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

October 30, 2020 

In this Week's Pellet Wire:

From the Director's Desk: Early Season Jitters

Last week I authored an executive summary for our members based on the most recent data share from the Energy Information Administration (EIA). After fielding a half dozen phone calls, all from folks seeking essentially the same information, I thought it would be more efficient to simply get in front of the inquires and offer my take on what the data currently says.

The phone calls were largely motivated by a feeling and a handful of anecdotal reports of retailers struggling to find pellets. The published data simply served to amplify the current heartburn surrounding pellet availability as the broader pellet heating adapts to the continuing trends of smaller standing inventory, greater summertime sales, and increased in-season production. Anyone looking just at the inventory level as reported for July would understandably be concerned. Wood pellet inventory historically peaks in July, and the sector closed out the month with just 211,938 tons on the ground, a record low. Without considering any other data points, that number is certainly unsettling but look at summertime wood pellet sales. In 2019, producers sold just under 420,000 tons of wood pellets from May through July. This year, over the same time span, producers sold 100,000 more tons over that same time period (521,000 tons). It seems unlikely that wood pellets sold in July have already been burned so while those tons aren’t sitting in inventory making everyone feel a little more comfortable, they are out there, presumably in the homes of consumers or on the showroom floors of pellet retailers.

My big concern for the year reaches all the way back to mid-March when COVID-19 descended upon the American economy, bringing many sectors to a halt. Would COVID-19 cost wood pellet producers production time? Getting production hours back is all but impossible for most producers. Labor is already the biggest challenge facing producers and bringing on and training an entirely new shift to throttle up production for a month or two just isn’t viable in most instances. Each month when the EIA data is published, I first look at total production. 2020 year to date production numbers show no significant or lasting challenges by producers to keep their plants up and running. In fact, 2020 production totals show a 20,000 ton increase from 2019 so far. Producers did fail to match 2019 production totals in April, May, and June but got back on track in July. Fiber purchases remain strong as well and I’ve begun using that data point as peak into the box for future production. To date, residual fiber purchases top 8 million tons while 2019 found fiber purchases just short of 8 million tons at the same time last year.

So what does it all mean? The news section of this edition of Pellet Wire features two short articles on the predictions for what this winter will bring. We certainly don’t have the kind of inventory position that would have people cheering for a deep and prolonged winter, but I doubt many producers want to return to the kinds of inventory glut the industry had to endure in 2015-16.

I think the story of this heating season will be determined by one of two factors. First, the weather. Weather is and always be our biggest and most impactful variable on pellet sales through the heart of the heating season. Second is in-season production. Last year, producers averaged nearly 190,000 tons of production in the last five months of the year and we’ll need all of that to keep our retail customers happy. Producers have largely figured out a way to source fiber and maintain strong production so far this year and I’m certainly not going to bet against them now.

Finally, please give the Photo of the Week a close look. The photo was sent to me by Charlie Niebling and represents the second time in as many editions of the Pellet Wire that we’ve been able to include a photograph of an elected representative being welcomed to a wood pellet production facility. It is hard to imagine a more valuable or impactful action any of us can take with our elected public servants. If you’ve already welcomed your elected officials to your plant this fall, please send along the photos. If you haven’t, consider making some time for that this fall.

Tim Portz 
Executive Director

Photo of the Week: Socially Distant Congressional Outreach, Part II

Members of Lignetics welcomed Congressman Anthony Brindisi to their Schuyler production facility. 

 From Left to Right: John Bartow, Executive Director, Empire State Forest Products Association; Charlie Niebling, Lignetics; Congressman Anthony Brindisi; Rocco Bouse, national sales director, Lignetics; Adam Daktor, Schuyler plant manager, Lignetics.

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

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Industry News

Pit Boss adds WiFi to its latest Pro Series pellet grills (Engadget)

When it comes to pellet grills, Pit Boss has a range of options that can compete with bulk of the competition, but at a more affordable price. The company has been giving backyard cooks the ability to smoke, grill, sear and more for a while now, but much of its lineup was missing a modern standard feature: WiFi. 
Read Full Article

EPA delivers final rule on cost, benefits of CAA regs to OMB (Biomass Magazine)

The U.S. EPA on Oct. 21 delivered its final rule that is expected to change how the agency considers the costs and benefits of regulations promulgated under the Clean Air Act to the White House Office of Management and Budget.
Read Full Article

Warmer winter forecast possible but almanacs remain split (Farm Progress)  

Whether you rely on the shape of a persimmons seed, magnetic storms on the surface of the Sun or just good old-fashioned science, predicting the weather, especially the long-term forecast, isn’t an exact science.
Read Full Article

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More Industry News

Here’s the National Weather Service Official Forecast for This Winter (24/7 Wall Street)

Once a year, the National Oceanic and Atmospheric Administration (NOAA), which is part of the U.S. Department of Commerce, puts out its winter forecast for the United States.

Read Full Article

Renova moves forward with sixth biomass power plant (Biomass Magazine)

Japan-based Renova Inc. announced on Oct. 26 it has made a final investment decision and reached financial close on a 75 megawatt (MW) biomass power plant under development in Sendai, Miyagi Prefecture, a city approximately 225 miles northeast of Tokyo.

Read Full Article

Pellet Fuels Institute

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