I own and operate
http://www.PelletComp.com
We primarily make alfalfa, corn, grass feedstock pellets as well as some other products.
I can tell you from many years of experience with a pellet mill that
1) If you think you are going to buy a cheap (under $10K) pellet mill, throw some material in and get pellets you are wrong.
Making pellets is an art... it requires proper temperatures, moisture levels, lignin content, and a very consistent and proper feed rate into the mill.
These cheap chinese made mills (some may say "American motor" but they still have a chinese MILL) are garbage. They jam, plug, wear parts wear wrong or uneven, bog down, the list goes on and on...
sure you can buy them all day long for about $2k... trust me they are garbage.
You must consider a consistent feed rate (simply hand feeding them is tiring and causes many moisture level flukes which result to plugging. The result is to buy or build a good variable speed hydraulic controlled conveyor belt with a hopper. Theres another $3k if you build it yourself 4-5k+ if you buy one.
On hammer mills... they make A LOT OF DUST. consider ventilating the shop space with filters or doing it outside only. Might as well call it a dust mill. However shredders are much less dust.
Im in Monroe, WA... bring me 40lbs of hops and we can figure it out at my mill.... at the price per pound for pelleted hops im tempted to give it a shot, but i dont know anything about brewing and I have a lot of responsibility to my livestock owners to provide high quality feeds.
theres much much much more to it than anyone on this thread has even considered... i do this professionally for a living.
Cheers to you beer guys!