What drives the price of firewood?
by Natalie Hormilla
The price of a cord of green firewood is running about $185 this year, about the same as last year. It’s a price that’s mostly determined locally — at least compared to other home heating fuels, like oil or propane. It reflects the cost of pulpwood and fuel, and the weather, to name some of the factors that figure into the annual cost of cordwood.
And it’s a price that hasn’t fluctuated much for long stretches of time, although there was a dramatic leap around the turn of the millennium.
Back in 1970 or 1971, when he first started logging, David Poirier of Barton charged $50 a cord. Today he’s asking $185, but for years the price did little more than creep up.
Michael Moore of Brownington is selling firewood for $170 a cord this year, the same as last.
Mr. Moore said he’s been logging, or at least involved in it, since he was four years old. “I used to ride the horse, the skid horse,” he said.
While a number of factors affect the price of firewood, one in particular is weighty:
“The pulp wood market — it’s what the mills are paying for the wood,” Mr. Moore said. “The pulpwood market is what drives the price. You’re not going to buy firewood that’s cheaper than pulpwood. It can make a difference of $10 a cord on firewood, very easily.”
Mr. Poirier agrees.
Mr. Poirier logs with his son and partner, Jeff, and they cut about 600 cords of wood per year. He said mills can determine the price that they’re willing to pay, notify the loggers they work with through the mail, and therefore control the price of firewood through supply and demand.
“When the demand is there to make wood products, they’ll raise the price,” he said. “It might be for three months, but if it’s worth $150, and they decide they need a bunch of stuff, they’ll raise it to $175. They pretty much determine all that stuff.
“They’ll raise their prices so they can get more of it. It gives more incentive to the loggers to say the hell with the firewood.”
Mr. Poirier also pointed out that the pulpwood market is a year-round market for loggers, and therefore an important part of their business.
“Pulp is what you make toilet paper out of, writing paper, anything that you do that you write on, is all made of pulpwood, whether it’s hardwood or softwood,” Mr. Poirier said.
The pulpwood market can change quickly, too. “A big outfit might need 100 tractor-trailer loads of Scott paper towels, but then the market might change and they say they only need 20,” he said.
Those changes have an immediate effect on the price of firewood.
“Say your wood at the mill just drops like heck,” Mr. Poirier said. “Course that’s going to affect the price of your firewood. If you don’t drop the price of your firewood there’s people out there that will do it just to cut you out of the picture. Just like the stock market, you keep an eye on it very closely.”
The price of firewood is relatively stable, he said.
“It usually doesn’t fluctuate too much. Last year, we were selling for $190 and we actually went down to $185, because there are a lot of cutthroats out there. We should be getting $200 now, but there are so many people out there doing it for easy money, and people see that.”
“I’d say, it doesn’t usually fluctuate more than five bucks a year,” he said. “Sometimes ten, but that’s rare.”
Mr. Poirier and Mr. Moore both said that the price of gas and oil affect the price of firewood.
“Everything we run is fuel related, and fuel is $3.50 a gallon right now,” Mr. Poirier said. “The more you pay for fuel and repairs and all this, it all fluctuates like that. So the cost of fuel means it costs more money to produce the cord of wood.”
Mr. Poirier said that when he first started logging over four decades ago, fuel was only a quarter a gallon.
“So that makes a big difference,” he said. “Hydraulic oil over the last ten years has doubled in price.”
“It’s expensive, period,” he said, about the cost of producing a cord of wood. “All your expenses to get it out, whether it be fuel or whatever.”
Mr. Moore also cited the rising cost of fuel, and the equipment itself, as drivers of the cost of firewood.
In 1980 he sold green, cut and split wood, delivered, for between $50 and $55.
“In 1980, I could buy the best saw around for $200,” he said. “Now it’d be $2,000, or $1,500 anyway. We were buying chainsaw gas for 50 cents a gallon and diesel fuel for 40 cents a gallon,” he said.
He also pointed out that just about everything under the sun is more expensive over time.
He also said that delivery, and where the logger and customer are located, add to the cost. He said it’s hard to compete with people who are closer to their customers, so that makes a difference in price — by up to about $5 a cord, he said.
“Who’s near you and who ain’t?”
Mr. Moore also touched upon a bigger-picture factor that he believes affects the cost of firewood.
“Next big thing is probably the state of Vermont,” he said. He said the state owns hundreds of thousands of acres that don’t get cut. “The wood is going by because it’s not getting cut.”
Mr. Moore believes this has had a big effect on the cost of firewood.
“Because all the wood is in competition with the lack of wood. Because the more you shrink the supply, the more you drive the price up.”
“The supply is limited by the amount of wood the state isn’t cutting in certain areas,” he said.
“We had a dramatic change in the price here during and after the Champion Lands buyout,” he said. “Because it was a huge mark of land, and it went off the grid.”
The Champion lands buyout, completed in 1999, is Vermont’s largest conservation project in history, according to the Vermont Land Trust. The former Champion Lands consist of 132,000 acres of forestland, located mostly in Essex County. The land was owned by Champion International Paper Company before being transferred over to a mix of public and private entities including the Fish and Wildlife Department and the Agency of Natural Resources.
The firewood market is particularly important in the state of Vermont.
About 15 percent of Vermont homes use wood as their primary source of heat, said Matt Cota, executive director of the Vermont Fuel Dealers Association.
There are still more homes that use wood to supplement a heating system that mostly runs on other fuels, like oil or propane.
“If you look at the U.S. census data, wood is a minor player in every other state,” he said. “In Vermont, New Hampshire, and Maine, it’s in double digits. But everywhere else it’s in low single digits.”
Another factor in the price of firewood is that about 50 percent of homes in Vermont use oil as their primary source of heat, Mr. Cota said.
“When oil prices go up, there’s more demand for cut and split wood,” he said. “The higher the price of oil goes up, the higher the price of wood goes up. If the oil price is okay, people might not go out and buy that extra cord of wood. A lot of people in Vermont supplement with wood, even if they use oil.”
The use of oil as a primary source of heat is mostly unique to this area, Mr. Cota said.
“Of all the oil heat consumed in the United States, almost all of it is consumed in New England, New York and New Jersey. Over 80 percent of oil heat is used in the nine Northeastern states. It’s gas and electricity elsewhere.”
Mark Collette, alternative heating specialist with Blanchard Oil Company of Orleans, has seen the effect of the price of oil on the firewood market.
“In ’08 or ’07, when $4 oil was thrown in our faces, and people were looking at a $10,000 a year oil bill, it was a banner year for boilers,” he said, referring to wood-fired hot water heating systems.
Mr. Collette said that newer, more efficient wood stoves can also cut down on a person’s need for firewood. He said that if a person replaced a “non-EPA, old technology, pre-1985” stove with a more efficient model, they could use between 25 and 40 percent less wood to heat the same home.
Mr. Collette said that convenience factors in, when people decide whether to heat their homes with wood or other types of fuel.
“The convenience is what you pay for, and that’s the big deal with oil and propane — it’s convenience, and you pay for it,” he said. “The time it takes, the physical demands of cord wood are significant, depending on one’s potential.”
“People forget — short term memories — what it used to be like,” he said. “It’s like $3.50 or $3.60 for oil per gallon, and propane varies widely on consumption.”
Mr. Cota said the same thing.
“On a BTU basis, oil costs more than wood, but there’s also something nice about turning the thermostat and leaving it — the comfort and simplicity. With wood you got to wrestle either the bag of pellets or the chunk wood. It’s part of the Vermont tradition, but it’s hard work. It can be very satisfying, but it’s hard work.”
Weather also factors in to the price of firewood, Mr. Cota said.
“Wood prices go up or down according to weather. Is there a supply? Can they get out into the forest to get it cut and split and dried before it’s cold?”
“There could be a supply and demand issue if the weather is bad,” he said. He remembers a summer sometime in the last five years that was really wet, so the wood was hard to deal with.
“The amount of wood taken off land to cut for the winter was less. Then there’s great summers.”
Mr. Poirier said he couldn’t put away any seasoned wood this summer, due to the wet conditions.
Much like the loggers, Mr. Cota said that the wood market is driven more by what’s happening in the area, as opposed to the cost of other fuels.
“Oil price is determined on a global level. Wood is local,” he said. “The price of oil in, wherever, you name it, affects the price of oil in Vermont.”
Mr. Poirier pointed out that while wood is cheaper than oil, propane is cheap, too. “But the trouble with that is that’s not a real controllable market,” he said.
“Anything you have as far as gases, we don’t control that — government controls that stuff. Wood is controllable, but not the same way.”
“I think people get a lot more for their dollar from a cord of wood compared to oil,” said Gary Lyman of Glover.
Mr. Lyman cuts about 50 cords of wood a year from his property.
“Like eight cord will heat most homes,” he said.
He multiplied that number by the cost of a cord of his wood this year, which is $200, to show what it would cost to heat an average home with wood.
“I bet they would use more than that on fuel oil,” he said.
Mr. Lyman described himself as a farmer and a half-ass logger, who only cuts wood for firewood customers. Still, the pulpwood market affects his price, too.
“I go with what everyone else gets,” he said, on how he determines his price. “So of course it affects me.”
He said his price is maybe $10 higher than last year. He couldn’t remember how much he charged when he first started cutting wood about 45 years ago.
“I’m sure way back we gave it away, you know, it was really cheap. I can’t remember how cheap, but not much. Just in the last ten, 15 years, it’s got up to worth doing.”
When asked if he thought the price of wood is determined more locally than globally, he referred to recent conversation with family.
“A relative in the Burlington area said it’s $250 and higher, a relative in Connecticut says it’s the same as it is here. So you figure it out, because I can’t.”
contact Natalie Hormilla at [email protected]