Wood Pellet Data: Crunching the Numbers

Year over year, the 2019-’20 heating season in the U.S. was warmer, but production, sales and revenue were up. Lower feedstock costs drove higher seasonal production, alleviating widespread industry concerns about low inventory from last year.
By Anna Simet | May 08, 2020

U.S. wood pellet producers experienced a warmer than average winter, alleviating concerns of dwindling wood pellet inventory and potential shortages after coming off the 2018-’19 heating season. Despite above-average temperatures, about 122,595 more tons of wood pellets were sold in 2019 than in 2018, resulting in an increase of about $46.3 million in sales year over year.

Heating Degree Days
According to data from the U.S. National Oceanic Atmospheric Administration, on average, the 2019-’20 heating season was 10.4 percent warmer than 2018-’19 and approximately 8.9 percent warmer than normal, when comparing the number of heating degree days from September through February.

While November and December trended close to the heating degree day values for the same months in 2018, September and January were significantly warmer, at 26.9% and 14.4% warmer in 2019 than in 2018, and 56.3% and 18.5% warmer than normal, respectively.

The Mountain region (Montana, Idaho, Wyoming, Nevada, Utah, Colorado, Arizona and New Mexico) and Pacific region (Washington, Oregon, California), trended closest to normal range with heating degree day values 141 and 183 lower than normal from September through February, respectively. The Middle Atlantic, East-North Central and New England regions saw the biggest (lower) variations from normal values from September through February, with differences of 488, 452 and 439.

Fiber Costs
The 84 manufacturers reporting to the U.S. EIA for December purchased 1.46 million tons of raw biomass feedstock and produced 770,000 tons of densified biomass fuel. In comparison to December 2018, respondents purchased 1.11 million tons of raw biomass feedstock produced 710,000 tons of densified biomass fuel, equating to a year over year increase of 360,000 tons of raw biomass feedstock and 60,000 tons of densified fuel.

For specific fiber stream costs, in December 2019, the per ton cost of roundwood/pulpwood averaged $28.77 in 2019 compared to $29.98 in the same month of 2018, sawmill residuals averaged $32.47 compared to $41.65, wood product manufacturing residuals averaged $35.19 per ton compared to $34.42, and others sources—including bark, logging residue, wood chips, post-consumer and other unmerchantable wood—averaged $28.83, compared to $30.02 in 2018. 

Overall, feedstock costs averaged 8.6 percent less in December 2019 than in 2018.

Production, Sales, Inventory and Personnel
The 84 wood pellet manufacturers reporting to EIA in December produced 770,000 tons of densified biomass fuel, sold 840,000 tons had an equivalent of 2,333 full-time employees, compared to production of 710,000 tons in 2018, sales of 790,000 tons and 2,130 full-time employees.

In December 2019, inventory of domestic pellets was 68,640 tons, with production at 197,000 tons with an average per-ton selling price of $174.24, compared to 94,550 tons of inventory, and 196,931 tons sold at an average price of $162.98 per ton in December 2018.

Industrial wood pellet inventory was 320,026 tons with an average price of $178.17 in December 2019, compared to 229,042 at $167.89 per ton in the same month in 2018.

Domestic wood pellet production for the year topped out at 2,035,107 tons, compared to 1,666,145 in 2018. Industrial wood pellets hit 7,436,738 in 2019, compared to 4,088,221 in 2018.

Author: Anna Simet
Editor, Biomass Magazine
701-738-4961
asimet@bbiinternational.com