Catch up with PFI in this issue of the Pellet Wire!

September 30, 2022

From the Director's Desk: 

The Waiting is the Hardest Part

I have a passion for college football. I grew up following the Iowa Hawkeyes specifically and the Big Ten conference generally. One of my favorite things to see, like many other football fans, is a long pass downfield in a close game. The ball seems to hang for an eternity before its outcome is determined. Right now, I feel like the wood pellet industry and the heating season is a little like a long bomb. The ball has definitely left the quarterback’s hands, it's nearly October already, but we don’t know if the ball will be batted away at the last moment or if this pass will be the go-ahead touchdown. 

The table is set for a big year. Competing fuel prices are high. Manufacturers are fielding inquiries for volumes from overseas buyers with regularity and there remains a federal tax credit for qualifying pellet appliances for those consumers who decide to get off the roller coaster ride that is fossil-based heating fuel prices. The Pellet Fuels Institute is urging consumers to act now and secure their pellets now, sound guidance considering all the marketplace variables that are in place. Still, the biggest marketplace variable that shapes the market for domestic wood pellets, Heating Degree Days is yet to be determined. Last year’s PFI Index watched as a warmer winter unfolded in nearly all of the pellet burning corners of this country. Wood pellet sales sagged everywhere. In March the industry sold just 70,535 tons of wood pellets, the lowest ‘in-season’ sales total in the report’s six-year history. Consider for a moment that in March of 2019, the industry moved nearly 160,000 tons of wood pellets. The real driver in wood pellet sales is colder temperatures and I suspect that even amidst all of this dynamism in this year’s market, the year will once again be determined by how cold it gets and for how long. 

The June data revealed last week in the EIA’s Monthly Densified Biomass Report suggests that producers may be hearing the calls for volume from overseas (and by June they most certainly were), but are facing sluggish sales and slow moving inventory at home. Through June U.S. total sales were 645,007 tons, slightly down from the same time last year (660,982 tons) and well off the 939,733 tons of 2020. U.S. total inventory settled in at 310,998 tons as June closed, 6,000 tons ahead of last year’s July high water mark. Producers returning to their facilities after hearing all about the potential demand spike at the 2022 PFI Annual Conference likely wondered when it might show up as they confronted indoor and outdoor storage areas at the operations stuffed full of finished product. 

Purchase orders in June were better than last year at 140,340 tons but only slightly ahead of the June average (132,659). Monthly demand picks up each month as summer progresses with monthly averages topping out at 242,000 tons in October. If the 2022-23 heating season is going to shape up and deliver the once in a decade kind of sales numbers we all agree are possible this year, the demand will have to begin to be felt in October.

—Tim Portz
 Executive Director

Save the Date 2023

PFI 2022 Annual Conference

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Industry News

EIA Monthly Densified Biomass Report (now with June data!)

As of June 2022, the monthly data collection included 80 operating manufacturers of densified biomass fuel. These manufacturers had a total production capacity of 13.27 million tons per year and collectively had an equivalent of 2,479 full-time employees..

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Heating Degree Days Data

Read the weekly summary of heating degree day data from the Climate Prediction Center - NCEP - NWS - NOAA.

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Experts confirm BC wood pellets are responsibly sourced

A new study confirms that wood pellets in British Columbia are sourced entirely from sawmill and harvest residuals or from low-quality logs and bush grind rejected by other industries.

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Guess I’d better buy my wood pellets soon …

The price hikes and supply crunches that have clobbered fuel supplies and raised prices throughout the world are starting to affect the one fuel we can call our own: Wood pellets.

*the comments section is one of the better comment sections of any article I’ve ever read online. Somehow the “I make $6000 a month online” bots haven’t found it. Instead, real topics like dealing with homeowners insurance policies and the value of quality pellets are discussed. 

Read Article


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