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Another covid issue. When covid hit, some mills shut down or slowed production by limiting shifts because 1) they didn't want to have workers where they could transmit covid, 2) they figured housing construction would fall off the cliff like it did on 2008 and 3) they didn't account for everyone being home and wanting to do small scale remodeling and fix ups. Mill owners that were in business in 2008 remember well how hard they were hit as many of them had bought timber at relatively high prices and suddenly were on the hook for it even though they didn't have any place to sell lumber.

So the lumber pipeline got thin before the mills started back production and even then some were affected by having workers out so they aren't running flat out. Those that can run are doing well; very, very well as timber prices are flat, well below where they were pre covid. (Trust me, I check those prices frequently.) Is it greed? Yep, certainly that plays a part but mostly it's happenstance, supply and demand.

There's a surplus of timber in the country as demand has never caught up to the accumulated growth after 2008, particularly in the southeast. Eventually it will settle back to an equilibrium but in the meantime, keep looking and buying lumber- we'll grow more trees.

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Here are some fairly recent articles on the subject:



Here's a more in depth look: https://www.srs.fs.usda.gov/sustain/draft/timbr1/timbr1.pdf

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Strange times we are in. Seems we have a record number of people on unemployment that claim they can’t find work. Yet every store I walk into has a help wanted sign posted. Other local businesses are running adds looking for help. My employer pulled me off a crew that was already short handed to go help out another.

one of my coworkers wanted to get some concrete pored , was told not this year, maybe next summer by more than one contractor. Every where I look houses are being built. Seems to be a lot of commercial building too.

One of my friends wants to have is property logged to improve deer habitat. He’s being told standing timber isn’t worth much now and he should wait until the market improves. But yet lumber seems to be in short supply.
I'm being told the same thing about standing timber but timber is a local market due to hauling costs. In our case, if 2-3 mills have enough timber purchased, the rest know to cut their prices.

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I disagree.
I don't mean to sound callous, but there's work out there for anyone with the ambition to work and willingness to go where the work is.
There really should be very little loan failures.
You are dead correct, there really shouldn't be a problem except people are so set in living where they want to live, doing what they want to do that many won't go to a job in a different location or won't take a job that's not what they want to do.

Very different attitude from what I grew up with. My parents did what they had to do and tried to make it work with what they wanted to do. You provided for your family first, then your desires came second. That didn't mean the kids got everything we wanted, we most certainly did not but we got what we needed- food, a safe home, necessary clothing etc. We also learned about working- there's nothing like pulling weeds in a bean field for pennies an hour to give you appreciation of a dollar. Loading baskets of tomatoes on a truck was another fun job- it's the only time I ever saw our one hired man have to be helped to shade because the heat got him.

Bottom line in those days was if you didn't have a job and one was available, you took the job that you could get even if it wasn't what you wanted. If you wanted more money, you either found a better job or took a second job or even a third job. I was always able to make do with jobs in the area but many had to move to where a job was. Historically, that's what built the cities that are now in such a mess. People moved to Detroit, Chicago, New York etc. because that's where jobs were. Since those cities are business unfriendly people need to move elsewhere and many are. Sadly, many able bodied people won't move and instead expect the government to take care of them because there are no jobs. Even more sadly, there are plenty of politicians willing to "fix" the problem as long as the non-workers will vote the right way.

Oops, might have infringed on the political section. Please ignore the previous sentence.

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Prices will slowly come back down. CME bid on random length is showing some weakness going out into the future. There's no shortage of timber overall although the Pacific NW may have some issues due to the fires.

The sawmill production issues may linger if covid makes a come back but some mills shut down for maintenance when covid hit and they are now coming back on line. Industry wide, there's enough capacity but some spot shortages may persist. If you are in a fire area or hurricane area, lumber may have to be shipped in which will add to the cost. The mills that kept running during the spring make a lot of money.

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Im on a bit of a crunch as I am trying to build a duck blind for the kids to have down at the pond. May have to drive an hour each way to Topeka to get the lumber I will need to finish it.
LOL, that's one advantage of building a duck blind on the shore of a river. 90% of the lumber can be picked up on the shore from storm damage. I've probably used debris from an old blind to build a new one, lol.

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I am considering replacing the deck on my car trailer as it has a few bad spots. I haven’t figured out exactly what I need yet do to the weather and the trailer being covered with snow and ice. Looks like it’s going to be $40 plus per board. I think it’s decked with 20’ long 2x8s. .
Even in normal times those are going to be a bit pricey. Anything over 16' gets a premium price and may be harder to find.

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I work in the building material industry, and it is the strangest of times. We have been purchasing CDX for less than OSB, have found AC plywood for cheaper than CDX. It has literally been a take what you can get.

As far as our hardware side, it has been crazy what the shortages are. Air filters, PVC, conduit, wire, PVC electrical boxes, breakers.

My two cents, if the interest rate was to increase building will stop. The incredibly low interest rate is the only thing helping offset the increases.

As far as the weekend warriors doing reno projects and decks, etc. There are a bunch of new people that were not very handy before, taking time to tackle their own projects. I think that is great. In reality they are spending twice as much on materials, but saving on labor.

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Interest rates and the covid stay at home deal certainly have impacted demand. There's also a demographic thing where a large generation delayed home purchase while they were living with their parents. Now that generation is starting to get into the housing market so that increased demand as well.

Timber supply, especially in the SE US isn't the issue. Timber growth has outstripped removal for a long time. Mill capacity is an issue and it's been tough for mills to ramp up with covid as the usual process is to run one or two extra shifts and the workers just haven't been available for many mills.

I think the Pacific NW has some different issues as much of that timber is on federal or state land. Environmentalists shut down harvesting in many areas and the whole supply chain collapsed. Mills shut down, loggers found other employment, truckers did something different etc. Then out of control wildfires got much worse because there was less harvesting and those areas are out of production for a long time as once the fire is hot enough to burn thousands, tens of thousands of acres down to mineral soil it's a slow process to come back. There's a significant timber price difference between the South and Pacific NW and I'd guess some lumber price differentials as well although it's more efficient to ship lumber than logs.

If the economy slows down and housing starts drop at some point the lumber demand will fall below mill capacity when running normal shifts. (For some mills that's one shift for others it's 2 or three shifts- just depends on the mill.) As soon as it drops below that "normal" capacity, lumber pricing will start to soften. Some smart economist can figure the timing based on housing starts but I'd guess it's somewhere around 1 million single family homes/year. It might be 1.1 or 1.2 million but doubt it's higher than that unless new mills come on line or existing mills actually build more capacity. Many of the mill owners still remember 2006 and later when demand cratered and are reluctant to build capacity even though they are extremely profitable right now.

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This could actually have some positive end results if it creates a new wave of salvaging old structures in place of demolishing them.
The issue is that old structures take a lot more skilled labor to renew correctly. Any labor is tight as long as people are being paid to not work. Skilled labor is really hard to find in my area. Really good carpenters are few and far betweeen and have their pick of jobs. Most of them are as old as I am.

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I know Ive put off more than one project due to costs.
Emergency/necessary repairs are another thing, and quite costly when they involve lumber. Hopefully Ill not have anything like that any time soon.
Heck, I hadnt even looked at lumber prices for some time, and went to get some OSB in January only to find the price more than double what I paid just a few months before. Now its closing in on 4x. No way Im paying that for 9 sheets to finish a wall in the shop that doesnt NEED to be finished any time soon. It will just stay as it is until the price gets back to what Id call reasonable.
Whats it going to take to get it back down? I have no idea, but I cant imaging it will be good.
Over time, mills will catch up with demand. That's the good scenario. The bad scenario is that with too much government money chasing too few goods and people being paid not to work the demand will continue and the mills can't increase capacity to keep up with demand. That will drive prices even higher until ultimately the system collapses and your dollars won't buy anything.

I hope we get the good scenario but with lumber, oil products, electricity, rubber, steel, etc. all taking significant price increases I'm afraid we are looking at the bad scenario. I truly hope not because people will get devastated with hyper inflation.

It's not a lack of timber in the country. There's plenty of supply for the mills but so far they are still paying 2015 prices which weren't good then.

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I know some folks, and have family that live in N. Wisconsin, and the UP. From multiple sources, I have been told that the mills are chock full of lumber, just sitting there, on the property. So much, that they have never seen the mills with that much wood just sitting on premise before.
Different situation here. Most of the mills have low inventory. One hardwood mill I drive by had started cutting pine but the last time I went by, I think they were back to hardwood but probably only 1/4 of the lot was full of lumber. I need to visit some of the bigger mills and eyeball their inventory.

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Chatting with a few builders....... Lots of "our" wood comes from Canada...Border is closed.
Lumber yards will not sell to public ( sheet Goods) must be a contractor.
Builders are screwed on presolds as the lumber prices are changing daily and you pay whatever it is the day of delivery.
No way to prepay and lock in a price unless you store it yourself

Realtors are and have bee n predicting the housing crash in the Portland ,Or area.
Its not if but when.

I wish it would just happen and be done with....this is retarded.

They keep replaceing all the windows broken in the nightly raids in Portland.
Can't afford to cover with plywood & glass don't burn....
Village Idiots
Yep- much lumber in the PNW does come from Canada and there are some issues there. Historically lumber would flow from the west to the east via rail but doesn't go the other way even though the southeast US now produces more timber than the west. It sure doesn't help if large amounts of plywood get wasted boarded up because of riots. Same deal with glass- there's only so much supply and if it is being wasted so some idiot can throw another cinder block through it night after night, well I think that may be the definition of insanity.

It is still possible to price protect on the Chicago BOT but that might involve a bit more lumber than you want- think railroad car full for each trade. Oh, and you might get stuck with margin calls as well.

It's crazy for sure.

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Last weekend I commented that with all the "crisis" that the news is reporting on, they are totalling ignoring the obvious crisis which is that we have incentivised not working to our breaking point. We are successfully killing our great nation by not teaching work ethic any more. There should be a huge gap in the lifestyles of those that work and those that choose not to. But we are coddling those that don't, to the point that they can't.
Just about every business I drive by has "Help wanted" or "Now Hiring" signs out. Managers I talk with all have the same story- they have jobs but people are making "enough" staying at home. The trucking firms we deal with at work and one I recently visited said the driver shortage is very real. I agree with Dr. M- when people get what they want by sitting on their butts at home, few people will want a job. Even fewer will stick with a job day in and day out to build a career. Yet, to really be a human being you have to contribute, not just take. So those who push the story that people should have everything given to them are ultimately taking from those same people by denying them the reason to learn to work, to contribute and to help build their community, country etc.

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One news tidbit I saw stated that the lumber 'shortage' has added $35K-$40K to the price of an average home build. IDK what 'average' means but if a $200k home is now going to cost $240k, that's $170 a month more on a 3% 30 yr mortgage just to cover this lumber bubble. What happens when lumber prices collapse? IMO people will be stuck paying a $240k mortgage on a $200k house. Cue the next housing market collapse.
Ordinarily I wouldn't look for a collapse from the lumber price issue. I do think there will be a slow decline as demand wanes and supply stays constant or builds. However, given that much of the issue is at least associated, if not caused by various governments a collapse is certainly possible. If the Fed wakes up and realizes we do have inflation and decides to substantially raise interest rates, that could be a trigger. If China or other countries stops buying our debt until interest rates go up, that could be a trigger. If the administration gets their tax package and investment flees the country, that could be a factor. If all of those conincide, IMHO we're screwed. It won't be just lumber prices collapsing.

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It might be of interest to know china has been reducing holdings of US debt since 2017.....currently Japan is largest total foreign holder over china......but the largest single holder of US debt is the Federal Reserve itself Currently holding about as much as Japan and China combined......

just thought i would toss this out there since you seem to follow these things......im sure you know what the Fed buying debt implys
Yep, when the Fed is buying debt it essentially means the Treasury is printing money.

The issue of China reducing holdings is good sense on their part but not good for the US because it means they anticipate dollars will be worth less or worthless in the future.

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2305 w/ 200CX FEL and 62C MMM
My neighbor has 8 6"x6"x10' salt treated that have been lying on the ground for over a year. It might be a better investment than Bitcoin.

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Monday night I talked with a builder. He had quoted a house in December. When the first load of framing lumber came to the site in January it was $14,000 higher than they had figured. He had some room in the house quote but not that much. . .

They are rewriting their contracts to cover material inflation.

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