Webmaster said:
Michael6268 said:
Large distributor in my area - "Sold out entire stock for season" over 10,000 tons. Will be getting trucks "here and there" throughtout the season. Said people were ready to kill him! I know money is tight, but it was to be expected, and people should have bought early... Also noticed the sign at Agway advertising pellets is down.
Where?
Harry, has anyone done a real study on the amount of Pellets compared to the projected increase in stove sales? In other words, does anyone know what is going on? Talk about customer problems.....a lot of $3000 stoves with no fuel or fuel at 50% extra markup is not going to make for happy campers.
We are up 81% over same time last year in pellet sales. Stoves are up, but nowhere near as much...15%? (although thats something considering last year- I evpected a drop from last year). Part of the problem might be the "allocation" of pellets tho...up until this year, the pellet co's would allow dealers to stck up early at somewhat reduced prices. Of course, all dealers dont do this because of lack of storage space. the reason this was done was supposedly to "smooth" out the pellet inventories, make more available later in the year. WHat it seems to have done is limit supplies yet again. One supplier tells me they have extra softwood pellets, and are raising their prices because the was LESS than expected demand, and they are now having to pay warehousing fees. So, they have extra. They are upset with their dealers because the delaers committed to alot, and never took delivery (not me, by the way). Another supplier is supplying their dealers with roughtly half of their monthly allocation. The rumor is, their warehouse is empty. There are supposed to be more pellets coming into the Northeast, for instance a bagging mill in Palmer, Ma, but it likely wont be online till October. That mill is supposed to supply 80,000 tons of softwood pellets into the NE market. Thats really not much, certainly not enough to cover the stoves sold.
What we've done this year is make a fairly large investment in pellets, both softwood and hardwood. Us New Englanders dont like to burn softwood pellets for some reason, and some are gonna "wait" for the hardwoods...a mistake, i believe. Ive burned them all....softwoods, hardwoods, premiums, standards, industrials. I dont see a big difference between soft and hardwoods on the premium level....maybe a little more deposits on the glass with softwoods, thats all. Anyways, the folks who buy stoves from us this year, we guarantee 3 tons of pelelts with the units, as long as they invoice them with the stoves. We arent guaranteeing hardwoods, just pellets...might very well be softwood. And they MUST be invoiced with the units....its the only way I can ensure the supply. I cant hold inventory back hoping folks are gonna come in. So far, its worked well. We dont sell any pellets we dont have on the ground either.....no preselling....cant rely on the allocation system...what happens if the mill breaks down or burns? That said, at the moment we are OUT of hardwood pellets, we have only Softwoods...Quality Brand, from Bristish Colombia, $239/ton. The hardwoods sell like mad. For instance, last Thursday, we received 3 t/l's of hardwoods, thats 100 tons...we were sold out of them by 10:30 Saturday. As of 4pm Saturday, we had 400 tons of softwood available....we'll see how it goes.
50% extra markup?! wow! Who is getting that? Im not sure where folks stop buying pellets either....I know they'll pay $259/ton picked up, not alot of folks shutting down the stoves at that price...$300? who knows? We also charge for delivery, thats not included above in the $259/ton. Costs us serious cash to deliver these things....truck, driver, insurance, taxes, etc. We try to get folks to pick them up, but around half have them delivered.
In short, no, I dont think anyone knows whats going on, both on the pellet supply side, and the how-much-will-folks-pay-before-they-burn-alternative-fuels side. I do know that most likely stove supply will outstrip pellet supply if it already hasnt. I also do know that procrastinators will always pay more if they wait...if they can even get any.....but youve heard me say that before and often. Theres a cheap time to buy fuel, and an expensive time..
!
