Inland West Business Trends – September/October 2022

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Softwood sales in the Inland West region show some strength, but the outlook is questionable.

A manufacturer of Softwood lumber in Idaho stated, “We’re seeing changes in the marketplace. It’s still good for us. We’ve seen the prices decline and we expect volatility in the future. But we’re also seeing production difficulties with many mills dropping a second shift due to not having the staffing to run a second shift. We’ve seen an odd and eerie balance in the market as housing begins to slow down but we still think there will be opportunities in the lumber business. There will also be volatility. The ebb and flow will be as it is when we potentially move into a recession. We feel our company is well positioned to navigate it and we’re excited for the future.”

Compared to a few months earlier, he said the market is worse.

He sells Spruce, Ponderosa Pine, ESLP, Doug Fir and Hemlock Fir in all grades from economy to appearance lumber, from 2×3 to 2×12.

His customers include home centers, pro dealers and distribution yards. “I wouldn’t say they’re struggling but they’re seeing changes,” he noted. “Nobody wants to admit they’re struggling just yet. We’re still profitable as an industry, but changes have occurred. We don’t know the magnitude of these changes. For example, the interest rates and housing affordability are major issues. We think that there will be a correction in home values and that tends to take money out of the economy. It feels different than the Great Recession that began in 2007 and 2008, but it is eerily de ja vu in appearance.

“Truck driver shortages are affecting everyone and we’re seeing inflationary pressures,” he stated. “That’s all negatively affecting our business.”

An Arizona lumberman said his market is “quiet. It’s definitely slowed down. Generally, it’s the economy causing this. The interest rates are up and inflation is making people nervous about committing to new housing.”

The market is not as good as it was a few months ago, he stated.

He sells all No. 2 Common White Fir, Green Doug Fir and White Fir Select struct. His best seller varies “but right now the Doug Fir is the predominant mover,” he remarked.

He sells lumber to distribution yards and manufacturers such as modular housing. “They’re all telling me their sales are 50 percent off to a little off, but they’re all down some.

“Transportation is horrible,” he stated. “Trucks are hard to get and rail has become a nightmare. Railcars that normally take two weeks to get here are taking eight weeks and they’re still not here. I’m told it’s just a lack of people. It’s a mess; I can tell you that.”

In Wyoming, a sawmill representative stated, “Our markets have been really slow. Prices have been deteriorating over the past three or four weeks. There’s a lot of pressure from western mills now with excess stock. It’s been tough.”

The market is not as good as it was a few months ago, he said.

“Three of our mills produce primarily Ponderosa Pine boards and shop,” he noted. “One of our mills is a stud mill.” His company manufactures ESLP. “Our Ponderosa Pine is primarily boards and we do some 5/4 and 6/4 shop. Boards are 1-inch thick.”

He sells primarily to distribution yards. “They actually seem a little more optimistic than we are,” he stated. “They’ve seen business slowing down but they’re pretty optimistic about how the year’s going to turn out.”

“Transportation has been good,” he commented. “We have a transportation department that we book probably 50 percent of the trucks with, and that helps.”

By Terry Miller

Editor, Marketing Consultant, and Third generation publisher. With Miller Wood Trade Publications since 1983.

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By Terry Miller

Editor, Marketing Consultant, and Third generation publisher. With Miller Wood Trade Publications since 1983.

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