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Any updated Pellet pricing now that we're into August?

Post in 'The Hearth Room - Wood Stoves and Fireplaces' started by PutnamJct, Aug 3, 2006.

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  1. webbie

    webbie Seasoned Moderator Staff Member

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    I was taking prices from Harry at 259, which he said were the biggest sellers and then adding $30 or so for delivery.

    Even harrys calculation shows the fuels within 10% of each other - that is no difference at all.

    It is evident that there are areas where oil is cheaper and other where pellets are, but I would bet that if we take the average price of the delivered fuels in New England in the next 2-4 weeks, it would turn out to be approx. equal. And, remember, my point and concern are for the industry. Putnam says that $313 is completely ridiculous and that the day they hit $300 and oil goes down a little, the stove goes off....

    My point exactly! Two tons from harry of the good stuff delivered outside your house is anout $290 - that is not too far from $300 or $313.

    So, what is the figure that breaks the camels back?

    Don't want an answer.....I just want our industry to prosper and customers to be happy....but they won't be if they cannot get fuel at reasonable prices. My "job" is customer education....simple as that. The biggest selling space heaters in the world are electric ones - the ones with the highest cost of fuel. So there will always be a market, even at $300+ a ton, but Harman and others might have a tough time paying the mortgage on the new digs if price spikes and availability is low.

    BTW, I am doing a picture and video tour of a Pellet Plant next week, so I'll be able to post a pictorial on the process.

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  2. webbie

    webbie Seasoned Moderator Staff Member

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    Harry said:
    .just let the oilman fill the tank, no work involved, rather than stacking the pellets wherever you have to...Im not sure what the nuisance factor is there tho.

    --------------------

    Well, let's guess at it - per ton:
    1. Haul 50 - 40 pound bags from where delivery is to longer term storage - I'll say this is worth about $15. (cheap)
    2. Haul same 50 bags into house and empty into stove - give that another $15.
    3. Dispose of 50 plastic bags and of the ash produced - we'll set a bargain at $10
    4. We will not include the dust from pellet pouring, ash, etc. nor maintaining the stove.

    This is a total of $40.00 per ton.
    Using harrys numbers above....279/ton plus 40 - this makes the pellets higher than $2.55 oil.

    What has become clear, I think, is that the monetary gain is not the primary reason for purchase of a Pellet stove in the Northeast......now, the customer may or may not know this, but that does not change the facts. However, the idea of renewable fuel, sticking it to the "man" ( the oil men and OPEC) and the idea of a fire in the living area are good sales points in themselves....let alone the idea of a backup system (especially for those Pellet Stoves that run off backup batteries).

    Now, if you are down the road from some large corn storage facilities, or near a Pellet plant, things can look different.....and a lot of people are. The heartland is just FILLED with corn.

    Anyway, the idea of so many of our luxury items paying for themselves is a strange one. Last time I looked the only things I have that actually pay for themselves are tools!

    Interesting point about the media telling people they should buy pellet stoves for heat. Even our trade org has long taken the tact that stoves and fireplaces are a part of life - just like a TV....have a nice looking one in every room, etc - but the message for the last two decades has never been to heat your house! Then, all of a sudden we have uneducated media types broadcasting live with a pellet or corn stove dealer saying "get 'em while they are hot".
  3. HarryBack

    HarryBack New Member

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    sure, but my nuisance factor makes wood expensive too, doesnt it? If its free you are starting from $0, but if you are paying the going rate here, $200/cord, doesnt that make it expensive as well? I think the nuisance facotr for would is considerably higher than pellets or coal........but, if you are getting the wood for free, or scrounging it, more power to you.
    I wish I knew where the magic number was for pellets. Everything is so interrelated its difficult to tell. We all know we have to have heat, be it electric, gas, pellet, wood, coal, etc. I think the pellet price in the northeast is an abberation at the moment and pray for the day we have more local pellets to hopefully lower the cost. I see the prices the folks pay out west and south and its amazing. I make the same money on a ton if it costs me $100/ton or $300/ton...we dont work the percentages. I do agree there is a certain number where any fuel wont be bought....the coal example of Craig's was a good one. In the 70's we sold huge amounts of Riteway coal/wood stoves. nowRiteway is out of bisiness...has been for a long time. Look at the coal dealers. There arent many left. We've sold coal since before the turn of the century, and I dont have to tell you the coal biz is a shadow of what it once was. I wonder if this doesnt bode badly for wood as well. If a bunch of folks pounce on the wood bandwagon, buying and scrounging wood, I would think there would be a shortage there as well. If you have 10 guys in your town scrounging, no dig deal, but what if there were 100?
  4. cbrodsky

    cbrodsky Member

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    So then add in something like $3K for the installed cost of the pellet stove, and let's assume someone uses about 100 million BTUs per year to heat their home - you're saving roughly $200 per year. You're not doing any better than dropping that $3K in a CD and kicking back while the oil man does it all for you.

    Also interesting that the same pellet stove site makes the case that purchased cordwood or coal is half the cost. At least there you get something for all your work...

    -Colin
  5. begreen

    begreen Mooderator Staff Member

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    That can still be fuzzy math - there are too many variables such as the age and efficiency of the furnace, lost heat due to uninuslated or leaky ductwork, future prices of oil, pellets, etc. Also, you'll likely never resell your furnace. Keep the pellet stove in good condition and buy a good brand and you may be able to recoup a good part of the investment.

    As noted before, our price for pellets remained relatively constant over 5 yrs. Stove sold for 50% of what we paid for it. Savings over propane was greater than 50%. So for us, pellets were a bargain and kept us more comfortably warm.

    We have a regional advantage right now, but I'm pushing for leadership that recognizes this renewable source of heat and helps perfect it where sawdust, corn, grass, etc. is plentiful. I want to see those delivery fees drop and the local propane truck replaced with a pellet delivery truck that blows them into a big hopper. :) Harry, you're to the point where you could probably make this work. Think of all the oil that goes into those virgin vinyl bags and then to the landfill. For me, it's time to stop having our policies dictated by our addiction to oil. If it costs a bit more in the short term, then perhaps the govt. should switch subsidization from oil to wood.
  6. smirnov3

    smirnov3 Feeling the Heat

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    Maybe, but even assuming 80% efficiency, with an 80% efficient central furnace, that means 64% over all efficiency

    And many older homes don't have a very good heat distribution system. They often have hot water radiators, with the hot water pipes running along the outer walls.

    For instance, my 80 year old colonial has insulation that was installed about 15 years ago. The furnace is rated at 78% efficiency.

    I burnt 1400 gallons of oil last year, keeping a 2000 SqFt house at 66F. Some of my radiators on the second floor never got past luke-warm.
  7. smirnov3

    smirnov3 Feeling the Heat

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    There is a company out there called Changing World Technologies that makes fuel oil out of farm waste. They were complaining that the US gov't wasn't willing to give them any tax breaks / incentives. Their claim was that regular, 'dig the oil out of the ground' companies get gov't subsidies that total about $1 per gallon (so that means that all you pellet burners and wood scroungers are still paying for oil :) ).

    FYI, Changing World Technologies is moving operations to europe.
  8. vgrund

    vgrund Feeling the Heat

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    Well, it is always moving target year to year but IIRC our price this season is around $2.04 gallon. Thus your ballpark analysis is very close to my reality.

    The upfront investment for anything seems to be quite substantial to do things right whether gas, pellet, or wood (reline, cap, ...). Not to mention, there are some hack dealers around here recommending installations that terminate inside the chimney and don't use a full liner. There is no point in a cheap/unsafe installation, but one has to self-educate substantially just to weed out bad advice from so-called professionals. If I had to go through the same process when selecting a dishwasher or a clothes dryer I'd lose my mind.

    Let's assume I'll do wood in one and the debate is what to do about the other, LP or pellet. One significant factor, fuels being roughly equal, is that my lessor used fireplace already has 60K BTU LP gas logs (these should have no place in the world, what a sucker "decorative appliance"!). I don't have to run a gas line if I opt for LP fuel but if I choose another fuel I'll have to pay to remove it. I would have to imagine that LP inserts are less complicated / expensive than pellet inserts, too, but I've not done any comparison shopping yet. Also as you say, there is the maintenance factor as well.

    Victor
  9. kevinlp

    kevinlp New Member

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    Costs us 2.45 if we prebuy more than 500 gallons. Less than 500 gallons is 2.75. We prebought none. Gonna make the stove earn its keep.
  10. vgrund

    vgrund Feeling the Heat

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    That, sir, is what I call an incentive to conserve. We have a good price for our area, I hear the same thing every year. But then again we buy at least 1700 gallons per year (it was a lot more before I got started fixing things, I assure you). Our propane company offers two programs, one is essentially a budget plan with monthly payments spread over 10 months and a discounted fixed buy price, the other is a prepay plan which offers a few cents less per gallon for those willing to tie up their money all season. We do better in the markets than we do with the few cents savings.

    I'm just lucky I have one of the more reasonable suppliers. I have heard of others in the same town paying .40 - .60 more per gallon for similar volumes. The problem with my area is that the propane company owns the buried 500-gal propane tank. They have "right of first refusal" meaning it is very difficult to shop around. I think I'd have to arrange a transfer of ownership to switch suppliers.

    Victor
  11. MountainStoveGuy

    MountainStoveGuy New Member

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    Update for the west. My supplier arent shipping me squat. They are claiming raw material shortages, due to the weak construction industry and weak economy, for the reason that they cant produce. So i will soon be forced to buy pellets from a local distrubitor for darn near reatail. Home depot is $5.69/bag I will be at $6.50 if i cant get pellets direct. Currenty my price is holding at $5.00 with 40 tons left. I have a one ton limit now.
  12. Roospike

    Roospike New Member

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    Already ? ......... I dont understand the "weak construction industry " part . The price of lumbar went sky high with all the stuff down south and the big supply and demand .... Where is all the scrap from that ? Something sound fishy bout that story.
  13. moralleper

    moralleper New Member

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    When you say "west" were are you talking about? In my area, SW Washington, $5 per bag is only for the non local pellets like Lignetics, and Eureka.
  14. MountainStoveGuy

    MountainStoveGuy New Member

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    and prices will hold in your area as long as your suppliers have good stock. I cant speak for all the pellet mills, just the three that i deal with. But it is somwhat a red flag.
  15. Xena

    Xena Minister of Fire

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    Today in Southeastern Massachusetts:
    Home Depot in Avon MA looking for 279 per ton.
    Feed/Grain store in Taunton not much prettier
    at 265 per ton.

    I saw oil prices as low as 2.15 per gallon in my area.
    Pellet stove may be used as ornamental furniture this year
    after the 3/4 ton I have from last year is gone.
    We will see what transpires.
  16. Roospike

    Roospike New Member

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    Pellets are running for $399.00 - $425.00 a ton on Ebay ........... This is getting out of hand. The funny thing is people are still buying them at $400.00 a ton ! Some people need to do the math. Its just crazy .
  17. webbie

    webbie Seasoned Moderator Staff Member

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    I suppose some people will pay $500 a ton, but it bodes very poorly for the future of the business. If I were a pellet stove maker or pellet producer, I would shake in my boots when I heard this stuff!

    For years stove dealers and producers have been telling people to save money with low cost home grown pellet fuel. Now we see Pellet producers pricing what the market will bear - exactly like oil producers. Of course, that's the story with just about anything - people are not going to sell things for less than the top dollar they can get, but they are likely to hasten the death of the goose that laid the golden egg.
  18. Homefire

    Homefire New Member

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    I paid $240 a ton last week..... but that included delivery from 40 miles away and stacked in my garage.
    That may have been a little steep but it is the best I can find in CNY.

    .
  19. Roospike

    Roospike New Member

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    What would be nice to find out is of all the owners of pellets stove and had some kinda stats on how many owners use the pellet stoves for 100% of there heat , 75% heat 50% heat or just buy under a ton to turn on the stove on the weekends / at night after work ect...ect... I can almost amagine the stats on the fireplace as used mostly for the ambient heat and i would also think the wood stove owner is using the wood stove for as much actual main heat or to 50% of there heat for there home. I just can't place what the bulk of the pellet stove owners use there pellet stoves for. With the prices going sky high per pellets and even more $$ and LP , El , oil are a lot or most of the pellet stove owners going from main heat of there stove down to ambient heat ?
  20. Choppedliver

    Choppedliver New Member

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    Hey Roo
    We Sell about 1000 tons of pellets a year and I would say 75% of my customers buy 2-3 tons a year and heat 75-100% of there house, 5% buy 3-5 tons and heat 100% of there house and maybe a shop or garage the other 20% are 1 ton or less and just "enjoy the heat"
  21. HarryBack

    HarryBack New Member

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    We are on track to sell somewhere near 5-6000 tons of pellets this year and ChoppedLiver is pretty close to the mark here in MA as well. Id say about 85% of mine are 3-5 tons/year (with the pellets providing the bulk of their heat), 10% at 1-2 tons per year (the recreational user), and, oddly enough, 5% at 6 tons+/year (Im not sure whats going on there, Ive got one guy who ordered 20 tons.....doesnt take a genius to guess what hes doing).
  22. Roospike

    Roospike New Member

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    Thats great information guys . I've always wondered about it . I also wonder how that compares to the box stores if there sales are along the same lines or they get the fill in sales .
    Yeah ...... Enough of these guys and the high prices and any shortage is not going to get any better just like the ones selling pellets on Ebay for $400. a ton. I wonder how much the "stocking up extra" of pellets is adding to the shortage.
  23. MountainStoveGuy

    MountainStoveGuy New Member

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    I complety agree.

    What kind of pellets are you selling? and whats your current price? When i run out i will send some people your way. Do you keep pellets all year 'round?
  24. TedNH

    TedNH Member

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    Are pellets really selling out?
    Thats not good.

    Back in April when I had a chance to "lock" in the price of my propane for the year it was $2.80 per gallon. I decided to roll the dice and buy a pellet stove and spend the money to button up my house a little better. Im almost done with the buttoning and the pellet stove should be in this weekend.
    Pellets to be delivered on the 21st.
  25. MountainStoveGuy

    MountainStoveGuy New Member

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    I think its a local problem, im having trouble getting them for a decent price, it seems the east coast and west coast are ok, mountain states might be a different story, hard to say because i am only one dealer, and i have three sources. It wouldnt hurt to buy your entire seasons of pellets now, and in the future, buy them in the summer for upcoming seasons.
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