From the Director's Desk: Season’s End, Overheard: Pellet Availability Hit Or Miss In Some Markets

Season’s End

Winter doesn’t age well. In November and December those of us who live in states that have a real (with snow) winter, cheer those first meaningful snowfalls. Fresh snow is a perfect complement to the holiday season and an observer might even be able to detect a smile on the faces of homeowners firing up their snowblowers for the first time in a season. 

Those days are long gone. On Saturday the Twin Cities received 8.5 inches of heavy wet snow and no one cheered. Most grumbled. The snow is now in full retreat, the days are getting longer and the sun angle means more delivered heat every day. 

Along with all of that comes diminishing heating degree days, slowing pellet sales, and a chance for producers to perform some much-needed plant maintenance and prepare for the late spring/summer inventory build. 

April by the numbers (average - record)

Production: 114,872 – 151,134 (2019)
Sales: 95,224 – 119,636 (2018)
Inventory: 296,002 – 505,342 (2016) – low was 168,431 in 2020

A note on inventory: The last indication we all had of inventory was the December closing position shared in the Monthly Densified Biomass Report’s March data dump. At 85,000 tons and some change, the number is reminiscent of the inventory positions at year-end in 2018, 2019, and 2020. April finds producers well into their inventory build with producers averaging over 40,000 tons of inventory built each April. Just two years ago producers put 65,000 tons into inventory, more than half of the month’s production. 

The average inventory build from January through April? 60,000 tons. Interestingly, last year was well over the average with 156,000 tons of inventory built in the first four months of the year. 

Overheard: Pellet Availability Hit Or Miss In Some Markets

As the heating season draws to a close everyone in the wood pellet supply chain, from producers all the way to consumers is working to limit the number of pellets they’ll carry forward from this season to the next. Consumers move away from whole ton buying, transitioning to purchasing by the bag, showing a reluctance to tie up cash (or space) in/for wood pellets they won’t use for six months. 

While speaking with some producer members this week I heard about more inbound phone calls from customers struggling to find wood pellets where they would normally expect to find them. On top of that, some consumers have been told not to expect wood pellets to be back in stock until the mid-summer preseason buying season. 

The challenge is simple enough to understand, while a solution is elusive. Wood pellets are seasonal items and consume an enormous amount of square footage in retail locations. Many retailers utilize the same square footage for other seasonal items like mulch and garden soil and need to make a switch at some point. Picking the perfect moment is no doubt a challenge. 

The goal for the industry should be consumers needing wood pellets will be able to procure them when they need them. Simple enough to type, but more challenging to accomplish. I bring this up as a discussion point for producers and retailers alike. How do we guarantee pellet availability without exposing anyone in the supply chain to an inordinate amount of risk?  

—Tim Portz
 Executive Director