Southern Maine Pellet Supply Drying Up

[mkmh]

Just talked to my pellet guy and i'm getting my last 2 tons delivered Saturday. He told me that they've run into significant problems with production in Athens and Corinth and that nobody is taking any more orders at this time. Futhermore he noted that people he told that they'd get their pellets in August are now looking at October/November.
All this and it is frickin 90 degrees out today!! True sign of the times that anybody is thinking about next winter's heating bill.

I'm calling it now that we're going to see 500 per ton on CraigsList come November.

 

[MCPO]

Unless oil goes over $5 a gal , pellets @ 500 per ton won`t be worth the hassle. The industry will be will committing suicide.
John

 

[mkmh]

I don't see the industry posting those prices any time soon. It'll be the opportunist reseller crowd.
It is easy to pray on people who just paid 5 K for a stove...but they've got nothing to burn in it.

I look at this as an adjustment year for the wood pellet industry. There will be pain this year, next year will be better

 

[gw2kpro]

Unless oil goes over $5 a gal , pellets @ 500 per ton won`t be worth the hassle. The industry will be will committing suicide.
John

Oil's currently above $5 in many places on pre-buy plans. I have talked to several people that refused to lock in at $5.05.

 

[MCPO]

I guess what I was trying to say is pellets absolutely have to be a significant cost advantage or they won`t be worth the effort.
John

 

[sinnian]

No offense to you mkmh, but threads like this is what is causing some of this commotion. If people would just relax and take care of their needs in an orderly fashion, without the hysteria, we would all be much better off.

 

[cimbo190]

No offense to you mkmh, but threads like this is what is causing some of this commotion. If people would just relax and take care of their needs in an orderly fashion, without the hysteria, we would all be much better off.

I agree absolutley. I drove by a place on my what home that had at least a dozen pallets of pellets right in the front for sale. These were clearly marked Wood Pellets.

Perhaps all of the simple locations are not as readily available, but there are pellets out there, just nbeed to do some leg work.

 

[mkmh]

No offense taken. Just passing on information that was new to me and that I believe is relevant. I believe the picture is different than is was 60 or even 30 days ago.
Nobody is a bigger cheerleader for the pellet industry than I, but I think this is going to be a year full of growing pains for the industry.

 

[webbie]

but I think this is going to be a year full of growing pains for the industry.

Of course, it takes an old salt like me to say - Deja Vu

I have heard those exact words at least twice before........first in the mid-90's and then in 2005.

Adjustments are continual...we never "get there"........true of any commodity......it will go up and it will go down.

Remember that business is largely chaos. There is no "plan", nor is there any promise that pellet production will meet the needs of all the stoves being produced or vice versa......

As usual, it is every man (or woman) for him or herself. Hey, in the worse case look at it as life insurance...who wants to collect anyway? If you have a Pellet stove and heating oil falls to $3.00 next winter, so much the better!

 

[stoveguy2esw]

Maine has a deal going on with tax breaks and such , there is a big glut on the market right now in pellet stoves , and you know when a stove gets bought a few ton of pellets get bought with it , its a bump , but its probably going to right itself in a few weeks , i think the 12th is a "tax holiday" in maine for this stuff so it will be peaking about then and should attenuate after the feeding frenzy , pellet fuel as a whole is actually in very good sahpe , but these tax things along with the high oil prices tend to cause these blips ive seen em many times, after the initial oh chit , it settles back down. this one is a big one , but the industry , particularly the pellet manufacturers have seen it coming from farther back , its not like 05 when katrina and alll that caused a no-notice glut. its not going to be that way this year IMHO. i wouldnt push the panic button just yet.

 

[JustWood]

AAAAHHHHHHHHHHHHHH! NOPE, not yet !!

 

[Mom2Czars]

Wouldn't you think that people who hoard pellets are also part of this problem? I mean...how much do you really burn per season?

 

[mralias]

but I think this is going to be a year full of growing pains for the industry.

If you have a Pellet stove and heating oil falls to $3.00 next winter, so much the better!

Ahhhhhh the good old days....

 

[JustWood]

No offense to you mkmh, but threads like this is what is causing some of this commotion. If people would just relax and take care of their needs in an orderly fashion, without the hysteria, we would all be much better off.

High oil,gas and propane prices are causing this! Not a thread here.

 

[mkmh]

Wouldn't you think that people who hoard pellets are also part of this problem? I mean...how much do you really burn per season?

I burned 5 tons last season (2 stoves) and that is what i'm going into next season with. Considering that delivery fees are often flat, it usually makes sense for me to buy several tons at a time. It is usually a bit more expensive to buy them by the bag versus by the ton. I have no intention of reselling my personal supply for gain, so nope...I don't think I am part of the problem.
Folks who don't own a pellet stove....but who are out there buying 22 Tons with the idea of reselling them on Craigslist for a huge profit -- They are part of the problem.
I'm convinced that there are some people doing just that.

The guy I spoke with yesterday has raised his per ton price for pellets 5 times since May. I imagine some of this is just passed on from the distributor...but I suspect there is also a component that he feels like he can almost name his own price at this point (He claimed that he was still getting 5-10 calls per day for pellets).

After going through a few winters with stoves i've found that the best strategy is to always be keeping an eye out for pellet deals, and be ready to buy at any time. This past year I picked up 4.2 tons in March from Pelletsales.com. They were having a blowout sale (something like 210 per ton delivered) so I jumped on them. I think if you are always trying to plan 6 months (or so) out you'll likely be safe from the shortages and panic situations that we saw in 2005...and that we're seeing now.
I realize taht some people don't have room to store more than a ton or so, but if you can make it work...buying quantity is the way to go.

 

[JustWood]

Just recieved the July issue of a trade magazine I subscribe to. 14 sawmills are going on the auction block this month alone .. 14 less sawmills producing sawdust. The price issues are supply and demand related not because of hoarding. If everyone bought 3-4 years supply then yes I would say it is caused by hoarding.
With high energy costs and lumber markets non existent it makes for the perfect storm.

 

[kilarney]

With high energy costs and lumber markets non existent it makes for the perfect storm.

Meh. You've been predicting doom for the pellet industry for quite some time. Despite enormous pressure, prices this season are very reasonable. New plants are coming online that are going to use pulp. Maybe the days of $150 per ton pellets are gone, but the sky is not falling.

 

[slls]

Talked with Sam's Club Bangor yesterday, they are going to have a pellet open house or what ever the 7-16 in the parking lot. Will have tons of Pennington hard wood to sell, she stated no shortage there. They had 8 tons on hand Wednesday.

 

[MButkus]

Agway, NJ. Just got 2 tons with delivery and stacking for $544. Plus $2.45 tax on the deliver charge. Not tax on fuel.

 

[JustWood]

With high energy costs and lumber markets non existent it makes for the perfect storm.

Meh. You've been predicting doom for the pellet industry for quite some time. Despite enormous pressure, prices this season are very reasonable. New plants are coming online that are going to use pulp. Maybe the days of $150 per ton pellets are gone, but the sky is not falling.

Did I EVER say there would never be another ton of pellets to buy EVER. No ! The sky is NOT falling. The conditions are PERFECT for some very high per ton prices and supply problems which we have already seen and it's only July.

 

[mkmh]

Perhaps part of what is going on is that the locally produced pellets are at a stand still, but once the supplies from out of state (or Canada) start coming in things will be better.
Time will tell, but personally i'll feel a lot better when they drop off my last 2 tons on Saturday.

 

[ugenetoo]

i just began selling pellets here in northern maine. athens' maine woods pellets. 240 ton. no delivery at this time. 80% whole tree hardwood chips. 20% softwood mill waste. the pellets look good (no fines and very consistent size).
the mill is right up against it as far as production goes, but they have only been producing for a couple of months and output has been climbing. the big problem is bagging as far as i can determine.
using chips takes the materials volitility out of the equation.
ill be real surprised if pellet prices dont drop back down to this level before winter. a lot of people out there selling for whatever the market will bear and with no long term business goals such as getting and keeping good customers. this makes for short term price swings and that is what you are seeing at this time.
"$343 from pelletsales.com" thats just ridiculous and anyone who buys at that price should give me a call. i have some oceanfront property up here for sale!

 

[kilarney]

80% whole tree hardwood chips. 20% softwood mill waste. the pellets look good (no fines and very consistent size).

This is the future of pellets. That's why I'm concerned about sawdust prices, but not too worried.

 

[Mom2Czars]

A piece on Channel 9 news about the 'pellet shortage' (thanks tv folks!) had quotes from New England pellet basically saying that if people could calm down and order in a normal fashion, everything should be fine. Right now, they're working at capacity 24/7. Orders are up 200% for them right now. They say they anticipate supply to be better this winter than last. I believe I also heard that NEWP is opening a new factory up north sometime soon.

 

[j00fek]

from what iv seen and herd from dealers in auburn/lewiston people are panicking and buying 5-6-7 tons at one time and cleaning out stores. i think some dealers thought they would make good money if they kept selling that rate then they ran out and now there are lists with people waiting for delivery, some 100-200 tons behind other people at the top. this is just lunacy, and i think its most of the small dealers fault for pushing the sales earlier then getting swamped with orders, and then finding out they they cant get any more pellets till sept/oct.

glad iv got my 4 tons in the garage...