In the Inland West, suppliers of lumber and their customers are adjusting to the massive price drops for many items.
In Montana, a lumber provider assessed the drop in prices for Softwood lumber and expressed a positive outlook. “Lumber is cheaper, and in my world that’s better,” he stated. “The mills can offer more competitive prices. There’s not a huge demand that is spiking the price of lumber each week. The market on dimension products, Spruce and Fir, came off quite a bit, almost $1,000 per 1,000 board feet. The board-market is tapering down to a slower pace. Prices dropped from $1,700 to about $700 per 1,000 board feet on select structural grade. It was a gigantic price fall-off in a three-week time frame.
“I would say we’re better off on price,” he continued. “It’s just where are we going to settle out, and what will be our new normal for expectation of price and availability? Is the price going to continue to fall or settle out at a higher number than it’s at today?
“The prices of lumber are better because of supply and demand,” he noted. “The mills are starting to hold inventory again and they have inventory to offer on the ground. They’re not selling two to three months ahead. That’s the reason for the price fall.”
This lumberman handles Douglas Fir, Larch, Ponderosa Pine, Lodgepole Pine and Spruce in 1×4 to 1×12 and 2×4 to 2×12. The best sellers, he said, are 2×6 SPF and 1×6 Ponderosa Pine and Lodgepole Pine.
He sells to distribution yards. “Their contractor business is still really strong,” he stated. However, he remarked, “I think that the home center business has virtually, in many ways, come to a halt.” Also, he noted, “We’re in the slow season, and people are traveling. The extra income that would have gone to vacations last year went into their houses for DIY projects. Now, they’re spending money on travel. This is a return to normal as far as COVID goes. What we’re waiting to see is if the home center business will spike again, depending on COVID and as we move into fall.”
As for challenges to his business, he said, “Finding available truck drivers, the high price of transportation, finding employees: those are the primary difficulties.”
An Idaho lumberman said the market for his products is worse than a few months ago but still good. “Cedar is still good for us, boards and dimension. Pine Shop is also good. Boards are not as hot as they used to be in Ponderosa. A couple of months earlier, lumber was still moving well and prices were trending upward.”
He sells Cedar in 4/4, 1×4 through 1×12 and 2×4 through 2×12, decking, Ponderosa Pine and Idaho White Pine boards in 4/4, 1×4 through 1×12, and 5/4 Shop. Best seller, he noted, is Cedar boards.
Customers are mostly distribution yards and some remanufacturers. “Their business is good,” he observed. “Relative to 2019 numbers, everyone is up a little bit. You just have to throw out 2020 as a once-in-a-lifetime event.
“Transportation is a challenge,” he said, “but wood is moving. There’s always some sort of problem every week in transportation. Rail cars are tough to get and trucks can be tight. Week-to-week there’s always a headache, but we are getting it done. The cost of transportation is up but percentage-wise compared to the cost of lumber, it’s not a huge deciding factor.”
“It’s pretty slow at the moment,” stated an Arizona lumber provider. “Everyone’s been waiting for this market to continue its slide before they step out and buy anything. For now, it’s pretty quiet.”
Asked to compare the market to the way it was several months earlier, he replied, “For the short term, I’d say it’s definitely worse. I know that there’s a lot of work to be done in our market, so I think when people step back in to buy, it will be about the same as six months ago.”
Everything he sells is No. 2 in green Douglas Fir, Spruce and White Fir. “We handle White Fir select struct,” he added. “Our best seller varies but probably Douglas Fir is generally the biggest seller.”
He sells to distribution yards. Their business, he said, is “kind of like ours. Everyone tells me they have a lot of work in the pipeline and they’re just waiting for their buyers to step back in. With the market sliding as much as it has, everyone has kind of put everything on hold to see where the market is going. Prices have dropped dramatically on dimensional lumber and on panel products.”
Asked if transportation is a problem, he answered, “Absolutely. Trucking is extremely hard to get and way more expensive than what we would consider the normal – double or quadruple to get trucking covered. There are rail issues, too, due to forest fires and other matters. Depending on where the wood comes from, there can be no transportation issues or a lot of issues.”