From the Director's Desk:
Your Average September ..?, Foreign Ag Service, Miami Vice
Your Average September ..?
It will be nearly Christmas before the EIA publishes September’s Monthly Densified Biomass Fuel Report and we get a clear look at how this important sales and production month shook out in 2022.
Using the data available from the EIA and looking back to September of 2016, here are some interesting data points (all in tons):
- September production average: 145,660 (3rd ) – 150,916 last year
- September sales average: 215,415 (3rd ) – 220,454 last year
- September inventory depletion average: 35,510 – 15,464 last year
- Inventory position average: 331,566 tons – 254,422last year
- September production record: 186,559 (2019) – 150,916 last year
- September sales record: 229,327 (2019) – 220,454 last year
September is a big month for our sector. The month sees the summer inventory build overlap with the tail end of the early buy season. The month may begin with pellet appliances idled and cold, but the month doesn’t end without most pellet appliances getting at least a test fire.
Production and sales are both strong across the sector, each ranking third when the months are sorted most to least in each category. I think a record production month is certainly possible this September but it would take a significant departure from last year. While we can’t see production numbers past May in the current EIA data set, what I can see is that production from March – May was up significantly over each month’s average production. In March U.S. production was 141,000 tons (18% higher than the monthly average), in April production was 130,000 tons (15% higher) and in May production was 143,000 (13% higher).
What I find interesting about those higher production numbers is they came along with disappointing and soft sales numbers. Only in May did the sector experience an above average sales numbers with March and April well underneath monthly averages (March 2022 – 70,535 tons vs. Mar avg. of 120,459 and April 2022 – 82,062 tons vs. Apr. avg of 100,517 tons). Still, producers operated a higher-than-average throughput. I’ve got to assign some of that discrepancy to the continued discussions, interest and inbound inquiries regarding wood pellets needed by overseas buyers. If we’d exited the winter on the wood pellet ‘low fuel light’ I’d probably point to that, but inventories for wood pellets through the last months of the heating season were strong, at five-year highs in most cases.
Foreign Ag Service Tea Leaves
One of the news items in the Industry News section is a short online news blurb about the data released by the Foreign Ag Service (FAS). The FAS maintains a multitude of different data sets for all manner of grown and raised agricultural commodities. Wood pellets are a commodity they track. Additionally, the data becomes available a little sooner than similar data at the EIA. This quote includes data through July. This quote from the story got my attention.
“Total wood pellet exports for the first seven months of 2022 reached nearly 4.97 million metric tons at a value of $851.09 million, compared to 4.12 million metric tons exported during the same period of last year at a value of $596.7 million.”
A 20% jump in sales is one thing, a 40% jump in revenue is quite another. Clearly foreign demand is impacting not only shipments, but landed prices as well.
Miami Vice
The Pellet Fuels Institute Board of Directors will host its fall board meeting at the Fontainebleau Hotel in conjunction with the Exporting Pellets conference. Our board will meet Tuesday afternoon allowing producers who are interested to take in the conference.
If you’re interested in joining us, please contact me.
—Tim Portz Executive Director
