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

July 1, 2022

From the Director's Desk: 

Conference Recap

Successful conferences require an appropriate level of planning to be sure, but they also require some luck. Lady luck was smiling on the Pellet Fuels Institute Annual Conference last week giving our gathering that little boost that really put everyone’s experience over the top. We did have some balls that didn’t bounce our way as the persistent travel woes the airlines are muddling through found some attendees rerouted, or in at least two instances, canceled and unable to find a suitable alternative at all. 

Still, we lucked out with the weather. Milwaukee was still plenty warm but just days before the wood pellet sector descended onto Brew Town, the Upper Midwest had been broiling. Each day found the temperatures more and more bearable and the weather for the golf outing was as good as it's been in at least 5 years. 

Finally, I think people really enjoyed Milwaukee. Those that went to the Board/Diamond and Platinum sponsors event at American Family Field watched as two teams vying for the division lead duked it out. On Wednesday night I counted at least five tables at Mader’s family restaurant that were from our event which made the restaurant feel like an extension of our event. 

And what did we learn about our business? The themes of runaway inflation, high trucking costs and very difficult labor markets that we all knew last year were coming were the talk of the conference. I don’t know that it is any solace, but at least our industry isn’t uniquely feeling those pressures, they are widespread throughout our economy. 

I’ll talk more about the numbers revealed in the latest data set published by the EIA in a moment, but the conversations around the conference and a few since we gathered suggest that we may well be glad to have the higher inventory numbers later this summer as anecdotes of strong and very strong pellet appliance sales are starting to pile up. Consumers are anticipating and seeing high to very high heating oil prices and with a federal income tax credit available for qualifying appliances are pulling the lever for a transition to wood pellet heating. Layered on top of all of that is a global wood pellet market working to figure out how to replace 2 to 3 million tons of Russian supply. This year’s wood pellet season will be an interesting one to watch. 

March Numbers

While the 2022-23 heating season might offer plenty of intrigue, the data set rounding out the end of the 2021-22 heating season underscores just how much of a dud last year was for most producers. 

Production in March felt normal(ish) at 140,682 tons, ahead of the six year rolling average of around 120,000. A look at the sales data reveals that producers maintained their production throughput despite the information they were receiving from inbound sales. Sales in March were well off with U.S. total sales volume at just 70,535 tons, the lightest sales month since April of 2017. Normal production levels paired with low sales numbers inevitably swells inventory and the month closed with roughly 250,000 tons on the ground. Last year between March and the high inventory mark at the end of July producers added 135,000 tons of inventory. The same pace would have us flirting with 400,000 tons as a summertime peak. While normally that number might make many producers uneasy, I think this coming heating season is likely to be anything but normal. If winter is normal or even colder than normal, we might be very happy indeed to have had that much inventory come February. 

One Final Thank You

For everyone that took time out of their busy work and personal lives to join us in Milwaukee, I offer a heartfelt thank you. Gathering as an industry once a year is critical to our industry and the Pellet Fuels Institute is humbled and gratified to host such an occasion. 

Below are the organizations that supported our conference as sponsors. I’d like to highlight their investment once more publicly. Thanks for caring enough about our industry to support our conference. It is very much appreciated. 

Have a great 4th of July holiday everyone. We live and work in a terrific country filled with wonderful people. Enjoy a safe celebration with your friends and loved ones. 

Save the Date 2023

PFI 2022 Annual Conference

Photo of the Week:

Pictured (L to R): Kenny Lisle (Lignetics), Ralph Ten Bruin (Weber Stephens), John Utter (Dansons) and Tim Portz (PFI).

Talking ‘Que: Last week at the Pellet Fuels Institute Annual Conference Tim Portz moderated a panel of BBQ wood pellet and appliance manufacturers in a discussion that covered market growth, supply chain challenges, best manufacturing practices and the role the PFI can and should play as the BBQ market continue to grow. More pictures from this year’s conference can be found here.

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

EIA Monthly Densified Biomass Report (with March data)

As of March 2022, the monthly data collection included 80 operating manufacturers of densified biomass fuel. These manufacturers had a total production capacity of 13.26 million tons per year and collectively had an equivalent of 2,456 full-time employees.

Read Article

FutureMetrics calls roundwood restrictions for pellets misguided

Some European Union policymakers are calling for a restriction on the use of roundwood as feedstock for wood pellet production. FutureMetrics LLC on June 25 published a white paper explaining why those efforts are misguided. 

Read Article

JAPEX breaks ground on 50 MW pellet-fueled plant in Japan

Japan Petroleum Exploration Co. Ltd. (JAPEX) on June 6 announced it has broken ground on the Ozu Biomass Power Plant, a 50-megawatt (MW) wood pellet-fueled facility under development in Ozu City, Ehime Prefecture, Japan. JAPEX announced plans for the project in March.

Read Article

Biomass plant on Fort Drum could close next spring

A biomass plant that provides Fort Drum with 100 percent of its energy could close next year after legislation supporting its operations failed to make it through Albany.

The 32 employees who work at the biomass facility on Fort Drum were told this week that come next spring they may not have a job.

Read Article

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