Will Pellet Prices Go Down?

[Bigjim13]

Oil and pellet prices have very little to do with each other. Pellets are not cheaper to produce because oil prices are lower. Fuel costs make up a small portion of delivery costs.

I get what your saying but if you recall a few years back when oil was up, pellet prices went up as well because, we were told:

1. It costs more to produce with oil up

And the ever popular

2. It costs more to get said product to the end user because the cost of oil has driven up shipping costs.

So I can see why someone would reach the conclusion that when oil goes down, so should pellet prices.

 

[Michael6268]

But yet when fuel goes up, prices skyrocket immediately.

 

[katman]

Pellet prices will probably stay high here because we are sending so much to europe. People there aren't going to retool to burn oil or gas and they actually might see a slight drop in pellet prices if shipping costs decline due to lower fuel prices for cargo ships

 

[Brettsdaddy2010]

I just checked and oil is $2.36 per gallon where I live in Vermont. I just had 2 tons of LG pellets delivered last week at $250 per ton. Right now it'll still be about $45 per month cheaper to burn pellets but...that savings is shrinking by the month. I haven't run my oil furnace in almost 3 years but if the oil prices keep dropping it may get to a point where I'll have to consider starting the beast up again. This is all a big game of supply and demand, for the past 3 years the demand for pellets has been high because oil prices have been outrageous pellet manufacturers/dealers could charge just about whatever they wanted as long as it was lower than oil and they'd have more customers than they could handle but with oil prices dropping like a rock the demand for pellets is dropping accordingly the price of pellets will also have to come down or many dealers will be stuck with a ton (or in this case MANY tons) of leftover pellet inventory sitting in their yards that they will have to pay on all next summer...you can't charge top dollar if the demand is no longer there or you will in fact be helping to drive former/potential customers back to oil!

 

[harttj]

I burn mainly corn. When corn shot up in price all the corn stove manufactures dissapeared quickly. Corn is cheap again. If pellets stay expensive wonder if the manufactures of the stoves will do the same.

 

[Bigjim13]

I just checked and oil is $2.36 per gallon where I live in Vermont. I just had 2 tons of LG pellets delivered last week at $250 per ton. Right now it'll still be about $45 per month cheaper to burn pellets but...that savings is shrinking by the month. I haven't run my oil furnace in almost 3 years but if the oil prices keep dropping it may get to a point where I'll have to consider starting the beast up again. This is all a big game of supply and demand, for the past 3 years the demand for pellets has been high because oil prices have been outrageous pellet manufacturers/dealers could charge just about whatever they wanted as long as it was lower than oil and they'd have more customers than they could handle but with oil prices dropping like a rock the demand for pellets is dropping accordingly the price of pellets will also have to come down or many dealers will be stuck with a ton (or in this case MANY tons) of leftover pellet inventory sitting in their yards that they will have to pay on all next summer...you can't charge top dollar if the demand is no longer there or you will in fact be helping to drive former/potential customers back to oil!

Curious if that $45 savings includes the labor involved with owning the stove?

If not, to me it's a wash cost wise.

 

[TheRambler]

People are right when they say the price of oil is completely seperate from the price of pellets for the most part. However it does change the supply and demand equation. With oil and propane dropping there will be far fewer people buying pellets this year. If the pellet market doesnt lower their prices for next year then they are going to start losing money even more, and the small ones could even go under.

The prices are stuck where they are for the time being. They will hold out at a high price for as long as they can to try and ride the oil wave to see if it goes back up. I doubt any significant pellet price drop will be seen before spring.

 

[Brettsdaddy2010]

Curious if that $45 savings includes the labor involved with owning the stove?
If not, to me it's a wash cost wise.

To me there isn't much labor, I store my pellets in my sun room so they are out of the elements and more importantly I don't freeze my butt of when it's 30 below outside . Sure there's annual maintenance to the stove but I do most of that myself plus there's annual maintenance on a oil furnace as well and that I can't do so I'd be hiring a guy to provide me a $150 check up for the furnace each year. Add to that fact 150 gallons of oil which is in most cases the minimum amount you can order lasts me about 1 month at $354 (using the $2.36 per gallon pricing) compared to a ton of pellets which lasts me about 1-1/2 months at $250 per ton...that's over a $100 savings and the pellets last longer. Still worth it to me but as I said, if the price of oil continues to drop dramatically over the upcoming months I will definitely have to give strong consideration to starting up the oil furnace again.

 

[Michael6268]

Pellet prices will not go down unless pellet users wise up and stop wasting their money. The reason pellet prices are as high as they are is because most people are paying the crazy prices! I hear every day on this forum I don't care how much pellets cost, im using my pellet stove. If people are crazy enough to pay the prices they're asking for, they're going to keep asking for it, getting it, and laugh all the way to the bank at the consumers expense.
Its like the beanie baby craze. A stuffed animal that cost a nickel to make, if that, people were willing to pay $30 $40 $50 even hundreds of dollars, and the makers also laughed all the way to the bank! Only the consumer has the power to see to it that pellet prices go lower.

 

[Jason845845]

My stove isn't all about saving money. My wife and I like the constant heat. We also like that the house is 72 as opposed to 62. My wife, the liberal kook likes the fact that we aren't "polluting the planet and causing global warming". I like the ambiance of the stove in the room. I also sort of enjoy "the chase" of getting pellets.

As far as the price of pellets skyrocketing, I'm furious about it and I will be using more oil this year relative to my pellet use, but my stove isn't going anywhere, at least until I switch over to wood, which will be free.

Pellet prices will not go down unless pellet users wise up and stop wasting their money. The reason pellet prices are as high as they are is because most people are paying the crazy prices! I hear every day on this forum I don't care how much pellets cost, im using my pellet stove. If people are crazy enough to pay the prices they're asking for, they're going to keep asking for it, getting it, and laugh all the way to the bank at the consumers expense.
Its like the beanie baby craze. A stuffed animal that cost a nickel to make, if that, people were willing to pay $30 $40 $50 even hundreds of dollars, and the makers also laughed all the way to the bank! Only the consumer has the power to see to it that pellet prices go lower.

 

[Grisu]

Good that you don't see me go shopping; you would go ballistic. Just two days ago I bought at our local farmers market tomatoes for $3.50 per lb and a loaf of bread for $6. Both I could have gotten for half the price in the supermarket and it was not just the inferior quality that made me not buy them there. It is the realization that I don't want to pay some corporate executives or shareholders millions in salaries and profits when the actual workers slave away at a minimum wage. Because many people here share that mindset our farmers can actually make a decent living. None of them is getting rich, though, despite working hard all day. I may be wrong but I doubt that the pellet industry is making billions in profits or paying its executives millions in salaries; Quite different from the oil industry. Add to it that by using fossil fuels we are burning away the wealth of future generations and I fully sympathize with anyone who keeps burning pellets even at those "outrageous" prices.

This cartoon shows a very different perspective from our everyday thinking and is very fitting for labor day: (broken link removed to http://links.org.au/files/surplusvalue.jpg)

 

[Pete Zahria]

Pellet prices will not go down unless pellet users wise up and stop wasting their money.

That is such a subjective word.
Is buying a large Dunkin Donut coffee every morning "wasting", because you
can make it at home for a fraction of that?
Is a Keurig "wasting" at 50¢ a pod?
Is $20,000 on a Harley that you ride a few months a year "wasting"?
How about a 52" TV?
What about a $5,000 vacation?
A $600 phone?
$2,500 bicycle?

Economy is based on buying things you 'want',
not always things you 'need'..
It is also the reason you work harder, or more, to enjoy those things.
Saying people are crazy, for buying something they want, is a little unfair.
(IMO)

Dan

 

[Michael6268]

You're missing the boat Dan. Buying a Harley over a Honda or a Ford over a Chevy is not wasting money. It's a matter of choice due to aesthetics performance quality personal preference, riding style etc. If you only wanted something to get you from point A to point B and didn't care about these factors, it wouldn't make sense to buy a Harley when a scooter would do. That would be wasting money. Buying coffee at Starbucks , could be personal taste, convenience while on the road etc. As far as heat goes IMO -heat is heat. This garbage that pellets throw a more constant heat doesn't fly with me. I live in a 3000 square foot house and if I put a pellet stove in, sure the room it's in might be comfortable but no way would it travel throughout the house like a furnace does. Maybe people that speak of the constant heat live in a very small small house. Still, years ago when pellet stoves came out almost everyone said I'm buying one to save money. I didn't hear anyone saying I'm buying it to spend more money. Again IMO heat is heat! How it gets there I could care less! You can't compare cars, motorcycles, coffee, etc, to hot air! I don't think anyone would leave one gas station and drive across town to another gas station that sells the same brand etc and pay more for their gas there. So why would one do it with hot air? OP originally asked will pellet prices come down. The sad fact is they won't if people are still paying crazy prices for them.

 

[Michael6268]

God bless you Grisu! You are a good man! I unfortunately have to be thrifty with my money. Quality is one thing, but spending more for a similar product just not to support the execs, I can't afford.

 

[Jason845845]

Aaaaaaaand I'm out.

You're missing the boat Dan. Buying a Harley over a Honda or a Ford over a Chevy is not wasting money. It's a matter of choice due to aesthetics performance quality personal preference, riding style etc. If you only wanted something to get you from point A to point B and didn't care about these factors, it wouldn't make sense to buy a Harley when a scooter would do. That would be wasting money. Buying coffee at Starbucks , could be personal taste, convenience while on the road etc. As far as heat goes IMO -heat is heat. This garbage that pellets throw a more constant heat doesn't fly with me. I live in a 3000 square foot house and if I put a pellet stove in, sure the room it's in might be comfortable but no way would it travel throughout the house like a furnace does. Maybe people that speak of the constant heat live in a very small small house. Still, years ago when pellet stoves came out almost everyone said I'm buying one to save money. I didn't hear anyone saying I'm buying it to spend more money. Again IMO heat is heat! How it gets there I could care less! You can't compare cars, motorcycles, coffee, etc, to hot air! I don't think anyone would leave one gas station and drive across town to another gas station that sells the same brand etc and pay more for their gas there. So why would one do it with hot air? OP originally asked will pellet prices come down. The sad fact is they won't if people are still paying crazy prices for them.

 

[bags]

There is a point where the cost of pellets would no longer make sense to shell out for. Not there yet but as you all can see in this thread (and many other cheap oil threads) it is beginning to knock on that door. IMO everyone purchased a pellet stove to save money heating. But then again some of you would rather have a $50 Big Mac than a $35 filet and lobster tail. Enjoy your Big Macs is all I can say.

Where is the logic in paying more for heat and doing more work for said heat? Just curious. Kind of like me saying I would rather spend a bunch more cash to go back to wood splitting and burning vs. my current reasonably priced pellet heat.

I do spend a bit more for pellets than "free" wood but convenience and current needs are factors also. All I can say as logically as possible is that IF I could flip a stat switch and change furnace filters and save money staying warm another way then it makes sense to me and I would likely do that than hump 40 pounders and clean ash. Call me crazy. It's your cash so spend it as you see fit.

Another fact is that when pellets come with a silly and hefty price tag I'll be busting and humping wood again instead. That said I would rather flip a switch and ride the couch in comfort spending less.

Bottom line is cheap oil is making people question pellet prices AND they should. If I could heat cheaper with oil I'd be on that program because it makes sense in many ways and for the diehards well, you can still fire the stove up for ambiance or a warm blast of heat at your leisure for enjoyment. That would help you save on the cheaper oil. You can also drive down the road throwing out $20 bills every five feet.

If it makes ya happy then I am happy. Hell, we are all happy but please give me a courtesy call when you want to drive by my place tossing those $20's out. After collecting them I could off set my high dollar pellet heating costs.

 

[Peterfield]

When I was researching pellet stoves getting ready to buy my first one last year, the ONLY matter discussed after how many BTU's I needed was when the "low" cost of heating with pellets would pay for the stove. That was what the vendors were hawking and that was what every one of my friends that had one already said. Yes, the heat is more even than the wood stove I was used to and it will burn evenly all night versus my old wood stove almost being out in the morning, but that little dial on the wall will have my oil burner humming and keeping the temperature of the entire heating zone at whatever temperature I want it, just by twisting a little dial. I admit to the ambiance of looking at the flame but that's subjective and if oil keeps dropping, I can just put the Harman in manual mode and use it like a fireplace when the mood strikes.

 

[Pete Zahria]

God bless you Grisu! You are a good man! I unfortunately have to be thrifty with my money. Quality is one thing, but spending more for a similar product just not to support the execs, I can't afford.

Everything you wrote in your long response in #38 was explained well in this one...

Everyone has to decide for themselves, what "wasteful" is... In your case, you cannot afford the extra.
Others can, and do.
They aren't "crazy"... and neither are you.

I can't believe how the Doug Firs are selling... People call and just want them..
Are they crazy? No... It's what they want.. I doubt they are in danger of losing their home.

I see no difference in buying pellets over oil, than a Harley over a Honda.
If it's what you want, you do it. You are the only one that knows if you "can" do it.

Dan

 

[bags]

Those Doug Firs must be as good as the taste of a $50 Big Mac. No one will see me buying a $50 burger nor a north of $300 ton of pellets and I can afford both.

Now explain this: How does the inside temp (let's say a nice comfortable 74*) of your home feel any better by spending more to get it to the 74*. Another words, what you are saying is that your house brought to 74* with high dollar Doug Firs is a better 74* than the same 74* your house could be at with a cheaper heat source? Really?

74 degrees is 74 degrees. It feels the same because it is the same. Bikes have no relevancy here unless you want to roll it into your living room for engine and exhaust heat which would be an epic failure. I have three bikes BTW. I like them all. One is high dollar and the other two low dollar.

Simple economics. No one loves their pellet stoves enough to spend ridiculous money feeding them. The thread is about pellets not being the great bang for the buck as they once were. Some are weighing in the other joyful factors of stove ownership as well vs. flipping a switch. Heating my home is a priority as is for everyone else. Doing it cheaper is better is my motto on that. Riding whatever bike or slurping high dollar wait in line with sheeple coffees are the individuals choice. Sure Starbucks has some good java but I stop at a local mom and pop shop almost every morning and nail down a kick azz cup for $1.19. Paying more doesn't make anything better. So paying more for the same 74 degrees is silly if you ask me. I also refuse to wait in a long line or slow moving drive thru for a cup of Joe.

The least expensive and easiest way to heat one's home is the best. Oil will be used a lot this season by those that have that option.

So Dan, ya might want to trade in that coal stove you heat your home with because it is cheaper than pellets. LOL! Send it my way......

 

[Bigjim13]

God bless you Grisu! You are a good man! I unfortunately have to be thrifty with my money. Quality is one thing, but spending more for a similar product just not to support the execs, I can't afford.

I don't know many people that can afford that.

I got into pellets 7 years ago, oil pre-buy budget an for me was like $4.79/gal. I didn't mind hauling, stacking the pellets, cleaning the stove with pellets at $219/ton. I was saving $1200-$1500 yr.

Now the savings is next to nothing and when I factor in time & labor, it may cost more. Just not feeling it this year. I want to burn pellets and not oil but it just doesn't make sense.

 

[bags]

Bigjim13,
Exactly. Doing a little extra effort is worth it to many no matter what to save $1,200 to $1,500 per heating season. Let's see, say you do like Starbucks a lot and don't mind the lines. $3 Java a day x 5 = $15 bucks per average work week or $60 bucks a month x 12 months = $720 annual budget for coffee.

By saving say $1,440 a year using pellet heat you would still have another $720 to boot to spend on other stuff or entertainment after the coffee tab is paid.

I went the pellet stove route for two main reasons: 1.) An economical way to heat 2.) Ease of use and fueling stove for my wife mainly since I was working out of town. Therefore, I elected to actually pay a little more vs. my endless wood cutting and humping. Made perfect sense but now I am wondering how it will pan out on return on investment since pellet prices are climbing.

Pellets are still had here for between $205 to $230 per ton except most big boxes want $4.98 a bag or $250 a ton now like many other places. Even at $250 per ton pellets make sense for me but not that much sense at all really. Anything more than that and I'll be going to plan B because I refuse to be beaten. At $250 plus or $300 a ton of pellets per month thru the heating season I will definitely be flipping my thermostat switch on.

Why would I want the extra cleaning and bag toting? Why would anyone? I like my pellet stoves,,,,, But...... I like my cash and free time much more. I am hoping the pellet suppliers are just trying to pimp cash currently and the market will level a bit. My friend that sort of helped in my decision to go the pellet route was paying $180 to $190 per ton for several years up until last year he paid $225 a ton which I paid $224 per ton my first season. This is his fourth winter heating with pellets. Now he is on the fence but did buy a new Harman recently so he is committed also. I guess mixing 50% corn to knock costs down is looking a little better too. Somewhat more of a hassle and slightly more work though.

I still have my wood options too for heating cheaply as much fun as that is and extra work We shall see.

 

[Bigjim13]

Bigjim13,
Exactly. Doing a little extra effort is worth it to many no matter what to save $1,200 to $1,500 per heating season. Let's see, say you do like Starbucks a lot and don't mind the lines. $3 Java a day x 5 = $15 bucks per average work week or $60 bucks a month x 12 months = $720 annual budget for coffee.

By saving say $1,440 a year using pellet heat you would still have another $720 to boot to spend on other stuff or entertainment after the coffee tab is paid.

I went the pellet stove route for two main reasons: 1.) An economical way to heat 2.) Ease of use and fueling stove for my wife mainly since I was working out of town. Therefore, I elected to actually pay a little more vs. my endless wood cutting and humping. Made perfect sense but now I am wondering how it will pan out on return on investment since pellet prices are climbing.

Pellets are still had here for between $205 to $230 per ton except most big boxes want $4.98 a bag or $250 a ton now like many other places. Even at $250 per ton pellets make sense for me but not that much sense at all really. Anything more than that and I'll be going to plan B because I refuse to be beaten. At $250 plus or $300 a ton of pellets per month thru the heating season I will definitely be flipping my thermostat switch on.

Why would I want the extra cleaning and bag toting? Why would anyone? I like my pellet stoves,,,,, But...... I like my cash and free time much more. I am hoping the pellet suppliers are just trying to pimp cash currently and the market will level a bit. My friend that sort of helped in my decision to go the pellet route was paying $180 to $190 per ton for several years up until last year he paid $225 a ton which I paid $224 per ton my first season. This is his fourth winter heating with pellets. Now he is on the fence but did buy a new Harman recently so he is committed also. I guess mixing 50% corn to knock costs down is looking a little better too. Somewhat more of a hassle and slightly more work though.

I still have my wood options too for heating cheaply as much fun as that is and extra work We shall see.

The older I get, and I'm not that old yet, the more I value my time and time withy wife and daughter.

My in laws have an endless supply of wood, but that's even more time & effort. They also have an outside wood furnace which are against codes in our towns...so that's out.

Natural Gas hasn't made it here yet. So that leaves oil and propane and I'm looking into both.

 

[bags]

I wouldn't sweat it much because after the 2016 elections it will be business as usual and prices on stuff will soar right back up there. Including gas and oil. Right now everyone is require to wear their rose colored glasses until the next pack of thieves take their oaths after elected.

Overall I think pellets will remain an economical heat source. They had better or I'll be ramming a slightly use P68 right square up someones azz.

 

[bags]

I have an OWB Woodmaster 5500 and love it with plenty of wood on my land. Just keeping up with downed and standing dead keeps me very busy. It's the time and work involved I can not afford for my "free" wood. After ten years with the wood pig and decades of heating with wood my butt is worn out for now. Three kids and a busy work schedule doesn't help wood processing and it doesn't cut. split, stack, and carry, itself.

It is my cheapest heating option, but time is money too. And to be perfectly honest I'm not missing it much. When pellets get more expensive I will suddenly miss it more.

 

[Grisu]

God bless you Grisu! You are a good man! I unfortunately have to be thrifty with my money. Quality is one thing, but spending more for a similar product just not to support the execs, I can't afford.

The question is if we can really afford to pay all those execs, shareholders etc. for not (really) producing much if anything useful. Your spending is another person's income. If we collectively try to reduce our spending, we collectively try to reduce our incomes. What's the benefit of that? And when we keep paying those non-producers we make sure that they can consume more and more while the actual workers will receive less and less. By now, those workers are mostly found abroad. In the long run that is not sustainable and we have seen it blowing up in 2007/08.

You see, I am completely selfish when paying those "high" prices. Those farmers will keep me employed, a Chinese factory worker not so much. When I want to have my work compensated fairly I need to do the same for others.