Midwest sellers of Softwood lumber, at the time of this writing, acknowledged reasons why the market was – or could be – slow but, to a man, found reason for optimism.
In Kansas City, a lumberman said, “The market has slowed a bit, due to seasonality and the economics of the country with rising interest rates, which are shocking to home buyers. In the next few months, people will grow accustomed to these interest rates, and things will get back to normal.”
At press time, the market was not as strong as it was several months ago, he stated. His items for sale include Green Doug Fir, SPF, SYP and Western Red Cedar in No. 2 and No. 3 and No. 2 Premium. The highest volume of sales was in Green Doug Fir. He sells SPF, Green Doug Fir and SYP in 2×4 to 2×12; and Western Red Cedar in 1×2 to 8×8.
“We sell lumber to pro dealer lumberyards and national retail stores such as Home Depot and Lowes. We are a reflection of their sales. So, I think there’s a slight pullback in their purchases from us, but that’s to be expected in the winter months. I think the true test will come in Q1 or Q2 to see what the impact of these interest rates is.”
In transportation, “Trucks are still expensive, but they can be found,” he commented. “For a while, they were expensive, and you couldn’t find them.”
A lumber provider in Oklahoma stated, “The housing market is down 65 percent, and yet, in the market for sales of Softwood lumber, we’re kind of holding our own. Our branch sales are up 75 percent over last year. We have probably the most outstanding sales force in our company, with longevity, extreme experience and we know what we’re doing. However, pricing-wise, the market has been in the dumps for the last six to seven months. Prices have dropped dramatically, so you can’t make the same profit as you did in the COVID years.
“I’ve been doing this for 43 years,” he continued. “I’ve seen ups and downs, and every six to eight years, a correction. Right now, the market is worse, but it’s cyclical. High interest rates are keeping some people from buying homes. That’s a lot of what is happening in our market now. I think 2023 will be a horrible year for our industry. I think in 2024, we will work our way out of it because interest rates will be lower.”
He handles Doug Fir, SYP and SPF in 2×4 to 2×12. His best sellers, he noted, are Doug Fir in narrows and SYP in wides.
His sales are 85 percent to retail lumber yards and 15 percent to manufacturers.
Transportation has been tough, he said. “It’s hard to find someone who wants to drive 9-11 hours a day.”
A Texas lumber provider mentioned the seasonal slowdown. But, he noted, “The outlook from our customers is positive. A lot of big quotes are being done for jobs that will come to fruition soon. We’re still clicking along on our sales average. It’s been a good year.”
Over the past several months, he remarked, “We’ve been steady, with not much of a downfall. Our customers are still quoting, and people are still active in the market. Things are still rocking along because we focus on the custom side of the industry, not the tract side.”
He sells No. 1 and Better Douglas Fir, No. 1 and Better kiln-dried Douglas Fir and Standard and Better Western Red Cedar – in 4×4 to 20×20 in Douglas Fir and 4×4 to 12×16 in Cedar. Doug Fir is his best seller.
He sells to retail lumberyards. “In the tract business,” he said, “they’ve slowed down immensely. On the custom side, sales are staying steady.”
At the time of this writing, he said, “Transportation hasn’t hurt us.”