Good Observation and Question from my son!  The answer to the question is biochemistry...

On my way to dropping my son off at the Peabody summer camp during the cool morning, we pass by a large pile of wood chips on the side of Route 111 in Shelton near Jones Farm (Figure 1).

Figure 1

My son not only noticed but asked why is the pile smoking?  This is a great question because it involves lots of science disciplines.

The pile is not really smoking as it is water vapor produced as the wood chips are being composted somewhat.  Composting is a bit more involved.  Aerobic bacteria in the pile feed on the wood chips, as they do they produce carbon dioxide, water vapor, and heat.  Most life forms on Earth do this.  In fact, most of the instruments looking for extraterrestrial life are looking for these compounds rather than direct evidence.

Since the wood chip piles are slightly warmer than the rest of the ground, the cool morning air causes warm moist air from the compost to condense and produce the mist.   The air became saturated with water and reached its dew point as a result of lowering the temperature.