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Predictions about the up coming heating season

Post in 'The Hearth Room - Wood Stoves and Fireplaces' started by elkimmeg, May 23, 2006.

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  1. elkimmeg

    elkimmeg Guest

    Last year in May, nobody could predict the run on pellet stoves. Wood burning inserts followed the run.
    Can we expect a similar run? Will pellet pricing and availability factor in?

    Dealers: Where do you put your money? How much do you alot to pellet stoves and wood stoves inventory?

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  2. MountainStoveGuy

    MountainStoveGuy New Member

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    I have so much gas left over from last year, that all i had to buy was wood and pellet. I still bought plenty of pellet stoves, even though i hate them. There a dealer nightmare. But neverless i cant afford to not to stock them. I have 100 pellet stoves ready to go, and about 150 wood stoves. 180 tons of pellets ready for burnin. Im set for the first half of the burn season.
  3. wg_bent

    wg_bent Minister of Fire

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    Hey MSG. Just an observation on your numbers. seens your low on pellets. If every person who buys a pellet stove burns only 1.5 tons, your out. I know inventory is expensive etc etc etc... How may pallets do you expect to sell in a year? are they hard to get?
  4. MountainStoveGuy

    MountainStoveGuy New Member

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    Not near enough pellets, but thats all i have room for at any givin time. During the burn season, we have a trucker that works for us, and all he does is go pick up pellets 26 tons at a time. Leaves on monday, get backs usually on wed or thurs.
  5. Shane

    Shane Minister of Fire

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    I'm thinking wood and pellet will be in demand. Corn is getting alot of attention too. Here though the NG is pretty cheap so I don't think I'll be seeing every one wanting a pellet stove like last year. I've been selling a fair amount of gas inserts and some fireplaces. Not a whole bunch of freestands though.
  6. HarryBack

    HarryBack New Member

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    We are somewhat fortunate in that we are pretty diverse, and dont only sell pellets, stoves, accessories.....also sell building materials, not that that is a huge profit-center these days either. Id have to guess that roughly 90% of the stoves we sell are pellet stoves, 5% coal, 5% wood. We just got in 125 stoves for the late summer/fall. Folks are still buying pellet stoves....sold 2 on saturday, one on sunday. NG isnt at all available in our area....gas customers have to have it bought in, and its hugely expensive. Ive been thinking about our customers, and why they burn what they burn. Some guys have woodstoves that are quite old, like the old Riteway models...they are still out there, until someone leaves the ash door open and warps out the grates and/or stove. Most of these guys seem to be scroungers like many who abound here, getting their wood very cheaply or free....very hard to argue with the economics of free fuel. But I see many lifelong wood burners who are just plain tired of dealing with it, and they go to pellet or gas, even though the cost is alot higher. At some point POSSIBLY pellets may just be too expensive to burn, but i dont think we are there yet.
    As for pellet supply, weve got somewhere around 500 tons on the ground right now, both hardwood and softwood, with between 6 and 10 truckloads (156-260 tons) coming in per week. As for deliveries, we have sold roughly 400 tons we have to deliver, which i have omitted from the above totals. It was hard to make money by selling pellets before, but doubly hard this year, since the pellet companies arent offering any real early-buy incentives. Theres only one pellet mill in New England, and they seem to know it, by looking at their pricing. That mill used to be preferred by my customers, by far, but now that their prices is $20/ton higher than the other hardwoods, people are switching to my other two brands. Im kind of hoping this is a wake-up call for the pellet mill thats more local. The real test will be when we run out of our allotment of hardwoods....will people pay $20/ton more, or buy some softwood pellets? The verdict is out on that one. I also brought in about 150 tons of standard grade pellets, higher ash, about 1.2%, instead of the .5% or so, but they are cheaper, at $210/ton....I expect we'll sell out of those by July.
    I prefer to put my money in the bank and get interest...T-bills have been ok....but as for stoves, Ill put my money in pellet stoves still, since the majority of our sales are there. I cant make the leap of faith and put alot of money in woodstoves on the "if I build it, people will come" theory. I know how many I sold in last years' boom year, so, I order a fraction of that for summer/fall. If I had to guess, Id say that its going to be another good year for the pellet stove, but likely not as good as last year. I dont mind at all selling wood stoves, but its usually a one-time sale, and Id prefer to keep having my customers back, year after year (just a retailing thing, i guess), so for that reason as well, pellets are nice.
    Id like to see more pellet manufacturers around New England so as to have more competition and lower the price. I really cant see how I can lower my prices anymore and still make money, to where its worth the trouble. I dont sell cordwood, so, after selling a stove, the folks arent gonna be back for anything other than smokepipe in 5 years or so. Maybe just a selfish reason, who knows?
    Also, some of the clientele buying pellet stoves require yearly cleaning, parts, etc, so theres more potential sales with those stoves. I know, all this might sound somewhat greedy to all you folks who arent in retail, but return customers are a retailers lifeblood. Service in this industry is on a whole not very good, at least in my area. If you can service the customer well, say what youre gonna do and do what you say, you can do well. Even selling pellets.
  7. Eric Johnson

    Eric Johnson Mod Emeritus

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    The New England pellet mfg you refer to, New England Wood Pellets, is in the process of a major expansion that, as I understand it, will double or triple their production capacity in the coming year. They are also planning to manufacture and sell pellet-manufacturing equipment, so I suspect you'll also see some more competition before long.

    It pays to remember that given their druthers, pellet manufacturers will buy debarked chips that sawmills produce from the slab and other wastewood produced when they cut lumber. As such, they're competing with pulp and paper mills and some industrial wood burners (schools in particular), so their raw material is subject to commodity market price swings. People tend to assume that they use waste wood and therefore get it for next to nothing, but that's not the case.
  8. wg_bent

    wg_bent Minister of Fire

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    Seems like you need to start SELLING wood stoves with the fuel being BIOBRICKS. Same basic technology as Pellets, only a small amount more work, but it would allow you to diversify.
  9. stuart

    stuart New Member

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    hey i need to 2 tons who will bring them to me in CT
  10. warminwisco

    warminwisco New Member

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    My pellets are at 137.00 a ton for bagged hardwood, and 130.00 a ton for bulk canadian fir, a better pellet. Guy I buy from sells for 7-15 over cost. How much is you NG a therm for pellets at your prices to be cost effective. No offense just asking. I was at 1.10 to 1.40 a therm for last winter.
  11. stuart

    stuart New Member

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    well i called the guy i bought my stove from $288.00 a ton is that too high or spike in price???
  12. elkimmeg

    elkimmeg Guest

    It is always a pleasent supprise I paid $2.20 per gallon COD Got about 236.4 gallons paid $520
    I will only need 200 gallons to finish my winter heating season my wood stoves will take of the rest.
    Btw did you know there in now Bio fuel that can be burnt in your oil burner?
  13. babalu87

    babalu87 New Member

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    If Willie burns it in his bus we can put it to the oil furnace.

    I wonder how much used cooking oil I could put in a semi full tank of #2 oil?
  14. webbie

    webbie Seasoned Moderator Staff Member

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    It's my opinion that you are driving the pellet market, not the other way around. I have seen this time and time again. When I was in NJ we sold almost no Pellet Stoves, but some new stores opened up and sold nothing except Pellet stoves....not because they were in demand, but because they created demand (by lying, in this case - 1 ton pellets = 2 cords of wood, no service, etc.)....

    BTW, these shops are long out of business!

    Without even knowing it (or maybe totally knowing it), you are sold on Pellet stoves and probably burn, display, stock and sell a lot of them. However, if you loved wood stoves, used them and displayed a bunch - and talked to customers carefully informing them of the potential problems with Pellet stoves....well, you'd probably sell more wood and gas (yes, even LP).

    Charlie is a heck of a sales guy!

    I've been to places in NY state that have enough firewood to supply the world, and folks were buying Pellet stoves and trucking stuff in at 3-4x the price of local wood.

    It does not have to make sense. There is an ass for every seat. SUV's sell big also....real big. It all depends what one chooses to build their business around. You can't go wrong with Pellets right now, but over the last 25 years there have been big ups and downs - the market almost went away completely once or twice.

    Just for discussions sake, I'd bet I could open a store near you and sell ONLY wood and gas stoves (selling against Pellet Stoves) and still do well....maybe very well.

    BTW, we found the complete opposite with Pellet stoves and future business. Folks liked them for a year or two, then the shine wore off when they paid for service, pellets, cleaning, etc. - But, in the case of wood and gas products, we saw many of the same customers over and over again for 2nd and 3rd stoves. Then, when they moved or built a new house, we'd see 'em again. Many even stopped by to buy their last stove when moving south for retirement (VA, NC, etc.). They also bought stoves for second houses, for their kids, etc.

    As long as you can keep your finger in the dike and have a reasonably priced pellet suppy, and be able to service hundreds of stoves and keep everybody happy in-season, things should roll along fine. However, one big hiccup - just ONE, like no Pellets for a cold month, or a major manufacturer that either closes up or produces a run of defective stoves (that are then placed in the field and fail within a year) could cause major headaches.

    In NJ, we did the math and were unable to provide the time, service, pellets and all the other stuff to the level we wanted to - as a result, we stopped selling Pellet Stoves since it was making no one happy. My former shop, which is in a very wealthy rural surburban area, still does not sell Pellet stoves.
  15. mlouwho

    mlouwho New Member

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    I am so glad to hear you'all denounce the pellet stoves. I have been saying it for years. Around here, most homes have natural gas already installed. The box stores & my competitors keep convincing customers that they will save money over the nat gas if they burn pellets. Makes me laugh, they will spend four grand to install a stove, to spend more heating their house thatn they previously did.

    60% of my sales are still gas, the other 40% is split about evenly between wood & coal. I think this will be another busy year for wood & coal stoves, I just hope that the manufacturers doa better job of keeping up with orders this year.
  16. warminwisco

    warminwisco New Member

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    I suppose not all folks have access to corn but at 65.oo a ton early season it is a fuel that is economical over NG. Clinker stoves must be attended 1-2 times a day as in the St. Croix by pushing in a lever to drop it. Good Stoves not big box stoves used to be under 2400.00 to buy. It would seem NG will spike and stay there one of these years, I bet not to far off. I agree though that at the 200 a ton pellet prices you are talking they are a ripoff for folks with NG anyway. I burned two ton of pellets and 1 ton of corn this year 120x2 and 65 times 1 305. Bill last year was 750 for heating only so there was a savings. PC45 was 2800 with free pipe abd 1/2 ton ogf pellets.

    I guess I do not see this as more than a supplemental heat source for most folks as it is a continuos job when you otherwise can just flick a switch. How much do you folks pay for a therm of NG in the cold winter months? Now I could get green wood for 125.00 a chord early season how many would I need for the same needs. I vasolated between corn/pellet and wood before I bought the pc45. I run 50 50 corn pellet and have no clinker and dump ash once a week from a tidy pan. Thanks Bruce in wisconsin
  17. webbie

    webbie Seasoned Moderator Staff Member

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    My only concern is that folks get what they want and dealers succeed. Price is only one issue - frankly the Pellet Suppy in the east and other areas of the country are my #1 concern. After that it is keeping both dealers and customers happy.

    Sooner or later, there almost surely will be more pellets available...but from an energy standpoint, it is just plain foolish for someone to buy a stove that ties them into ONE energy supplier.....especially if they are doing it because they don't want to be tied into one energy supplier (like the electric co.)

    As far as cost of fuel, electric heaters sell in the millions and they are more costly in fuel than any others - proving that cost of fuel is just one part of the equation.

    The market, in this case energy, will always eventually level out. That is, customers will gravitate toward the fuels that cost less and are less hassle - that is why gas took over from oil.....less service, no delivery, etc.

    In the short run, though, all these market are subject to manipulation, fads and also the relatively small percentage of people who CAN afford to say "I'll pay more for fuel because I think it's good for the earth".

    Heck, if we used "practical" as a lifestyle, there would only be 5 car models and one pickup truck......in fact, a minivan would still be the biggest seller (can't beat 'em for value).
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