In March, the U.S. EIA published our sector&rsquo;s production and sales data for December 2020, completing the dataset for the year and offering the industry a chance to compare the year in its entirety to the others in its archives. Despite my predictions in the last issue of Pellet Mill Magazine, we were not able to eclipse the 2019 sales figure (2.22 million tons), falling just short with total sales of 2.18 million tons. Sales in 2020 were tracking just slightly ahead of 2019 figures through October, but a mild start to winter saw sales sag in November and December, with almost 60,000 fewer tons sold in the last two frames of 2020 than in the year prior. Despite the utility of this important dataset curated by the EIA, what it does not and cannot convey is the perilous business environment this near-record year saw producers having to navigate. In the earliest days of the COVID-19 pandemic, it seemed that the industry was on the precipice of managing the biggest business disruption in the sector&rsquo;s history. In late March, wood pellet producers were long on questions and very short on answers or certainty. Would producers be able to remain safely in operation? How? Would upstream fiber partners so vital to pellet manufacturers be able to remain in operation? Would consumer demand for the products those partners manufactured continue unabated? Some of those questions were answered in short order, as federal guidance on wood product manufacturing secured our sector&rsquo;s status as essential. Other questions could only be answered in time, and were illuminated by the slow accumulation of sector data and anecdotes from the field. Wood pellet production lagged in April, with the sector logging just 122,000 tons of production, the lowest one-month total since July 2018. As the 2019-&rsquo;20 heating season ended and the pandemic accelerated, producers lengthened planned maintenance outages, phased out peak-season throughput totals or just modulated their production throttles slightly. Beginning in April, monthly output trailed 2019 numbers, but only slightly. The last nine months of 2020 saw the sector average 164,000 tons a month, down from 177,000 in 2019, but still well ahead of the monthly production averages of 2016-&rsquo;18. Considering the uncertainty that surrounded the industry and the others that wood pellet producers rely on&mdash;not only for their fiber, but also to sell their finished product in the early months of the year&mdash;2020 must be considered a runaway success. This year also underscored how vitally important wood pellet manufacturers are to our upstream and downstream partners. Our ability to safely remain online assured upstream manufacturers that if they were able to remain in production, wood pellet producers would be ready to and willing to pay for their residuals. This cannot be overlooked. Sawmills and wood product manufacturing sites across this country throw off incredible volumes of clean, high-quality residuals. In 2020, wood pellet producers purchased 8.7 million tons of these residuals. At 23 tons of fiber per load, that equates to 350,000 individual truckloads. A convoy of that number would stretch from Anchorage to Miami. Had the wood pellet sector not been able to remain in operation, the fiber bottleneck would have soon snuffed out upstream sawmilling and wood product manufacturing.&nbsp; Finally, most of the pellets produced and sold in bags are used to heat peoples&rsquo; homes. It is believed that over 1 million American homes use wood pellets either as a primary or supplemental heat source, and those homeowners needed pellet producers to figure out how to overcome the challenge of the pandemic. They certainly did, continuing to deliver to the market a high-quality fuel to heat what were not only people&rsquo;s homes, but had become remote offices and children&rsquo;s classrooms as well. The fact that the sector was able to meet this challenge in the most uncertain of times and deliver upon our commitments to both our fiber partners and our end users is not articulated in the data. Instead, this accomplishment can only be captured in stories told years from now that begin, &ldquo;Do you remember when ... ?&rdquo; Author: Tim Portz Executive Director, Pellet Fuels Institute <a href="mailto:tim@pelletheat.org">tim@pelletheat.org</a> <a href="http://www.pelletheat.org">www.pelletheat.org </a>
Printed in Issue 2, 2021 of Pellet Mill Magazine

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Considering the uncertainty that surrounded the pellet industry and others that wood pellet producers rely on, 2020 must be considered a runaway success.

Despite Everything, 2020 Was Strong for Pellet Producers

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