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Pellet Prices- We are doing it to ourselves....

Post in 'The Pellet Mill - Pellet and Multifuel Stoves' started by Ossy, Oct 26, 2008.

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  1. Ossy

    Ossy New Member

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    It amazes me that people don't understand the consequences of their actions...case in point...

    http://ellsworthmaine.com/site/index.php?option=com_content&task=view&id=17549&Itemid=1

    Greed in this country...and this world has become the norm and the ramifications of it has literally caused a massive upheaval in the very fabric of society....Look around and you see it unabated; oil, the stock market, the housing market, credit market (with high interest rates), and now in pellets....I seriously doubt that many individuals need 6 to 10 tons for a home less than 2000 sq ft, even here in Maine....

    The only good thing I can see coming from this is the coming pellet market crash...oil here in central Maine is hovering around $3 per gal on average...it is almost at the same price point for energy ($ per btu) as oil....with oil continuing to slide I doubt that pellets are going to continue to be advantageous ....I will wait until the cost comes down to $225 per ton and then I will buy mine...

    Ossy

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  2. Bushbuck

    Bushbuck New Member

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    well I do not agree. I say buy more pellets and stoves. Buy Buy Buy....

    I am happy to see these pellet store guys doing well. Many have struggled for quite a few years trying to survive and provide a great service. These are American companies providing jobs to retailers and to the installers. Many of these companies that are manufacturing stoves in the U.S. are also providing jobs here at home in the U.S. instead of closing the doors. There are also people that have invested millions in manufacturing plants here in the country providing jobs both in the woods, trucking and there plants.
    I would much rather see all these jobs remain here and the people in this industry begin to have some of the dollars we have been sending to other country's for there oil. Support Your local stove shop! Buy an American made stove, and enjoy the warm heat provided by the natural resources available from this great country of ours..
    Hopefully this rush will create more jobs in this industry in the long run, and I do not mind seeing all the people that have invested there money and sweat into the shops and manufacturing sector having a share of the American dream.
    Most of the people I know and have met that sell stoves are just Joe the pellet and wood stove Guy.. Good for them, they have my support..
  3. webbie

    webbie Seasoned Moderator Staff Member

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    Many oil companies are also American....and have done well.
    It's not a matter of cheering or not. The Pellet industry has yet to become a permanent fixture in this country. That is a fact - and the reason that Harman was unable to sell any stoves just ONE YEAR ago. The entire market had crashed to nothing because oil was THE SAME PRICE IT IS NOW.

    Now we have had the opposite for 6 months.......a run on the bank.

    I submit that neither is good for the consumer or the industry, but be that as it may......I am simply an observer.

    As far as pro-american and stuff....I think that Era is largely over - after all, the largest manufacturer (who makes Quad, Harman, etc.) is already making A LOT of pellet stoves and parts in China. I expect more in the future. We have no way of knowing who is investing in the Pellet plant operations either.

    Most people - with some exceptions - burn pellets because they cost less than other fuels (at certain times). When they don't, they won't. Period.
  4. Bushbuck

    Bushbuck New Member

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    some people will certainly pay more. There is a waiting list for a small electric company in Vermont for people willing to pay more for the energy because it is produced by local methane gas by farmers in that state. I think some people understand.
    I have nothing against Oil companies. I just hope one day all the oil we use comes from North America and the rest of the energy is from sources here also.
  5. Xena

    Xena Minister of Fire

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    From what I've seen on this forum anyway, there aren't many who
    are heating less than 2000 sq ft who have purchased 6 to 10 tons.
    The average tonnage ownership here is 4.

    Regardless, 6 tons is roughly equal to approx. 720 gals of oil.
    My home would use approx. 800 gallons of oil for heat and hot
    water during a winter.
  6. pybyr

    pybyr Minister of Fire

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    yeah, extreme boom and bust cycles are not good for anyone. but even though oil is coming back down I have NO regrets about having launched my Econoburn Gasifier + 1200 gallon modular stainless storage project. I never again want to watch a price curve in front of me in which heat and hot water could, projectedly, someday run me out of my home. And, since I already used wood some, I am delighted to be heading in a direction where my heat comes from across the road.

    Regarding globalization, etc., it was in part driven by some of the same excesses of artificially cheap energy, artificially cheap disadvantaged foreign labor, and unbridled short term greed by management and politicians in this country, who forgot Henry Ford's realization that he had more customers if he employed workers and paid them wages that actually allowed them to buy his products. Changes are coming and are bound to keep coming these areas/ variables.
  7. kinsmanstoves

    kinsmanstoves Minister of Fire

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    Pellets will not go bad and if you have the storage space for them, stock up if you feel you have a good price. It does make you feel better to know you have something in reserve no matter what it is i.e. toilet paper, fuel for your generator, extra food in the pantry.

    A down side is if you use 4 tons of pellets in a year and have 8 tons right now, will you buy another 4 tons next year or skip buying that year? What will that do to the pellet industry at that time? Kinda makes you think.

    Eric
  8. Rattlesnake

    Rattlesnake New Member

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    With the exceptional increase in the number of stoves purchased this year, and the substantial costs involved in the purchase and install, the market for pellets should become more stable over the next few years. This should allow fuel producers to better plan for US production and sales, as well as creating more methods of distribution, ease of operation, and quicker service. Don't know if it is true or not, but was told that 2/3's of US pellet production this year is exported, due to contracts executed a couple of years ago when the US demand did not meet production. We will see.
  9. kyburnr

    kyburnr New Member

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    Quote from the article: "His company (Corinth)expects to produce about 70,000 tons of pellets this year, and, at that rate, will displace about 7 million gallons of oil."

    Thats just His company .... 7 Million gallons !!
  10. BrotherBart

    BrotherBart Hearth.com LLC Mid-Atlantic Division Staff Member

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    That is one and two third million barrels of oil. In the month of July we imported that much per DAY from just Saudi Arabia. Not even counting the other countries we import oil from. In the U.S. we consume approximately 21 million barrels of crude oil every day.
  11. mjbrown

    mjbrown Feeling the Heat

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    i think i will stay with the pellets. dont matter to me if the price of oil drops to .50 per gallon, the pellet heat is more consistent and much more enjoyable...as long as i can buy'em i'm gonna burn'em. the prices will balance eventually, so many people went to alternative heat sources so fast its no wonder things are hard to come by.

    mike
  12. teddy1971

    teddy1971 Member

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    Loc:
    Orange County NY
    Based on what has transpired the past couple of weeks, I feel that heating oil will probably be @ $2.50 per gallon this season and maybe $2.00 gallon by next summer (if the financial environment does not improve). This being the case It will cost me @ $1600 to heat my house next season (09/10) if I were to lock my price in the summer like I used to. But the big difference is that I had to average @ 68 degrees when someone is home and 58 degrees at night and when no one is home to only use 800 gallons for my 3300 sqft house. With the pellet stove I am averaging @ 75 degrees when some someone is home (day and night) and 68 degrees when no one is home. Granted I am only heating 2500 sqft of my house but the basement is finished and maintains a temp of 65 degress without the heat running (I use an electric heater when Im working in my office or when the kids are in the playroom). I will never go back to oil if i can help it. I have not been this comfortable in the winter in my house and can’t image paying someone to be cold. I agree with the previous posts that with oil coming down alot of people will probably give up the pellet stove because of the work that it entails. This should, IMHO, bring the price of stove and pellets down. I’m hoping to get 4 to 5 tons in the spring for $200 per ton. It will be a big mistake for the pellet industry if they try to charge $300 or even $250 per ton for pellets if oil is $2.00 per gallon. I myself would still pay the $250 but it my cause me to suppliment my heat with pellets and not use it as my main heating source (maybe get 2 tons instead of 4 to maintain the temp I like). This spring can be a turning point for the pellet industry. They could charge less then oil to keep cusstomers like myself using pellets as their main heating source and make the money up on volume or they can try to make as much money in the short term as possible and lose customers. I hope that they remember that people have short memories and even though things are bad now it will be good again and pressing a button for heat instead of lifting 40 pound bags may cause people to forget how bad it really was and how bad it will be again.
  13. DiggerJim

    DiggerJim Feeling the Heat

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    Not sure where you got that number, but a barrel of oil produces between 1.75 gallons of fuel oil (as a byproduct) or 9 gallons (when the distillate is tuned for gas & oil) up to 30 gallons (when oil is desired to the exclusion of gasoline --- one reason gasoline prices tend to rise in the fall/winter as refineries shift to heating oil production).

    Maybe...and it's a stretch, Corinth has displaced as much as 3/4 million barrels but probably only 1/4 million barrels. Not that it's not a lot, but it's not much in the overall scheme of our oil consumption.
  14. BrotherBart

    BrotherBart Hearth.com LLC Mid-Atlantic Division Staff Member

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    Just using his 7 million barrel figure. I am very familiar with what fractions come out of a barrel and what they are used for. If he had in fact replaced enough distillate and resid to fill up that many 42 gallon barrels then it equals the number of barrels volume wise that I quoted. After a trip through the crude unit, not before.

    Also familiar with shifting from G to D mode according to season, market and inventory conditions.
  15. Wet1

    Wet1 Minister of Fire

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    I agree. The stove and pellet manufactures are making out big-time for 2008, but I think they are going to crash hard for the end of the year and 2009. I don't think you'll be seeing the ridiculous $300 pellet prices next year... they'll probably be closer to $200.
  16. tinkabranc

    tinkabranc Minister of Fire

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    This year seems like a repeat of 2005. Stove and pellet manufacturers
    caught short due to the unexpected high demand and they scrambled to
    increase their production. But how to they forcast for next year?

    If they base it on this year, they may end up with way too much inventory
    that isn't selling because the demand slowed back down OR demand stays high
    and they still cannot keep up.

    Isn't this what got Harman into financial trouble in the first place?
  17. dalspot

    dalspot Member

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    We bought our pellet stove back in... 1995 I think it was. We were paying $165 a ton delivered in June. When we got the stove, the dealers all were saying then that pellet prices were forecast to drop.

    We've since moved, and since switched to wood. I'm glad I'm not looking at paying $250+ for a ton of pellets.
  18. DiggerJim

    DiggerJim Feeling the Heat

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    We're paying $250/cord delivered for seasoned hardwood here. BTW, $250 isn't far off the inflation-adjusted price you were paying for pellets in 1995 (in fact, this spring, pre-buys were cheaper in adjusted dollars than your 1995 cost).
  19. dalspot

    dalspot Member

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    May be, but we can cut two pickup loads of wood for $20 each at our local state forest and I get free wood at the local yard waste recycling. We've gotten so much free wood there, we've cut out the second trip to the state forest. So nice most folks cut the wood into rounds and all we have to do is split it.
  20. woodsman23

    woodsman23 Minister of Fire

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    How come a cord of wood in my area is only 55 bucks delivered?? What give other places.
  21. JustWood

    JustWood Minister of Fire

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    Face cord.
  22. woodsman23

    woodsman23 Minister of Fire

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    Yes a face cord 4x8x16" what size are you talking for 350 bucks???? What size is a full cord?
  23. JustWood

    JustWood Minister of Fire

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    Full cord = 3 - 16" facecords.
    Wesrtern NY is notorius for calling facecords , cords.
  24. DiggerJim

    DiggerJim Feeling the Heat

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    A full cord is 128 cu ft of wood tightly stacked. Of course, stacking losely or with lots of variable shaped/distorted wood pieces can increase the air content of the stack and produce less than the 128 cu ft suggests. There's a law (now generally ignored) in CT that requires all wood pricing to be by the cord because people were getting confused by the difference between face cords and full cords.

    One of the good things about pellets is that they're sold by weight and although I can't weigh a pallet, I can weigh a bag and make sure I'm getting the full measure of product I'm buying. Not really possible with wood sold by the cord (in whatever part).
  25. woodsman23

    woodsman23 Minister of Fire

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    Okay then even at 55 a face cord (which i and all my friends know what a face cord is) x3 is still 1/2 the price when all added up. So 165 for a full cord here then man thats real cheap.
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