February 24. 2014 9:38PM

Heating pellets prove to be in short supply in NH

New Hampshire Union Leader

Anyone who did not pre-buy wood pellets this year is likely to find them in short supply for the rest of the winter. (UNION LEADER FILE)

Carol Newby’s search for bags of wood pellets to fuel the family pellet stove took her on a tour of Southern New Hampshire last week, with little success.

“We usually get them at the local Agway,” she said, “but they were in short supply and what they had was committed to customers who’d made pre-buys.”

She was able to get a few bags at the Lowe’s in Epping, but when she went back, they were out. After coming up empty at tractor supply stores in Epping and Hooksett, she tried a nearby Home Depot, which also had no pellets to sell.

Newby called Hearth Works Fireside Systems in Hooksett, which had already received 15 calls that morning, and the best the harried operator could offer was 10 bags, first-come, first-served.

“When I said, ‘Your ad says you never run out,’ she just hung up on me,” Newby said.

Fortunately, Newby and her husband don’t rely on their pellet stove for heat. “We bought a pellet stove as a supplement to oil heating,” she said. “We have a good-sized house, with a pellet stove in the living area. It’s an amenity, but we enjoy it.”

The Raymond resident represents the majority of the market for wood pellets. A much smaller number of households rely on biomass as their sole source of heat. Those buyers are more likely to buy ahead of time for the winter.

Anyone who did not pre-buy pellets this year is likely to find them in short supply for the rest of the winter, according to manufacturers and distributors of the fuel made from compressed sawdust.

Demand outstrips supply

Charles Neibling, formerly general manager of New England Wood Pellet in Jaffrey, and now a consultant with the company, said demand has far outstripped supply this winter because of the colder-than-average temperatures in the past two months.

The company operates three plants that produce pellets from raw materials for the wholesale market. “All three have been operating at capacity for the last 12 months,” said Neibling, but the company can’t keep up with orders from the retail outlets and distributors it serves.

Neibling doesn’t like to use the word “rationing,” but that’s what the company has had to do. “We essentially have all our sales outlets on allocation,” he said, “in as fair and equitable a fashion as possible.”

The shortage has come about because of a confluence of two factors, Neibling said. In addition to the below-average temperatures, more consumers have turned to pellet stoves to reduce the cost of heating by conventional fuels.As a result, he said, the market has seen a growing number of consumers chasing a limited supply, much like what has happened in the market for other fuels.

“It’s not only wood pellets that are in short supply,” he said. “Propane supplies are low; heating oil deliveries have been affected; and natural gas prices have gone through the roof. All heating fuels have had their supply or cost impacted by the significantly colder-than-average weather compared to recent winters.”

The milder winters that preceded this year are part of the problem, Neibling said, because consumer behavior is based on the past winter, not the current one.

“Five or six years ago, it was common practice to buy pellets in the spring or summer, when inventories were plentiful, and sock it away in the garage,” he said. “We’ve seen consumer behavior change in recent years and move in the direction of buying less volume all at once, replenishing constantly over the course of the winter.”

Return to old habits

Neibling predicted that consumers will return to the old habit of buying early and storing pellets, which will encourage the creation of new production capacity to keep up with demand.

“The market will respond,” he said, pointing out that production at New England Wood Pellets has gone from 40,000 tons in 2005 to nearly 250,000 tons this year.

“We’ve invested tens of millions of dollars in new capacity to keep up with growth in demand,” he said, “and I suspect if conventional heating fuels stay expensive, we’ll sustain that demand in the future.”

David Nydam, CEO of Woodpellets.com, said his company, which sells directly to consumers, has been able to keep up with demand but it hasn’t been easy.

“We still have pellets to sell, but it’s been a lot tighter than in prior years,” he said. “Our suppliers are filling on an allocation basis.”

Woodpellets.com, a subsidiary of American Biomass Distribution of Goffstown, concentrates on deliveries, but operates a pick-up location in Manchester.

Minimum delivery from Woodpellets.com, however, is one ton, or 50 bags, which is more than a consumer like Newby might want to purchase at any given time. For people trying to find just a few bags, the search can be grueling, as she discovered.

Other items in short supply

Wood pellets and other fuels are not the only commodities affected by the frequent dips of the polar vortex this winter. Try finding a bag of rock salt.

“No rock salt” signs were visible at hardware outlets and grocery stores throughout the region over the weekend as heavy rain one day turned to solid ice the next.Braen Supply Inc., one of the largest national suppliers of the material, posted this warning recently on its website: “As rock salt continues to be used so frequently, it is becoming extremely difficult for local and national suppliers to keep up with demand. All of these factors are contributing to the rock salt shortage of 2014.”

Even roof rakes were hard to come by as the region braces for yet another arctic blast.