Midwest Business Trends
A Steady Softwood Market For The Midwest
Chris Fehr
Marketing Consultant / Editor
Softwood activity across the Midwest remains steady, with modest signs of improvement in some markets but little indication of a broader rebound. Suppliers continue to report consistent demand, while transportation and fuel costs remain among the more significant concerns affecting purchasing decisions. Sources in the area mostly handling dimension lumber and assorted upper grades. Some market representatives noted that the slow down at this time is simply seasonal and a little predictable. A slight increase in building permits was listed as a bright spot by one source.
A Texas wholesaler described business as “steady,” although activity has been “flat” and somewhat slow. The source also pointed to cost pressures affecting Douglas Fir and Western Red Cedar.
The wholesaler offers Douglas Fir, kiln-dried Fir and Western Red Cedar, along with mixed hardwoods and specialty products. Grades include No. 1 Common & Better green Douglas Fir, No. 1 Common FOHC & Better kiln-dried Fir, and No. 1 Common & Better appearance-grade Western Red Cedar. Sizes range up to 20×20 timbers in green Douglas Fir and Cedar, with kiln-dried Fir available up to 12×12.
In the Missouri market, a distributor described softwood business as “seasonally normal” and “consistent.” Building permits have shown a slight increase compared to last year.
“We’re probably up about one to two percent,” the distributor said, noting that customers are reporting a similar pace of business.
No individual species is outperforming the others. The distributor handles Douglas Fir, Spruce-Pine-Fir, Southern Yellow Pine and Western Red Cedar, primarily in dimensional lumber ranging from 2×4 through 2×12. No. 2 Common and premium grades represent much of the company’s business, along with some No. 3 Common material.
“It’s pretty even across the board,” the source said of demand for the various species and products.
Transportation remains an issue. The distributor said truck availability has improved somewhat, but freight rates remain high. Higher fuel costs continue to add to the delivered price of lumber and affect buying activity.
Fuel prices are a key for concern in the region.
Looking ahead, the Kansas City distributor expects business to remain close to current levels in the near term. “I think it’ll be about the same,” the source said. The distributor noted that the end of the year typically brings some seasonal slowing as holidays and winter affect activity.
At an Iowa retail lumber yard, the supplier described business as “about the same.” Availability has not been a problem, but purchasing has become more difficult as transportation expenses continue to rise.
“Fuel prices are increasing everything,” the supplier said, adding that costs are increasing “across the board.”
The Iowa retailer offers building materials, including lumber, siding, fencing, doors and other construction products. Although availability remains adequate, rising freight expenses are putting additional pressure on purchasing.
Transportation is one of the clearest common concerns among the three markets. Even where truck availability has improved, suppliers continue to contend with elevated freight and fuel expenses.
Those higher costs are also keeping buyers cautious about inventory. With material generally available, the concern is less about sourcing product than the expense of moving it. Freight costs can quickly affect margins, giving suppliers and customers another reason to keep purchases close to immediate needs.
For now, steadiness rather than significant growth continues to characterize the market. Modest improvement in Kansas City, flat-to-slow conditions in Texas and rising transportation costs in Iowa are keeping suppliers cautious.
