State of the Pellet Industry

[garys314]

I am a long time user of Pellet Stoves. I have been using them for ten years. For the past several years there have been shortages in the supply of pellets. I have electric heat and use two pellet stoves as the main heat source. The predictability of pellet availability is ridiciulous. I have had suppliers promise me supply is no problem only to be burnt each time.

I see stores selling stoves but not able to deliver pellets. How can this go on. Also, have had several maintenance problems with my older insert. There is a shortage of people who can service these stoves. First go around i had to wait three weeks for someone to fix my stove.

With sales of stoves booming i only see things getting much worse. I would love to hear what other people think on the subject.

Gary

 

[MCPO]

I am a long time user of Pellet Stoves. I have been using them for ten years. For the past several years there have been shortages in the supply of pellets. I have electric heat and use two pellet stoves as the main heat source. The predictability of pellet availability is ridiciulous. I have had suppliers promise me supply is no problem only to be burnt each time.

I see stores selling stoves but not able to deliver pellets. How can this go on. Also, have had several maintenance problems with my older insert. There is a shortage of people who can service these stoves. First go around i had to wait three weeks for someone to fix my stove.

With sales of stoves booming i only see things getting much worse. I would love to hear what other people think on the subject.

Gary

More than one factor involved here such as waste product availability , production, and transportation costs not to mention the high costs of pellets and a good stove but the main hangup is that the pellet industry has not matured to the point where it is considered a prime time player.

 

[MCPO]

Gio, do you write the responses, with your pants down you ankles? You sound like Cliff Clavin from Cheers.....P.s. That part of the state is N.Y.

Reviewing your responses you must be an adolescent. And if your intentions are to alienate other forum members, it`s working but at great expense to your credibility. Time to grow up isn`t it?

 

[schoondog]

Well now that Dr. doofuss has been shushed how bout the original question ? I'm confused about the state of pellets too. The mills are quite, will there be enough wood to give adequate supply for summer pellet purchases ? Now that there seems to be more folks burning pellets and sales tax income for government are down, will our new leaders decide to tax biofuels driving prices up even more? Oil is low now, will it stay low? I'm seeing pellet prices come down a little, how much is enough vs. oil or electric? ........... ......I want to keep burning pellets. I'll pay perhaps a little more than oil would cost because I hate the oil companies and would rather see the pellet mills flourish and my money stay here. I also enjoy the heat. I'm hoping the mills can produce wood and the pellet manufacturers can get them close enough to me so I can pick em up. If both pellets and oil go up (electric will go up with oil) then I will hook the wood stove up again. I love this wood stove and hope the industry can find a way to grow.

Schoondog

 

[mnkywrnch]

Im also very new to pellet stoves,and to this forum which is why I post only when I have something useful to add to a post people like Dr. big mouth give noobs a bad name (mainly just himself)

 

[imacman]

Schoondog,

the latest that I have seen is that the "experts" think oil will be at about $48/barrel in 1 year, a rise of about 20% from what it is now (approx $41).
What that means for the price of HHO I don't know....I just paid $2.54 for my first fill-up since the first week in Aug. so roughly using 20% that would mean about $3.00/ gal in my area.

If I can pre-buy pellets this spring anywhere near $250/ton, I'm going for it.

 

[schoondog]

Schoondog,

the latest that I have seen is that the "experts" think oil will be at about $48/barrel in 1 year, a rise of about 20% from what it is now (approx $41).
What that means for the price of HHO I don't know....I just paid $2.54 for my first fill-up since the first week in Aug. so roughly using 20% that would mean about $3.00/ gal in my area.

If I can pre-buy pellets this spring anywhere near $250/ton, I'm going for it.

Me too. I can buy Appling County Pellets right now for $269 a ton. Like you I am a big fan of Lignetics though, so I'm gonna wait. I just got a load of oil for $2.10 a gallon so I'm good now for hot water/ back up heat until late spring/summer. The next few monthes will tell me what to do. I see gasoline going up $.25 a gallon in the last month and the price of a barrel of oil dropped back below $37 today. May be $45 a barrel next week if a shiek gets a cold or whatever, who knows? Too volitile. I may put in new chimney for wood stove and hook up an electric hot water heater and valve/switch it to run on whatever I think is cheaper at the time. I believe that adaptability may be the way of the future. But your right, if I can spend about $850 to heat my house with pellets next year and have those beautiful bags of Lignetics neatly tucked away in my garage by Sept. 1 I'm goin for it.

Schoondog

 

[Kenny1]

I am a long time user of Pellet Stoves. I have been using them for ten years. For the past several years there have been shortages in the supply of pellets. I have electric heat and use two pellet stoves as the main heat source. The predictability of pellet availability is ridiciulous. I have had suppliers promise me supply is no problem only to be burnt each time.

I see stores selling stoves but not able to deliver pellets. How can this go on. Also, have had several maintenance problems with my older insert. There is a shortage of people who can service these stoves. First go around i had to wait three weeks for someone to fix my stove.

With sales of stoves booming i only see things getting much worse. I would love to hear what other people think on the subject.

Gary

The state of the pellet industry as a whole is that it is (IMHO) too small.

I may be way off base here, but if you will indulge my rant....

Being a small industry leads to problems in a couple of different areas.

One that we talk about all the time is pellets. And always the same questions:
Will there be any?
What is the quality?
What will be the price?

No one questions if there will be heating oil, gas, or electricity to run the central furnace. And where was the last time you heard people talking about the "quality" of the main stream fuels? They are so prevalent that they are standardized to acceptable levels to work with the readily available equipment (furnace/boiler/etc).

The next problem with the pellet industry being small is the appliances and the service. Not many places carry the stoves, fewer carry replacement parts, and qualified service people are scarce. If my oil furnace breaksdown, I can call 6 to 10 places around here who will send a guy with a truck full of parts to fix the thing. They are on call 24/7. Just because I did not buy the furnace from them will not stop them from coming and fixing it for me. And I do not buy the oil from the guys who service the furnace.

Finally is the overall effort. More people will move to alternative fuels when it is fairly easy to do so, if it is close in cost to existing fuels. That means they have to be able to buy equipment, have it serviced, and get fuel delivered without too much effort.

So, this becomes a chicken and egg issue. All of the issues can be addressed if there is a large enough customer base. However, you will not get a large customer base until the issues are addressed. We have yet to hit critical mass with the pellet industry. That may change - will the European demand for pellets make it viable to set up whole tree processing plants? Will tax incentives move more people over? I dunno.

This is not ment to be a knock against the industry - there are good dealers, service people and manufactures out there. And who knows, maybe in 5 - 10 years, pellets will become more main stream. In the meantime, we are on the fringe, which leads to interesting developments ;-)

 

[begreen]

The minor tangent into mudslinging has been deleted. Let's keep the conversation on topic and helpful folks.

 

[imacman]

The minor tangent into mudslinging has been deleted.

Thanks BeGreen

 

[newpelletstove]

The state of the pellet industry as a whole is that it is (IMHO) too small.

I may be way off base here, but if you will indulge my rant....

Being a small industry leads to problems in a couple of different areas.

One that we talk about all the time is pellets. And always the same questions:
Will there be any?
What is the quality?
What will be the price?

No one questions if there will be heating oil, gas, or electricity to run the central furnace. And where was the last time you heard people talking about the "quality" of the main stream fuels? They are so prevalent that they are standardized to acceptable levels to work with the readily available equipment (furnace/boiler/etc).

The next problem with the pellet industry being small is the appliances and the service. Not many places carry the stoves, fewer carry replacement parts, and qualified service people are scarce. If my oil furnace breaksdown, I can call 6 to 10 places around here who will send a guy with a truck full of parts to fix the thing. They are on call 24/7. Just because I did not buy the furnace from them will not stop them from coming and fixing it for me. And I do not buy the oil from the guys who service the furnace.

Finally is the overall effort. More people will move to alternative fuels when it is fairly easy to do so, if it is close in cost to existing fuels. That means they have to be able to buy equipment, have it serviced, and get fuel delivered without too much effort.

So, this becomes a chicken and egg issue. All of the issues can be addressed if there is a large enough customer base. However, you will not get a large customer base until the issues are addressed. We have yet to hit critical mass with the pellet industry. That may change - will the European demand for pellets make it viable to set up whole tree processing plants? Will tax incentives move more people over? I dunno.

This is not ment to be a knock against the industry - there are good dealers, service people and manufactures out there. And who knows, maybe in 5 - 10 years, pellets will become more main stream. In the meantime, we are on the fringe, which leads to interesting developments ;-)

Kenny, I think this is very well said.

 

[rowerwet]

Yay! we're the pioneers!
Now where's my government subsidy, bailout, and saftey hammock?

 

[OU812]

I was just pondering that question myself. There was already a bad pellet shortage not long ago and stores were limiting how many bags you could buy at a time. Now with the tax credit being offered along with unpredictable oil prices this may put a real strain on the pellet market. If everyone becomes a pellet pig will pellets go to $10.00 a bag? It does look like some alternatives like switchgrass pellets are now being offered and hopefully some of these alternatives will offset the market a bit.

 

[krooser]

It would be nice to have the dealers here respond since they are on the front lines of this industry...Eric where are you?

 

[OU812]

He is probably stocking up on pellets!

 

[rowerwet]

Due to supply and demand the number of pellet mills will increase if there are shortages, (not quite so easy for NIMBYs to stop as oil etc.) the same thing with dealers, service companies, and manufacturers. like was said before it will take some time to settle out, and some things will fail while others do great. The only real issue I see is that thanks to congress mucking up the banks, a lot of pellet mills etc. won't get financing and that may cause price spikes to last longer.

 

[krooser]

The pellet industry is still very young.... it's still pretty much the "wild west" compared to other industries.

Like many fledgling technologies, the entrepreneurs will take the risks and invest and grow the industry. Big business will then take notice and come in and dominate the landscape. Lennox is already making stoves after acquiring another manufacturer. Others will follow IF the pellet industry becomes large enough to generate $$$.

 

[thz123]

I believe that we are looking at higher pellet prices next year.

With the new home construction industry at a decline, the pellet mills will have a harder time buying raw material. The law of supply and demand will effect the industry with regard to pricing the raw material for making pellets. If we have a shortage of raw materials, the price of pellets will increase.

In the U.S., the price of electricity has risen this past year, which will affect the price per pound of pellets, due to the electrical usage in processing.

Next, if we consider businesses ability to acquire financing from banks to finance production, this has been a problem all over the country (not only with the pellet industry). Our economy affects the credit and new home construction industry, which in turn will affect pellet pricing.

The price of diesal fuel has dropped over the last few months, however the price of pellets has increased, one would think the price of pellets would decrease.

Then take a few moments and google a few of the companies that make your pellets, and you will see on the web pages that they are advertising to purchase wood waste. This is the first year I have seen these pellet companies advertising on their web sites to buy raw material. I emailed one of the people in sales from Marth. He informed me that the raw material is hard to come by, because the housing industry is in a slump.

Last weekend I stopped by my Quadrafire dealers store, to see if they had any pellets, and he said that they have been waiting on a shipment for some time. He sells Fuel King which is made in Spencer, Iowa (I live in Iowa). Then I went to our towns farm supply store to see what type of pellets they had for sale. They had Pike and Eureka for sale. I asked about the Fuel King Brand, and he said that they haven't been able to get a truck load delivered. So apparently Fuel King is having trouble supply product to the dealers.

Because of all this I plan to start buying pellets right now for next year. I think I have about 2 tons now. I intend to have 4 tons by the begining of summer. I will be buying between now and then.

Also, the pellet industry needs to realize that they may price themselves at such a high point where it would be cheaper to burn fossil fuels. That would decrease the demand for the product. No profit = no new pellet mills....

 

[JustWood]

The pellet industry is young but the infrastructure is in place for there to be plenty of pellets for existing stoves in North America IF, IF, IF, IF no pellets are exported. Everyone seems to forget Europe has experienced high fossil fuel prices for many years and their hunger for cheap alternatives is bloodthirsty.

 

[jtakeman]

I was just pondering that question myself. There was already a bad pellet shortage not long ago and stores were limiting how many bags you could buy at a time. Now with the tax credit being offered along with unpredictable oil prices this may put a real strain on the pellet market. If everyone becomes a pellet pig will pellets go to $10.00 a bag? It does look like some alternatives like switchgrass pellets are now being offered and hopefully some of these alternatives will offset the market a bit.

I just got a qoute for switchgrass pellets. $6.00 a bag. A little cheaper by the ton but not much.

About the same as pellets. I think right now the pellet price is off setting there prices.

There goes that Idea.

Jay

 

[Sawduster]

Firestarter from N.E. Kingdom, I love your idea of small localized pellet producers, but I don't see how a small producer like yourself could afford to sell at a price that would be competitive with the big boys. In theory it is a great idea, but it is like the buy local slogan here in Vermont - the slogan applies to food and many other commodities. The problem is the cost is usually twice that of something brought in from somewhere else. As much as I want to support my local producers, most of the time I can't afford it.

 

[jtakeman]

I was just pondering that question myself. There was already a bad pellet shortage not long ago and stores were limiting how many bags you could buy at a time. Now with the tax credit being offered along with unpredictable oil prices this may put a real strain on the pellet market. If everyone becomes a pellet pig will pellets go to $10.00 a bag? It does look like some alternatives like switchgrass pellets are now being offered and hopefully some of these alternatives will offset the market a bit.

I just got a qoute for switchgrass pellets. $6.00 a bag. A little cheaper by the ton but not much.

About the same as pellets. I think right now the pellet price is off setting there prices.

There goes that Idea.

Jay

wish youd try a bag. i thinx they might burn baad! wish i could

CZARCAR,

I just priced Premeir pellets at my local TSC for $5.78 a bag. Why bother! Stopping by tomorrow to get a ton for $289.00.

Jay

 

[hearthtools]

More and more mills are popping up
Like it has been said the problem at this time is Raw materials to make the pellet
and then Most of the cost is Transportation of Raw Materials to the Mill and then Transportation to your supplier.

Most of you are on the East coast Looking at the Map you have 3 times the amount of mills to choose from that I do on the west coast.
and there is NO pellet mills in California because our Logging Industry died with the spotted owes in the early 90's
There was 2 large lumbers on across the street from me that is now a shopping center and a industrial park and the other 10 Ten miles from me now just a open field and a broken down mill stuff. now the closest lumber mill is 125 miles away and the other is 200

as far as the stove biz in general we are dieing out here in the west coast with Housing market down and warm winter.
it is 70 deg here right now. when normaly it is 30 to 50 deg. Our sales are down 75%.
not sure how long I can hold on.

 

[humpin iron]

Everyone must remember that it would help us all if people would buy in the off season. If your load is late in June or July who cares? If it's late in Nov. the dealer sucks. Pellets are made year round, 80% are called for in the fall. As far as the price of pellets, we also thought they would drop with fuel going down. How ever there is a price war going for raw material. Pellet mills compete with plywood makers and from what I've been told the big one is ethanol makers. There are other fuels being developed, switch grass is a big one, actually piano grass, switch grass got gobbled up by the ethanol makers.
Now everybody remember to call for A/C service when the weather breaks, not when its 90.

 

[jtakeman]

Rod,

This has been the worst winter for use in a long time. The guy I just bought the Omega from has had his best year is stove sales.

Funny how mother nature works.

Good luck, Hope you can hang in there!

Jay