Wood pellets in high demand

Monday, September 15
PITTSFIELD — When Kelly Sullivan purchased her wood pellet stove two years ago, she figured it would help save money on her oil heating bills.

But when she tried to order her supply of pellets recently for the upcoming winter, the Lenox resident had a hard time finding any.

"It's getting pretty tough to get them," said Sullivan, who after contacting six different dealers has only managed to buy half the amount she wanted. "It's become a game in a way."

As residents search for alternatives to the rising prices of home heating — heating oil prices are projected to be up a whopping 31 percent this season — the wood pellet stove industry is struggling with rising demand and limited supply.

Wood pellets — which are essentially compressed sawdust — were first produced in the 1970s and have become popular, particularly in the Northeast in recent years, because they are a cheap alternative to oil heating. Pellets come in 40 pound bags and are placed into a hopper that feeds a stove fire.

While most manufacturers expect the supply to eventually catch up to demand, the current shortage has left consumers scrambling.

The sawdust used for the pellets is most commonly procured from sawmills, but a deflated housing market has dramatically impacted the supply. In addition, demands and shipping costs are making pellets increasingly expensive. And because it is a relatively small industry, many producers are wary of producing too many pellets and are not equipped to quickly react to large shifts in either demand or supply.

Pellets, which were being sold for $250 a ton earlier this spring, are currently being sold for more than $300 a ton. The average pellet stove will burn between 3 to 5 tons in an average winter.

Sales of pellet stoves also jumped to previously unseen levels this spring as gas prices hit $4 a gallon and preset home heating oil prices were announced at more than twice last year's price.

Shipments of wood pellet stoves for the first half of 2008 jumped by more than 200 percent this past year, according to Leslie Wheeler, director of communications for the Hearth, Patio & Barbecue Association.

In Pittsfield, there have been 104 permit applicants for wood pellet stoves this year, compared to 126 for all of 2007, according to the building inspector's office.

"In the third week in May, all hell broke loose and the phones were ringing off the hook," said Mark Wilson, COO for New England Wood Pellet, a pellet manufacturer based in New Hampshire.

To meet demand, New England Wood Pellet has begun running its plants 24 hours a day and reopened a packaging plant in Palmer, increasing their supply by more than 10,000 tons.

Wilson said that while they are behind demand now, manufacturers should eventually be able to meet demands as long as the winter isn't exceedingly cold.

The process has been difficult for many local suppliers.

"It's frustrating and challenging for us," said Bart Raser, owner of Carr Hardware in Pittsfield. "People have relied upon us for years."

Raser said his store has no pellets, having sold more in August than in all of 2007.

His current wait list is more than 150 people long.

"It's not looking very good for this year," he said. "I anticipate the price will continue to rise and there will be limited supply all year."

L.P. Adams has been sold out for nearly a month, despite limiting sales to two tons per customer. One of its vendors said it might not be able to get more in until February.

"I feel bad for the people who invested in these stoves," said Theresa Dapretto, an L.P. Adams customer service representative. "I think everyone realizes its going to be a mad rush when the pellets do come in."

Even larger stores are struggling to meet demand.

"It's been a hard commodity to get hold of," said Bruce Drewniany, manager for The Home Depot in Pittsfield, whose store typically receives 22-ton shipments.

"I've had a fairly consistent supply, but they sell out in a day."

While cutting in to their profits, The Home Depot has been able to maintain their pre-rush prices because of the company's size, according to Drewniany.

While the surge in demand may eventually recede, manufacturers are hoping the weather remains on their side.

"No one has a crystal ball," said Wheeler. "If the weather remains mild, it just gives manufacturers more time to catch up. If we get hit with a cold snap and everyone is trying to buy, it is going to be tight."

To reach Trevor Jones: tjones@berkshireeagle.com; (413) 496-6240.


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