The forest products industry has taken a big hit with the slowdown in the economy. Without people building new homes there is a low demand for traditional forest products like lumber which had been devastating to many forest products industries. An exception to this is wood pellet manufacturing which has not only remained steady but the demand is rising.
Both firewood and pellets are unique when it comes to forest products in that they are a consumable product that consumers buy year after year. As the timber industry suffers from cutbacks and mill closures my own firewood business continues to thrive and grow. No matter what the economy is doing people still want to stay warm.
Pellets as a source of heat came onto the scene in the late 70s but have been slow to compete with cheap and abundant electricity, oil and natural gas. Heating with pellets made a big hit with consumers but from time to time wood pellet manufacturing hasn't been able to keep up with demand and there have been occasional problems with pellet shortages.
As fossil fuel prices rise and as consumers are looking for green alternatives and renewable sources of energy, pellets are starting to get more attention as an alternative source of energy. Because of this, demand for pellet manufacturing will likely continue to increase and be an opportunity for the forest products industry.
Pellet mill technology has been changing in recent years and there is a new trend of making smaller scale pellet mills. These lower production mills are becoming affordable for small production operations and even consumers to enter the wood pellet manufacturing market.
This opens up opportunity for small wood products businesses and small forest land owners and managers to manufacture and sell pellets. It also gives home owners the ability to manufacture their own pellets the way wood stove users can make their own firewood.