Lake States Trends – February 2024

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While lumbermen in the Lake States continued to steadily “move wood” through the fourth quarter of 2023, they agreed that “something must change” in order to hit the ground running in 2024.

A Wisconsin source called the 2023 fourth quarter market “steady” but added that nothing is “booming.”

“We are still moving most species except Aspen and Basswood,” he noted. “The prices are not what I’d like in most cases.”

He said that White Oak sales are “great” and that there have been no issues procuring the sought after species.

Noting that his best months for sales are traditionally January through March, he said that interest rates must be lowered to keep the trend intact.

Specializing in 4/4 and 5/4 Red and White Oak, Hard and Soft Maple, Ash, Aspen and Basswood, the source stated that interest rates will eventually dip, opening the market up to new house buyers.

He also noted that, while gas prices continued to drop, the cost of diesel fuel remained “plenty high.”

“A lot of people don’t realize that just because gas is going down doesn’t mean that diesel costs are too,” he said.

A Michigan source said that he is “on the fence” regarding the market in 2024.

“There are just so many ancillary things that are giving us trouble,” he said. “Pulp and paper mills are slowing down. The markets are drying up.”

He added that the region is “low on logs because they can’t get anything done.”

“Crews are either sitting idle or not running because they don’t have enough work for them,” he said.

That is because potential buyers are unable to predict future interest rates and therefore choosing not to build until a concrete order is made, according to the source.

With numbers down in the fourth quarter, the Michigan lumber provider has begun to “take some measures” to stay afloat.

“A little bit, not a lot right now,” he said. “We are certainly watching it close. (Industry leaders) are slowing things down without cutting anybody off or shutting anything down.”

An Indiana sawmill operator said, at the time of this writing, that the market is “pretty much dead right now.”

“No one is going to buy until 2024,” he noted.

While he acknowledged that some wood wasn’t “moving,” he said Poplar and White Oak are the exceptions.

“But we really haven’t recovered since about a year-and-a-half ago,” he added. “It is going to take some time to get things back to (pre-COVID) numbers.”

The source said that lumber yards are keeping a small inventory.

“Everyone thinks that they can get everything they want, when they want it,” he said. “That is going to have to change (for yards to start having larger inventory).”

The Indiana lumberman also said that Medium Density Fiberboard (MDF) is taking the place of “real wood.”

“We’re not even sawing as much,” he said.

He said that he primarily ships lumber to Southern California for distribution.

But the loads are currently light.

“Timber prices haven’t gone down and labor is now a problem,” he said. “There aren’t as many loggers as there used to be.”

He said that there are entire days that go by with no wood being sawed.

“Some mills have already shut down here,” he said.

The Michigan man reiterated his concern for the near future of the lumber industry.

“It is more of the same,” he said, referring to the state of the business less than two months ago.

By Miller Wood Trade Publications

The premier online information source for the forest products industry since 1927.

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