A few months ago we shared an update on lumber pricing which focused mostly on how it is affecting the home building side of our industry. However, the current market is affecting woodworking industries across North America. This predicament is affecting hardwoods, sheet woods, and other essential goods.
Hardwood lumber prices are at the highest they’ve ever been, forcing a capacity to cut in half. Before the recession, they were producing 14 billion board feet and now production is around 7 billion. In 2020, $50,000 worth of lumber meant you could build over 10 single-family homes, now, the same amount of money could only build less than 3.
Different wood species have been affected in different ways. Supply and demand is a big consideration when it comes to pricing.
Poplar has always been a cheaper product, but now with the increased prices of the higher quality species, people are looking to poplar as a more affordable substitute. However, due to supply and demand, the prices have been altered in a way that doesn’t really make a difference.
In this case, there is not just one thing causing all the issues here. It’s a combination of a few things that add up to a volatile market.
Log supply is down
Loggers are not able to keep up with demand. There aren’t as many as we’ve had in the past. Logging was considered non-essential during the initial lockdowns caused by COVID, forcing production to slow or stop.
Sawmills Can’t Keep Up
Sawmills production has been down for 10+ years
During the 2008 housing depression, sawmills were forced to downsize or shut down completely, although that happened over 10 years ago now, they were not able to recover.
Another, more recent factor hurting the industry is the wildfires in Western/NW US. Many sawmills are closed, either ahead of imminent danger, or have already been catastrophically damaged or destroyed by fires.
Throughout the pandemic, more and more people are remodeling or considering updating their homes. Which normally, in our industry would be a great thing, however, throughout the country, companies are having a hard time finding people to hire and get work done. It’s a competitive market these days when it comes to finding employees. Larger companies can offer huge incentives to come work for them and the smaller companies are left struggling to decide how to move forward. The higher demand for remodels would normally help companies and increase production, but without the staff to produce the goods companies are forced to do what they can for now.
High demand, low supply, lack of trucks/trucking are impacting woodworking in general. In talking to our suppliers and other contacts, they all use words like "unprecedented", "unimaginable", "never seen it like this before...", "insane".
Things are slowly starting to “get back to normal” though with in-person events being scheduled and other plans being made that we are used to, we are starting to see a light at the end of the tunnel. Even though we’re in a rough patch now, the long-term future of this industry is looking very optimistic.