Quite right.
I have
no idea what they use for raw material, but the nail doesn't mean they're using pallets - they still could be but the nail wouldn't prove it. The one possibility that I know is not possible at all is for any object to make it through a pellet machine without being pelletized.
Just as an example of the amount of pressure applied in a pellet machine, there's 2 pictures attached. Each roll running inside the die has 2 tapered roller bearings. The first picture is a hardened steel roller from a bearing that failed. The second picture is another roller from the same bearing that got out when the bearing failed. Anything that goes into a pellet machine has to be pressed between the die and the rolls, which makes for pretty cool examples, but they aren't so fun to deal with at the time.
A nail wouldn't even slow the machine or make a noise but would be mashed into pellets. That's why there are normally several other systems in place to prevent metal from ever reaching pellet machines.
I don't doubt at all that you had a pallet nail in the bag. It just had to be introduced into the bag in some other way than through the pre-pelletizing production stream - somewhere after the pellet machines.
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