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Are pellets going to be impossible to find soon?

Post in 'The Pellet Mill - Pellet and Multifuel Stoves' started by ylomnstr, Jun 3, 2008.

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  1. ylomnstr

    ylomnstr Feeling the Heat

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    I had a pellet stove in my old home from 2004-2007. I moved into a new home in '07. My old home had electric heat, but it was such a small house that the pellet stove heated the whole house except for very very cold days. So my new house is significantly larger, and the oil was just killing me last year. The freestanding fireplace isn't very efficient, so we're going with a St. Croix pellet stove.

    My question is how hard is it going to be to find pellets. My dealer says he secured enough for all winter and they should have them in June, but he also says that 2 out of 3 people that walk in there are buying pellet stoves. He's never been so busy. So in the next few years, are Pellets going to skyrocket in price and become harder to find?

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  2. PelletOwner

    PelletOwner New Member

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    We've had a bunch of threads on this topic. I think that pellets will be easy to find due to the large number of mills opening up around New England. Some others think that it will be in short supply because there isn't as much timber being harvested, and oil prices are a bubble that will pop before the fall heating season. Both sides have equally valid points, but I think it's a far cry to say that pellets are going to be expensive or hard to find. We might see pellet prices go up a little, but it is proportional to diesel, not timber.
  3. webbie

    webbie Seasoned Moderator Staff Member

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    The market depends on at least three things

    Pellet supply
    Quantity of pellets that EXISTING pellet stove owners decide to buy
    Quantity of new pellets stoves sold

    The number of variables is INFINITE......warm weather, prices of ALL other fuels, raw materials availability, etc.

    No one that I know has done a accurate study of the supply vs. demand on a national basis. Some companies have predictions for their market area(s).

    So what can be assured with a relatively high degree of certainty? Probably only this: If you can buy and store your pellets off-season, you should be able to buy fuel at a relatively reasonable price for now. As to the future, that is pure guesswork. We all certainly hope there is plenty of supply, but the actual decisions are going to be made by economics alone (at the plant level and higher). If they cannot make money, they will not produce pellets. They have no actual responsibility to pellet stove owners, etc....it is purely a matter of economics.

    In other words, pellets are not a regulated industry or utility. Same with LP or Oil....not regulated or "public" utilities. Even wood and coal are somewhat similar - other than the fact that you can possibly dig up some wood to cut yourself.
  4. GVA

    GVA Minister of Fire

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    Well it's all speculation right now, we should revisit this topic in say.......... August. ;-)
    On a side note let's hope the stove manufactures don't over produce stoves this summer counting on a repeat in sales next year. I'm sure they learned thier lesson after Katrina and the following 06 season though.....I hope :-/
  5. MCPO

    MCPO Minister of Fire

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    Hopefully not.
    A few things seem to be positive such as
    1.......they are a renewable source
    2......they are reasonably clean
    3........there will be a demand for them
    4.. they could very well help to absorb the wood harvesting slack caused by the papermaking industry slowdown.
    5.....the perceived increase of pellet processing plants

    It seems this year is really making lots of folks uneasy due mainly to the cost of oil doubling.

    My advice to a first timer is to do what I did. That is to get into it slowly and not put all the eggs in one basket. Start with a simple stove and enough pellets to get you thru the first year. I would think by tuning into this station on a regluar basis throughout the heating season the forum members will be discussing every conceivable aspect of pellets and their availability and by next April you will be nearly as knowledgeable as most every one else.
    I`m leaving my options open till I have a better handle on the heating industry as a whole and where it`s going.
    Ask me this time next year what I`m gonna heat with the following year.
    John
  6. JustWood

    JustWood Minister of Fire

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    Don't want to comment on this subject again in fear that I will be SHOT once again!!!!!!!!!!!!!
    I'm close to bled out now!
  7. MCPO

    MCPO Minister of Fire

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    Could be some truth that this fall there might be some problem getting enough pellets but lets hope for the best.
    Where there is a need/demand there will be a product produced and sold. Not to say there won`t be some shortages in some areas as that`s been experienced previously . Surely , until the industry gets more widely accepted and levels out sporadic pellet shortages are likely to happen. This is not unlike other commodity product shortages of the past.
    Obviously there`s also going to be a substantial increase in stove sales especially in the northeast and that itself might add to the possibility of a shortage . However I`d expect the pellet industry is aware and making some kind of effort to increase sales and supply of their fuel . Those new plants have to be paid for somehow.
    Of course everyone`s been advised to buy early and I`m sure most seasoned users will do just that.
    BTW, today I just got my 250th credit card offer (slight exaggeration but not far off) to charge anything I want or transfer any balance owed with no interest till April 2009.
    And I already paid for next years pellets. Damn!
    John
  8. lessoil

    lessoil Minister of Fire

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    The Pellet Stove scene is new to me.
    We have contacted a supplier @ $215/ton about 10 miles from us.
    They are made at the Corinth plant here in Maine.

    http://corinthwoodpellets.com
    I think that is the link.
    The link below talks about the new plant just opened.
    http://www.boston.com/news/local/ma...wood_pellet_plant_opens_for_business_in_maine

    Giovanni had some good points......
    1.......they are a renewable source
    2......they are reasonably clean
    3........there will be a demand for them
    4.. they could very well help to absorb the wood harvesting slack caused by the papermaking industry slowdown.
    5.....the perceived increase of pellet processing plants


    I too am concerned about the price/availability of pellets in the future.
    But, what other choices to we have right now?
    If we stay with oil, our heating cost will increase by almost $2000.
    That would be about $4000/year for a small 24X32 Cape!!

    This is a great forum and I will report our pellet use and savings next Winter.
    I think that we will be going with a Harman P61A installed in the living room.

    Thanks!!
  9. sinnian

    sinnian Minister of Fire

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    From who and where? PM me if you don't want to say here.

    Thanks ~ Jeff
  10. mkmh

    mkmh New Member

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    Hey lessoil...I think you hit it right on the head. What are the other viable options?
    Sure there is unknown with pellets, but there is just as much unknown in the oil game for sure. Adding a new stove to the tune of 3000 is a somewhat expensive gamble, but at least is a move toward diversification. I don't think i'd recommend anyone putting "all" their eggs in the wood pellet basket, but pellets are as good a bet as any right now....and for Mainers I think the odds are pretty good that pellets will be available and priced quite a lot lower than oil for the foreseeable future.
    A top notch wood stove is probably (IMO) the only safer bet out there right now, but that assumes you have the time and energy to keep up with it. Personally I don't have time for it, but I have managed to make time to run and maintain my 2 pellets stoves for a while now.
    I paid less for my 2008 pellet supply than my 2005 pellet supply. Of course that trend won't continue, but i'm going to enjoy it while it lasts...and hope that Maine pellet plants recognize a great opportunity and continue to push production to meet the growing need. This could be a great thing for this state long term.

    Good luck...and BTW - The P61A is a great stove.
  11. Czech

    Czech Minister of Fire

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    Location, location, location too, we've been lucky in MN/MI/WI due to the plants here. That and a multi fuel stove for potential other fuels, but I don't think many of the grains are coming down in price any time soon. There's always waste dog food? Regardless of what you decide, it is nice to have an alternative heat wise imho. I just passed on $175/ton great quality pellets (mom got a ton, neighbor got a ton, I know where to 'borrow' from) from a farmer friend who started getting them in last year due to corn prices, I have no where to store tho. One thing he assured me on was the fact the fuel prices and associated delivery will drive the price up from here.
  12. JustWood

    JustWood Minister of Fire

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    OK, OK, Uncle , You guys are killin' me with #4.
    What you guys don't understand is with lumber markets down and all the mill closings the supply of sawdust is very low. Right guys , I think we all agree on that. BUT when logging for grade lumber is not taking place then pulp/polewood is not being produced either. Pulp is a byproduct of logging. It is not cost effective to produce pulp ONLY. Ya sure , there is always gonna be some dilhole logger out there that will deliver pulp at a loss but it's not gonna happen on a large enough scale to supply a pellet plant. SO , these pellet mills that have diversified into chipping pulp for raw material are still screwed unless they make it more cost effective to the logger to produce JUST pulp. In other words raising their scale prices dramatically which in turn will be passed on to YOU the consumer.
    I know buyers and informed people on the inside of the forest products industry and they are all telling me to "go fishing" for at least the next year.It's gonna get uglier before it gets better but when it turns around the guys who survived this downturn will be winners in a sellers market.
    Don't hold me to it but I'm predicting a substantial price increase in pellets by fall and possible supply issues. I'm not coninced that pellet suppliers are aware of or paying attention to what is going on in the raw material supply chain. I seriously doubt pellet heating costs will anywhere near equal oil but I do know that prices will go up.

    Ok ,now go ahead and put me out of my misery with one last bullet! LOL
  13. Willman

    Willman Minister of Fire

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    Seems as if the sawmill sawdust connection is closely related. I wonder if the pellet mills pay better than the paper mils for raw product. Also do they pay by weight or scale ? The real answer to the OP will be known in a few months.
    Will
  14. webbie

    webbie Seasoned Moderator Staff Member

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    Heck, why should we believe a guy in the business who has nothing to gain or lose? As opposed to a salesperson or single homeowner?

    Bang! :)

    the MAINE thing is you gotta tell us what we wanna hear.

    It's interesting that we are even discussing this when Pelletsales.com - with BY FAR the largest network of pellet suppliers and logistics in the Northeast has already stopped taking orders. Does that mean anything? It's the beginning of june, for gosh sakes.

    I suppose that there will be instances when ALL of the above scenarios come true. Some people will pay over $300 delivered. Those lucky midwesterners will get them for well less than $200. Others will have to scrounge. Maybe some contracts will be canceled and a mill have thousand of tons extra to get rid of...one week.

    I'll bet we hear it ALL this year.
  15. JustWood

    JustWood Minister of Fire

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    Interesting thought just crossed my mind. OPEC - Organization of Pellet Exporting Countries.
  16. mjbrown

    mjbrown Feeling the Heat

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    i dont care if the price of pellets goes to 400 bucks a ton here. i will need 4 ton to heat my home, maybe a little more...thats 1600 dollars


    todays price for K1 WAS 4.50 PER GALLON in my town. we all know that by winter it will be 5 or more per gallon( fat chance on the oil bubble bursting).if i went oil only , i would spend well over 4 grand. its a no brainer for me.


    this is rediculous! whats going to happen to the elderly and low income this winter? the elderly is going to have a choice between starving to death, freezing to death, or dying because they cant afford their meds.
  17. mkmh

    mkmh New Member

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    Agreed. I will likely use about 5 tons of pellets next year and I'd be fine paying in the 3-400 range per ton.
    I definitely respect the wealth of experience we have on the boards here, but the doom and gloom gets old.

    "Are pellets going to be impossible to find soon?"
    Highly doubtful for those of us within 100 miles of a pellet plant.
    "Are pellets going to be impossible to find for under $300 per ton soon?"
    Now that seems entirely possible to me. Plants are likely going to have to start shelling out a lot more money for sawdust which is going to drive the price up. Transportation costs are going to continue to rise driving the price up. More demand for pellets in the marketplace will likely begin to drive the price up.
    So yeah, it seems extremely unlikely that prices can stay in the 200-250 range in the North East, but i'm reasonably confident that pellets will be very available to people willing to shell out the money for them when they start going up.

    One would think that there is room for some more innovation in the pellet industry too. As sawdust supplies decrease perhaps pellet manufacturers will find new additives to mix in without adversely affecting the quality. I know one year New England Wood Pellet put like 6% corn in the mix. There must be other crap that can be tossed in there.
    Tough times and challenging business problems often lead to some pretty exciting solutions. Lets hope we have enough of the creative free-thinkers in the industry to work through the challenges and keep moving the technology along. 2008-2009 will be an "interesting" heating season for sure.
  18. compressedwoodsupplier

    compressedwoodsupplier New Member

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    I have just talked with my manufacturer for pellets and asked about his price going up due to the raw material price going up. He stated to me this year it propably wont go up due to us dealers being locked in. On the other hand i was going to be carrying energex pellets also but there prices just went up $20.00 a ton effective June 1. I know from speaking with numerous pellet manufactures that they are all booked up for the season and are not taking any new dealers. Speaking with a bunch of stove reps we all think there maybe a shortage of pellets this year.(i hope not ) but i guess we will have to wait and see I do know that a lot of people are buying more pellets earlier than expected this year so just keep that in mind.
    I just commited to 5,000 ton for this year so hopefully i will have enough. If anyone needs any pellets give me a call 207-542-0834
  19. JustWood

    JustWood Minister of Fire

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    Doesn't matter if your 1 or 100 or 10,000 miles from the plant if they're out they're out. No sawdust + no pulp = no pellets
    I too would hope that they would have some other "recipe" for pellets but just like other alternative energy ,technology is lagging behind.
  20. MCPO

    MCPO Minister of Fire

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    Well, you won`t get any points from me for predicting pellets will go up . Any product associated with transportation costs are expected to rise but the question from the OP is "are pellets going to be impossible to find" ?
    You have to ask yourself if those new plants are being built with little to no planning regarding the procurement of wood product or do you know something they don`t?
    Pellets will also certainly have to maintain a significant cost advantage over oil or the industry will die.
    If and when the price of pellets get too close to the price of oil ,pellet burning will serve no useful purpose anymore .
    The work / storage /inconvenience/etc associated with a pellet stove can be written off to the money saved but when that savings diminishes so will the demand for pellets.
    John
  21. MCPO

    MCPO Minister of Fire

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    I can remember 9-10 yrs ago when I was burning wood and you had to get your wood early , preferably in the spring or even earlier if you intended to burn it that coming winter . Come the fall seasoned wood was usually hard to find and rarely available . Planning ahead was always prudent.
    The cut , split , delivered wood industry has been and still is more of a cottage type industry . Small , localized , unregulated , and not unified in any way. These suppliers have historically been sole proprietorships that serve their local users . And that`s not been a bad thing either but still usually limited to what their own two hands can produce.
    However the bottom line is that both these industries are subject to the availability of wood and the need to harvest, process and deliver it.
    Personally I would have to believe the pellet industry is a more dependable source of fuel compared to raw wood.
    Their sources are more diversified and they as an industry are able to wield more financial clout in obtaining the raw product.
    Comments / appreciated.
    John
  22. webbie

    webbie Seasoned Moderator Staff Member

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    John,

    Fuel wood is available in thousands of places - like the woods behind my house! It can be harvested by anyone with a chain saw.

    It is hard to say that anything which is manufactured and transported and involves millions in equipment is more reliable. ???

    Using the simply rules of supply and demand, there are certainly more firewood processing operations in the Northeast than there are pellet mills. Also, a new one can be set up for as little as 250K worth of equipment (processor, truck, etc.), so the capital cost is tiny compared to pellets.

    Pellets have a lot of advantages over fuel wood, but a dependable source of supply is not yet one which is proven by history.
  23. burntime

    burntime New Member

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    Pellet prices will continue to go up with the cost of everything else. If a supplier can create a frenzy they will. Heck it costs 2 times just to get then to a location to sell then 2 times in fuel again to get them to your home. Wood here was 200 a cord last year, now asking 280-300 a cord. Buy your pellets now if you can get them, a lot of people will have the equiptment and no fuel come winter. My opinion, that and 50 cents (make it a dollar fifty) will get you a cup of coffee.
  24. sinnian

    sinnian Minister of Fire

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    Ok, I have a question that goes along with this thread.

    I just ordered at pellet boiler, and will have it hooked it up to an indirect hot water tank, and my house is about 200 square feet with up to date insulation codes (R39/48? in the attic, had sill plates foam sealed etc.

    In the past I used about 800 gals of oil with my burner (86% efficient prior to the flue), which included domestic hot water (not indirect tank). I have been told that just to keep my water heated at all times, I probably used a tank of oil.

    So how many tons do you think I would need for an average winter in Southern Maine? I use a programmable thermostat set to 68 for about 6 hours per day and 64/65 the rest. I also plan on having a timer type switch for the hot water installed.

    The calculator at MES (I think) said for 800 gals of oil, it would be about 6 tons. My pellet boiler dealer told me that if I used the indirect hot water tank I would use about 3 tons.

    I know there are a lot of variables (pellet quality, etc), but I just ordered 6 tons of CleanFire from PelletSales.com, if I have the space, should I get more?
  25. Richardin52

    Richardin52 Member

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    I would like to wade in here with a few comments.

    Europe is about ten years ahead of us with regards to using pellet fuels. Here in Maine pellet mill owners know there is a ready market for pellets in Europe. Maine is the closest US state to Europe and has a large amount of biomass so we are going to see even more pellet mills popping up because there will be a ready market for fuel pellets both here and in Europe. I heard Eastport just approved a permit for three large pellet silos to store pellets that will be loaded into ships that will transport them to Europe.

    That means at least for the long term we will be producing more pellets than are needed in this area. In the short term it all boils down to supply and demand. If more people switch to wood pellets faster than these plants can ramp up then short term price spikes could happen. All I can say is right now prices are good and right now I am buying a years supply.

    I also own a farm. I have been talking to one pellet mill owner about selling 700 lb. round bales to them for use in pellets. They are very interested in my hay but have not come up with a price as of yet. There is a study out from Canada that predicts that some areas of the US and Canada will see more and more grass used for pellets because of the low historic price of grass in certain areas. I can sell hay dried to aprox. 12% and that will make grass cheaper to process than undried wood. Pellets made from Switch Grass burns hotter than wood. So if they want switch grass I can plant switch grass.

    The way I see it high gas prices are bringing a lot of changes and most of them for the better. Just look at all the fuel dollars that will stay in Maine, talk about a boost to our economy. Look around a see how many fields you see growing up to golden rod, that’s all fuel pellet land waiting to be put into production. Anybody not want to see farming come back?

    So short term I say buy um when you can get um, a years supply if you can. Long term, I wouldn’t even start to worry about it.

    Rich
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