Pellet Price Jump

[pourlepayssauvage]

Just started looking around at pellet prices for the upcoming season...I mainly burn MWP -- last year Home depot had them for 209/ton, looks like it's 239/ton this year. The local EBS had them for 239 delivered last year and they're at 259 delivered now. Anyone else seeing a price jump??

 

[hossthehermit]

yup ..........

 

[Bioburner]

Even worse around here in Minnesota. Going back to corn mostly this season. Tomorrows high 65?

 

[camdids]

Definitely in lowes and Home depot. My Local Dealer though is pretty much the same as last year. Much better pellet too.

 

[TimfromMA]

Seeing $20 - $30 per ton increase locally.

 

[Pellet-King]

And there not selling around here...good.....letum realize there ripping us off for the same exact pellet a year later...DO NOT FREAK OUT AND BUY PELLETS UNTIL THERE ABSOLUTLY NEEDED!!... a warm winter will have them giving them away!

 

[Boomer Sailor]

If the Pellet King above is right, I'd agree and say wait... However, I'd much rather be safer and buring a few extra $$$ per ton for pellets which I had delivered in July than taking the chance and have to revert to my VERY EXPENSIVE electric baseboard heat for my 2,300 sq. ft. house

(Ever see a $950 electric bill in January - for a normal January at that? I'd rather not go there)

 

[TimfromMA]

And there not selling around here...good.....letum realize there ripping us off for the same exact pellet a year later...DO NOT FREAK OUT AND BUY PELLETS UNTIL THERE ABSOLUTLY NEEDED!!... a warm winter will have them giving them away!

OR don't buy them and scramble around for whatever crap pellets you can get if shortages rear their ugly head again (assuming you can find any at all)

 

[sperley03]

Just bought 4 ton of Energex and 2 were delivered yesterday. Got them for $275/ton delivered, but I did notice the guy across town that was asking $249/ton undelivered is now up to $259.
My career is logging, I operate a harvester and have noticed there is a price increase over last year's per ton at the mill so maybe this is the reason why we see an increase since the cost of raw materials has increased.

 

[Big papa]

How much do u think it actually cost the companies to make a ton of premium pellets their cost?

 

[Boomer Sailor]

How much do u think it actually cost the companies to make a ton of premium pellets their cost?

Who would know? I'm sure a lot would pretend to know... But a better question would be how much does it cost an investor to build a pellet mill, acquire land, buildings, machinery, bagging, acquire raw materials during what time of year, hire employees, pay for insurance, utilities, marketing for thier particular quality of pellet, advertise, transportation, pay town, county, state and federal taxes, etc.? Yes, once all that is covered the actually price per ton of pellet produced from raw materals is probably minimal... the rest is overhead with a little profit left over to pay the employees! Oil companies only make about 7 cents per gallon of gasoline... the rest are taxes and overhead!

 

[Big papa]

Sounds good but he or she owning a sawmill lumber mill is making money from waste that used to cost them money to get rid of and having all those costs minus the pellet mill beforehand

 

[Boomer Sailor]

Sure, they are making money from what used to be waste... but they still have to have all that overhead to now make something of the waste product... they don't exactly just sell plastic garbage bags of sawdust. It was less expensive for them to simply toss the sawdust as a waste product - turning it into something we want to buy costs an investment of a small fortune to say the least. Why does good glassware cost so much... they are only using sand and heat.... But what do I know - I'm a pilot and not an economist!

 

[Big papa]

Was just curious just wondered how pellets I bought in the spring for 180 a ton can go up to 250 a ton by fall not a prob for me have all the pellets I need for this winter just think there's more overpricing than there should be

 

[Boomer Sailor]

Maybe you're wondering... why do some pellets cost just more than $200/ton while others sell for $350/ton? Why are some people willing to spend up to 75% more for one brand versus another? Are some pellet mills making a larger profit per ton than others who share similar costs of production and material aquisition? All for the same reasons some people buy coach vs. first class tickets.... Fords vs. Mercedes-Benz.... basic replacement windows vs. Andersens!

 

[Big papa]

No I was wondering way the same pellet from the same company cost $60 more in the fall as opposed to the spring price in the same year

 

[Boomer Sailor]

Ahhhh that's a different question! It is all supply and demand! There were shortages last winter and everyone has to now cough up a little more this year. If this winter is a total bust and we have an above normal winter in terms of temps... and supply houses are sitting on tons of supply, you'll end up paying less NEXT year than the prior year - lets hope that happens!

Glad you have your winter supply already on-hand - as do I! We won't be the ones scrambling to find pellets - we'll be the ones watching the game, beer in hand and wondering what all the fuss is about

 

[Big papa]

Yup headin to bed gotta get up early thanks for replies

 

[tjnamtiw]

(Ever see a $950 electric bill in January - for a normal January at that? I'd rather not go there)

Holy crap! I'd be looking at the new super high efficiency multi-room ductless heat pumps if I were you. The ones I was looking at are rated for full heat output down to -5 F.

 

[scajjr2]

Yeah Greene Team at Lowes are up $24/ton from last year.

Sam

 

[mepellet]

I didn't see any price increase on my mwp blend this year. However I did purchase this years pellets a couple months ago.

 

[ScotL]

Price increases aren't always from the mill. A small mill increase can lead to a larger retailer increase.

It looks like there is confusion about the costs involved with making pellets. Here's a partial breakdown of costs involved, just to help with the confusion:

Raw Material x 2 - by the time you remove the water from the wood and burn some to fuel a dryer, it can take more than 2 tons of raw material to make 1 ton of pellets.
Electricity - this has doubled recently. In the winter it increases by a factor of 8, on the good days.
Electricity transmission + demand charges + capacity charges + REC fees - sometimes the transmission costs more than the electricity.
Hardware - pellet machines and hammer mills especially take a lot of wear. You'd be surprised how much bearings, rolls, dies, and even grease costs for pellet machines. All the other machinery wears out too.
Labor - lets just say it's not cheap and is getting more expensive all the time. Labor costs a lot more than just what the employee is paid after taxes.

If there was a lot of money in it, supply would be much higher.

 

[Pete Zahria]

And there not selling around here...good.....
letum realize there ripping us off for the same exact pellet a year later...
DO NOT FREAK OUT AND BUY PELLETS UNTIL THERE ABSOLUTLY NEEDED!!...

(broken image removed)

You are SOOOOOOOO wrong....

Dan

 

[mepellet]

I knew ScotL would chime in on this one! Keep up the good work ScotL! I enjoy being able to purchase a locally made pellet (MWP) sold by a small local company (SIB).

 

[Jaymaine34]

All of the places I buy from have plenty of product on the ground people in my area just aren't buying yet .hard to think winter when we are gonna hit almost 90 for the next 2 days . One of the suppliers I deal with actually called me and asked if I wanted more . He's worried he bought to much ! He's a good friend told him not to worry he'll be out soon enough . Prices are up about 20 a ton but all it has done in my mind is put the big box store pellets inline with the better quality stuff . Everyone is waiting on a sale ! Myself I bought early like I always do and bought extra gave a few tons away last year ( never take cash ) just tell them to replace them . I don't ever want to go one a mad scramble like I saw people doing last year . It's piece of mind to know I'm all set for this winter and the start of next . If there is a sale I'll buy more for next year ( I'm lucky I have the space ) my dad taught me young always plan ahead !