Saw this thread a while ago on another site and did some research, as I think it should be not too expensive to set up - there are some suppliers in China that do some small units for not crazy money ... I am sure setting up the system to get consistent pellets will take some experimentation - anyone done this already??
prices are what I was quoted min 2 units per order
So the small CF158 Hammer Mill (makes saw dust) 2.2kW motor US$297
The small pellet press KL120A 8hp diesel US$525
There are 3-phase versions and larger ones available
I dont own one and havent tried one - but it was easy to get this info from the manufacturer.