A Hard Look at the Current State of the Wood Pellet Industry

As a company in the business of selling wood pellets year round – we are always watching supply/demand fluctuations through the seasons. While it’s scary to think of another wood pellet shortage, it’s impossible to ignore the increasingly tight supply of pellets at the moment.

While demand continued to rise through the 2018-19′ heating season due to increased pellet stove sales and high oil prices, the supply took some serious hits leaving the pellet market in a delicate, vulnerable state.

Aside from the fairly recent series of catastrophic mill fires that crippled production, inventory building has been seriously hindered by weather. Last year’s winter stretched far into spring, which depleted much of the inventory normally built up over the summer. Plus, the extremely wet fall months and bitterly cold November led to historically low levels of raw material and finished product.

While we want to avoid causing a panic – we also want to be honest with our customers about what we’re seeing. For those who remember the winter of 2014, pellet shortages can occur very quickly and without much warning. However, right now the warning signs are glaring. For example, most mills currently have about 20 percent of the inventory as they had last year at this time – and even last year was tight.

In order to stay shortage-proof and avoid inevitable price increases, we strongly recommend you secure your pellet fuel for the next heating season now if you’re able…or at least well in advance.

A Look at the Current State of the U.S. Wood Pellet Industry

As a year-round wood pellet retailer, we’re always seeing fluctuations in pricing and supply/demand through the seasons. However, the beginning of the 2018-’19 heating season has its fair share of complications.

These setbacks have affected a significant number of pellet stove owners throughout the states – understandably resulting in many questions.

While we are hesitant to use the phrase “wood pellet shortage” – we are concerned with the increasingly tight supply of pellets in the Northeast and Mid-Atlantic states and the ability for pellet mills to meet a growing demand.

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Wood Pellet Stove Troubleshooting Guide

Since every pellet stove is different, some of the best advice can be found in your stove manual. Whether you’re burning pellets for the first time in a new stove, firing up your system at the start of a new season, or switching to a new brand of pellets, this quick reference guide for troubleshooting some common burn quality issues should come in handy.

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Ohio Community Crowdfunds Wood Pellet Fuel for Animal Sanctuary

His Hands Extended SanctuaryAbout 50 miles west of Columbus Ohio, the His Hands Extended Sanctuary in St. Paris provides medical care, food, and shelter to homeless pets that would otherwise be forgotten. The organization notes that what’s also very importantly provided is “lots of love – to begin the rebuilding of shattered lives.” His Hands Sanctuary not only facilitates the adoption of these animals into loving families, but also provides a comfortable lifelong home for those not adopted.

A simple post on the rescue’s Facebook has sparked a touching series of donations…and a new way to manage their fuel delivery. With many buildings for the dogs and cats who live there, the sanctuary relies on multiple wood pellet stoves for heat. The post explained how the sanctuary uses wood pellets to keep the animals warm, and that “any help with this huge expense will be wonderful”. They asked for any willing donors to call Woodpellets.com to contribute directly to the pellet fund. It wasn’t long before the sanctuary had four donated tons in their account.

In the past, volunteers have donated their time and effort to hauling in pallets of wood pellets in multiple trips from a box store. The whole team was so touched by this example of community giving, Woodpellets.com will deliver all future His Hands Extended Sanctuary wood pellet orders for free.

If you’d like to learn more about this organization, you can visit their Facebook page here.

The Woodpellets.com Referral Program: $25 for You $25 for Them!

Tell your friend about Woodpellets.com, and he or she will get $25 off their first order! Plus, when that first order is delivered, your Woodpellets.com account will automatically be credited $25! So, if you’re happy with our service, our products and our convenient delivery…share the pellet love!

Here’s an example: Woody is a current Woodpellets.com customer, and his neighbor Wilma is not a customer yet.

1. Woody tells Wilma about the convenient delivery options, the variety of high quality wood pellets available, and the expert customer support at Woodpellets.com. He tells her she’ll love it, and she will get $25 off her first delivery if she mentions his name at the time of ordering.

2. Wilma calls 1-800-735-5387 to speak to one of the Woodpellets.com experts. After a conversation about what she’s looking for, and what kind of delivery she needs, Wilma exclaims, “Woody referred me!”

3. The Woodpellets.com expert looks up Woody’s account, and Wilma is given a $25 discount on her order.

4. When her order is delivered, Woody’s Woodpellets.com account is automatically credited $25!

It’s as simple as that. And another thing…there is no limit on the amount of referral credits you can receive.

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NEW 3-Ton Cleanfire Bundle for Strategic Wood Pellet Heating

NEW Power Pack 3 Ton Bundle!Due to a growing trend of pellet stove owners mixing and matching fuel orders to create a strategic burning strategy, we have created a new money-saving bundle – THE POWER PACK! This special 3-ton Cleanfire pack consists of 1 ton of Cleanfire Douglas Fir, and 2 tons of Cleanfire Pacific bundled together for a discounted price.

What’s a strategic burning strategy? Instead of sticking with just one type of wood pellet, folks are burning pellets with a higher heat output during the coldest months of the heating season, and burning pellets with a lesser heat output (and a typically lower price tag) in the early season and late season months.

Buzz about the extremely hot heat output of wood pellets made of 100% douglas fir has been spreading over the last couple of years. Many Woodpellets.com customers have started to incorporate our super-hot, low-ash Cleanfire Douglas Fir Wood Pellets into their burning strategy. This “Cadillac of Wood Pellets” is saved for the bitter cold months, and the always reliable Cleanfire Pacific is burned during the rest of the season.

Is the Cleanfire Power Pack right for you? Call 1-800-PELLETS or visit Woodpellets.com to learn more!

 

 

*Pricing and availability vary by region. 

Why Now is the Time to Buy Wood Pellets

Warm summer weather doesn’t typically make you think about securing your wood pellets for the next heating season. But this year, there are two major factors at play that could change that: wood pellet demand and pricing.

Due to the European Union’s goal for 20% of all generated power to be sourced from renewables, the demand for wood pellets overseas remains steady. United States exports to the EU have continued to rise, with almost all of the pellets produced in the US for export coming from southeastern states. Last year, overall US exports increased by 10%, solidifying the United States as a top supplier of wood pellets to Europe.

See Map: Wood Pellet Industry Import/Exports

Demand has been growing in the States as well, due to heating oil price increases.
Crude Oil Pricing

According to the EIA, the U.S northeast region represents almost 85% of total U.S. residential heating oil sales – and many homes use wood pellet fuel as a heating supplement.

Oil pricing has a significant effect on wood pellet demand because when the price of oil increases, consumers tend to lean more on pellets for heating.

Read: Crude Oil Hits Highest Price in 4 Years 

Like any fuel, the price of wood pellets fluctuates due to a variety of factors, including transportation costs. A widespread truck driver shortage has resulted in serious driver pay raises – which combined with increasing fuel costs means prices are rising on anything that requires trucking.  As for the wood pellet industry, this problem has unfortunately made price increases a certainty for 2018.

Read: Trucking Shortage Causing Price Increases Everywhere

What can you do to save? Order your supply of wood pellets as soon as possible to avoid paying more.

Lock in current summer pricing AND choose the month you want delivery. Shop online at Woodpellets.com or call 1-800-PELLETS (800-735-5387) to speak to an expert!

Crude Oil Hits Highest Price in 4 Years

Following sharp increases since last summer, crude oil has topped $70 a barrel for the first time since 2014. Crude Oil PricingThe growth of global oil demand has contributed to upward price pressures. The United States Energy Information Administration estimates that global oil consumption in the first quarter of 2018 was 1.9 million b/d higher than the first quarter of 2017’s consumption. Naturally, sharply increased exports result in a significant hit to supply levels.

Further, President Trump withdrew from the 2015 nuclear pact with Iran earlier this month. The U.S. plans to reimpose economic sanctions on the country, which will continue to influence the crude trade.

 >> Learn more about how supply, demand and geopolitics drives the price of oil here.

According to the EIA, the U.S northeast region represents almost 85% of total U.S. residential heating oil sales – and many homes use wood pellet fuel as a heating supplement.
US averages: heating oil retail prices

Oil pricing is partially responsible for northeastern wood pellet demand because when the price of oil increases, consumers tend to lean more on pellets for heating.

Will the 2018 oil price increase affect your wood pellet purchase decision for the ’18-2019 heating season?

Take care of your Woodpellets.com order now, but choose your own delivery month by calling 1-800-PELLETS or ordering online at www.Woodpellets.com!  

How to Mix and Match Your Order to Burn Wood Pellets Strategically

Wood Pellet Colors
Did you know that you can select multiple products to add to your Woodpellets.com shopping cart?

To “mix and match” your order, simply choose the first brand and the number of tons you’d like from your zip code’s gallery. Once it’s added to your cart, select the Continue Shopping button that will appear on a pop-up box. You’ll be directed back to the gallery, where you can select another type of fuel. Continue this until you’re ready to view your cart, make any changes, select your delivery type and check out.

>> Bonus: For a limited time, you can choose your delivery month too! Take care of your pellet fuel order now to lock in current pricing, but you tell us when you’d like us to deliver by selecting your desired month from the dropdown menu!

Woodpellets.com Wood Pellet Burn Strategy ExampleWhy did we add the mix and match feature? Over the years, we have noticed a growing trend of burning pellets with a higher heat output during the coldest months of the heating season, and burning pellets with a lesser heat output (and a typically lower price tag) in the early season and late season months.

Not only are there significant heat output differences between hardwood and softwood wood pellets – but the ash content is much different as well. Hardwood pellets tend to produce more ash than softwood pellets – which makes for more cleaning and upkeep. Therefore, this burning strategy is also a perfect opportunity to learn which kind of pellets are the best fit for your home heating needs, your budget, and the amount of ash cleanup you’re willing to deal with.

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Trucking Shortages Make Wood Pellet Price Rise Inevitable

With all consumer goods, pricing is based on the provider’s cost – which fluctuates due to a variety of factors. You might begin to notice some price increases on all types of products throughout the year, which is directly related to a nationwide shortage of truck drivers. As for the wood pellet industry, these unrelenting transportation issues have made price increases a certainty for 2018.

For years, there has been a growing shortage of qualified CDLA drivers, and it has only gotten worse over the past year. According to the American Trucking Association, there’s a shortage of 51,000 truck drivers nationwide, up from 20,000 in 2013 and 36,500 in 2016 with a predicted increase to nearly 100,000 by 2021. As driver supply has dwindled, more trucking companies have turned to intermodal rail, which has even made these containers scarce.

Why is this shortage happening? Baby Boomer drivers are retiring due to age, stricter DOT medical certification processes, and frustration with newly required Electronic Log Devices (ELDs) which have created tighter hours of service regulations. This technology – which is designed to enforce limits on driving time without breaks – has not only pushed many seasoned drivers to quit, but also reduces the number of trucks available overall.

Additionally, millennials are far less enthused than previous generations to join the trucking force due to the arduous duty of long cross-country trips, away for days and weeks at a time. Furthermore, the men and women completing tractor trailer schools these days are not always accepted by insurance companies, which often require at least three years of driving experience.

Of course, all of this leads to a shortage of truck volume available to shippers, which directly affects the consumer. Ben Cubitt, a senior VP from freight-management firm Transplace, estimates that 99% of trucks nationwide are in use, up from 92% in late 2015. Cubitt says, “every truck is spoken for every day.”

What does all of this mean for wood pellet stove owners? It’s understandable that just like any fuel, wood pellet prices fluctuate – but the effects of this trucking shortage have turned the risk of a 2018 pellet price increase into a reality.

What can you do to save? Order your supply of wood pellets as soon as possible to avoid paying more. 

Lock in current summer pricing AND choose the month you want delivery. Shop online at Woodpellets.com or call 1-800-PELLETS (800-735-5387) to speak to an expert!

 

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