Inland West Business Trends – May/June 2022

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Sales of Softwood lumber in the Inland West region have slowed down, but, according to one source, “Wood’s still moving.” Asked how things are going in the market, this same source, a sawmill representative in Idaho, said, “They’re going. Obviously, the selloff on futures is making people a bit apprehensive but wood’s still moving.”

Asked to compare the market to several months earlier, he commented, “I’d say it’s about the same.”

He handles Hem Fir, White Fir, Doug Fir, Ponderosa Pine and Cedar. The best seller, he stated, is Ponderosa Pine.

He sells his Softwood lumber mostly to distribution yards, but also to home centers. His customers’ sales are “good,” he noted. “Home centers are good and distribution yards’ lumber is moving. The positive news from our perspective, as a sawmill, is: it doesn’t sound like our customers have a lot of inventory. So, oftentimes, even during a down market, they’re asking how quickly we can get them the lumber. For us, this is a bullish indicator that things will turn around the moment they feel the futures have come off all they’re going to come off. Then, they’ll come back and buy more aggressively.

“Transportation is a huge hassle,” he added. “We’re almost more excited about finding trucks than we are about getting purchase orders. It’s a nightmare. Everybody’s fighting it. It’s worse than it’s ever been.”

“We’ve slowed down a little bit,” reported a wholesale distributor in Montana. “Things have quieted down just a touch. I think inflated pricing is having an impact on that: inflated truck pricing and inflated material pricing. I think it’s temporary though. There are still a lot of people waiting on jobs for pricing to come back down on lumber. There will be a resurgence, but I don’t see it right now.”

Asked how the market compares to a few months ago, he said thoughtfully, “That’s always a tough question because I don’t look back very often, but probably better now.”

He offers Select Struct and No. 1 Hem Fir, No. 2 Hem Fir and No. 2 and Better SPF. His best seller, he figures, is upper grade Hem Fir.

Retail lumber yards are his customers. “They’ve had an outstanding first quarter, but things are starting to slow down a little bit – just like us. It’s just a temporary pause.”

Transportation is “absolutely” a problem, he remarked. “I don’t know anybody in this business that transportation isn’t affecting. We have longer lead times and short rail car supplies. All those things are affecting our business.”

Another lumber supplier, this one in Arizona, commented, “Actually, the market is really quiet. The last two to three weeks have been pretty quiet. I think the prices just got too high.” Asked if he saw signs of improvement, he replied, “Yes. With the lumber prices that finally came down pretty hard recently, I think another week or two of that will bring people back into the market. The prices will get down to a level that starts making sense to buyers and they will come back to the table. People will wait a week or so to see what the prices will do before they’ll step back in. After that, I think people will get back into buying again.”

He compared the market at that time with the market six months earlier. “As far as sales, they’re worse now,” he stated. “Trucking is worse, and rail shipments are not better. But I think the long-term trend is that sales will come back.”

All the lumber he handles is in No. 2: green Doug Fir, Inland White Fir and Select Struct White Fir. The species he sells the most is green Doug Fir.

He sells lumber to distribution yards and brokers. “Most of them have a lot of jobs to do,” he stated. “They’re just waiting to purchase as they see these prices going down. I have customers who need millions of board feet of lumber that, once it gets to a price level that makes sense, they’ll be stepping out and buying a lot of lumber. But right now, everybody’s just waiting. Their sales have slowed down, too.”

He said, “Transportation is expensive, and even when you get someone to say they’ll pick up a load, they frequently don’t pick it up. It’s a struggle.”

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