pellets > $400 per ton. seems like a shortage

[DiggerJim]

Years ago, the price increase didn't hit the consumer until the next delivery. Today, the prices jumps as soon as the internet reports there is a situation, real or anticipated.

When the station's owned by the oil company, it can wait to raise the price. When the station is not company owned (most are no longer owned by the oil companies), they pay for the gas when it's delivered --- you have $35,000 sitting around?

Say you just got your tanks filled Monday at 3.25/gallon. Add a bit of markup and you're charging 3.69/gal. The difference should pay for the station, labor, lights, insurance, maybe a bit of profit. Next Monday if all goes right you'll need another 10,000 gallons and if the price stays the same, you've got the cash to pay for it.

On the other hand, if it's Wed and you've pumped maybe 5,000 gallons and something happens that makes it look like the price you're going to get charged on Monday for the refueling is going to go up, what do you do? You could wait until Monday, find out that it did indeed go up 15 cents and find yourself $1,500 short and they won't give you all 10,000 gallons as a result--it's delivered COD (or at least requires a bank wire). Or you look at the news, guess that they'll raise the price 15 cents and figure out how you're going to get that extra $1,500 you're going to need on Monday. What you do is divide $1,500 by the gas you've got left in the tanks (5,000 gal) and figure out you'll need to raise your prices 30 cents.

If it does go up 15 cents, you've got the extra cash and can drop your price a bit since you now have 10,000 gallons to spread the new cost over. If you're wrong and it goes up 20 cents, you're raiding the piggybank. If goes up less, you've got some to return to the piggybank to make up for last week when you guessed wrong.

That's why it can go up 15 cents in 24 hours and not be gouging. Gasoline inventories are at an 8 year low right now, very real possibility the refineries will be out of action for at least a week (they're shutting them down to protect them from damage due to the hurricane and can't restart by flipping a wall switch), not a lot of truckers willing to drive through a hurricane to deliver gas, etc. etc.

Still think it's unreasonable?

 

[JustWood]

WELL If Chuck,Zunaira,and Scott say it’s so, then it must be! SORRY, I was wrong all along.

_------------------------------------------------------------------------------------------------------------------------------------------------

Or maybe a state government.

http://abcnews.go.com/Business/story?id=5791480&page=1

A "feel good" move and good political publicity for state governors who want to get re elected and be noticed as "taking action" towards the heathenous "gougers"!!

When someone in the oil industry gets prosecuted for "gouging" because they raised their price $1/gal , I'll believe there is such a thing as gouging.

IT'S NOT GOUGING IF YOU DON"T BUY IT(gas) For 10 days we have heard nothing but "IKE is coming , BE PREPARED" . If I lived down there I would have filled my tank and extra cans days ago to avoid this BS and drove by every station when leaving town with both middle fingers in the air.

PREPAREDNESS WILL allow you to avoid sudden swings in market conditions (NOT gouging)!

 

[webbie]

Folks, please stop posting 5000 word news quotes - post your OWN words or a link and your opinion. Posting...and then (even worse) quoting those posting in reply....wastes time, space (my server space), internet bandwidth...and no one reads it anyway.

For the record, I agree with Lee - no such thing as gouging. Get a bicycle and work closer to home - or at home! Get rid of that 3rd car. Go shopping only 4 times a week instead of 10 times. Etc. etc.

And please try to keep threads on topic. This is the pellet area........

if you want to discuss Ike, try the Ash Can.

 

[novah]

Sounds like they are robbing Peter to pay Paul and unfortunately, I am Peter. However, your explanation does make it understandable why it happens.

 

[alexei27]

Situation is sad on Long Island. Was planning on getting pellets from Lowes. Was number 55 of the list they were maintaining. Went in yesterday and was told corporate made them throw the list in the garbage. I guess they like riots. Only two trailers being delivered in September(maybe nothing this past August) plus 2 ton limit @ $305 and $85 for delivery + tax. So an area that can easily use 1000 tons right now will be getting 42 tons in September. Home Depot is worse, only 1 store does pellets and they order 50 tons for the season.

Next option is private dealers. 349 - 389 per ton plus delivery plus tax, so lowest = $412 per ton. Not even sure they have them at these prices, will call during the week.

I found some bidding info on the internet for a local pellet dealer asking for a shipper $2500 for 22 tons to pick up from pellet mill. This helps explain the high costs. Although the prices are high, some have said at least you have control over your heating costs for the winter. But it is the availability that bothers me. I don't see it any better next year when all the new pellet stove owners decide to get pellets early.

Maybe I should just start a business as pellet dealer. My garage can hold a trailer worth of pellets. Just need a portable dock and fork lift.

Oh, and who knows if the the $5k stove will even show up.

-DC

You are right...it is sad. I got 3 tons at 280/ton back in April out in Riverhead. This...unfortunately...is the busy time of year. I was looking for a friend and almost everyone I talked to says the same thing...they cannot keep up with the demand here. It is probably cheaper...at this point...to rent a truck for a day...drive upstate and buy 3-4 tons.

 

[Snowman]

https://www.hearth.com/talk/threads/23051/

 

[kenzmadie]

You are right...it is sad. I got 3 tons at 280/ton back in April out in Riverhead. This...unfortunately...is the busy time of year. I was looking for a friend and almost everyone I talked to says the same thing...they cannot keep up with the demand here. It is probably cheaper...at this point...to rent a truck for a day...drive upstate and buy 3-4 tons.[/quote]
You won't find them in this area of upstate NY. I should have bought my pellets back in May (when they were $200 a ton) when I ordered the stove. I tried to find them in early August and none were available. I finally found some (Lignetics at $237 a ton) at a nearby hardware store. They had four ton left and that's what we needed. Was a bit concerned because I had never heard anything about Lignetics before but from what I've read on this site, people like them a lot. I was at the area Agway today and for the heck of it asked if they had pellets in. The lady there said no one in the area has them, that they have a waiting list, and they keep getting their shipments postponed. I have been on a waiting list at another area farm and home store since early August. I didn't remove my name from the list just out of curiousity to see when they'd call me. Still no calls. I know people who can't find them anywhere. I'm going to buy mine in April or May from now on.

 

[GVA]

Why do I get the feeling that the areas that have pellets, will be shipping to the areas without pellets leading to a balanced yet smaller supply with "increased pricing for all"
05-06 shortage in the east
06-07 shortage in the west
this year???????
Maine ships thier "surplus" to ??????????????????

 

[JustWood]

Shipping by truck from the midwest to New England can easily add $100+/ton to the price of pellets.
As soon as the snow flys I'd be willing to bet pellet makers in the midwest will start seeing shortages themselves.

 

[Catfishjack]

I reside in Northern NY where everything is expensive.but...I just got 5 ton of quality hardwood pellets from my St Croix/Harmon dealer for $230.00 per ton....Picked them up on a flatbed and brought them home...For all you Northern New Yorkers I was told there building a new Pellet manufacturing facility somewhere in St Lawrence County, New York..Anyone from there know if this is true or not?
catfishjack

 

[imacman]

I was told there building a new Pellet manufacturing facility somewhere in St Lawrence County, New York..Anyone from there know if this is true or not? catfishjack

You should probably make this a new thread so everyone sees the headline question.

 

[Ecoteck]

I know most people here are mainly out on the Eastern coast, but has anyone here thought
of looking else where for pellets and getting them shipped in?
We are located in Northern Minnesota and there are places here that sell high end pellets for
$225.00 a ton. I know shipping would be pretty hefty but there must be other places that sell
cheaper, so shipping added wouldn't mark it up to terrible.
Just a thought.

 

[DiggerJim]

I know most people here are mainly out on the Eastern coast, but has anyone here thought
of looking else where for pellets and getting them shipped in?
We are located in Northern Minnesota and there are places here that sell high end pellets for
$225.00 a ton. I know shipping would be pretty hefty but there must be other places that sell
cheaper, so shipping added wouldn't mark it up to terrible.
Just a thought.

Shipping in bulk can add $100/ton. Try getting a frieght quote on a 3 or 4 ton order. Truck shipping for an individual is cost-prohibitive. Now if you have a railroad siding available and interested in really large volumes, that's a different story

 

[iceman]

I know most people here are mainly out on the Eastern coast, but has anyone here thought
of looking else where for pellets and getting them shipped in?
We are located in Northern Minnesota and there are places here that sell high end pellets for
$225.00 a ton. I know shipping would be pretty hefty but there must be other places that sell
cheaper, so shipping added wouldn't mark it up to terrible.
Just a thought.

Shipping in bulk can add $100/ton. Try getting a frieght quote on a 3 or 4 ton order. Truck shipping for an individual is cost-prohibitive. Now if you have a railroad siding available and interested in really large volumes, that's a different story

even then its much cheaper to get them in a big rail car THEN bag yourself (if you have eq) the to get say 300 ton in box cars

 

[Harman PC 45 x 2]

A buddy and myself bought 14 tons @ $155 per ton. Picking up tomorrow morning.

 

[Harman PC 45 x 2]

A buddy and myself went in on 14 tons @ $155 per ton. picking up tomorrow.

 

[Tristan]

No such thing as shortage. So silly. Can you say .... OPEC??? ... Guess who is taking lessons from who?

 

[Bullets n Beans]

I was at a Harman dealer in Lakeville MN on Saturday and he was selling hardwood pellets for $200 a ton to customers, $225 for non customers.