{"id":746,"date":"2014-04-14T18:14:23","date_gmt":"2014-04-14T18:14:23","guid":{"rendered":"http:\/\/www.woodpellets.com\/blog\/?p=746"},"modified":"2014-04-17T14:34:49","modified_gmt":"2014-04-17T14:34:49","slug":"the-5-factors-driving-wood-pellet-fuel-prices","status":"publish","type":"post","link":"https:\/\/woodpellets.com\/blog\/2014\/04\/14\/the-5-factors-driving-wood-pellet-fuel-prices\/","title":{"rendered":"5 Factors Driving Wood Pellet Fuel Prices"},"content":{"rendered":"

Like any fuel, the price of wood pellets will\u00a0inevitably\u00a0fluctuate.\u00a0However, even with their increasing popularity (pellet production has significantly increased over the last few years) wood pellet prices don\u2019t get nearly as much attention as other fuels such as heating oil. \u00a0We realize our customers might have some questions about what factors determine wood pellet price changes. As always, we prefer to keep our customers as informed as possible. So, here are the top five factors influencing wood pellet pricing:<\/span><\/p>\n

\u00a01. Industrial and European Demand<\/strong><\/p>\n

\u00a0The European Union has set a goal<\/span><\/a><\/span> to obtain 20 percent of its energy from renewable sources by 2020.\u00a0Because Europe does not produce enough timber to meet this type of demand, imports of wood pellets from the U.S\u00a0are increasing.\u00a0Fortunately,\u00a0the entire wood pellet industry is undergoing huge structural changes that will ultimately help provide better stability and greater availability in the longer term as the production capacity in North America increases. However, in the short term, prices are being driven up by\u00a0these new large customers overseas\u00a0as the pellet mills have not been able to scale up production fast enough to keep prices from rising.\u00a0 According to the\u00a0European Pellet Council<\/span><\/a><\/span>, global trade in wood pellets is expected to increase five- or six-fold to 60 million metric tons by 2020.\u00a0As the diagram below demonstrates, wood pellets have quickly grown from\u00a0a residential home heating alternative into an international energy and environmental super-power.\u00a0<\/strong><\/span><\/p>\n

\"Wood<\/a><\/p>\n

(click to enlarge)<\/em><\/p>\n

2. Cost of Sawdust and Lumber<\/strong><\/p>\n

As the industry has grown, the demand for raw materials to make pellets has gone way up.\u00a0 Normally, this would drive up the costs for those materials considerably, but luckily we have the Internet to thank for keeping the cost increases due to raw materials mostly in check.\u00a0 As the economy moves to electronic communications and away from paper, there is less demand for wood products from paper mills, which has (mostly) balanced out the increased demand from the pellet mills.<\/span><\/p>\n

3. Other Energy Costs<\/strong><\/p>\n

Another factor that drives prices of wood pellets is the\u00a0cost of fossil fuels \u2013 for two reasons.\u00a0 First, most pellet mills are still powered by electricity and traditional fuels to make the pellets themselves.\u00a0 Second, the cost to\u00a0transport pellets via trains and trucks from the mills to people\u2019s homes is mostly dependent on diesel fuel.\u00a0 This still results in a lower overall environmental impact than using fossil fuels for heating,\u00a0but it still affects the price of wood pellet production.<\/span><\/p>\n

4. Customer Necessity<\/span><\/strong><\/p>\n

The need for residential wood pellet heating supply has increased overall, as well as in the short-term, as we saw most dramatically during pellet shortage in late February and early March of 2014. Although there were retailers who increased prices during the pellet shortage, we are proud to say that\u00a0<\/span>WoodPellets.com<\/span><\/a><\/span><\/span>\u00a0never raised prices.\u00a0 We also never turned new customers away \u00a0– or stopped delivering pellets.<\/span><\/p>\n

5. Pellet Quality<\/span><\/strong><\/p>\n

The best pellets take the best raw materials and the most exacting manufacturing process.\u00a0 Even in cases when the other factors may not be changing on average, one or more of these factors may change specific to a particular product.\u00a0 For example, the highest heat output and lowest ash pellets are made exclusively from <\/span>Douglas Fir<\/span><\/a><\/span><\/span>. \u2013 if the price of Douglas Fir changes, the price of pellets made of Douglas Fir will also change.<\/span><\/p>\n

 <\/p>\n

Even with these 5 Factors, the vast increase in demand is a testament to how pellet prices are remarkably stable and efficient vs. other heating fuels.\u00a0 By burning 4 tons of pellets over the course of a winter, a typical family stands to save close to $700.\u00a0 You can calculate your own savings with the <\/span>Woodpellets.com Savings Calculator<\/span><\/a>.<\/span><\/span><\/p>\n

WoodPellets.com makes every effort to provide our customers with the best value in wood pellets – and to keep pricing as stable as possible.\u00a0 By adding capacity, focusing on reducing distribution costs, and using the latest technology to improve our efficiency,\u00a0we have been able to hold pellet pricing steady over the last couple years and minimize pricing changes even in the face of the huge changes in the industry.<\/span><\/p>\n

Given the substantial economic and environmental benefits over traditional fossil fuels, we expect the demand for wood pellets to continue to grow for the foreseeable future.\u00a0 From residential pellet stoves to replacing\u00a0coal in electricity generation – wood pellets have become a very hot commodity. Pun intended!<\/i><\/p>\n

To conclude, we strongly recommend you buy your pellets early<\/em> t<\/span>his season.\u00a0 Not only will you be able to take advantage of low Spring pricing, you’ll also avoid the risk of further pellet shortages. <\/span><\/p>\n

Visit us online at www.woodpellets.com or Call 1-800-735-5387 for pricing and delivery options in your area!<\/strong><\/span><\/p>\n

 <\/p>\n","protected":false},"excerpt":{"rendered":"

Like any fuel, the price of wood pellets will\u00a0inevitably\u00a0fluctuate.\u00a0However, even with their increasing popularity (pellet production has significantly increased over the last few years) wood pellet prices don\u2019t get nearly as much attention as other fuels such as heating oil. \u00a0We realize our customers might have some questions about what factors determine wood pellet price […]<\/p>\n","protected":false},"author":6,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[2,3,4,7,8,10,11],"tags":[85,84,86,83],"_links":{"self":[{"href":"https:\/\/woodpellets.com\/blog\/wp-json\/wp\/v2\/posts\/746"}],"collection":[{"href":"https:\/\/woodpellets.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/woodpellets.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/woodpellets.com\/blog\/wp-json\/wp\/v2\/users\/6"}],"replies":[{"embeddable":true,"href":"https:\/\/woodpellets.com\/blog\/wp-json\/wp\/v2\/comments?post=746"}],"version-history":[{"count":10,"href":"https:\/\/woodpellets.com\/blog\/wp-json\/wp\/v2\/posts\/746\/revisions"}],"predecessor-version":[{"id":763,"href":"https:\/\/woodpellets.com\/blog\/wp-json\/wp\/v2\/posts\/746\/revisions\/763"}],"wp:attachment":[{"href":"https:\/\/woodpellets.com\/blog\/wp-json\/wp\/v2\/media?parent=746"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/woodpellets.com\/blog\/wp-json\/wp\/v2\/categories?post=746"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/woodpellets.com\/blog\/wp-json\/wp\/v2\/tags?post=746"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}