![]() Prestemon emphasized that supply and demand for products determine the price of commodities. tariffs on Canadian softwood lumber are not fully known, but they could have further constrained wood imports during the pandemic. Some Canadian provinces’ annual allowable cuts were lowered because of a Mountain Pine Beetle epidemic, which has attacked half the total volume of commercial lodgepole pine since the 1990s. Other factors also limited supply from Canada. However, imports were slow to arrive due to shipping constraints. Canada, historically the primary source of wood imports to the U.S., increased shipments of wood products to the U.S. Overall, the supply of wood from Canada and other countries was not enough to lower U.S. “It takes time to develop these skills, so ramping up production in a short period of time is not as easy as it was in the past.” “Because work in the wood products industry is becoming more mechanized, the workforce now needs to be more technically competent and highly trained,” says Prestemon. High-level skills are increasingly needed to work with advanced machines in wood processing facilities. Higher pay, however, did not result in enough extra workers to make up for increased demand and limited supply. “This is basic economics: when the supply curve shifts backwards and demand increases, prices will go up.”Īnother outcome of worker absences and departures was an increase in average industry wages. ![]() “Mills wanted to increase output, but they couldn’t find workers,” says Jeff Prestemon. ![]() At the end of the line were those of us who were homebound under travel restrictions, wanting to spend more money on home improvements.ĬOVID-19 resulted in large price changes for softwood lumber and other wood products like plywood and oriented strand board (Courtesy photo by Sam Beebe). The domino effect continued with supply chains further disrupted by a lack of truckers to move materials. The pandemic triggered a worker shortage in many sectors, including the forest products industry, which led tolimited availability of wood products, such as softwood lumber and structural panels (softwood plywood and oriented strand board). “The knowledge we develop in the Forest Service can lead to more mutually beneficial solutions and decision-making in both government and the private industry.” “As researchers, we investigate the reasons for a problem, quantify its impacts and look into solutions,” says Prestemon. Wholesale prices for plywood increased from $400 to $1500 per thousand square feet (roughly equivalent to retail prices of plywood increasing from about $12.80 to $48.00 per sheet).įorest Service Senior Research Forester and Project Leader Jeffrey Prestemon studies the market factors behind increased prices in these important consumer products. Of course, that influx of buyers only put more upward pressure on prices.The COVID-19 pandemic disrupted supply and demand of forest products and labor, including trucking and transport (USDA photo by Lance Cheung).ĭuring the first year of the COVID-19 pandemic, prices of processed wood products, such as softwood lumber and plywood, nearly quadrupled. Stinson Dean, CEO of Deacon Lumber, a lumber trading company, tells Fortune those buyers didn’t want to get caught off-guard like last time so they bought ahead “just in case” prices climbed back to the exorbitant levels of spring 2021. That supply decline is simply outmatched by high demand from builders who are still selling homes faster than they can build them.Īs prices started to spike late last year, suppliers and homebuilders responded by increasing their lumber orders. Meanwhile, mudslides and flooding caused by a record rainfall in November have delayed lumber shipments coming out of the Port of Vancouver. ![]() Pacific Northwest and British Columbia-the epicenters of North American softwood production- saw some sawmills curtail production. The bad wildfire season this summer in the U.S. Instead of lockdowns, blame mother nature this time. During the last go around, pandemic lockdowns had limited production just as remote working set off a home renovation boom and recession-induced low mortgage rates spurred more demand for homebuilding. That’s up 186% (or almost triple) above its bottom price in August.īut the dynamics pushing up prices are very different this time. As of Friday, the cash market price is back up to $1,111 per thousand board feet. Since bottoming in August, lumber has gone on another run that’s starting to look a lot like the historic run we saw last spring.
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