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Navigating the Lumber Pricing Roller Coaster
The past 2 years have been a roller coaster in a lot of ways, and product pricing has been a big part of that “ride”. It seemed like the rollercoaster was only going up, and everyone was waiting for the peak. It seems now we may be heading down the other side. Just in the past few weeks we have started to see red oak, soft maple, hickory, and cherry pricing start to lower.
White oak and hard maple are still in high demand. Ash demand is slow to steady, but with ever increasing lack of supply, ash pricing will remain up. Some have asked, how is ash in short supply with lots of trees and logs around? The issue is the quality of those logs. If the loggers can’t beat the emerald ash borer to the tree, it will only be usable as firewood.
In the past 2 years labour has been a large factor in higher prices. One of our suppliers commented they hired 7 people on a Friday, 1 of them showed up Monday morning, and by 10 am that person quit.
The sawmills are finally getting caught up with log supply, but now they need to keep plugging away with few workers at the mill level. Once the logs are milled, the next hurdle is a lack of truck drivers. Some of our suppliers may have adequate supply of lumber, but there are few trucks available to transport it.
Now in Canada, we are facing ever-increasing interest rate hikes. Because the interest rates were kept so low for the past few years, the Bank of Canada is sure making up for it this year! These hikes are keeping some from going forward on their building projects.
To tie all this together, at this moment we are seeing some quieter demand, which is allowing the sawmills to catch up with inventory, and when supply is greater than demand, prices start to lower.
That is how I interpret what I am hearing in the news and from suppliers. And that is just lumber. Plywood is a whole different ballgame, which we don’t have time for today!
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PO Box 280 Drayton, ON
N0G 1P0