Future Price of Pellets?

[velvetfoot]

I'm thinking of putting in a pellet boiler (out a wood boiler). Any ruminations on what the price of pellets is going to do in the future? Here in NY the State is getting involved in promoting it, so that will only increase the price. I currently get log length wood and process that, but it's still a fair amount of work, and there's all the moving and stacking. Convenience factor is high with the pellet option.

 

[BigJohnfromCT]

I think we're all asking the same question. This has been a tough winter. I expect the laws of supply and demand to start flexing the market. That is, stove demand may increase, thereby affecting the supply of pellets which, in turn may impact price. Notice my use of theword "may". I'd use my crystal ball but it's all frozen over.

 

[reallyte]

All the more reason to be a pellet pig. I buy big ever summer/fall for this reason.

 

[Jaugust124]

Just had an oil delivery, 147 gallons @ $4.04 / gallon. That's a $600 bill for 35 days of heat. OUCH! Because of my set up I can only use the wood stove to supplement the heat. If I don't get natural gas this year (They are working in the area) I WILL be getting a pellet stove to further heat the house. Even if price of pellets goes up, it has to be cheaper than oil.

Wood is work, work, work. Pellets certainly must be easier.

 

[dlavigne7324]

I'm thinking of putting in a pellet boiler (out a wood boiler). Any ruminations on what the price of pellets is going to do in the future? Here in NY the State is getting involved in promoting it, so that will only increase the price. I currently get log length wood amt process that, but it's still a fair amount of work, and there's all the moving and stacking. Convenience factor is high with the pellet option.

If I could product the future then I would be a billionaire !!

 

[oski]

If I could product the future then I would be a billionaire !!

This is the first year I run a wood pellet stove ( supplemental heat to oil) - new home since about a year ago. I bought a stove in the summer, and ordered 3 tons of pellets. I just went out to buy one more ...and it seems alot of places are out.( I got a ton coming in few days) .
From talking to the install people ( they are coming in few days to add a wood-stove ) they are quiet busy for the time of a year. It seems alot of people are switching over.

<start of completely unfounded speculation>
Since pellets are mainly made out of wood that is being recycled ( from big mills or floor manufacturers etc) it seems that there may be a real supply constraint in the system. With constrained supply and raising demand laws of nature (economy ) would point to future higher prices ....
Also some politician may wake up one day and realize that they like taxing energy (see taxes on your gasoline) ... and aren't pellets ...energy?
</end of wild speculation and spreading fear>

Btw since this is my first post.... Hey everyone

 

[fmsm]

I can remember paying $99 a ton for stove chow. That was back in the mid 90's. Considering you can buy that ton now for $219 the price has a little more than doubled, oil was if I remember correctly around $1.30 a gallon, it's far more than doubled since then.

 

[Bioburner]

This is the first year I run a wood pellet stove ( supplemental heat to oil) - new home since about a year ago. I bought a stove in the summer, and ordered 3 tons of pellets. I just went out to buy one more ...and it seems alot of places are out.( I got a ton coming in few days) .
From talking to the install people ( they are coming in few days to add a wood-stove ) they are quiet busy for the time of a year. It seems alot of people are switching over.

<start of completely unfounded speculation>
Since pellets are mainly made out of wood that is being recycled ( from big mills or floor manufacturers etc) it seems that there may be a real supply constraint in the system. With constrained supply and raising demand laws of nature (economy ) would point to future higher prices ....
Also some politician may wake up one day and realize that they like taxing energy (see taxes on your gasoline) ... and aren't pellets ...energy?
</end of wild speculation and spreading fear>

Btw since this is my first post.... Hey everyone

Some pellets are the unused wood from logging. The sawmill grade gets taken to mill and the limbs etc used for the pellets. That's why some pellets have a high ash and are brown in color. Some are produced by grinding up used pallets. With the Emerald ash bore devastating major areas of prime wood some will make it to pellets.

 

[Madcodger]

You may as well roll dice. Accuracy will be about as good.

 

[RKS130]

I'm thinking of putting in a pellet boiler (out a wood boiler). Any ruminations on what the price of pellets is going to do in the future? Here in NY the State is getting involved in promoting it, so that will only increase the price. I currently get log length wood and process that, but it's still a fair amount of work, and there's all the moving and stacking. Convenience factor is high with the pellet option.

This is my third season burning pellets as my almost exclusive heat source - the oil burner gets its chance when temps are under 20 for more than 2 days, and then only for 45 min in the morning and again at night. The first year HD pellets (AWF at that time) were $187/ton, until mid-season when the price (for Green Supreme) rose to $209/ton. They have stayed at that level (FSU this year, along with various other brands) since then, despite what is an obviously hugely greater demand, judging by the volume of pellets passing through the store.

My guess - and its only a guess - is that increased demand will spur increased production which will, in turn keep prices stabilized. Obviously the price will rise over time like everything else, but I think the relative value of pellets over other fuels will remain. Just an opinion for what little it is worth.

 

[JustWood]

Lots of factors to consider but I think you'll see a spike in pellet prices but it will be short lived. Raw material supply seems to be pretty consistent barring major weather events like we are seeing right now or extremely wet weather for months in a row affecting the delivery of raw material.
I don't believe you'll see prices in the $200/ton range for much longer. $180 is about rock bottom with production/transportation costs. Those costs are increasing dramatically .
The # of pellet using units sold in the next year will play a big part also. IMHO there could be lots of units sold in the south due to the extended cold spell they've experienced this year.

 

[RKS130]

Lots of factors to consider but I think you'll see a spike in pellet prices but it will be short lived. Raw material supply seems to be pretty consistent barring major weather events like we are seeing right now or extremely wet weather for months in a row affecting the delivery of raw material.
I don't believe you'll see prices in the $200/ton range for much longer. $180 is about rock bottom with production/transportation costs. Those costs are increasing dramatically .
The # of pellet using units sold in the next year will play a big part also. IMHO there could be lots of units sold in the south due to the extended cold spell they've experienced this year.

True - but this winter seems to be anomalous, so the demand for pellets (as opposed to stoves) over the next few years should probably not have too much of an impact. Unless of course pellet mills ramp up production based on stove sales, in which case there is likely to be a relative glut of pellets which will stabilize prices further.

 

[JustWood]

True - but this winter seems to be anomalous, so the demand for pellets (as opposed to stoves) over the next few years should probably not have too much of an impact. Unless of course pellet mills ramp up production based on stove sales, in which case there is likely to be a relative glut of pellets which will stabilize prices further.

I think people are getting fed up and educated on "fossil fuel supply issues". This winter could be a game changer due to the HHO and propane supply issues
Most mills can't increase production due to running at capacity or raw material supply issues. It will take new infrastructure from the woods all the way to the mill to increase nation wide output. The last 10 years of different issues has decimated forest product infrastructure. Any newly vested infrastructure will likely be made for export production.

 

[Bioburner]

With the Cochin pipe line being purposed to move the Bakken crude south the propane it normally carried north is a major factor for the propane shortage. Its hard for trucks and trains to move that much gas. There was a pellet plant in northeast MN for sale last year. I had posted picture of product and looked like it was 10% toothpicks. Probably closing because of poor quality or the state has the 3rd highest tax burden on companies of the nation even implementing a warehouse tax. With electric rates rising because we are selling and letting the Chinese burn our coal the pellet cost will have to rise as grinding and driving a roller mill go thru the roof.

 

[moey]

Lot more competition with pellets to keep the price low. Also its a low capital investment to start a pellet mill compared to a oil/gas refinery. Ive yet to read about the billionaire tycoon who said he/she made their fortune in pellets.

 

[moey]

OP have you considered other heat sources ground source heat pump perhaps? I know in Maine you can get the 30% tax credit and $5000 rebate that in my opinion would make it no brainer in some cases over a pellet boiler.

 

[velvetfoot]

Rocky ground here. Wells are expensive. Worth a thought.

 

[Bioburner]

Rocky ground here. Wells are expensive. Worth a thought.

They put the coils in trenches around here as well as wells. Wells are for sites without much room.

 

[moey]

Rocky ground here. Wells are expensive. Worth a thought.

Worth looking into they can do a lot even on small lots with a excavator. You may have to call a couple companies everyone specialized in something different some wells some digging some both. You may end up being pleasantly surprised. Quotes are free . They did ours using 150 ft by about 15 ft of clear land that is enough for our 2500sq/ft house. We have a larger lot but its all trees which they could have knocked out but didnt see the need.

 

[PoopieBritches]

Has been said here before, I don't remember who, but pellets are definitely not ready for main stream acceptance. Too many inconsistencies with quality, just look at the reviews board, this pellet was great last week, this week, not so much(slight exaggeration). Plus, there is still a fair amount of work involved to keep a pellet stove running efficiently.

As far as taxation, already here. In New York, it varies by county, some charge tax on fuel, some don't. Surely only a matter of time before they all do.

Personally, I like the fact that the masses are not ready to do so much "work" to heat their homes. Keeps the price down for those that do.

 

[Bioburner]

When I was messing with making peat logs I met with a gentleman from Europe that said that some areas had someone coming into home on a very regular basis to feed and service the heating elements. Instead of the Culligan man delivering and servicing the water softener you would have a fire meister servicing the heating unit.

 

[DZL_Damon]

OP have you considered other heat sources ground source heat pump perhaps? I know in Maine you can get the 30% tax credit and $5000 rebate that in my opinion would make it no brainer in some cases over a pellet boiler.

Did you know they just enabled a new Efficiency Maine grant that gives a $5000 rebate for a pellet boiler as well?

 

[Tonyray]

One thing you CANNOT COUNT ON IS THE WEATHER..and neither can pellet dealers and manufactures..
No guarantee that next winter will be the same or worse.
could be mild in some regions in which case pellet demand and sales would drop..
and that would give us all better sale prices the following spring...
so, I don't see the sky fallin here concerning pellet prices..