Unit 2: Financial Management and Business Organization

Ch. 10: Consumption and Savings

 

Wood pellets in high demand and short supply

Wood pellets are becoming harder to find on store shelves months before snowfall

 

CBC News Posted: Sep 14, 2015 7:14 AM AT Last Updated: Sep 14, 2015 7:14 AM AT

 

 

 

 

 

 

 

 

 

 

Customers are purchasing wood pellets early and fast. (CBC)

 

Wood pellets have become a favourite for those who shy away from electricity or fuel to heat their home. But they're becoming harder to find.

 

"My advice is to get them while you can, as soon as you can," said Home Hardware employee Daniel Anstis. "People have been buying them in August."

 

In the last few years wooden pellets have been in high demand and short supply.

 

Derek Russell, the manager of wood pellet supplier H.J. Crabbe & Sons Lumber, said he's been preparing for the heightened demand all year.

 

"We've been running a double shift here at our facility and this summer we did a couple of modifications that will give us an extra 20 per cent production."

 

Russell says the shortage may be short-lived as long as the winter isn't as harsh as last winter.

 

Those looking to buy wood pellets are limited to how much they can buy when they do find them.

 

"Two pallets is the maximum," said Anstis. "Every two weeks we'll get a truck which is about 26 pallets and there's 70 bags to a pallet," he said.

 

"We try to keep it so it's even for everyone, so that everyone can get some."

 

Summary

            In an article published and written by CBC News on September 14th, 2015, it is learned that wood pellets are in short supply but in high demand. Wood pellets are a popular source of heat for those who prefer not to use electricity or fuel. However, in the recent years, wood pellets have been in high demand and short supply. Home Hardware employee Daniel Anstis says “get them while you can, as soon as you can. People have been buying them in August.” Derek Russel, the manager of wood pellet supplier H.J Crabbe and Sons Lumber has been preparing for the rising demand of wood pellets all year. He says “we’ve been running a double shift here at our facility and this summer we did a couple of modifications that will give us an extra 20 per cent production.” Derek adds that the shortage may not last for that long, as the winter this year is not expected to be as harsh as last year. Despite the shortage, employees like Daniel Anstis are still attempting to give everyone an equal share of wood pellets, as well as providing as much wood pellets to consumers as possible.

 

 

 

 

 

 

 

 

 

 

 

 

Wood pellets are produced from wood deemed unfit for production into lumber. They are a very popular source of heat, which has caused a shortage of them in the recent years

 

Economic Concept

            In class, the law of demand and shortages have been discussed. The article discusses how the wood pellet industry has experienced a higher demand for wood pellets. This increased demand happened because consumers are willing and able to pay more for wood pellets. It is known that if the demand for a product exceeds the supplies that are provided by a supplier or vendor, then a shortage of the product will occur. This is what is happening in this situation. Wood pellets are in high demand by consumers, however suppliers cannot keep up with this increased demand, which will result in a shortage of wood pellets. In the article, suppliers such as Derek Russell are striving to counteract this shortage of wood pellets by making modifications in order to get an extra 20 percent production increase. A shortage is the opposite of a surplus, which occurs when the supplies of a good or service are greater than the quantities demanded by consumers. In this situation, we do not have a surplus of wood pellets. Instead, there aren’t enough wood pellets available for consumers.

 

Demand: The quantities of a good or service that buyers are willing and able to purchase at various prices

 

Law of Demand: If the price of a good or service rises, the quantity demanded by consumers will fall. If the price drops, more people will want to buy it, so the demand rises

 

Shortage: When the demand of a good or service is higher than the supplies provided by a vendor or supplier

 

Surplus: When the demand of a good or service is lower than the supplies provided by a vendor or supplier