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The domestic wood pellet industry met with optimism in Louisville, Kentucky, in early June. Many bright spots are bolstering business, but a nagging issue seems to be plaguing all supply chain segments: employees. BY ANNA SIMET
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trong pellet sales, appliances selling faster than manufacturers can make them, optimal levels of inventory and policy victories—these were many of the positive discussion topics at the 2021 Pellet Fuels Institute Annual Conference held in Louisville, Kentucky, June 8-10. Tim Portz, executive director of the PFI, began the event with a thorough review of how 2020 stacked up to 2019 and the past five-year average. As for sales, the domestic wood pellet industry exceeded the five-year average, just missing 2019 numbers at about 2.185 million tons. Average monthly inventory equated to about 81,000 tons, compared to about 18,000 tons in 2019. The “right” level of inventory is a number that has been heavily contemplated, Portz said. “But I don’t know what the Goldilocks number is—that’s for you to decide,” he told a room full of pellet manufacturers and other supply chain stakeholders, many who were attending an in-person event for the first time since 18 BIOMASS MAGAZINE | ISSUE 3, 2021
the pandemic began. Portz said 2020 was overall a solid year, though there were a few valleys with the peaks. While summer sales were significantly high—a buying trend the pellet industry has strongly encouraged its customers to embrace to help prevent spot shortages and help producers gauge demand—October to December saw the lowest average sales in the past five years. Portz highlighted the fact that the wood pellet industry injected more than $478 million back into the forest products industry. “We do great things for our partners in this sector,” he said, pointing out the incredible amount of wood residuals the industry purchases in a year. “About 14.5 million tons of residuals—that’s trucks lined end-to-end from Anchorage to Orlando. Portz also pointed to the merger and acquisition activity in the industry, underlining the fact that pellet producers are spending money in this strong, predictable market. “The BTU Act is already having an effect—one retail member reported pellet appliances up 39%,” Portz said. “Efforts
to expand the BTU act have already begun, but our question is: How much leaning in and work should our sector do?” FutureMetrics President Bill Strauss turned the discussion to carbon policy, beginning with a review of EU carbon reduction initiatives. The country has enforced policies that discourage use of fossil fuels, particularly heating oil, and it’s working, according to Strauss. “I think that’s what
