Catch up with PFI in this issue of the Pellet Wire!
April 29, 2022

From the Director's Desk:

A January Fizzle

Last week the EIA published their first wood pellet production and sales data of 2022 with their release of the January 2022 Monthly Densified Biomass Fuel Report. The lackluster Heating Degree Day data we have been tracking all year seems to have finally come to a head with January sales and production. The month saw U.S. sales totals at just 116,046 tons, well off the 3-year average (2019-21) of 185,831. No region escaped the soft market conditions January offered with the biggest outlier being the south with just 12,281 tons showing up in the sales column. This figure was a sizeable enough departure from the three-year rolling average (44,207) that I’ve inquired with the EIA about a missed data point. Producers rolled out of the production throttle and produced just 129,081 tons, the lightest January production total since 2016.

The decision for skinny production was no doubt informed by producers watching their own inventories grow in December and despite lackluster sales, stored inventories did move (roughly 16,000 tons) in January. We finished the month with roughly 170,000 tons, a far more manageable number than the 200,000-plus tons we would have had if producers had logged even an average January from a production standpoint. The data accumulating this year is a stark reminder that in this business its all about the weather. I’m putting a note on my calendar for July 20 to see if the April 2022 data that is scheduled for release that day offer any indication of a month that found much of the country mired in a cool, slow to warm spring.

Looking at the Wood Pellet Sector through a Drinking Straw

Last Friday the broader wood pellet industry found itself once again in the crosshairs of the mainstream press as a major network ran a nearly 8-minute piece on industrial wood pellet production in the southeast. I’ve decided not to offer a link to the story as I rankle when other wood energy outlets amplify negative stories about our sector, so I’m not doing it. It's out there if you want to look for it. 

At this point in my career, I could write the script for these stories. I could certainly list the video and photo shots that will be featured. The selected imagery exposes the motivations of the reporter and this story was no different. The frustrating reality is that the story misses the big picture and this is, of course, intentional. I’m a big fan of magic and magicians will tell you that their art hinges on their ability to command your attention and look at what they want you to look at and more precisely and importantly, not look at what they don’t want you to look at. The story of wood pellet production, industrial or residential and BBQ pellets, cannot be told in an 8-minute spot. I did author a rebuttal which I delivered to the reporter and directed him to our “3-Facts” document. Truthfully, I doubt it gets much traction or even a response from the outlet. However, these documents can and should offer some utility to you and I’ve already heard from members that their customers and sales teams have found both helpful. 

I’ll close with this thought, all of the rancor around industrial wood pellet production can be connected to an unfortunate misunderstanding in the general population that our forests are at risk because of markets for wood products and the media has been co-opted into perpetuating this myth. The fundamental truth is that forest inventories in this country have grown in the last 100 years not in spite of, but because of strong markets. Talk to any forest products manufacturing association, forest landowner or forester or staff member at the U.S. Forest Service and you will hear the same thing. Every summer the impact of unmanaged forests is on full display in the American West. 

Be proud of our industry’s contribution to the forest products sector. We extend the value of every tree, capturing energy from what would otherwise be a waste stream and provide clean, renewable heating fuel for a million American households. Spoiler alert: you’ll hear none of that in the TV spot that aired last week. 

Registration for the PFI Annual Conference is Open

If you haven’t had an opportunity to peruse the 2022 PFI Annual Conference agenda I urge you to give it a look. The agenda reflects the biggest questions, opportunities, and challenges facing the sector today. It is rich in wood pellet manufacturers talking about their businesses and the markets they serve. Whether you are a BBQ pellet enthusiast or an energy policy wonk you’ll find something on the agenda to circle. I hope you will join us.

We look forward to seeing you in Milwaukee! 

Register Now

  —Tim Portz
  Executive Director

  Photo of the Week:

Photo: Tim Portz

Hope Restored: Adam Charron and John Utter, both of Dansons, pause for a quick photograph while discussing operations at Dansons’ new BBQ pellet production facility near Hope, Arkansas. The facility was built on the site of a former sheeted material production site and was welcomed into the area as a new demand center for the area’s abundant residual wood fiber. A special thank you to the Dansons team for welcoming me into their operation and showing me how they were able to bring this important wood products manufacturing site back into production, generating significant economic activity in the area. 

Send Us Your Photos! Help us build a collection of photos of our members, their pellet mills, and products! Send images to Tim Portz at [email protected].

Industry News

Heating Degree Days Data

(Worthy of a bookmark.) - I'll keep this link active for the remainder of the heating season. 

View Data

EIA Monthly Densified Biomass Report (with January data)

Read Article

Kentucky Pallet Recycler Diversifies With Vecoplan Pellet Mill

A Better Byproduct: Franklin Pallets has taken a leap into the pellet market and sees this investment will pay off due to the highly automated system offered by Vecoplan. This approach reduces labor requirements while turning a waste stream into a profit center.

Read Article

Director’s note: Yes, this story is nearly a year old, but I just came across it today while researching an upcoming trip. I thought it was important to include it in light of my comments about the negative TV spot. Wood pellet production provides a vital service for upstream wood product manufacturer. This quote from Kelly Gregory at Franklin Pallet says it all; “Honestly, the main reason we decided to get into pellets is our partners who took our scrap started charging us a lot to take our scrap. But I now see this is a big investment for our future.”

Groupe Lebel announces plans for new wood pellet plant in Quebec

Groupe Lebel announced on April 4 that it will continue its investment program by building a brand-new wood pellet plant on the Cacouna site it has occupied since 2002.

PFI member featured: Prodesa
Read Article

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