September / October 2015
Vol. IX No. 5
Serving Soil, Mulch, Compost & Wood Pellet Producers www.SoilandMulchProducerNews.com
NEWS
Attention Readers !
Are you looking for Products, Equipment or Services for your business? If so, please check out these leading companies advertised in this issue:
Bagging / Wrapping Systems Amadas Industries – pg 21 Hamer LLC – pg 7 PremierTech Chronos – insert
Buildings & covers ClearSpan – pg 3
Compost Equipment/spreaders Ecolawn Applicator – pg 19 HCL Machine Works – pg 19
dust & odor control Buffalo Turbine – pg 4
Mulch Coloring Equipment/ Colorants AgriCoatings – pg 13 BASF / Colorbiotics – pg 11 CMC – pg 5
Shredders, Grinders, Chippers & Screening Systems CW Mill Equip. Co. – pg 22 Ecoverse – pg 10 Komptech USA – pg 24 Morbark Inc – pg 2 Neuenhauser – pg 12 Peterson – pg 23 Premier Tech Chronos – insert Rawlings – pg 16 Rotochopper Inc – pg 15 Screen Machine Industries – pg 17 Sundance Grinders – pg 19 West Salem Machinery – pg 18
Trommel Brushes
United Rotary Brush Corp – pg 19
TRUCKS & TRAILERS J&J Truck Bodies – pg 9
Wear Parts
ArmorHog – pg 18 King Kong Tools – pg 10
Mulch Manufacturers Continue to Feel Heat from Wood Pellet Industry
G
By p.j. heller
rowing demand for wood pellets from the European Union, prompted by renewable energy mandates there, is severely impacting mulch manufacturers in the Southeast United States who are facing diminishing wood supplies and rising prices. The situation has become so dire that some mulch manufacturers are purchasing their own plots of land to obtain wood supply. “The demand [for wood pellets] is extremely high,” says Robert C. LaGasse, executive director of the Mulch and Soil Council. “We know this because if you’re anywhere near a major port, availability of raw materials has gone down and cost has gone way up. “My people are looking at 30 percent to 50 percent less material available and a 40 percent to 60 percent increase in price,” he reports. Ralph Spencer, president of Mulch Manufacturing Inc., one of the largest producers of packaged mulch products in the nation, says the wood pellet industry has created negative economic conditions that “make it difficult for us to compete in the marketplace and grow and be profitable.” “Generally speaking, there’s not additional wood to go around, so when the pellet industry moves into an area it affects availability of raw materials for everybody. Prices are up and
people have to go further distances to get raw materials to compete,” says Spencer, whose Ohio-headquartered company has been serving the eastern U.S. since 1985. The United States has become the No. 1 wood pellet exporting nation, shipping some 4.4 million tons in 2014, more than double the amount shipped only two years earlier. Demand for pellets is expected to increase in coming years as the EU, under its Renewable Energy Directive, attempts to achieve a 20 percent renewables target by 2020. One of its goals is to replace coal with biomass pellets to generate heat and electricity. The wood pellets can be burned in the same coal-fired plants, reportedly without requiring significant modifications. Renewable energy subsidies from the European Union are helping to drive the industry. In addition, U.S. taxpayers are supporting the industry through federal and state tax breaks or subsidies. Pellet mills have been built in at least seven Southern states and more plants are expected to come online; one major pellet manufacturer already operates three ports for shipping pellets overseas, with a fourth port scheduled to open next year in Wilmington, NC. LaGasse says that if subsidies for wood pellets were cut off by European countries, Continued on page 3