Saturday, May 23, 2009

To pre-order or not 2009-2010?

This is a great question and comes up each year. Last year I pre-bought Hamers (very early- March) Hot ones for $175 a ton, however this year that same pellet from that same store was $285 (pre-buy).

So what to do? I will will pre-buy half or less than my anticipated need for the winter of 09-10 and look for better deals durring the season. I believe pellets are at an inflated price at the moment and will possibly decrease during the heating season.

Why do I think this? Simple- pellet stoves are not a tremendously economical option when pellets are @ $300+ a ton and oil is at $2 a gallon. Also last winter represented a pellet stove craze because in the summer oil was $4+ a gallon, pellets and stoves where in hot demand. I believe this year we will see a dip in demand as many of the pellet newbies of last year give it up because of the work and lack significant savings because of high pellet prices.

My prediction- look for a glut of used stoves on ebay this summer and declining pellet prices through out the year.

Disclaimer- This is just my opinion and could be totally off, so take this with a grain of salt.


  1. I agree that the last Winter, and lower oil prices, threw out the big savings. I also can't imagine giving up the steady constant 24x7 heat for less money than oil would cost! I don't think we'll see lower oil every again, and my savings are still fine at the current prices. And work? I've got the weekly cleaning down to 20 minutes. There are those folks who shouldn't have a pellet stove though, nor a wood stove! Then again, I have coffee all Winter with the local oil burner repair guy, and he's convinced there are some that can't handle a thermostat of any type.. LOL

  2. This is an interesting prespetive. I think that perhaps this is accurate as I am debating how to buy currently. Locally, good premium pellets are about 250 a ton if you pick them up (more if you store or get delievery)

    The savings is pretty much gone now I must admit vs. Oil and the new home market continues to suck (thus decreasing the pellet supply via decreased hardwood supplies) So the question remains, will the decreased economic value of pellets tip the scales or is supply low enough that demand will increase the price.

    I'm actually thinking that supply is incredibly low right now and that pre-buy is the right way b/c we arn't seeing an increase in new home sales anytime soon!

  3. Certainly the supply of saw dust is not going to shoot up any time soon, but the demand for pellets could drop and I think it will.

    Either way it is a gamble, but I think $250 a ton is too high to be worth the trouble. My speculation is pellets will be less than $250 this winter.

    Ebay is currently loaded with used pellet stoves, I think that in itself is a sign.

    Time will tell.

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