Hi, and thanks for your review of the Traeger Apple Pellets. Dust can form in a couple of different ways, including as a result of how the pellets were stored. If kept where there is too much humidity for an extended period of time (including inside the grill), the wood can slowly absorb moisture from the air and start to degrade. But if this happens, dust won’t be the only problem, since even whole pellets will have become compromised, ultimately affecting how well they burn. However, when it comes to a new bag, it is more likely that the dust is a byproduct of transportation or handling, but either way, this won’t be a problem unless the entire bag gets poured into the hopper. To avoid the dust issues completely, simply scoop out the pellets with your hand, or even a slotted spoon, so that the majority of the dust sifts out. But if you suspect that excess moisture is the culprit, just take a couple of pellets and break them between your fingers. If they take a little effort to break and snap cleanly in half without crumbling, then you should be good to go. But if they fall apart fairly easily, or have lost their sheen, you may want to consider replacing the bag.