From the Director’s Desk:
March Pellet Data Released, Pat’s Capitol Report, Thank You Sponsors, See You Next Week
March 2026 (5-year average) -in tons
East
Sales – 60,562 (43,894)
Production – 85,817 (74,172)
Inventory – 54,340 (141,941)
West
Sales – 8,953 (22,625)
Production – 23,329 (34,187)
Inventory – 82,530 (52,684)
South
Sales – 12,075 (13,036)
Production – 13,767 (17,465)
Inventory – 10,221 (35,471)
All U.S.
Sales – 81,590 (79,555)
Production – 122,913 (126,306)
Inventory – 147,091 (230,088)
In late March of 2024, the residential heating pellet sector had over 300,000 tons of wood pellets produced, bagged, and sitting in storage. At the time, the number was worrisome, and questions about summertime production abounded. Producers made fiber purchases not because they needed the material, but because they didn’t want their upstream suppliers to find a new offtake partner. Just two years later, the sector is eyeing pellet inventories that are half that level, and in the East, the inventory position at the end of March (54,340) is the second lowest in the region ever, trailing only 2019 (26,817). Producers have shown a tendency to modulate their production throttles, and it will be very interesting to see the numbers stack up over the rest of the summer to see what kind of tonnage the sector makes out East. The data (see this week’s Photo of the Week) makes it clear that producers have been able to dramatically ramp up production in the region, but that was nearly a decade ago. Hardwood sawmilling in the region has declined since 2019 and is at roughly 65% of pre-pandemic production levels. Less sawmilling means less fiber generation, and tight hardwood fiber markets are a frequent topic of conversation when I connect with producers from the region. While the East has posted a 100,000-ton month in recent history (October 2025), they have been rare since 2023. Is the fiber there to string together multiple months of 100,000-ton+ production?
We’ve discussed in detail the inventory position in the West. How it resolves will be interesting to watch, but I wouldn’t be surprised if transcontinental shipments of pellets occur this summer. The West is long in pellets, the East is short. The question is, will eastern pellet consumers pay the premium for Douglas Fir pellets plus the additional shipping costs? I expect producers out West will continue with their modest production. Production from April of 2025 to March of 2026 is down 15% from the same timeframe 12 months prior. Will producers go lower? Remember, producers are reticent to completely turn off inbound fiber streams lest their fiber partners find a new offtaker, so I see the current production levels (roughly 26,000 tons over the last six months in the data set) as something of a floor.
Pat’s Capitol Report
by Pat Rita
Wood Innovation Grants
Last week, the House Appropriations Committee approved the Fiscal Year 2027 Interior, Environment, and Related Agencies appropriations bill. The vote was 35-27. The committee-passed measure includes $30 million for the Wood Innovation Grant (WIG) program, which funds cutting-edge wood manufacturing projects around the country. PFI was part of a coalition advocating for a “plus up” to $40 million, but we are pleased with this number and the committee’s recognition that WIG is an important program necessary to spur markets for wood products and residuals. The measure also includes $18 million for the Community Wood Energy program, a $3 million increase over the current funding level. Community Wood also provides money for wood manufacturing, but its emphasis is on biomass heating and power projects. This program is critical for building markets for sawmill residuals. One final notable in this bill is language reauthorizing the PFI-supported provision directing the Environmental Protection Agency, the U.S. Department of Agriculture, and the Department of Energy to recognize forest-based biomass fuels and energy as “carbon neutral” in any environmental or energy policymaking.
Farm Bill
PFI picked up signals last week that the Senate Agriculture Committee may release the text of a Farm Bill reauthorization measure sometime next week. If a committee draft does emerge in the coming days, we will promptly prepare a summary and make that available. Recall that the House approved its version of a Farm Bill reauthorization measure at the end of April on a 224-200 vote. We remain hopeful that the Senate will act expeditiously and that Congress delivers a final product to the President before the August recess.
Thank You, Sponsors
Next week, our board, our members, and a strong roster of industry partners will gather in Point Clear, Alabama, for the 2026 PFI Annual Conference. Our conference is an important annual touchpoint, reunion, and fundraiser. The support from our industry supporters was incredible this year, and I want to offer my personal thanks to the following supporters.
Diamond Sponsors:
Alfred H. Knight
McGriff – a Marsh & McLennan Agency LLC Company
Outdoor Brands LLC
ProAmpac
Platinum Sponsors:
AndritzKESCOPrimary Packaging
Yemmak/Bliss
Gold Sponsors:
CPM
Fagus GreCon
FireRover
FRAM Renewable Fuels
Stela Drying Technology
Silver Sponsors:
Engineered Packaging SolutionsEvergreen EngineeringKluber Lubrication
Rotochopper
Timber Products Inspection
Thank you for supporting our event.
See You Next Week
For those of you traveling to the PFI Annual Conference next week, thank you. It’s a busy stretch in the weeks leading up to the event, but I always enjoy seeing everyone gathered together, talking about our industry, and having a few laughs. A special shout-out to my conference partner in crime, Kenny Lisle (Lignetics), for his substantial effort to make sure our attendees have a comfortable venue, a fun golf course, and good food. Cheers Kenny.
