Are they cutting those surcharges down now that fuel has come down? Some metals have also come down on their highs and yet I don't see those prices falling from the makers. The market will always get what it can for a product, regardless of the cost.
I agree that places need to invest in their plants, but....
Isn't Henry Ford the ultimate example here? As he grew his plants and increased production, and therefore economy of scale, he was able to sell the car for the same price or less...even with vastly improved and additional features.
As you know, improvements should be amortized over the service life of the equipment. I'm certain they would not improve and upgrade the plant unless it allowed them to produce MORE for LESS, while also figuring in a return on the investment. In other words, everybody benefits...hopefully.
This is a very young industry and as such it is likely to make mistakes. Although there is no price fixing, a number of independent operators are causing the price and supply to be less than perfect. I think that the entire industry would benefit from relatively consistent pricing and more ample supply. No one can wave a magic wand and make this happen, but competition from corn, firewood and other fuels will help.
We have to run some numbers.....the NE Pellet plant is approx 100,000 tons a year, or enough to supply 25,000 households with 4 tons each. So how many Pellet stoves already exist in New England and how many have been sold last year and this year?
Tough question - harryback sold over 50 one summer weekend. That's one store! So, let's say he sells 400 a year and 20 other dealers in Mass, plus combined internet, direct, big box and all other sources sell a bunch - how does 6,000 units in this state sound...in one year. So that is 12,000 in two years. Let's add Ct and RI and double that.....so we are at 25,000 new units in the last two years. Add in NH, VT, Maine, parts of NY State and Pa that are within reasonable distances, then add in the tens of thousands of pellets stoves that are older than that.....anyway, I am speaking out my butt here - but there are a LOT of these babies out there! And a LOT more headed in that direction. Sounds reasonable that there will be 100 to 200,000 working units total in a few years. Even 150K units at 3 tons each = 450K tons. Yes, there are other plants - energex, etc...
This does not figure in increased industrial and light commercial use - which will be growing if the price stays right. Given the right set of circumstances, would we consume 1 million tons just in New England?
I'd be interested if I am anywhere in the ball park...someone here probably knows and answer!
