A frigid winter, increased demand for wood pellets and customers who underestimated how much they would need contributed to a strain on manufacturers and suppliers, according to officials at the Maine Pellet Fuels Association.
Mills across the state are working nonstop to produce pellets and get them to distributors, but some stores are running out or rationing bags to prevent customers from hoarding them, according to Bill Bell, executive director of the nonprofit corporation that promotes the industry and supports pellet manufacturers and suppliers.
He said Thursday that while the state has enough capacity to meet the demand, producers are struggling to make the pellets as fast as retailers want them.
“It is not a capacity issue; it is a timing issue, a marketplace issue,” Bell explained. “Our four pellet manufacturers are running mills around the clock to produce, but I have heard from several stores that they have had to ration their product.”
Bell indicated Corinth Pellets Manufacturing in Corinth is undergoing a $7 million upgrade, which has slightly slowed that firm’s production.
Another contributing factor, he said, has been an ordering learning curve experienced by customers, retailers and bulk distributors.
“We have to get our customers to order earlier in the year,” Bell said. “We need retailers to do it, too. Ideally, customers would be buying 12 months a year. We also need to develop the storage capacity to keep pellets stored all year around.”
It is an idea Justin Moran, director of sales and marketing for Geneva Wood Fuels, agreed with.
The company produces premium-grade hardwood pellet fuel at its plant in Strong. It has an annual production capacity greater than 80,000 tons, according to its website.
“Retailers and consumers need to help us out by ordering earlier and more consistently,” Moran said. “People need to think about pellets being something you order all year round and store.”
Moran said production at the plant has increased “dramatically” over the past four years and cited last year’s numbers as an example.
“By the end of March, we will have produced and shipped 20 percent more pellets than the last heating season. Industry data has shown us that in the last three years, more than 200,000 stoves were sold in the U.S. That kind of growth creates organic growth for the industry.”
A similar situation with supply and demand occurred about this time last year, when big-box retailers based orders on previous, milder winters and suddenly started running out.
“This year, the big-box stores placed orders early,” Bell said.
Still, in Bangor on Friday, Home Depot was out of pellets, though an employee said the store would be getting a shipment in Monday. Nearby at Lowe’s, a shipment the store received Thursday was gone by Friday afternoon.
At S.W. Collins Co. in Caribou, vice president and co-owner Gregg Collins said pellet inventory at his store has been “inconsistent.”
Employees have needed to ration bags at times, he said, though he stressed it was not a consistent practice.
“We have had to do a five-bag limit, but it fluctuates from week to week,” he said. “We encourage customers to check with us because it changes daily. We have been selling lots of full pallets. I think a lot of it has to do with the very cold winter.”
Collins added he “absolutely” has seen a jump in sales of pellets and pellet stoves.
“We have had people replacing pellet stoves and putting them in where they once had fireplaces or using them in just one room or as central heating systems,” he said Friday. “We are even seeing new home builders who are choosing wood pellet boilers over electric or gas.”
At EBS Building Supplies in Orland, branch manager Jim McCrum said he has not needed to ration bags of pellets. On Friday, however, he had run out.
“I was promised two truckloads this week, but I haven’t seen them yet,” he said.
Bell said he would like to see his industry develop a system similar to what fuel oil dealers have, in which they keep track of how much oil customers typically use to heat their homes each winter and offer them a chance to order it in the summer for a lower price.
“We do need to know what the demand is,” he said. “We are growing up and growing out as an industry. Pellet stoves are becoming more popular. We don’t track pellet stove sales, but there seems to be a lot of people buying them.”
Homeowners are learning and adapting, too.
Joe Sutherland, a Presque Isle resident who has only had a pellet stove for one winter, said earlier this week he needed to drive to several different stores in Caribou twice this month to buy pellets.
“I really did not buy enough this fall,” he said. “Half of it was just not knowing and the other half was financial. I will know next year.”