Pellet prices this winter

[jkane]

PA Pellets. Did you use the NE wood pellets last season? Last year close to half of the calls I got asking me to help with pellet stove issues (from customers who didnt buy stoves from us) Told me they were using NE Pellets and their problems were solved after a good cleaning by us and using the PA pellets. But if they are working good for you then the ole "Different stoves like different pellets" May just apply. At 289 per ton we are making about 50 bucks per ton profit, which barely covers the propane for the forklift and the time spent unloading and loading them up for customers.

No problem with NEWP. This will be my third year using them (seven ton have passed through my Quad 1200).

Oh, I realize you don't make much on a ton, I didn't mean that you had to give them away. If the product is indeed of a quality that people are willing to pay more for it, good for you in offering an alternative product. I suspect however, the frugal nature of CNY residence drives them towards lower prices.

Where's your shop?

NEWP brought bulk pellet out of western canada by rail and bagged it under their name in Palmer Ma. They had a lot of trouble with these pellets. If you got pleets manufactured in Jaffrey NH you were fine.

 

[cac4]

wonder if thats what I got last year. I had some NEWP softwood...bag said they were packaged in Palmer. They were very fragrant. made the whole basement smell like a christmas tree. (not a bad thing. just something I noticed).
they burned just fine, although I don't think my stove really cares, one way or another. {insert snooty-Harman-smiley} ;-) I did think they were a little bit dusty, though.

 

[cac4]

bags were tan, with green lettering. didn't see a pallet cover, cuz I didn't buy a whole pallet.

 

[imacman]

bags were tan, with green lettering.

They are brought into jafferey by railcar in bulk, and then bagged. The are most likely from Canada, and are softwood. The Hardwoods are made & bagged in NY and are tan bags w/ dark maroon lettering.

 

[jkane]

PA Pellets. Did you use the NE wood pellets last season? Last year close to half of the calls I got asking me to help with pellet stove issues (from customers who didnt buy stoves from us) Told me they were using NE Pellets and their problems were solved after a good cleaning by us and using the PA pellets. But if they are working good for you then the ole "Different stoves like different pellets" May just apply. At 289 per ton we are making about 50 bucks per ton profit, which barely covers the propane for the forklift and the time spent unloading and loading them up for customers.

No problem with NEWP. This will be my third year using them (seven ton have passed through my Quad 1200).

Oh, I realize you don't make much on a ton, I didn't mean that you had to give them away. If the product is indeed of a quality that people are willing to pay more for it, good for you in offering an alternative product. I suspect however, the frugal nature of CNY residence drives them towards lower prices.

Where's your shop?

NEWP brought bulk pellet out of western canada by rail and bagged it under their name in Palmer Ma. They had a lot of trouble with these pellets. If you got pleets manufactured in Jaffrey NH you were fine.

WRONG WRONG WRONG...sorry, but that is just NOT true..there was NOTING wrong with the pellets and many dealers still ask about them to this day. LOTS of customers LOVED this pellet and said that it was the best pellet many of them had ever used... The reason NEWP stopped bagging them had everything to do with not paying for the product to start with and NOTHING to do with quality of the pellet. Typically when you don't pay for something or don't pay in a timely manner, that will usually get the supplier to stop shipping to you. That was the case here. Not to jump all over NEWP here, cause for the most part, I hear pretty decent things about them (for the most part), but I won't let something like this go out without comment. They got cut off by one supplier for non payment after using them for 2 years and then another in the 3rd year...and couldn't get supply without payment up front. They went to dealers and asked for committments for the 2009-10 season and wanted 60% of that committment paid up front and just about all the dealers said...Thanks, but NO thanks...that is why they stopped doing the custom bagging....

WOW, did not mean to touch a nerve. I agree that people should pay in a timely manner, and do not know the details of your business with NEWP. I do not have dog in this fight. I generally hear good things about NEWP, and western pellets are widely considered of high quality. I have delivered to people who had issues with those pellets. Once you ship them by rail ,even if they were the best pellets ever produced, you have lost control of the downstream processing. Shipping, how they were handled, bagging etc. I think cutom bagging like that has potential if done properly, and you actually pay your suppliers. In the words of the great Rodney King, "Can't we all just get along?"

 

[Clay H]

This is a price history here in OK as i remember it
Pellets were 3.85/bag (192.50/ton) when i started this 5 years ago (fossel fuels begine there 450% rise over 4 years)
4 years ago 3.90/bag (195.ton) - 1.2% increase (fossel fuels still headed to a total 450% rise over 3 more years)
3 years ago 3.95.bag (197.50/ton) - 1.2% increase (fossel fuels still headed to a total 450% rise over 2 more years)
2 years ago 3.99/bag (199.50/ton - 1% increase (fossel fuels still headed to a total 450% rise within the next year)
1 year ago SHORTAGE 4.50/bag (225/ton) - 11% increase (fossel fuels top out at a total 450% rise over 3 more years)
this year NO SHORTAGE 5.50/bag (275/ton) - 18% increase (fossel fuels fall on there face - decline of 350% over last year)

Fossel heating fuel this year is the cheapest its been in several years yet pellets went up almost 30% in 18 months?! There is no shortage and with the rules of supply and demand, this is pure price gouging by the manufacturers based on greed and there percieved concept of "pellet stove popularity trends" The retailers have little to do with it.
I hope these manufacturers choke on there overstock this month and next and then we will see a price drop as they can't eat them all. a 30% drop probably.

 

[MainePellethead]

I bought 30 bags of these last winter. Was probably the dirtiest and hardest burning pellets I have ever burned. I had burned some the winter before and thats why I bought them last winter. Thats why I have always said.... you get bad quality cheap pellets and you get bad quality top dollar pellets....

bags were tan, with green lettering. didn't see a pallet cover, cuz I didn't buy a whole pallet.

 

[Havlat24]

I hope the pellet prices drop soon, or else I may have a tough time convincing my wife the purchase was necessary vs paying 1/3 as much to get a good propane stove installed in my new area. Logic would dictate that the prices will fall after the fall rush to get supply. If everyone buys a only enough to get by instead of enough for the winter, I think the prices will drop in mid winter if fossil fuel prices stay low. I'm going to buy a Ton and wait to get the rest.

What would be considered a good price for pellets? $225/ton? More or less?

The prices will not drop. There is serious competition for mill waste streams. Given the Industry is 50% curtailed, that = less raw material, which = higher cost to purchase raw material which = higher price of pellets.

 

[Havlat24]

I went with pre-buy on fuel oil at $2.30 a gallon. The cost is slightly higher (about $100 for the entire heating season) than pellets but there is no work to heating with oil and the whole house is warm instead of a few rooms. A local farm store is still trying to sell Barefoots at $300/ton. His yard is full of unsold pallets. The local Wal-mart is trying to peddle whatever off brand they have sitting in the rain for $290. I don't get it. Lowes had a good deal in September but by then I had already locked in and I'm not about to spend scarce dollars for pellets I don't need this year. I hope the pellet producers choke on their overpriced inventory this winter. Maybe they will learn a valuable lesson. That being, all thing considered, most people refuse to overpay for compressed sawdust.

So if a ton of heating oil (332.85 gallons) cost $2.30 per gallon, that would equal $765.56 for dead dinosaur.. that sounds expensive when you do the math that way doesn’t it…?
I guess it’s safe to say you probably won’t be buying any of my “pretty little pellets”, this season huh?…I’m just messing with you…… ;-)

How come your pretty little pellets are stored outside..in the rain and snow?

I drove through Quesnel this week, and was surprised to see 100's of pallets of pellets stored outside. In the rain and snow.

 

[Clay H]

I hope the pellet prices drop soon, or else I may have a tough time convincing my wife the purchase was necessary vs paying 1/3 as much to get a good propane stove installed in my new area. Logic would dictate that the prices will fall after the fall rush to get supply. If everyone buys a only enough to get by instead of enough for the winter, I think the prices will drop in mid winter if fossil fuel prices stay low. I'm going to buy a Ton and wait to get the rest.

What would be considered a good price for pellets? $225/ton? More or less?

The prices will not drop. There is serious competition for mill waste streams. Given the Industry is 50% curtailed, that = less raw material, which = higher cost to purchase raw material which = higher price of pellets.

I don't care how much less raw material they have, they can't survive with the current competition from low priced propane, natural gas and heating oils when they are sitting on an overstock situation, they have to have cash flow.

 

[TboneMan]

Threads like these remind me of some motor oil brand arguments I've read on truck sites.

I think it is safe to say that we all have our own motivations for purchasing a product (or not) and using the heating fuel we feel best fits our individual needs (financial, comfort, environment, community).

It is nice to have choices. Lord help us the day we don't have a choice.

 

[Clay H]

Lord help us the day we don't have a choice.

That time is fast approaching... Theres your "change"

 

[TboneMan]

Lord help us the day we don't have a choice.

That time is fast approaching... Theres your "change"

;-)

 

[Havlat24]

I hope the pellet prices drop soon, or else I may have a tough time convincing my wife the purchase was necessary vs paying 1/3 as much to get a good propane stove installed in my new area. Logic would dictate that the prices will fall after the fall rush to get supply. If everyone buys a only enough to get by instead of enough for the winter, I think the prices will drop in mid winter if fossil fuel prices stay low. I'm going to buy a Ton and wait to get the rest.

What would be considered a good price for pellets? $225/ton? More or less?

The prices will not drop. There is serious competition for mill waste streams. Given the Industry is 50% curtailed, that = less raw material, which = higher cost to purchase raw material which = higher price of pellets.

I don't care how much less raw material they have, they can't survive with the current competition from low priced propane, natural gas and heating oils when they are sitting on an overstock situation, they have to have cash flow.

Actually they can and will survive. Pellet mills are heavily subsidized by government due to the "green" nature of their business, also..the price you pay isnt necessarily the price the mills charge.

IE: Go to the lumber store, and buy a 2x4.... the mill didnt set that price...they got what the market said it was worth...the retailer marked it up.

 

[Stentor]

http://online.wsj.com/article/SB10001424052748703298004574457512739866456.html

Is there any "official" list of pellet prices and trends available to the public online?

Today's Wall Street Journal has a story that reports natural gas will drop around 12% and electricity and heating oil around 2% but I wonder if there are any predictions about wood pellets. Supply seems OK and prices are down a bit here in Mass. and southern NH, but that's just my impression. Any facts out there to look at?

Interesting comments from all and lots of emotion. But I don't see any answers to the original question. Is there some publicly accessible pellet industry information online?

 

[imacman]

.......The prices will not drop. There is serious competition for mill waste streams. Given the Industry is 50% curtailed, that = less raw material, which = higher cost to purchase raw material which = higher price of pellets.

Excuse me if I'm a little skeptical of that being the whole reason. I seem to remember last year when pellet prices were high, that every dealer in my area that I called didn't complain as much about raw material shortages, as they did the high price of diesel fuel for transporting the pellets.

But last spring, when fuel was VERY low, pellet prices stayed high. Hmmmmmmmmmm, it couldn't be the pellet dealers leaving the prices high, even after their transport costs when down, could it (add heavy sarcasm here)?

 

[MainePellethead]

Especially when their PRIME reason for pellet prices escalating was.....none other than..... transport costs! lol Transport came down dramatically.... prices did not. If the mills and dealers end up with mountains of excess pellets I will not sympathize. But if they dramatically drop the price.... I will get a bigger trailer and buy buy buy.

But last spring, when fuel was VERY low, pellet prices stayed high. Hmmmmmmmmmm, it couldn't be the pellet dealers leaving the prices high, even after their transport costs when down, could it (add heavy sarcasm here)?

 

[daydreamer]

I have seen that with everything, soda pop, groceries, whatever. Raise the price big time because of high fuel cost. Then when fuel prices went back down the prices have stayed high.

 

[investor7952]

I use 1075 gallons of oil to heat my house without the pellet stove.With the pellet stove I use 330 gallons. and 4 tons of pellets an avg of 265 a ton

 

[Stentor]

I use 1075 gallons of oil to heat my house without the pellet stove.With the pellet stove I use 330 gallons. and 4 tons of pellets an avg of 265 a ton

So you're saying your pellet cost excluding amortization and maintenance is $1060 (4 x $265). You avoid oil costs of $N (745 gallons x $unspecified per gallon). The difference between $1060 and $N is your net savings (or net loss). Seems a reasonable formula.

 

[sculptor]

Just called for my first ton purchase, $289.50 for Rocky Mountain Supreme. I can't wait to fire it up this week!

 

[investor7952]

I use 1075 gallons of oil to heat my house without the pellet stove.With the pellet stove I use 330 gallons. and 4 tons of pellets an avg of 265 a ton

So you're saying your pellet cost excluding amortization and maintenance is $1060 (4 x $265). You avoid oil costs of $N (745 gallons x $unspecified per gallon). The difference between $1060 and $N is your net savings (or net loss). Seems a reasonable formula.

Yes and the amount of oil I am not buying from the scumbag in the middle east makes me very very happy

 

[Dr_Drum]

I use 1075 gallons of oil to heat my house without the pellet stove.With the pellet stove I use 330 gallons. and 4 tons of pellets an avg of 265 a ton

I have seen wood pellets rated between 7500 and 8500 btu/lb of pellets. I have read that 8500 btu's can only be achieved in a labratory under perfect conditions, but I used 8500 anyway.

No. 2 heating oil is rated at 138,500 btu/gal (some places list 139,000). 1 gallon of heating oil equals 7.2 pounds, 138,500/7.2 = 19,167 btu/lb of oil

So:
1 ton of pellets: 17,000,000 btu's (listed at16 million at WoodPellets.com, but I'm feeling generous)
1 ton of oil: 38,334,000 btu's

4 tons of pellets = 68,000,000 btu's
4 tons of oil = 153,336,000 btu's

Your 1075 gallons of oil should hold 7,740 lbs or 148,352,580 btu's

So your 4 ton's of pellets 68,000,000 btu's , added to your 330 gallons of oil 45,540,792 btu's = 113,540,792 btu's. That's not enough btu's to match your 1075 gallon need. You are 34,811,788 btu's short. That's around another 252 gallons of oil? Something doesn't add up. Your oil heating system must be very, very inefficient, or someone stole a couple hundred gallons of oil from you. ;-P
Mike -

 

[Xena]

..on second thought, I retract my post since I don't want to get in the debate.
Sure wish this forum software could be updated so we can delete our own posts. :roll:

 

[Scoop]

How come your pretty little pellets are stored outside..in the rain and snow?

I drove through Quesnel this week, and was surprised to see 100's of pallets of pellets stored outside. In the rain and snow.

Let me state that our Dragon Mtn pellets which are made by Pinnacle are shipped out of their Armstrong BC mill and not their Quesnel mill. I can't tell you why they keep them outside or how much they have there, but since ALL of their bagged products have a one piece pallet cover over the whole stack, some rain or snow really shouldn't be an issue. Thousand of pellet dealers, all across Canada and the US, from the big boxes to the mom and pop's store their pellets outside and for the most part it doesn't cause too much of a problem.

Since Pinnacle has now 6 mills that make pellets, I couldn't tell you if these pellets are going domestic, to the States or export, you would have to ask them that. Also as you probably know, since you were just there, they are getting into the teens already and that tempurture wouldn't hurt the pellet in anyway if properly stored. Do we recommend that you store your pellets inside, sure that just makes sense, but being exposed outside won't hurt them either as long as it's not for an extended period of time. I would have to believe that most mills store their pellets outside at some point, maybe not all, but I would be willing to bet the majority do, regardless of where they are made....That is why just about all pellets that I know of have a one piece full pellet cover and shrink wrapped...to keep the elements out for a reasonable period of time...

Any other questions?

And yes they are pretty aren't they...

Everyone around here is selling pellets for $300 a ton or $6 a bag. I feel I am being ripped off and won't buy them at this price. I paid $240 a ton last year. Since your in the business, please explain how and why this is a fair price. I would buy lots of pellets for $5.49 a bag. I just feel $6 is too much.

Stan in Ont.