Not way off. We didn't either... Our prices have been about the same for several years.... I do believe, as well, and have commented on it many times, that the BBS finally decided to make a profit on pellets. They aren't gouging, just making a profit. If they were selling them for 189-199, they were not getting very rich... Dan
It is a pretty common now days to believe that producers from oil to coal to pellets to lettuce are price gouging. This is, IMHO, a direct result of recent (last 8 years or so) finger pointing at industries by certain politicians who currently have the public's attention. The fact is there is very little price gouging in the USA (although there are surely isolated and blatant examples of it). Oil and gas are frequent targets, yet a review of pricing structures and costs quickly reveals that despite political finger pointing it is in fact layers of government who reap a large chunk of the revenue. In fact government take exceeds oil company profit by a goodly amount. As for pellets, although I do not pretend to have intimate (it being close to Valentine Day) knowledge of cost structures I do "see" that it costs several millions of dollars in plant, land, regulatory hurdles, and labor to produce pellets and that most mills are relatively small players in the scheme of things. The biggest problem with pricing quite honestly is corporate size, not greed. Using the company I retired from as an example. When I started it was family owned and the family qwas part of the work force. Later it became part of a relatively large corporation and the family lived off bonds, and stock dividends that were were "acquired" as part of the buy out. They were no longer part of the workforce but what they had previously did still had to be done. Hence greater labor costs. Yet they still wanted an income just like every other stock holder from Union pension funds to institutional funds to individual brokers. What used to be a working owners salary was now paid to a surrogate manager and the difference was made up with price increases, greater debt loads and productivity increases (read that as greater automation and less people). Capital needs to be paid a return on investment. Some of that return comes from labor's right pocket in the form less labor hours. Another chunk comes from labor's left pocket in the form of less labor and knowledge intensive work, and some comes from the customer base in the form of either higher pricing or less service. Again, using my former employer as an example, at least 95% of all productivity increases in my 25 year term were the result of automation that reduced labor hours AND simplified required knowledge. Eighty percent of our employs needed only to know red turned the machine off and green turned it on. The other 20% required specialized knowledge that we gave them. When I began with the company those percentages were probably roughly reversed. ALL pricing advantages were part of our cost inputs and with very few exceptions were passed along. ALL capital investments were like wise part of the cost inputs and also passed along. There is very little gouging. There are greater and greater pressures to slide profits to non working ownership groups. The more consolidation an industry is subjected the greater that particular cost becomes. We have long ago crossed the line where larger equals cheaper.
