Pellet Price Jump

[Pete Zahria]

Sure, they are making money from what used to be waste...

That's really a misconception. Mills haven't had much "waste" for years.
They have been using practically every part of the tree for various products.
Chipboard, particle board, bedding materials, landscaping...
The "waste" people talk about, is more from factories that produce things like furniture etc.
Pellets that do contain "waste" are generally lower grade pellets.
they can contain bark, junk, additives...
Like the ones you read people here complaining about.
Premium pellets, are mostly harvested trees, FOR pellets.
Then.. they get rid of the bark etc. for other uses...

So for example, last winter was brutal. The loggers had a tough time getting stuff out of the woods.
Then... when things are really really cold, equipment breakdowns contribute to lost production etc.
There are just so many factors, that end users like us do not realize and take into account....

Dan

 

[moey]

Walmart around me southern maine has MWP for 210. Thats what they were last year at the end.

May be the beginnings of everyone dropping their prices Lowes right next store was more for their cheapest pellets.

 

[ttdberg]

Walmart around me southern maine has MWP for 210. Thats what they were last year at the end.

May be the beginnings of everyone dropping their prices Lowes right next store was more for their cheapest pellets.

What is your price at Lowes this year? Lowes, HD, and TSC are all at $239 in this area. Don't think my local Walmart sells pellets other than a very, very small amount of Pennington's - Will have to stop in and check if that's still the same situation.

 

[Boomer Sailor]

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.

That's why I have my Harman (and LOVING IT) I just had someone come over today to work up an estimate for 23 replacement windows... I'll be getting the (gasp) news on Monday...

 

[Bioburner]

That's why I have my Harman (and LOVING IT) I just had someone come over today to work up an estimate for 23 replacement windows... I'll be getting the (gasp) news on Monday...

Wanna lay bet that bill will be over 10k?

 

[Boomer Sailor]

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.

And to also keep in mind... if this mill was getting its electricity supplied by a coal plant... well with the war on coal, those days of 'cheap' electric for them will be over soon

 

[Boomer Sailor]

What is your price at Lowes this year? Lowes, HD, and TSC are all at $239 in this area. Don't think my local Walmart sells pellets other than a very, very small amount of Pennington's - Will have to stop in and check if that's still the same situation.

I was just at Lowes in Danbury, CT - (not there to buy pellets) - and they also had pellets out in front for $239/ton!

 

[Boomer Sailor]

Wanna lay bet that bill will be over 10k?

I'm praying for under $15k ! Actually my uneducated guess for 23 Pella replacement windows, double-hung, vinyl inside/outside, grids between the glass, half screens and widow wrapping outside... $13,500! I'll let you know on Monday if you can stand the suspense lol

 

[NHcpa]

I'm praying for under $15k ! Actually my uneducated guess for 23 Pella replacement windows, double-hung, vinyl inside/outside, grids between the glass, half screens and widow wrapping outside... $13,500! I'll let you know on Monday if you can stand the suspense lol

Don't forget to check out Fed and State tax credits for energy improvement...

 

[Boomer Sailor]

Don't forget to check out Fed and State tax credits for energy improvement...

Thanks for the heads-up on the Fed tax credit!!

However, I don't believe there is still a federal tax credit for windows.... but the guy who came over today said that if you purchased the X grade of window (which has the gas between the panes), then you don't have to pay the state sales tax! (which would probably be the difference between the base level of replacement window and the next level up) I'm curious to see that email estimate on Monday.... I'm hoping to be out-the-door at no higher than $15k

 

[Pellet-King]

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)

This isnt back in the "ole" days 10 year's ago when if you didnt buy your pellet's in sept you were chit outta luck, the shortage last year will make pellet's even more plentifull this year...I see you got sucked in!

 

[Boomer Sailor]

Geee people on both side of this "get your supply now / don't worry about it, you'll be fine" issue all seem so sure of themselves... I say we continue this when it really counts, like in January / February. At that point, there will be a lot of "I told you so" to go around!

 

[Pete Zahria]

... I say we continue this when it really counts,
like in January / February. At that point, there will be a lot of "I told you so" to go around!

Could go in either direction!

Personally, I hope it does not happen,
even if I am on the side that thinks it's possible...
This past spring was horrible.

Dan

 

[Boomer Sailor]

Could go in either direction!

Personally, I hope it does not happen,
even if I am on the side that thinks it's possible...
This past spring was horrible.

Dan

Oh absolutely - I'm totally with you! I have the room and the money to buy my winter supply in June/July....

I just feel badly for those who either do not have the money or the space and consequently can buy only a few bags at a time when they are able. Those who choose to wait and gamble as to whether or not there will be a shortage, I do not feel sorry for when they then have to turn on the oil or gas burners for heat if they lose their bet! As for me with electric baseboard heat... I choose not to be a gambling man!

 

[Bioburner]

Heating season may be here even sooner than last year as weather forecast for snow in northern MN with a polar plunge for next week. I hope their wrong. We need 4 more weeks of frost free weather for the corn.

 

[TimfromMA]

Buying your pellets early is a win - win. If there are shortages then you're covered. If it's a warm winter and you don't need that many, it's just that much less you need to buy in the spring.

 

[Boomer Sailor]

Heating season may be here even sooner than last year as weather forecast for snow in northern MN with a polar plunge for next week. I hope their wrong. We need 4 more weeks of frost free weather for the corn.

Wow - well good luck and God bless to all those very hard working, butt busting corn farmers!!

 

[hockeypuck]

I am as American as they come..capitalist pig... Corn farmers have been doing very well over the past 8 years with the Ethanol craze. I am all for keeping our farm lands open and not developed, which is a good by product of a bad Ethanol policy.. but I digress. Pellets are a commodity. Firewood is a commodity unless you have your own land to cut. With the crap wood I have been getting delivered, pellets are still the best bang for the buck.

 

[Boomer Sailor]

I am as American as they come..capitalist pig... Corn farmers have been doing very well over the past 8 years with the Ethanol craze. I am all for keeping our farm lands open and not developed, which is a good by product of a bad Ethanol policy.. but I digress. Pellets are a commodity. Firewood is a commodity unless you have your own land to cut. With the crap wood I have been getting delivered, pellets are still the best bang for the buck.

Oh I agree - ethanol should be discontinued as a policy... but for the little mom & pop corn farmers out there who are working every day to just survive as farmers, I always wish them well

 

[TimfromMA]

Growing corn is harder than it looks. I tried growing a few rows of it in my little backyard garden and the ears I got were, small, sad looking and tasted awful.

 

[bcpellet]

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.

You are right on the money. Most pellet mills have been hanging on at the price levels of the last few years.The price increases this year are mostly offset by higher costs. Transport charges this year alone with fuel surcharges have put the price $6-10 per ton.As ScotL points out there are a lot of costs involved with pellets. Palletizing pellets costs approx. $30 per ton.Trucking costs are expensive. Even moving them 150 miles is a minimum of $500.00.which is $21 per ton. Last year mills was paying $3.50 per running mile. Now they pay $4.01 per running mile. Mills are getting very little of the increases if any at all. thats not to say the price can't go down, but if it does you will see mills cut back on production and some even close. Running a pellet mill is a rough way to make a living.

 

[Boomer Sailor]

You are right on the money. Most pellet mills have been hanging on at the price levels of the last few years.The price increases this year are mostly offset by higher costs. Transport charges this year alone with fuel surcharges have put the price $6-10 per ton.As ScotL points out there are a lot of costs involved with pellets. Palletizing pellets costs approx. $30 per ton.Trucking costs are expensive. Even moving them 150 miles is a minimum of $500.00.which is $21 per ton. Last year mills was paying $3.50 per running mile. Now they pay $4.01 per running mile. Mills are getting very little of the increases if any at all. thats not to say the price can't go down, but if it does you will see mills cut back on production and some even close. Running a pellet mill is a rough way to make a living.

I read on another thread that you can buy DF's out in Oregon for like $199/ton... but here in CT they are $350 if you can find them - and that increase in price is all transportation costs!!

 

[Bioburner]

Truck to rail, rail to bagger, bagging, truck to store

 

[Phoenix Hatchling]

... a warm winter will have them giving them away!

Good luck with that.

 

[lessoil]

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??

Just had 4 tons of MWP delivered. $229/ton plus $10 delivery fee.

Pellet Warehouse, North Jay