Do You Think There Will Be A Pellet Shortage on A Regular Basis?

[MX2]

With the recent shortages due to the harsh winter, growing popularity in pellet stoves, pellet mill mishaps and just general supply and demand, I was thinking there's a chance shortages and rationing may become a regular occurrence throughout the burn season. If this winter is any indication as to what we can expect to see in future winter seasons, I think there's a good chance supply will fall short of demand. What say you? Thanks. B-

 

[newf lover]

I bought my stove in 2008 (first shortage), was fine until this year. I don't think it will be a trend, but as has been mentioned by people wiser that me, there are no pellet shortages in June. Buy what you need early in the summer and don't worry.

 

[Enigma869]

there are no pellet shortages in June. Buy what you need early in the summer and don't worry.

Exactly! There are also no pellet shortages in September, when I always buy mine. You can buy as many ton as you want, and there are no issues. I'll be purchasing 8 ton in September and then getting ready for anything that Winter wants to throw at me.

 

[misterpat]

I'll be purchasing 8 ton in September

Wow, I thought I was getting alot with buying 6 tons!

 

[dave2112]

Depends where you live. Was no shortage in many places.

 

[hooter04]

This so called shortage this time of year is mainly due to a lack of raw materials.Usually by now the mills have a stockpile of product,but with the cold lingering on, that has depleted the inventories.There are more mills operating now,than there was say 5-6 years ago,so demand for the raw material is up.I guess we'll just have to wait and see if there will be any shortrages,but you can rest assure the prices are gonna go up.

 

[Tonyray]

Just ordered 4 tons Of Energex Hardwoods from my dealer...
Early buy special.....be storing them in the basement in a couple weeks..
Might also pick up ton of Stove Chows from Home Depot in the fall for shoulder burning..
yeah.. I'm one of those pellet nuts now... Pellets for all seasons...

 

[tjnamtiw]

With the continuing decline of the value of the dollar versus foreign currencies (%^$#^*:+), it will become increasingly cheaper for Europe to buy our pellets with their currencies. That means that it will be more advantageous for US pellet producers to sell to foreign markets rather than US ones. It's about the money! Already several new plants in Georgia are shipping pellets in bulk to Europe exclusively and I think this will be the trend in the future unless they can get a higher price here. They've already learned that people are willing to pay $7.50 a bag so why not keep the price high? Just like gasoline is twice what it was 6 years ago.
I don't have to tell you who we have to blame for printing worthless money and keeping the interest rates artificially low. Thanks a lot. The future is bleak, my friends. Even natural gas will be liquified and shipped to Europe. One new plant is now on line and I believe it is 7 more that just got the go ahead to start building. We can do that in record time but can't approve a little pipeline?

 

[johneh]

No shortage around here in fact Wally World reduced the price to get rid (3.88 )
of there stock. I always buy 3 skids 4.5 tons in the spring buy for
delivery in September . So with leftovers I start the season with better than 5 ton

 

[JustWood]

With the continuing decline of the value of the dollar versus foreign currencies (%^$#^*:+), it will become increasingly cheaper for Europe to buy our pellets with their currencies. That means that it will be more advantageous for US pellet producers to sell to foreign markets rather than US ones.

Doubtful. Totally different quality pellet.
Mills that export are usually within a short distance of the coast. Doesn't make $ sense to handle/export inland pellets and receive a lower $ for a better quality pellet.I could see this happening only if there were a huge over supply.
I look for domestic market supplying mills to come online within 5 years to supply the bulk furnace/boiler/multifuel market.
Mills will gear up to produce more product but it will be at a cost. I agree that prices will prolly be considerably higher for the next 1-2 years or until a mill inventory is built.

 

[tjnamtiw]

Doubtful. Totally different quality pellet.
Mills that export are usually within a short distance of the coast. Doesn't make $ sense to handle/export inland pellets and receive a lower $ for a better quality pellet.I could see this happening only if there were a huge over supply.
I look for domestic market supplying mills to come online within 5 years to supply the bulk furnace/boiler/multifuel market.
Mills will gear up to produce more product but it will be at a cost. I agree that prices will prolly be considerably higher for the next 1-2 years or until a mill inventory is built.

'Receive a lower $'??? My point was that, to a foreign company, our pellets look inexpensive even at a HIGHER $ amount because the dollar isn't worth a flip! Our pellet companies would receive a HIGHER dollar from a foreign company because it looks cheaper to THEM than to US.
Sooner or later the issue of available trees will become an issue as well since the only ones that grow rapidly and are planted on 'farms' are pines. The beloved hardwoods take much longer. Then you have the issue of deforestation and mudslides as well as the government stepping in to screw things up. 16 Million tons just in the US is a LOT of trees! (broken link removed to http://biomassmagazine.com/plants/listplants/pellet/US/) And they all apparently are not listed because none of the 3 that I use are on the list.

As to being 'Doubtful', I guess we'll just wait and see.

 

[JustWood]

'Receive a lower $'??? My point was that, to a foreign company, our pellets look inexpensive even at a HIGHER $ amount because the dollar isn't worth a flip! Our pellet companies would receive a HIGHER dollar from a foreign company because it looks cheaper to THEM than to US.
Sooner or later the issue of available trees will become an issue as well since the only ones that grow rapidly and are planted on 'farms' are pines. The beloved hardwoods take much longer. Then you have the issue of deforestation and mudslides as well as the government stepping in to screw things up. 16 Million tons just in the US is a LOT of trees! (broken link removed to http://biomassmagazine.com/plants/listplants/pellet/US/) And they all apparently are not listed because none of the 3 that I use are on the list.

As to being 'Doubtful', I guess we'll just wait and see.

Doesn't have a single thing to do with the value of the dollar. Commercial grade pellets fetch a lower money amount/ton than domestically sold pellets.
The deforestation hoopla is just that,,,, hoopla. Forests are growing at a faster rate than ever due to management practices. There are other forms of biomass that are soon to come on board also that will take pressure off of woody biomass.

 

[stoveguy2esw]

i think the occasional shortage (late season) is possible but its mostly due to the winter's demand exceeding projections pellet manufacturers tend to try to "guesstimate" what amount of product they will sell in a given season and usually they are pretty close, usually when there is a shortage its due to either a longer or harsher winter such as we had this past season, or other factors which drive the new stove market such as big jumps in traditional fuel costs (also seen this season in some regions) which spur a higher amount of "converts" to pellet than the usual, a lot of mid season sales this past year, we were shipping product in large quantities well beyond our usual busy season, im sure the other stove manufacturers were seeing similar extensions to their sales season as well. one of the big movers was the big jump in propane costs in several states in the middle of the country, when fols see propane jump a couple hundred percent in cost they will move to a different heating system in a lot more cases.

as for the point that Tjnmtiw makes above , it is relevent but other sources are being used to offset the deforestation issue , which comes more from traditional wood use than from specifically harvesting for pellets alone. the removal and grinding up of "beetle kill" trees in the midwest for instance is not only harvesting trees which are literally "dead standing" but also in removing the trees possibly helping with the beetle problem as its possible that the trees are removed with the beetle larvae still in them.

 

[tjnamtiw]

Doesn't have a single thing to do with the value of the dollar. Commercial grade pellets fetch a lower money amount/ton than domestically sold pellets.
The deforestation hoopla is just that,,,, hoopla. Forests are growing at a faster rate than ever due to management practices. There are other forms of biomass that are soon to come on board also that will take pressure off of woody biomass.

Which do you think a pellet maker will make > a small quantity of high grade pellets for local markets or a huge quantity of low grade pellets for overseas that demand lower quality control, cheaper materials and still fetch increasing prices because it DOES have everything to do with the value of the dollar dropping lower and lower? Witness the huge new pellet plants specifically geared toward foreign markets. They wouldn't be making those investments if there weren't equally huge profits to be made. And they refuse to make and sell pellets for the local markets. I've personally talked to two of them.

 

[cruzn57]

Doesn't have a single thing to do with the value of the dollar. Commercial grade pellets fetch a lower money amount/ton than domestically sold pellets.
The deforestation hoopla is just that,,,, hoopla. Forests are growing at a faster rate than ever due to management practices. There are other forms of biomass that are soon to come on board also that will take pressure off of woody biomass.

not sure where your getting your info from, but we have over 7500 ac,all with old growth trees.
and nothing around us will be ready to cut for 10 -20 yrs! most of whats cut gets sent over seas, (cause it fetches more $$)
and $$ are more important than anything else,
if we stop exporting nat gas, propane, wood, etc, we would be self sustaining, but NO...... gotta get the all mighty dollar!
glad I'm older, so I won;t be around to see what people like the illegal , are doing to this country.
GREED, its what we (the USA) have become.

 

[ZBrooks]

On the deforestation point...Here in the West, the problem isn't too much logging. The problem is not enough. This is because the Feds control more than 50% of some states and will not allow the states to log what they should be able to. In Idaho alone, it is estimated that we're sitting on $1 billion/year in logging revenue. Next year could be a big year for fighting the Feds for the land.

As for a shortage in these parts, it isn't going to happen.

 

[richg]

I have seen four major pellet shortages: 2000-2001, post-Katrina, the Great Pellet Panic of 2008 and this heating season. It is averaging out to about one shortage every three years. When I burned pellets, my practice was to buy them whenever I saw them and had storage space, regardless of the season. You will never run out with this method, although everyone does not have space to store 6 tons.

 

[TimfromMA]

I was down picking up my first ton of next season's pellets last night. The owner and I got into a conversation about the pellet shortage. He told me that the reason for the shortage is the sheer volume of pellets they are shipping to Europe. He explained that they can sell the pellets for more money over there. The only reason they don't ship ALL their pellets over there and tell us to go screw is the uncertainty of the euro. They are scared of the euro so they hedge their bet by keeping some in U.S.

 

[JustWood]

not sure where your getting your info from, but we have over 7500 ac,all with old growth trees.
and nothing around us will be ready to cut for 10 -20 yrs! most of whats cut gets sent over seas, (cause it fetches more $$)
and $$ are more important than anything else,
if we stop exporting nat gas, propane, wood, etc, we would be self sustaining, but NO...... gotta get the all mighty dollar!
glad I'm older, so I won;t be around to see what people like the illegal , are doing to this country.
GREED, its what we (the USA) have become.

(broken link removed)
Although total forest area is stable ,,, tons growth/acre is up due to management practices.

 

[JustWood]

Which do you think a pellet maker will make > a small quantity of high grade pellets for local markets or a huge quantity of low grade pellets for overseas that demand lower quality control, cheaper materials and still fetch increasing prices because it DOES have everything to do with the value of the dollar dropping lower and lower? Witness the huge new pellet plants specifically geared toward foreign markets. They wouldn't be making those investments if there weren't equally huge profits to be made. And they refuse to make and sell pellets for the local markets. I've personally talked to two of them.

The pellet they make wouldn't burn as well as rabbit dung in todays pellet stove.
$180/ton + delivered to port, loaded on a boat , shipped across the Atlantic to be unloaded at port at a power plant with MILLLLLLLLIONS $ of infrastructure doesn't sound like a profit center to me.
These huge US coastal pellet mills are mostly owned by foreign power companies as a way to control their own supply. Inland pellet mills have no way to compete.

 

[DOLLARBILL]

Hey Im not buying the over the pond line! lets look at what happened this year snow here in Maine it ranked 12th on the most for a season recorded! Cold about the same more degree days than in the last twenty years Hell the Lakes and ponds are still frozen and people are still icefishing!Bottom line demand outweighted supply try a warm winter and see what happens !And lets face it its alot cheaper thanOil !

 

[Bioburner]

Trains were hauling Bakken crude and displaced pellet shipments east and even Oats for Cheerios. Look out for higher food costs. Already seen vegetables go up 25%.The prices of fuels seems to always level out to be the same per btu unless you make your own.

 

[TimfromMA]

Trains were hauling Bakken crude and displaced pellet shipments east and even Oats for Cheerios. Look out for higher food costs. Already seen vegetables go up 25%.The prices of fuels seems to always level out to be the same per btu unless you make your own.

My pellet dealer cited this as a reason as well. He said that his prices are going up a bit not because of the pellet shortage but becasue the cost of fuel transporting them from the plant to distributors.

 

[slheinlein]

This year is not near as bad as 2008 when we were paying $300+ per ton for pellets. I recently found some at Lowes after looking for a few days and only paid $4.50/bag. Key is to buy early. I didn't buy enough as I didn't predict the brutal cold weather we've had this winter. Glad to see the snow is finally melting...

 

[Bioburner]

Costs more to ship by truck than rail and usually has to be on pallets instead of hopper cars for bulk delivery.