Amaralluis said:
SmokeyStover said:
Personally I am a true believer in the concept of pellet heat. Everything about it, from the environmental impact, to the ease of use to the feel of the heat just makes sense to me. If it didn't I would no longer be in that area of the industry. The distributor who sells me stoves has made a commitment to purchase hundreds of tons of pellets so that his dealers will be able to sell new stoves confident in the fact that fuel for them will be available. It irks me to see big oil companies at home and in foreign countries raking in record profits when many pellet mills are struggling to stay afloat and when retailers, like myself, are busting their butts to make 5 or 10 cents a bag on pellet fuel.
I understand your point but then we have to ask ourselves who is raking the money?
I have a hard time believing that 20Lbs of compressed sawdust costs $6 or more to be produced and transported to retailers if indeed what you say is true that you only make a few cents per bag!
From a retailers viewpoint, here are some of the "hidden" costs that have to be factored in.
The time it takes for someone, usually me, to unload and store the pellets. Typically 1 1/2 - 2 hours per load.
Loss of product due to damage and occasionally theft. We salvage what we can and burn it in our display stoves but every season we lose 8-10 tons of fuel that can't be saved. This year was the worst as we had a canine chase a varmint under our pellet stacks and the critter proceeded to claw at every point he could get to. We lost about 5 tons in that incident alone.
Insurance. Our insurance cost is based on inventory. Cost of the pellets adds significantly to that total.
We have 2000 square of space dedicated to storing pellets. The local officials call that "improved commercial property" and tax it as such. It is about 20% of my total tax bill.
We don't deliver fuel but we do provide free storage for our customers. This allows them to pay for their pellets when the price is the lowest and pick them when they need them. That creates additional bookkeeping for me and all the employees.
As to why the manufacturing costs have skyrocketed, you don't have to look any farther than
BIG OIL
Yea the shortage of raw material is a big factor but consider this. Just about everything that moves in this country moves by rail or truck. It was not that long ago that diesel fuel was less expensive than gas. What changed that it is now more expensive than gas? Could be greed on the part of big oil?
Sawdust and chips have to be moved to the pellet mills by trucks using diesel fuel.
Pellet mills don't make the pallets they ship fuel on. They have to buy them and pay the freight.
They don't make the bags. The price of oil has driven the cost of plastic up and of course somebody has to pay the freight.
The cost of running the machinery in the mills has gone up. Diesel, electricity natural gas.
GM and Chrysler are all but gone. American workers are losing their jobs, their homes their lives. But oil companies are still recording record profits. Something is wrong with this picture and it might be something to consider the next time you start to feel like you pellet stove is too expensive or too much work.
Ok I'm stepping off my soapbox now. Thank you for listening.
SS
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