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In this Week's Pellet Wire:
From the Director's Desk: Maximum Uptime
First of all, a happy belated Veteran’s Day to any vets who are regular readers of the Pellet Wire. Thank you for your service to this incredible country of ours.
Next, while it will be some time until the EIA publishes production and sales data for November, I’m wishing everyone a month of everything going right at your operation. Early season demand is robust as consumers and retailers wonder about the impact of remote learning and work-from-home realities on overall wood pellet demand. Pellets are moving and producers are hearing a clear signal for maximum production. Good luck and safety to everyone working to keep wood pellet users supplied with high-quality fuel.
I always learn something when looking at the historical pellet data from the months we’re in and a review of what has transpired in November since 2016 is similarly illuminating. Wood pellet sales in November have been consistently around 230,000 tons, never venturing too far from the average of 233,864 tons. Production is a different story. In 2016 total U.S. production was just 59,704 tons. Numbers that low suggest that most producers were limiting production and at least a handful must have ceased production altogether. At the time, the sector had a half million tons on the ground. Storage yards bulged with finished product. Since 2016, November inventory numbers have steadily declined while production numbers have steadily risen. Last November, inventory fell beneath 100,000 tons and production that month set a November record at 178,976 tons. I’d be surprised if we don’t eclipse that number this year and while we don’t have visibility on August/September/October production yet, I suspect each of these critical production months will top 200,000 tons. If we don’t produce that much volume it won’t be because producers doubted they could move them.
The other dynamic at play of course is the weather. Demand fueled by speculative customers in August and September begins to be impacted by what Mother Nature has cooked up by November. A string of warm days can, and does, lead to less urgent consumers. Conversely, of course, a nor’easter could blow in and really catapult demand.
Being unable to control the weather, producers are left to focus on what they can control and I for right now our motto is most certainly “Maximum Uptime”.
A Note on the News
Since the Pellet Wire was launched it has featured a sidebar populated with industry news. While significant industry news abounds for the industrial wood pellet sector (and occasionally we run it), news about the home heating market can be harder to come by. With the meteoric rise in wood pellet BBQ demand and production, our news feed has increasingly run stories about wood pellet grilling, appliances and recipe ideas. A challenge has emerged as news about consumer products often come in the form of “Best of” lists, making maintaining impartiality a struggle for trade associations with multiple marketplace participants. We’ve received some good feedback recently on the news items we’ve chosen to run and I would certainly welcome more as we develop a more intentional methodology for deciding what to run, and what to allow folks to find on their own. Please know that the inclusion of certain stories isn’t an endorsement of one manufacturer over another. If you’ve got some thoughts or comments on this, please don’t hesitate to contact me.
—Tim Portz
Executive Director
Photo of the Week: For My Fellow D-Day Buffs
Since I attended the Veteran’s Day programs at the elementary school in my hometown in the 80s, I’ve been a World War II history buff. Two years ago, I was fortunate enough to travel with my family to Normandy. This church in Sainte-Mère-Église is a must-see site. A U.S. paratrooper, John Steele is famous for being caught on the church’s steeple.
Insider tip: Steele actually landed on the other side of the church but the parachute and mannequin were moved to the side facing the parking lot to make it more visible to the tourists. Once again, Happy Veteran’s Day.
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Industry News
Forests and Fires: Perfect Together, However…
Foresters and landowners in the forestry community are very aware of the impact of fires on our landscapes. Many of us use fire to provide conservation stewardship to forest ecosystems. As we now see with the ongoing historical wildfire events across the U.S., society needs to assess ways to live with fire, as opposed to continuing the long-term war on fire.
Read Full Article
Reducing Front End Expenses
Minimizing costs has always been a top priority for pellet producers, but today’s economic uncertainty underscores the urgency for companies to thoroughly evaluate methods of reducing waste—that is, regarding wasted efforts, wasted energy and wasted product.
Read Full Article
Why U.S. Residential Heating Oil Prices Slumped by 28% This Season
U.S. residential heating oil prices at the start of the winter heating season are 28 percent lower than in the previous heating season due to lower crude oil prices and high inventories of distillates in the United States, the Energy Information Administration (EIA) said on Tuesday.
Read Full Article
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More Industry News
November Warmth Sets Records in Concord, Manchester, Portland
Unseasonably warm temperatures the past few days have set records across New Hampshire and Maine
Read Full Article
Covid-19 to Mean More Residential Heating Demand this Winter, EIA Says
Changes in behavior due to the Covid-19 pandemic, along with colder temperatures, will result in greater residential natural gas consumption during the 2020/21 winter...
Read Full Article
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