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In this Week's Pellet Wire:
From the Director's Desk:
A January Meek and Mild; A Congratulations are in Order; See You in Louisville
A January Meek and Mild
Last week the Energy Information Administration published its first wood pellet data set from 2021, and, largely, January was a disappointing month for wood pellet manufacturers, certainly those producers serving the domestic bagged market.
Most notably January saw abysmal sales numbers. January sales haven’t dipped below 200,000 tons since 2017 and at 134,514 tons January of 2021 is the lowest total in that month in the report’s history. These sales align with anecdotal reports from the field as large swaths of the country had mild or even warm Januarys.
Producers are showing less and less appetite for producing through a slow period and ratcheted their production back significantly in January, producing just over 142,000 tons of finished product, a number more in alignment with early spring totals instead of mid-winter output.
Despite throttling back significantly on production, producers still grew their inventory position in every region except for the West. For the first time in five years, the industry grew its position in the month of January (from 80,534 to 98,875 tons). In January 2020 inventory sagged to just 50,000 tons, which generated raised eyebrows and inspired questions about inventory being “too lean”. At just shy of 100,000 tons the inventory heartburn should subside appreciably.
A Congratulations Are in Order
Included in the Industry News section of this edition of Pellet Wire is the announcement that Lignetics has purchased Great Lakes Renewable Energy, a wood pellet producer in Hayward, Wisconsin. Congratulations to our producer-member Lignetics for their successful purchase. This transaction brings Lignetics’ total footprint to 17 production facilities with 4 in Wisconsin.
Also included in this week’s Industry News section is a link to a story I authored in 2016 about Great Lakes Renewable Energy for Biomass Magazine. It may be the first time I toured a wood pellet facility that put BBQ markets at the top of its operational and go-to market strategy. - TP
See You in Louisville
We will gather as an industry in just six weeks, in person. Let that sink in for a minute. I hope you’ll be able to join us. There will be golf. There will be networking. There will be a thorough review of our sector and the challenges and opportunities before us.
Find more information and register here.
—Tim Portz
Executive Director
Photo of the Week
Senator King Reintroduces BTU Act: This week’s photo is from the PFI archives of our October 2019 visit to Senator King’s office. Senator King, along with Senator Susan Collins, both of Maine, reintroduced the bill with the dual hopes of extending the tax credit to commercial or business installations and extending and increasing the residential credit.
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Please get in touch with Tim Portz via email at [email protected] with information on your company's growth, job openings, promotions, or other news.
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Industry News
King, Collins introduced updated BTU Act
Sens. Angus King, I-Maine, and Susan Collins, R-Maine, on April 20 announced the reintroduction of an updated Biomass Thermal Utilization Act, which aims to provide tax credits for commercial and industrial wood heating appliances. It would also extend and increase the existing residential tax credit...
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Lignetics Buys Great Lakes Renewable Energy
Generational Capital Markets, Member FINRA/SIPC and a leading mergers and acquisitions advisor for privately held businesses, is pleased to announce the sale of its client, Great Lakes Renewable Energy Inc. to Lignetics Inc. (a holding of Taglich Private Equity LLC). The acquisition closed March 31, 2021...
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Cooking Up Higher Margins
Herb Seeger, president of Great Lakes Renewable Energy Inc., recently went to an auction at a distressed wood pellet facility. Recalling meeting the owner of the facility, Seeger says, “My mood isn't the same as his mood.” For Seeger and his team at GLRE, business is strong...
Read Full Article
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