Pellet shortage? Price increases? Oct 2020

[minux]

In reality very few of us burn pellets, it's just too expensive, we are allowed to harvest firewood on any vacant crown land with just a $5 permit, so most that do burn cut their own wood. But natural gas is so cheap almost everyone just uses that for heat, I live in a newer subdivision of just over 200 homes, I'm the only one with a wood stove, it's more of a novelty. The areas with houses built in the 70's and 80's have a much higher proportion of wood stoves however used for supplemental heat.

What has happened though is the supply of waste wood for our biomass to electricity plants has become more scarce, they now have to compete with the pellet plants for fuel. It really makes no sense, why ship the biomass in the form of pellets half way around the globe when we can burn it here in raw form and generate electricity for ourselves?

No our gas is pretty good, I've never had a single issue from poor fuel, and know very few people that have. If there is an issue it's usually from a fuel station causing water contamination. I live 4.5 hours away from Edmonton which has 4 separate refineries that produce the lions share of the gasoline for Western Canada, much of which is cracked from the heavy oil from the oil sands. In essence we get to burn semi-synthetic gasoline and diesel in our vehicles. We do have ethanol in our gas, 5% average is mandated by the government, but many stations offer ethanol free premium. In some ways the ethanol is nice, it acts as a gas-line antifreeze in the winter, it really doesn't take much moisture at all in -40 to plug a fuel line.

Your situation is emblematic of the global situation.

When you add-in the sunk costs for a pellet stove (e.g., stove, pipe, etc.), the fact the pellet stove still need electricity to burn, your time to load and tend to the stove, the cost to warehouse pellets, yearly or bi-yearly flu cleaning, shop vac with HEPA filter, and the rising costs of pellets; I would love to see someone's BTU costs versus everything else. Perhaps, buying cords of wood is more expensive than pellets, who cares. I am not a homesteader nor logger, so I want cheap winter heat.

Here is my tale - I was gifted a $6K stove. Do you know how much electricity $6K buys? Answer - a LOT.

If I was a homesteader, I would go all-electric: solar panels, High Efficiency mini-splits, etc. While my neighbor's are clearing 2022's wood, I'd have my cabin settled at a nice 95 degree, melting the snow right off my roof. Sometimes, TECH is GOOD, and it ain't dirty.

Unless you want a fire flickering, pellets for heat are OBE for many years to come and will never return to the $0.89 per bag.

 

[ARGlock]

Hi All,

Interesting reading in this thread! I'm anxious to hear what everyone is paying for pellets this season.

AR

 

[Highbeam]

Your situation is emblematic of the global situation.

When you add-in the sunk costs for a pellet stove (e.g., stove, pipe, etc.), the fact the pellet stove still need electricity to burn, your time to load and tend to the stove, the cost to warehouse pellets, yearly or bi-yearly flu cleaning, shop vac with HEPA filter, and the rising costs of pellets; I would love to see someone's BTU costs versus everything else. Perhaps, buying cords of wood is more expensive than pellets, who cares. I am not a homesteader nor logger, so I want cheap winter heat.

Here is my tale - I was gifted a $6K stove. Do you know how much electricity $6K buys? Answer - a LOT.

If I was a homesteader, I would go all-electric: solar panels, High Efficiency mini-splits, etc. While my neighbor's are clearing 2022's wood, I'd have my cabin settled at a nice 95 degree, melting the snow right off my roof. Sometimes, TECH is GOOD, and it ain't dirty.

Unless you want a fire flickering, pellets for heat are OBE for many years to come and will never return to the $0.89 per bag.

Obe ?

 

[minux]

Overcome by Events (OBE)

 

[SidecarFlip]

I too noticed the plywood price stayed the same while OSB jumped 2-3x.

I won't use OSB for anything. Basically material that can be made into pellets.

 

[SidecarFlip]

Was at the local TSC to get feed yesterday. They have MHW pellets stacked 3 pallets high and 10 deep in the back lot. No shortage of them here.

At 212 a pallet, I may buy a couple more for next year. I can store at least 60 pallets of pellets in the barn and haul 10 pallets at a time.

 

[minux]

Was at the local TSC to get feed yesterday. They have MHW pellets stacked 3 pallets high and 10 deep in the back lot. No shortage of them here.

At 212 a pallet, I may buy a couple more for next year. I can store at least 60 pallets of pellets in the barn and haul 10 pallets at a time.

Only a few years ago, same pallet was $180...

60 pallets is a ($1,920) difference in a few short years. How much is your lost barn space worth? Quite a few animals can live where 60 pallets can.

 

[SidecarFlip]

Only a few years ago, same pallet was $180...

60 pallets is a ($1,920) difference in a few short years. How much is your lost barn space worth? Quite a few animals can live where 60 pallets can.

Time flies when having fun...lol 180 was more than a few years ago, more like 10 years ago. When I first started buying pellets 25 years ago +, they were 100 bucks a pallet.

I actually have enough room for inside for a couple hundred pallets of pellets and if I were to get them in bulk, I'd pre order a full flat bed semi loads (44 pallets) from either Somerset or MHW in Muskegon, Michigan and have one of their company trucks deliver them to me. 2 reasons why I don't. One, it would take me a decade to use them all and pellets really don't keep well. They like to attract moisture and get mushy and if I bought that many, I'd have to sell them retail and I don't particularly like dealing with people, especially whiny individuals so, I don't. Bad enough farming but then I don't deal with individuals on that score either. Row crops are sold in bulk at pre determined contract price and all the hay I run is sold to a commercial feed lot operation, again, at a pre determined price. run it, load it and get paid at the end of the year. I(n fact, the farm just got a check for that.

Why would I pay 212 a pallet in bulk anyway. I didn't price them this year but I bet they are around 180 or 190 a pallet in truckload quantity delivered, transportation included. They side load them so you just pull them from the side of the flatbed. I use my forks on a farm tractor.

 

[johneh]

When I started with a pellet stove 19 years ago Cubix was 4 $ a bag 200 a ton
no provincial tax Last spring when I bought early bird it was 5:60 a bag or
280$ a ton Plus provincial and federal tax
Propane /natural gas/oil have also gone way up. Hydro is out of this world
Pellets are still #2 in line for cheapest Firewood in 2002 was 225$ a cord today
it is 350$ and some places are charging 375$ a cord. So what do you do
but try to do the best with what you have. Now the prices Quoited are for my area
and in Canadian Dollars

 

[minux]

Time flies when having fun...lol 180 was more than a few years ago, more like 10 years ago. When I first started buying pellets 25 years ago +, they were 100 bucks a pallet.

I actually have enough room for inside for a couple hundred pallets of pellets and if I were to get them in bulk, I'd pre order a full flat bed semi loads (44 pallets) from either Somerset or MHW in Muskegon, Michigan and have one of their company trucks deliver them to me. 2 reasons why I don't. One, it would take me a decade to use them all and pellets really don't keep well. They like to attract moisture and get mushy and if I bought that many, I'd have to sell them retail and I don't particularly like dealing with people, especially whiny individuals so, I don't. Bad enough farming but then I don't deal with individuals on that score either. Row crops are sold in bulk at pre determined contract price and all the hay I run is sold to a commercial feed lot operation, again, at a pre determined price. run it, load it and get paid at the end of the year. I(n fact, the farm just got a check for that.

Why would I pay 212 a pallet in bulk anyway. I didn't price them this year but I bet they are around 180 or 190 a pallet in truckload quantity delivered, transportation included. They side load them so you just pull them from the side of the flatbed. I use my forks on a farm tractor.

Not sure what your consumption per season is, size of your dwelling, nor insulation levels... I would take advantage of this warm October, get a case of spray-foam insulation, and go through all window and door frames one by one.

Our last bad Winter, we burnt 80lbs a day, using pellets as the only source of heat. I since upgraded all doors, redoing all frames, and consumption dropped to 30lbs a day, using pellets as the sole source of heat.

We had an "extreme" door frame issue on all entry points: could see clear daylight at every door. Unless you are in the Canadian Wilderness, going through 12 tons or more of pellets a season indicates something else is afoul.

Considering pallets are $220 a pop at HD (10% off eligible), I would look at some scerws and can insulation instead of bulk ordering tons of pellets.

 

[SidecarFlip]

We have a completely refurbished (and insulated 120 year old farm house) with spray foam in the stoop basement and R40 in the attic with spray foam in the walls and new windows too. My heat bills are never bad and I burn field corn and pellets and I grow field corn so the only cost with the corn is the usual inputs (fertilizer / seed) and combining and drying to 12% RM. I go through about 800 gallons of propane every winter but I also heat my tractor shop (40 x 60" with propane fired PEX in floor heat and that is where the bulk of the propane is consumed. I use the biomass stove to toast my feet and my wife likes it too, but it's not and never has been a must have and I'd never use one as a sole source of heat. They aren't designed to do that anyway. They are for 'supplemental heat' only. IOW, ambiance and keeping it toasty in a room or 2.

 

[SidecarFlip]

When I started with a pellet stove 19 years ago Cubix was 4 $ a bag 200 a ton
no provincial tax Last spring when I bought early bird it was 5:60 a bag or
280$ a ton Plus provincial and federal tax
Propane /natural gas/oil have also gone way up. Hydro is out of this world
Pellets are still #2 in line for cheapest Firewood in 2002 was 225$ a cord today
it is 350$ and some places are charging 375$ a cord. So what do you do
but try to do the best with what you have. Now the prices Quoited are for my area
and in Canadian Dollars

Living 60 miles south of Ontario Province is peachy with me, especially after you posted that. I don't pan ANY tax on pellets here in Michigan. Not even sales tax. I charge them off as a farm expense (tax exempt).

Never understood the Canadian tax system at all. Could you explain to me what VAT actually is? Value added to what?

 

[minux]

We have a completely refurbished (and insulated 120 year old farm house) with spray foam in the stoop basement and R40 in the attic with spray foam in the walls and new windows too. My heat bills are never bad and I burn field corn and pellets and I grow field corn so the only cost with the corn is the usual inputs (fertilizer / seed) and combining and drying to 12% RM. I go through about 800 gallons of propane every winter but I also heat my tractor shop (40 x 60" with propane fired PEX in floor heat and that is where the bulk of the propane is consumed. I use the biomass stove to toast my feet and my wife likes it too, but it's not and never has been a must have and I'd never use one as a sole source of heat. They aren't designed to do that anyway. They are for 'supplemental heat' only. IOW, ambiance and keeping it toasty in a room or 2.

How many tons of pellets do you go through in a season?

 

[tlc1976]

Living 60 miles south of Ontario Province is peachy with me, especially after you posted that. I don't pan ANY tax on pellets here in Michigan. Not even sales tax. I charge them off as a farm expense (tax exempt).

Never understood the Canadian tax system at all. Could you explain to me what VAT actually is? Value added to what?

I wondered how you did that. Any other time the Michigan tax is 6% except for home heating fuel which is 4%.

 

[SidecarFlip]

I wondered how you did that. Any other time the Michigan tax is 6% except for home heating fuel which is 4%.

Pellets are considered a farm related expense (I am heating the farmstead), so they are tax exempt. Of course we are a bona-fide farm, we are even an LLC. I don't pay state tax on propane either, it heats the farmstead and the shop, both farm related. I do pay Federal Excise tax however unless it's for dryer gas, then I'm 100% tax exempt, no excise tax or sales tax but I'd not want to get caught heating the farmstead or the shop with dryer gas. I suspect the Michigan State Department of Agriculture wouldn't be too keen on that. The grain dryer bottles (tanks) are entirely separate from the tanks that supply the house and shop and I own them all, no leased tanks here. That way I can fill with any supplier that has the lowest price but I tend to stick with one outfit, just so happens I hunt with the owner so always gives me a fair price. Of course that means I have to watch my own fuel levels but anyone can lift a dome and look at the gauge. All mine (6) 0f them are above ground. You can bury them here but I was never interested in that. Being as I own them, I paint then green and they blend in with the trees anyway.

Farmers need all the breaks we can get. Farming is a tough business to be in. Equipment keeps getting more expensive, fuel goes up and down, inputs keep climbing (fertilizer and seed) and the end product grains and meat keep getting cheaper. Have a good friend with a huge diary farm west of here. he's in constant borderline bankruptcy all the time. Me, I'm not but then I try not to overspend on the latest and greatest stuff. I'm basically cheap.

 

[SidecarFlip]

I wondered how you did that. Any other time the Michigan tax is 6% except for home heating fuel which is 4%.

If you had any idea of how much in taxes we (farm) pays, you'd be amazed. Lots.

 

[tlc1976]

I just was curious how that worked. Hats off to farmers, some of hardest working people on the planet.

 

[minux]

I just was curious how that worked. Hats off to farmers, some of hardest working people on the planet.

Also, generally, very good people... If I ever brake down on the side of the road, I look for truckers or farmers. Always willing to help out their fellow man.

 

[SidecarFlip]

I love the country and the country farm life. Around here everything is on a man's word. Do 90% of transactions with a handshake. Last tractor I bought was like that. never filled out any paperwork until a month after it was delivered, but, you screw someone, you name is mud from then on out. If every part of society operated like that, we would be a whole lot better off.

Only have a credit card for purchases other than local. Anything local is the handshake credit.

 

[ABMax24]

Never understood the Canadian tax system at all. Could you explain to me what VAT actually is? Value added to what?

It's not VAT, it's GST, Goods and Services Tax. Really no different than a sales tax in the US.

 

[johneh]

GST, Goods and Services Tax.

It is known by most Canadians as the GRAB and SCREW TAX
The %age varies from province to province. In Ontario
add 13% to just about everything you buy

 

[minux]

It is known by most Canadians as the GRAB and SCREW TAX
The %age varies from province to province. In Ontario
add 13% to just about everything you buy

I spent time in Nova Scotia and saw the 15% tax on purchases years ago. Really gorgeous country and amazing people, but darn....

 

[johneh]

I spent time in Nova Scotia and saw the 15% tax on purchases years ago. Really gorgeous country and amazing people, but darn....

With just over 40 million people in this Country our
social policies have to be paid for never mind infostructure
but that's the price we pay for clean air and water and
the life we choose to live

 

[SidecarFlip]

...and I thought 6% sales tax was high. 15% to fund the government is over the top. Governments in general are bloated inefficient entities.

Far as the cost of owning and maintaining a bio mass stove, the ROI is low considering the useful lifespan of one. Same holds true with a wood stove. Both require frequent maintenance but so does a central furnace, especially the newer condensing ones.

One does have to stay warm. Frostbite and freezing to death is not a good alternative.

Not a fan of solar or wind. never have been. Neither work very well when the power provider don't work, IOW the sun don't shine or the wind don't blow....and, the materials used in panel production are considered hazardous waste once the panels no longer are efficient producers. Panels degrade over time. They degrade between 1 and 2% per year with an average life expectancy of 20 years before they no longer produce current and have to be 'recycled', in a hazardous landfill of course.

Finally with the huge reserves of petroleum and NG, I don't see any viable reason not to use it other than not being 'green' and candidly, I don't want to be green. I myself am as green as I want to be, combusting 2 renewable fuel sources, pellets, which are recycled scrap wood that would otherwise end up in a landfill and field corn, which I grow every year. Pellets are a value added commodity for wood related industries as is field corn for me.

 

[minux]

...and I thought 6% sales tax was high. 15% to fund the government is over the top. Governments in general are bloated inefficient entities.

Far as the cost of owning and maintaining a bio mass stove, the ROI is low considering the useful lifespan of one. Same holds true with a wood stove. Both require frequent maintenance but so does a central furnace, especially the newer condensing ones.

One does have to stay warm. Frostbite and freezing to death is not a good alternative.

Not a fan of solar or wind. never have been. Neither work very well when the power provider don't work, IOW the sun don't shine or the wind don't blow....and, the materials used in panel production are considered hazardous waste once the panels no longer are efficient producers. Panels degrade over time. They degrade between 1 and 2% per year with an average life expectancy of 20 years before they no longer produce current and have to be 'recycled', in a hazardous landfill of course.

Finally with the huge reserves of petroleum and NG, I don't see any viable reason not to use it other than not being 'green' and candidly, I don't want to be green. I myself am as green as I want to be, combusting 2 renewable fuel sources, pellets, which are recycled scrap wood that would otherwise end up in a landfill and field corn, which I grow every year. Pellets are a value added commodity for wood related industries as is field corn for me.

I agree with what you say above about taxes.

The key with solar is to isolate uses, not even tying into the grid at all. Heat Pump? Dedicated bank of panels and batteries. Thermostat can be on the monopoly grid all day long, but the pump being powered is on its own off grid circuit.

You rip electric heat and A/C out of the equation, your bill to the monopoly is very small.