From the Director’s Desk: Fun While It Lasted - January Thaw on the Forecast, Grassroots Advocacy, Appalachian Wood Pellet Style, and Your Average January
Fun While It Lasted - January Thaw on the Forecast
Just a short week after frigid temperatures gripped most of the pellet-burning portions of this country, our cold weather prospects have pivoted. A January thaw is upon us and forecasts suggest it might be unseasonably warm for a week or better. For the first time since we’ve been publishing the HDD Index, accumulated Heating Degree Days in all our locations are within 5% of long-term averages. A good handful are within 2%. Portland, Maine and Concord, New Hampshire are more than 10% ahead of last year’s HDD pace. Unless everyone in the region decided to set their thermostat lower, pellet usage in the Northeast should be up. We’ll have to wait until March when the EIA releases January 2024 data to see if increased sales show up. Last January was dismal for U.S. pellet producers with just 138,610 tons sold, not an all-time low but well off the pace set in 2018-2020 when January saw over 200,000 tons of pellets sold each year. In the Twin Cities, the January thaw is predicted to become a February thaw as well with a high of 47 degrees currently predicted for February 1 on the 10-day outlook.
Your Average January
While looking up January sales data for the passage above, I was immediately struck by the range in the historical data for January. Sales for the month since 2016 have ranged from 118,217 to 235,220 tons. There aren’t a lot of in-betweens for January sales and the month is a big factor in the yearly totals. There are three years in the report’s history where the industry sold more than 2 million tons of pellets and ALL of them have January sales totals over 200,000 tons (2018, 2019, and 2020).
January Averages (record high total in parentheses)
Sales – 169,556 (235,220 in 2018)
Production – 141,033 (184,451 in 2020)
Inventory – 95,338* (169,626 tons in 2022) *
* 5-year averages for Inventory data
I suspect when January data is revealed in April, we will learn that the month performed better than the last three years, but will fail to achieve the eye-popping 200,000 tons + figures of 2018-2020. I’d like to be wrong of course and I think we will likely see impressive sales numbers in the East where the Heating Degree Days have really stacked up, but the Pacific Northwest and northern Rockies are on pace with last year. To sense check the idea that HDDs correlate to pellet burning, can we assume that the sales total for the region will be 12-15% higher than last year. Assuming the absolute most, we can expect sales numbers in the 93,000 tons range for January in the East. This figure is well beyond the soft sales numbers of the past 3 years but isn’t enough to drive the U.S. total towards 200,000. I’ll write that down so we can compare in April.
Grassroots Advocacy, Appalachian Wood Pellet Style
A tip of the cap and an attaboy to PFI board member Tom Plaugher for his continued efforts to make the most out of the opportunities to network with state and federal lawmakers when opportunities present themselves. Tom was one of 12 invited business representatives who testified before Senator Shelley Moore Capito (WV) and Senator John Boozman (AR) the ranking members of the Senate Agriculture, Nutrition and Forestry Committee of the Senate. Senator Boozman is one of the primary authors of the upcoming Farm Bill. Tom reached out to the PFI office to ask specifically about our farm bill asks and his timing was terrific. This listening session was an opportunity for the PFI to reiterate those points we made to Members of Congress in October. Our policy positions are current on our website, and we invite members to use them when these vital listening sessions are held. Thank you, Tom, for taking time out of your busy schedule to give policymakers vital context for how the Farm Bill impacts us. Two stories about the visit can be found in the Industry News section of this edition of the Pellet Wire.
Membership Renewal Season is Here
With the close of the 2023 calendar year behind us, the organization is now squarely in renewal season. Thank you to those producers who have already renewed. Renewal can be completed on the Pellet Fuels Institute website or by calling the Pellet Fuels Institute Office. Membership tiers are determined by a three-year rolling average of wood pellet sales so you’ll need to have 2023 sales numbers available to execute on your renewal. Please do not hesitate to reach out to the office with any challenges or questions!
