From the Director’s Desk: Your Average July, Dog Days in DC
Your Average July
In seven of the last ten years, wood pellet inventories have peaked in July. In the heat of summer, few consumers are thinking about heating fuels, but producers certainly are. August brings to mind a return to school, the academic calendar, and fall temperatures, and pellets start to move. In fact, for the last five years, wood pellet sales in August have outpaced July sales by more than 50,000 tons on average. In 2023, the delta between July and August was 74,265 tons. Producers know these July production days are crucial, and coming off of a strong year in the East, I suspect production totals for the region will be strong. The highest total production for July came in 2020 when producers made 174,016 tons. That year, producers in the East made over 100,000 tons, a production total seen in the region just twice in the last 10 years. Last year ranked 8th out of 10 years in the data set with 78,859 tons produced. This year’s July production in the East will be telling. Everything we know about the inventory position as we exited the heating season would indicate that producers would be running wide open all summer in an effort to rebuild decimated inventories. Still, stories of feedstock scarcity abound. The region needs a 90,000-ton month to shore up inventories that have felt thin since the start of the year.
As for the West, production in the region has fluctuated between 14% and 35% below the 5-year average, which I expect will continue until strong sales pull some inventory into the supply chain.
East
Sales – 80,288
Production – 87,737
Inventory – 172,075
West
Sales – 22,259
Production – 33,259
Inventory – 89,410
South
Sales – 16,918
Production – 15,244
Inventory – 55,910
All U.S.
Sales – 120,245
Production – 136,240
Inventory – 317,396
Dog Days in DC
When this edition of the Pellet Wire lands in your inboxes, Congress will have just one week of work before the August recess. Members of the House of Representatives begin their August recess today. As a result, things in DC are a little sleepy. Recently, Sen. John Boozman (R-AR) offered that he would like to see a Farm Bill markup from the Senate Ag Committee perhaps this week or next week at the latest. In a July 14 statement, Sen. Boozman noted that a recent fall by fellow Republican ag committee member Sen. Mitch McConnell led to some delays.
The window for getting a new Farm Bill done before the current extension expires on September 30 is getting narrower and narrower. The good news is PFI priorities are included in both the House and Senate versions that have been introduced, but it would be nice to see them all codified in a durable Farm Bill signed by the President.
