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Lumber prices rising quickly

27K views 232 replies 62 participants last post by  Treefarmer 
#1 ·
Disturbing news from The Motley Fool...

"Data from the National Association of Home Builders shows framing lumber prices have rocketed 26% higher over the past month, and are about double where they stood a year ago."

"there's one area where the home improvement warehouses can't disguise a lack of merchandise -- their lumber departments. A recent visit to my local Home Depot found the lumber racks virtually picked clean, with just a few stray pieces of dimensional lumber scattered about.
While sheet goods were somewhat better, pricing on even the cheapest grades of plywood were exorbitant, and it was like that at several of the area DIY centers I visited."

 
#2 ·
I have found that this stands to be true.
Lumber racks have been picked clean of most 2x, 4x, 6x, 8x and related in standard and pressure treated.
 
#3 ·
I was making some repairs to my deck last month. At the local lumber/hardware store the pressure treated was non existent. The guy says they don’t know when or where their next load is coming - looks like no more this year. Said every lumber yard within 100 miles was the same.

Can’t comment on the price of what I bought - have nothing to compare it to as I rarely buy lumber.

I’m used to getting rough sawn lumber at a little family owned mill anyway.
 
#4 ·
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.

Treefarmer
 
#5 ·
This is more than a Covid supply chain issue. Aside from unexpectedly high demand in many areas, the US and Canada are playing tariff games again. It's probably going to get worse as we continue to play games going into the election.
 
#6 ·
I figure in about another week the prices should drop as I'll have all I need to finish my shop. Dropped another $1500 today.
749695
 
#7 ·
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

Treefarmer
 
#8 ·
Hardwoods must be doing OK. They are logging on the mountain behind me - those guys are working 10 hour days 7 days a week.

Hearing the saw and the skidder from a distance is actually soothing to me......I can picture exactly what they are doing - can hear the tree fall then the skidder fire up.
 
#9 ·
red oak and cherry are at the bottom of the barrel, wood cutter that has been cutting at my aunts place here along the base of the mountain hasn't been here for over a yr because of the low prices. i watch a couple u-tube cutters and they claim same thing. for some reason no one wants any wood that has a red tint to it
 
#11 ·
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.
 
#12 ·
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.
Our neighbor is currently putting in an in-ground swimming pool.
 
#22 ·
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.

Treefarmer
 
#26 ·
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.

Treefarmer
 
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#25 ·
I've only been buying the lumber I have to have until the price comes down. Just another slow down for my ongoing shop project.
 
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#29 ·
#31 ·
#32 ·
I've noticed this myself. Went to our local Menards to get some 2x material and OSB. I was shocked to see a 1/2" sheet of OSB selling for around $30 and a 2 x 6 x 104-5/8" selling for $15. I sorted through a dozen or so boards that were crooked as a dog's hind leg before I decided I wasn't doing this and left. The project I was going to do can wait for another day.

We built a home in 2020...started in April 2020...so glad we locked in pricing on our framing package before prices started increasing. Got lucky there.
 
#34 ·
#35 ·
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. .
 
#36 ·
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.

Treefarmer
 
#39 ·
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.

Sent from my SM-G973U1 using Tapatalk
 
#42 ·
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.

Sent from my SM-G973U1 using Tapatalk
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.

Treefarmer
 
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