Lumber prices are up nearly 260% since April 2020, But Logs Are Still Dirt Cheap

Yes, The Fleecing of America!

I experience this 1st hand. I am under two Building Permits for two massive projects in my home. Per County Code I am considered The Master Contractor. I manage all the subcontractors. I do all of my own work with exception to plumbing, tile and some electrical. I do the design, get an architect to bless and stamp my drawings and I roll.

I build stuff to code. I don't cheat.

Today they sell ceiling drywall for the walls. The paper is so thin even blue painters tape will pull it off after 30 minutes. Plywood is almost up 200%. Studs. I mean those curly cue 2 x 4's they sell at the "lets do this" Home Depot or Lowe's. I do NOT touch them. I go to an independent. I get a decent board but it will cost me over $8. The big box guys are near $7. Supply and demand or something else?

Its something else as the trees are the same. Actually the cost of lumber is near 2011. So where are the feds? Waving rainbow flags or having another doom and gloom press conference on TV by some Dr. named Fauci.

Lumber prices are up nearly 260% since April 2020

At the start of the pandemic, sawmills anticipated weak demand and limited production by up to 30%. To their surprise, demand turned out stronger than ever: DIY boom: While the US economy shrank 3.5% in 2020, spending on home improvements and repairs grew 3%+ Low interest rates: In December, US new housing starts hit a 14-year high Despite wood production hitting a 13-year high in February, supply hasn’t caught up with demand — and now ~70% of builders are raising home prices to slow demand down. The result is a $24k+ increase in the average price of single-family homes since April 2020.

So how do they explain this.

Lumber Prices Soar, But Logs Are Still Dirt Cheap

(Bloomberg) -- Lumber prices have soared to records. Demand for wood is skyrocketing. The shares of wood suppliers are surging. And yet, trees themselves are dirt cheap in places like Louisiana, where timber supplies are plentiful. The so-called stumpage fee, or what lumber companies pay to land owners for trees, for Louisiana pine sawtimber on March 31 was $22.75 per short ton, according to the latest data from price provider TimberMart-South. That’s the lowest since 2011. An abundance of harvest-ready trees has kept stumpage fees extremely low across the U.S. South, home to half of the country’s production. Meanwhile, lumber futures are up 85% in 2021 because of soaring demand. Sawmills profit from the premium lumber commands over the stumpage fee -- think of it like the lumber crack spread. Those margins are exploding. The spread between futures and stumpage for Louisiana pine, for example, has more than doubled just this year, topping $1,100 per 1,000 board feet.

Something isn't right here.

a reply to: Waterglass

The supply chain is boned and trying to catch up.
Nucor near me is nearly 200 loads behind because they can't get enough trucks to make the deliveries.

Autos are sitting waiting for microchips.

ABS plastic is a 25 week lead time.

Lumber on the other hand is stocked and ready but way too pricey.


Welcome to the true cost of the pandemic shutdown.

a reply to: Waterglass

i just bought a wood mizer sawmill last summer... i am fine with this lol

People don't seem to realize that when fuel prices go up, so do shelf prices. U'___', as of the 19th, stands at a national average of $3.14. That's up $0.64 from last year. That doesn't sound like much, but when you're talking about a company that runs several thousand trucks, with new drivers that don't know how to conserve fuel, you're talking about millions of dollars a year for a few cent increase. In 2014, carriers averaged $70,000 a year, per truck, on fuel alone. That was 39% of their operating cost. A one cent increase in fuel prices, averages $200 a year. Even with government programs to help with fuel costs, such as the fuel rebate, you're still averaging a huge chunk of your budget for fuel alone.

Trees might be cheap, but transporting them isn't. Running a load of lumber several hundred miles is going to be expensive, because they have to pay for the fuel to transport it to processing, then to where they're sold or needed, etc. The more fuel goes up, the more costs will go up. Diesel goes down, prices will come own somewhat.

a reply to: Zaphod58

OK, but lumber is timbered when can be locally or regionally possible. Gasoline or diesel. I bought gas at Sam's in Columbia yesterday at $2.38 a gallon. Meaning what is harvested in South Carolina and Georgia goes to the mills here and is supposed to be sold here. I have lived in these states since 2014. Ongoing clear cutting of Southern Yellow Pine in the 100,000's of acres goes on all the time.

The land then regenerates in another 30 years for harvest once again.

So that discounts the fuel. Surcharge or not. So who's getting rich here? Certainly not the landowner.

a reply to: Bluntone22

The great global financial reset. Complements of the NWO.

a reply to: Waterglass

They still have to transport it by truck. They transport the trees to the lumber mill by truck. They transport the processed wood from the lumber mill to the selling or delivery location by truck. They timber it locally or regionally, but that doesn't mean they still aren't paying quite a bit for fuel. Those logging trucks tend to be old, and fuel inefficient, so they're paying at least as much as bigger, more modern companies, even though they don't travel very far.

a reply to: Zaphod58


The cost of diesel today is below the cost in years from 2011-2014. Its just above $3.11 / gallon.

The 3rd graph will delineate the average historical cost of diesel in USA from 1994 forward.

US Diesel Retail Prices History and charts (On-Highway, All Types)

Thanks

a reply to: Waterglass

And the industry has changed a lot since 2014. A lot of smaller independent companies are gone, and replaced by super companies that run thousands of trucks. So the market is set by them. And there's a driver shortage ongoing, which means more delays in getting loads shipped, which means more costs to get loads shipped faster. Combine that with the cost of diesel, and you have part of the reason for higher prices.

If you look at the whole picture though, in addition to higher fuel prices costing more for transportation, in 2019 there was lower demand and bad weather. So we have less production, due to less demand. Then in 2020, interest rates dropped, so suddenly there was more demand for lumber. But Canada had a pine beetle problem that destroyed massive stocks of lumber, resulting in low inventory, even though they were trying to increase production. Now one of the larger companies that works out of Alaska has announced they're ending their logging industry. So prices are going to stay up there for awhile.

Yeah it's insane. Not as many sawmills operating. Backing up others, tariffs and fuel prices, plus diy boom and new construction boom at the same time.
Lowes and HD are taking advantage of people and have put a nasty hike on just about everything.
Most of their other junk they sell comes from china...who had the tariffs, aka pre sales tax put on them.
Uncle scam wants 25%
Who will finance their kids?

a reply to: Zaphod58

Canada had a pine beetle problem that destroyed massive stocks of lumber

Interesting, I didn't know that.
I built a lodge once that had ash borer beetles in the wood.
It was a full tear out and treatment.
Not good.

May be related...

The cost of Behr paint at home depot went up like $10 in the last year.. $20 cans are now $30

With everyone staying at home with COVID.. Home DIY remodeling is skyrocketing.. that and the housing boom

I saw a meme..."I have 35 sheets of plywood, will trade for 2016 or better Silverado"
I planned on putting up a garage this year, but OSB and everything costing so much, I'll wait...but will it change?
It just makes my blood boil to think that the US was on the cusp of its greatest GDP and economical situation ever. We in the US should be living the high life right now 'cept for a biological weapon release.

I just had 8 sheets of plywood, 8 92 inch studs, some 4 x 4s and wallboard with insulation delivered. $2,300.

It COULD be fires - a lot of mills have burned.

Around 50 mills burned, 2019 to 2021 which has caused a major price increase.



www.diywithdave.com...

a reply to: billxam

Are you aware that "diy dave" in your embedded video says saw mill fires have not impacted the price of lumber?

This is killing my budgets.

Steel is through the roof too. I can't get a steel quote to hold longer than 48 hours.

Rockwool insulation is a 110 day lead time.

I feel like a crack dealer with no crack.

Construction is screaming! And no materials to build? Stupid problem to have.

a reply to: Zaphod58

In Canada, we just blame the US.

Story is, with Lumber, you are buying so much that Canadian suppliers are increasing our prices since they are only allowed to sell so much to the US.

That's the story, anyway.

Well, i know this guy is just a YouTube talker and a self-professed DIY'er but he walks through the situation pretty good, I do not know how accurate this is but some of the commenters on the video page seem to confirm what he is saying and some seem to even indicate a logger strike may be coming soon.. I will just put the vide here and let you watch it. He covers a bit of history and how it relates to the current pricing model in a 13 minute video but the real meat is closer tot he end if you feel like jumping around a bit.

I need to replace some planks on my trailer, $38.50 per 2x8x16’ treated lumber from a quality lumber yard. I need 10...damn.

We're seeing the beginning of a major recession, if not an outright depression. They've created so much money out of thin air, with no economy to back it. We rely so much on foreign goods that when economic shutdowns happen worldwide, we can't keep up with our own demand for products.

They're saying gas prices are going to be the the highest in 3 years. I'm already seeing it as high as the Obama years. I don't see it slowing down anytime soon as we start to reopen and the demand increases. And the demand will increase... Biden literally opened the southern border. All these people are going to need jobs, gas, food.

Manufacturing prices are going to skyrocket, transportation costs are going to skyrocket, Food prices are going to skyrocket.

China, Russia, and Iran are all posturing to start World War III if we don't recover. Canada is falling to fascism as we speak, all the major US corporations kneel to China in order to do business there, and the media and schools are pushing a communist agenda.

We've got violent terrorists attacking major cities, being weaponized by racism, pushing communism. We've got guilty white "woke" people pushing fascism.

In a time where the government knows every detail of your life, including your physical location within a few meters at the push of a button. Oh, and can listen to you and see you through the microphone and camera in every device in your life whenever they want.

Sounds Orwellian.