First, Douglas Fir is a soft wood and is loaded with pitch and resin which can give the food an unpleasant taste and gunk up the cooker. I know that pine wood is used for cold smoking cured meats but it is used in small quantities. Also, soft woods burn faster and give off less heat, so you will go through more pellets than you would with a good hard wood pellet and also have more ash.
Second, did you ask what they use as a binder in the pellets? Most heating pellets use a glue of some sort to hold the pellets together. Food grade pellets do not use any binder.
Third, did you ask what they lubricate the machinery with? Machines use to make food grade pellets are lubricated with food grade oils, not machine oil.
I'd bet that it you go through an analysis of true cost (pellets per hour at the same temp) the savings with heating pellets won't be as much as you think. Personally, I wouldn't take a chance with my family's health to save a few bucks.
Have you looked at buying pellets from a different source than locally? Big Poppa Smokers sell BBQer's Delight pellets (one of the best brands out there) and offers free shipping for orders over $40. They are $45 for 40 lbs, but the quality is top notch. In my FEC-100 I used about 8 lbs for a 16 hour cook during a competition. That's pretty economical. You can also look for other top brands like Bear Mountain, Cookinpellets.com and Lumberjack. If you can find other pelletheads in your area you can buy in bulk and save quite a bit.
"Ron Rico, Boss. You can call me Captain Ron..."
The Naked Fatty!
I'm thinking about summer!
Southern Q Limo Elite Gravity Fed/FEC-100/Memphis Pro SS/PBC/LBGE X 2/SBGE/Mini BGE/Nomad Pellet-matic/Good-One Model 42/WSM X 2/Cookshack Smokette 008/Weber Performer/Saber Cast 500/Weber Kettle X 2/Weber Smokey Joe/WGA/UDS/Coffee Roasting Gasser