Midwest Business Trends

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A lumber provider in the Midwest reports continued high demand, higher prices and low stock, while two others see somewhat of a slowing down in lumber purchasing.

“Sales have slowed down a little bit,” stated a source in South Dakota. “There’s no way it could keep up the pace it was at. It’s backed off a little bit, but we’re still busy.” Compared to several months ago, he said the market is “pretty much status quo.” 

He sells mostly SPF and White Fir in No. 2 Premium and Select Struct. Widths are 2x and 1x. This Softwood lumber is sold mainly to lumber yards. “A lot of them are busy and doing well,” he remarked. Access to trucks and rail cars are better, he noted.

In Oklahoma, a lumberman said the market is a “false-better. Our profitability is far greater than even I anticipated. What goes up, must come down. It’s been great. It’s a rise that we never anticipated happening. No one did. We’re hitting our goals. But people are slowing down in their lumber buying because of the pricing structure.”

He sells SPF, Douglas Fir and Southern Yellow Pine. SPF comes in 2×4 and 2×6, Douglas Fir in 2×4 and 2×6, with some in 2×8, 2×10 and 2×12; Southern Yellow Pine in 2×8, 2×10 and 2×12. SPF is sold in No. 2 and Better, Douglas Fir in No. 2 and Better. Best sellers are Southern Yellow Pine wides, Douglas Fir narrows and Douglas Fir studs in all widths.

He sells his lumber to retail lumber yards (75 percent of his sales) and to pallet and crating companies (25 percent of his sales). Recently, his customers’ sales to their customers have dropped considerably, he stated. 

He said builders are pouring pads for homes and letting the pads sit “until they see prices stabilize and see where the market is going to go. Their sales are off. 

“The biggest hit is the do-it-yourselfer. Nobody’s doing projects. Prices have gone way up on lumber. People say: I’ll take the kids on vacation this year rather than do anything on our house. That is a big change, a monster change. Last year, it was all about the DIY because of the pandemic. This year, they’re not even touching it with a 10-foot pole. They just don’t have the money.

“Lack of trucks,” is a problem, he noted. He said loads of lumber now take weeks to pick up. “And the reason they don’t pick it up is that the transportation cost has doubled. That’s all over the country. The truckers now get to pick and choose based on what they will get paid.”

However, in Iowa, a lumber provider said the boom continues with high demand, higher prices and low stock. That’s also the way it was six months ago, he observed.

His stock includes engineered wood, trusses and floor joists. These products are sold to retail lumber yards. “My customers’ sales are up,” he noted. “The only problem is getting enough product.”

Transportation, he stated, is not a problem. His firm has its own trucks and works well with other truckers. 

By Paul Miller

Paul Miller President Miller Wood Trade Publications

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