Midwest Business Trends – July/August 2022

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The health of the Softwood lumber markets in the Midwest region is mixed. Interviews with lumbermen there yielded varied depictions of the markets, from “gangbusters” to “slow” to the beginnings of lower demand.

In Texas, a sawmill representative said his sales are “going gangbusters. We are selling everything we can produce. We sell only boards.”

This market is better than it was a few months earlier, he stated.

He sells Southern Yellow Pine, No. 2 and 3 Common and D and Better. “With the market as it is, all of these are bestsellers,” he remarked. “All these boards are one-inch thick.”

He sells mostly to distribution yards but also to some end users. “From what I can tell, their sales are good,” he commented.

“I have heard transportation is an issue,” he said. All his lumber is picked up by customers.

A South Dakota lumberman said his market is “slow. With Cedar selling for a higher cost and construction slowing down, it’s been slow.

“With the way the market’s been slashing up and down, it’s hard to say if the market is better or worse than six months ago,” he said. “People are just riding the waves.”

He handles Cedar and ESLP in Arch Knotty, No. 2 and No. 3 and D and Better. His best seller is ESLP in one-inch thickness. His customers are distribution yards. He said their sales are “steady.”

Asked if transportation is problematic for him, he replied, “Not necessarily. We have our own trucks, and customers pick up some lumber from us.”

A Kansas City lumber representative is seeing “the first waning demand happening, I think due in part to the lowering prices we’re seeing in Softwood lumber and the rising interest rates. I think builders are cutting back on spec houses and doing more custom builds and speculating less.

“I would say demand has declined compared to six months ago,” he stated. “In commodity lumber, we’re seeing a price correction downward, and demand is waning. It’s not quite as strong as it was six months ago.”

He handles No. 2 Common green Doug Fir and No. 2 SPF and Western Red Cedar. Doug Fir is offered in 2×6 through 2×12, and SPF in 2×4 and 2×6. His best seller is green Doug Fir.

His customers include pro dealers, national chain dealers and box stores. “They’re still doing well in terms of sales. Even with the market somewhat weaker, it’s not the end of the world,” he said, “but there is a slight pullback on demand. My customers’ sales are still good, though.

“Transportation is still a struggle,” he observed. “It’s hard to find trucks, and it’s hard to get empty rail cars at the mills, and the fuel costs are high.”

By Paul Miller

Paul Miller President Miller Wood Trade Publications

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