From the Director’s Desk: Your Average August
August is a big month for our industry. In August, sales begin to outpace production, and producers bridge the gap with inventory they’ve produced throughout the spring and early summer. The opportunity to build inventory in preparation for the upcoming season has ended; retailers are beginning to move product and the season is very much in motion. Last August producers sold 150,000 tons of pellets, down slightly from the 5-year average of 176,418 tons. Production was also down slightly from its 5-year average (156,029 tons) at 135,510 tons.
I suspect this year’s August will be a return to the average from a total U.S. production standpoint, but I suspect that production in the East will outstrip its 5-year average, possibly by a good margin. The chatter in conversations with producers is that sales remained steady throughout the summer as retailers anticipate strong consumer interest in buying early. With continued instability in Iran, heating prices have remained high, leading consumers with both oil and wood appliances to plan for more pellet-derived heat.
The high watermark for U.S. production in August was set in 2019 when the sector made 195,822 tons of pellets. That figure is not likely to be eclipsed as soft sales in the West for the past two years have led to bloated inventories in that region. I do think the East might flirt with its production record of 122,337 tons (2019), but everything, including feedstock availability and plant uptimes, will have to go just right. Based on my conversations with producers, confidence is high that wood pellets will find ready buyers this season.
East
Sales - 115,906 tons
Production - 99,287 tons
Inventory - 156,685 tons
West
Sales - 32,286 tons
Production - 35,183 tons
Inventory - 86,762 tons
South
Sales - 25,166 tons
Production - 21,559 tons
Inventory - 44,534 tons
All U.S.
Sales - 176,418 tons
Production - 156,029 tons
Inventory - 287,982 tons
