years and been a manager now for 5. I know what cost is. And I also know when my screen says "Cost" its what we are paying. All I am saying is when I last looked it was $2 over selling price. Last year when pellets were around $219/ton where I work we were making roughly 30 cents per bag.

Jocko1 said:

I am expecting a huge drop in the price of pellets. With the cost of oil down 40% we should see a big decline in pellets. Just the cost of transporting pellets has gone way down since most are shipped by truck. And also if oil prices drop any further (another 20 percent) the savings you get from a pellet stove is not worth the effort it takes to run it. It's much easier to put on the boiler. Any thoughts?

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Amen Brotha!

tjnamtiw said:

My $250 a ton 'bar brand' pellets work fine for me. Old Granddad tastes just as good as Maker's Mark in my old mouth. (well, not really ) For the $95 a ton savings, I can buy 3 liters of Maker's Mark and then won't give a crap how much ash I get.

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Hell, yer in Georgia, you could't burn enuff to get a cupful of ashes burnin' Infernos .......................

hossthehermit said:

Hell, yer in Georgia, you could't burn enuff to get a cupful of ashes burnin' Infernos .......................

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See what happens when you go south hoss, the blood thins so much that the body needs additional heat, put someone from up north down there and they are running around in bathing suits while the locals are all covered toe to head in heavy winter gear. I just don't understand it.

tjnamtiw said:

Apparently you've forgotten last winter's posts with people paying up to $15 a bag and you must not have seen a post where someone admitted to paying $440 delivered for 1 ton. Several this year have paid at LEAST $350 a ton for the Super Duper Platinum Pristine Pellets. That's 7 bucks a bag.

Lowes guy hates pellets because his fork truck drivers are idiots and take delight in spearing the bags. One Lowes guy took out the rear lights on my trailer two years ago. The manager refused to pay for them saying it was the risk I took picking them up.

If the pellet people weren't making a profit, the plants would be closed. They aren't owned by any charity that I know of.

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I could have sworn that was TSC, where everything is scratched, dented or broken and the h-lo drivers work part time as demolition derby hopefuls....

I think I would have quietly waited until the manager left for the day, noted his vehicle, came back the next day and busted his tail lights and left a computer printed note under his windhield wiper....... You parked here at your own risk a'hole.

Petroleum jelly (vasiline) on the windshield wiper edges works well too. Turn on the wipers in the rain and it's instant 'can't see squat'. Makes for an interesting drive, in traffic.

SidecarFlip said:

I could have sworn that was TSC, where everything is scratched, dented or broken and the h-lo drivers work part time as demolition derby hopefuls....

I think I would have quietly waited until the manager left for the day, noted his vehicle, came back the next day and busted his tail lights and left a computer printed note under his windhield wiper....... You parked here at your own risk a'hole.

Petroleum jelly (vasiline) on the windshield wiper edges works well too. Turn on the wipers in the rain and it's instant 'can't see squat'. Makes for an interesting drive, in traffic.

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I can be very vindicatve... dirty chassis grease on the inside of a door handle is a great day maker too.

tjnamtiw said:

Apparently you've forgotten last winter's posts with people paying up to $15 a bag and you must not have seen a post where someone admitted to paying $440 delivered for 1 ton. Several this year have paid at LEAST $350 a ton for the Super Duper Platinum Pristine Pellets. That's 7 bucks a bag.

Lowes guy hates pellets because his fork truck drivers are idiots and take delight in spearing the bags. One Lowes guy took out the rear lights on my trailer two years ago. The manager refused to pay for them saying it was the risk I took picking them up.

If the pellet people weren't making a profit, the plants would be closed. They aren't owned by any charity that I know of.

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Apparently we are not talking about the same timeframe/subject...
I thought this thread was about what is going to happen this year (2015)..
Do I remember last year?
Absolutely.
I remember loading pellets bag by bag 7 days a week into back seats of peoples' cars,
that traveled as far as 2 hours because we were the only place around to have pellets..
I remember us paying as much as $285 a ton to get them... And we sold them at LESS
profit than during the summer!!

And even though Lowes is 2 miles from us, obviously competition, I would say your bad experience
with them, is not indicative of their stores in general. I hear people talk about their 'product',
but not about their service..
They hate pellets because it's a PITA, and they LOSE money on them.. period.

It always amazes me to hear people talk about how much money there is in selling pellets...

Keep in mind... if the land owner, logger, trucker, plant, trucker, wholesaler, trucker, dealer
all go up 3-5 bucks it's easy to see why retail is where it is..
The product doesn't go from forest to the store in one operation.

No offense, but I see this. The only thing we sell is pellets and coal..
Small operation... yes.
<2000 tons a year.. but we deal with the same people bigger dealers do.. (not BBS)

Dan.

bogieb said:

There are very few things that a retailer will take a loss on for long term. And when they do, it is called a loss leader to bring in customers that will find other things to buy. I wouldn't think of pellets would fit that category. I also find it hard to believe they are paying $7 a bag and selling them for $4.98.

Now, if you were shown "retail price", then that is the suggested price to sell it for, and the one that they will sell to individuals for - not the true cost, nor the price sold to retailers for. The mfg usually will not undercut their retailers as that is bad business for them, so they jack up the retail cost to be a good deal above what the retailers sell it for. And, it makes people think they are getting a good deal when they are shown the MSRP versus the "discount price" that the dealer will give it to them for.

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I can confirm this because I am not a real far drive from Somerset pellets so I called them thinking I might get a better deal. They said sure they would sell to me directly, but not for less than what Lowe's and retailers had them for and they knew what they were selling them for. I am not going an hour and a half in a big diesel truck with a big drag losing money on said diesel and my time when I can get a better deal locally at Lowe's. Cheaper than direct from Somerset with my 10% veteran discount.

They are making a profit or not losing much if any also or they wouldn't carry them so I think the speculation on them taking it on the chin for $2.00 per bag is far reaching IMHO. Businesses are in business to do what? Make Money! I will give some lead way on the bait and switch lure theory though. Here's why. Many quicky marts and such really do not make tons of cash from gas sales. They expect to dig into your pockets for the $1.50 bottled waters though and the $1.39 Reese's Cups. In fact Kroger's a big chain grocer here knocks off .10 cents per gallon for every $100 you spend that month limiting it to .90 cents or $1.00 per gallon in a month. Also a 35 gallon limit on amount of fuel. I let it build up and fill my trucks up there thinking I am getting a deal after the wife got spanked all month on food. Can you say.......... Trick f***ed. Seems like fun but they are making money hand over fist playing mind games.

So even maxing out at a $35 a month savings on fuel I KNOW my wife has lost more than that bopping around in there all month.

SidecarFlip said:

I can be very vindicatve... dirty chassis grease on the inside of a door handle is a great day maker too.

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C'mon Sidecar.... Be honest here. You crack me up! I liked to dirty tricks too. I can see saying it now.......... Uh, honey.... can ya come pick me up........ No I was picked up by the cops. No, I thought Sidecar had a great idea.....

Funny stuff! It is very fun to think about but not wise to do...... IF you get caught.

hossthehermit said:

Hell, yer in Georgia, you could't burn enuff to get a cupful of ashes burnin' Infernos .......................

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25 here this morning and for the last two mornings before that! We're talking good ole boy home construction too, not the tight super-insulated type you have up north.

Chris223 said:

I am well aware of the differences. I have worked at a big box for 9 years and been a manager now for 5. I know what cost is. And I also know when my screen says "Cost" its what we are paying. All I am saying is when I last looked it was $2 over selling price. Last year when pellets were around $219/ton where I work we were making roughly 30 cents per bag.

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Sounds like you need to fire your buyer! I've dealt with HD, Lowes, and Tractor Supply trying to get our products carried by them and they are VERY hard to deal with.

alternativeheat said:

i burned coal for more than 30 years and it has advantages and disadvantages. The rage now and rightfully so is the stoker stove. If you go with a hand fired stove I personally would not suggest dual fuel. A true dedicated coal stove that burns coal properly and long lived fires won't burn wood worth a crap ( good for the kindling that gets the coal fire going and that's about it). And a proper wood stove won't burn coal at all. Two completely different animals, the air ways are all together different between the two.. Unless things have severely changed in traditional coal stoves anyway ( stokers aside).

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Exactly right, AH. A hand fed or gravity fed coal burner wants air coming just up through the grate where a wood burner wants some up through the grate and some in above the fire. A stoker gets a force fed air stream up through the bed.

tjnamtiw said:

25 here this morning and for the last two mornings before that! We're talking good ole boy home construction too, not the tight super-insulated type you have up north.

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34 here this morning, 40 the day before ................... nyahnyah

hossthehermit said:

34 here this morning, 40 the day before ................... nyahnyah

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WTF????????? Sheeeet...........

jackman said:

We can all dream. I was hoping the cost of an airline ticket would go down but that hasn't happened.

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heard on NPR hursday re: the plane tickets that they buy way in advance as a hedge against price increases.. can expect to see fares lowered by mid May due to the current price drops

Hdhogger said:

Russia might be the answer to this. Although these might be self igniting pellets if they're made around Chernobyl.

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fwiw Chernobyl is not in Russia