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Back about a month ago, I posted an article containing a snippet of information from my neighbor, Bill. At that time, he thought he had heard in a meeting about some pellet prices increases due to a pulp wood shortage. But, he was scant on the details. When I went back to him for some clarification he put me in touch with Doyle Richards, who is the Forest & Park Administrator for Chippewa County. Hit the Read More link for his complete text response.
I'm not sure if I can provide much information on this or not. I think Bill
may have commented to you, based on something he heard at one of the
County's Land, Forest and Parks Committee meetings. If that's where he
based his comments from, he may have misunderstood the brief comments that
were made at the meeting. I'm not sure that wood pellets will necessarily
go up because of a demand for wood for pulp. I think it might be more
likely that pulpwood may go up because of the demand for wood for fuel.
I'm not aware of any shortage of wood for pulp in the state. There is
likely to be a shortage of wood that comes from sources where the land
management has been certified to be well managed. Forest certification is a
relatively new concept in the forest industry. It can apply to both raw
wood and to the forest products made from the wood. This certification
verifies that forests are well-managed—as defined by a particular
standard—and ensures that certain wood and paper products come from
responsibly managed forests. In order for the wood to be certified the
management of the land has to be certified by an independent organization to
a set of standards recognized to meet certain environmental and social
needs. There's been an increasing demand by pulp and paper mills for
certified wood so that these mills can offer certified paper to large
customers. There's a cost in obtaining certification and many woodlots
where the land may be well managed may not have gone thru the expense of
certification. This particularly holds true for the small private woodlot
owner, who owns the majority of wood in the state. Thus the potential for a
shortage of certified wood.
In regards to pellet mills, there's a push within the State and the Nation
to move towards greater use of renewable energy sources and away from fossil
fuels. Woody biomass is being considered as one source towards achieving
that goal. There are a number of alternatives being looked at for the use
of wood. Wood pellets, burning of waste wood, and the use of wood for
ethanol production are just some of the uses being considered. I'm aware
of at least two wood pellet plants that are being planned for construction
within the year. One is in Hayward and the other one is in Ladysmith. In
looking at a State web site, it appears there are several other plants
being considered within the state. For your information, the web site is:
http://www.forwardwisconsin.com/forward_docs/uploaded_documents/why_wisconsi
n/Wisconsin-Pellet-Plants.pdf . How the affect of increased use of wood for
energy is going to impact wood pellets is difficult for me to say. A lot
of the woody material that will go into wood energy is going to be low
value wood that was not utilized or was under utilized in the past. As
demand increases for wood for a greater number of uses it will increase
competion for the use of a finite supply of wood for a variety of end
products. If the demand for the use of wood for energy becomes high
enough, it could compete with pulp mills and the wood they use. Wood used
in the pulp and paper industry is typically of a higher quality than that
used for energy, such as wood pellets. There could be some competition
between the two wood using sectors which could drive up wood prices.
Wisconsin is the leading producer of paper in the nation and has been for
many years.
If there are more suppliers of wood pellets, the price might go down.
However, assuming there's more demand and or uses for wood pellets, the
price could very well go up. In addition, competition with the pulp mills
for wood could drive prices higher. I really can't say what is going to
happen. I think it's very likley that we're going to see greater use of wood
and wood utilization in this country for a variety of uses. It's hard to
believe that greater use won't increase the price of some wood products. I
wouldn't be surprised to see wood pellets rise in price, but perhaps less
than other energy sources.
You may want to contact Terry Mace, the Utilizatiion and Marketing
Specialist from the DNR. I would assume he could provide you with much
more information than I can. His e-mail address is :
This e-mail address is being protected from spambots. You need JavaScript enabled to view it
Doyle Richards
Forest & Park Admin.
Chippewa Cc.
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