The Southeast Reports Uncertainties But Holds Steady
Most Southeastern hardwood representatives contacted for this writing have reported that Red or White Oak, and even Poplar, are their best sellers. There is also a very low supply of all three listed species, observed one source.
A lumber spokesperson in Tennessee reported that the market in his area has been “up until the past couple of weeks, really strong and very stable.” He explained that this dip in the market is “mainly due to tariffs.” Despite this downward shift, at the time of this writing, he said that it is better than six months ago.
They carry “all Appalachian species” such as Ash, Basswood, Cherry, Hickory, Hard and Soft Maple, Poplar and Red and White Oak. They offer Poplar in “4/4 to 6/4” and are “strictly 4/4 in Red Oak” but work with “4/4 and 6/4” in White Oak. “Everything else is 4/4,” he added. “Poplar and Red Oak in No.1 Common and better are selling the best.”
Their customers consist of end users such as flooring, moulding and trim companies. They also sell to distribution centers. While they don’t export directly, some of the companies they sell to are American exporters. He commented that “everybody is in a wait and see mode. I think there is still some demand, but a lot of people are a little bit reluctant.”
He noted that his American exporters specifically are “a bit worried about the tariffs. They’re taking a wait and see approach. They haven’t disclosed any plans for it. China is the biggest issue because nobody can compare to the buying power they have. I think Vietnam, Indonesia, Malaysia and a lot of the European markets are okay. Mexico seems to be pretty good.”
According to him, transportation has improved. Interest rates aren’t as big of an issue for his company compared to others, as he explained that his company is “older;” however, it does “kind of limit the amount that we spend on equipment and items like that.”
In Mississippi, a lumber representative stated that while business has been “good, there is a lot of uncertainty about what is going to happen with the tariffs.”
It is better than six months ago, but on a “day-to-day basis, I don’t know,” he said. He attributed this improvement to the “very low supply of lumber,” especially in species such as Poplar, Ash and Red and White Oak. “White Oak is still popular but we’re not able to get the logs to saw. They are going to veneer plants and stave mills.”
A spokesperson in Mississippi shared his concerns about the decline in available loggers for hire.
In addition to Red and White Oak, Poplar and Ash, they “cut a little bit of Gum, Sycamore and Beech.” They handle these species in primarily “4/4 and 5/4 but we are doing some Common and FAS grades, too.” White Oak is their best seller.
End users and wholesale companies, as well as distribution/concentration yards, are their clients. They don’t export but his customers are “seeing a lot of uncertainty like I am, and they don’t know what to do.”
“Mainly labor and log supply are having a negative effect on us,” he noted. “Loggers have gone out of business and there aren’t nearly as many anymore.”
While he is “positive it is going to get better because it has to go in one direction eventually,” he lamented the price of lumber. “This cheap price of lumber has affected the buying of the logs. The lumber market has been down for so long that we couldn’t pay what we had been paying for logs and the landowners were holding it off the market.”
A lumber representative in North Carolina divulged why he said the market is “slow” in his area. It is caused by a “lack of demand but I think the interest rate needs to drop down to about six percent before it triggers housing to kick back in.”
He said “It has just been dragging along and is about the same as six months ago.”
They work with “Red and White Oak, Poplar and a little bit of Ash and Walnut in all grades and thicknesses. I’m going to say probably Red Oak is selling the best right now,” he added.
He listed the following end users as his primary customer base: door, window, millwork and flooring companies.
“Everybody is slow,” he said. “This should be a time when they are building up their inventory and stocking up but with the tariffs and all that, there is still a good bit of uncertainty. As soon as we start seeing that get resolved, then it will give the market a lot more confidence.”
He explained their company’s relationship with China and other countries that they export to. “Years ago, back during 2016 with the tariffs, we had reduced our volume going to China significantly by about 70 percent. Some people went all in and that’s just what they did with the lumber and logs. I think there is a percentage of sellers out there that shied away from China like us. A lot of our products ended up going to Vietnam instead but a lot of those companies in Vietnam are Chinese. We ship a lot to Mexico.”
Since the pandemic, they have struggled with labor but now, he believes they have an “adequate workforce but it’s hard to keep people at this level. We’re adding more automations.”
