Midwest Business Trends – March/April 2022

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Based on interviews with three lumber providers, it is evident that lumber in the Midwest isn’t selling like gangbusters, but sales are happening.

In South Dakota, a lumberman said his market is “steady, a little slower than a couple of weeks ago, not as slow as usual for this time of year, I suppose.” Asked to categorize “steady,” he said the market is good.

Compared to a few months ago, business is a little slower, he stated.

He sells Cedar, including architectural knotty; ESLP and Ponderosa Pine in No. 2 and No. 3.

His customers are lumberyards. “They all say they’re fairly busy,” he reported. “The further north you get, the slower the market gets because of the weather.

 “Transportation is a nightmare,” he observed. “You place an order for something, and it could be months before you see it. The problem is with both rails and trucks. It takes forever to get anything anymore.”

A lumber source in Kansas City said, “Demand is still strong, but the supply side has constraints causing shortages in the field. Material is flowing in, just flowing late.”

Asked to compare his market with what it was like several months ago, he replied, “It’s very much the same; it’s a continuation of the past three months. It’s very similar. I would say that logistics has gotten worse, though.”

He offers No. 2 SPF, No. 2 green Doug Fir and Western Red Cedar. Volume-wise, green Doug Fir is his best seller.

He sells lumber to pro dealer lumberyards and big box stores. His customers are going strong in the marketplace.

“Transportation is a problem for sure,” he stated. “There’s a crisis in Canada with COVID vaccine and quarantine mandates that is causing a driver shortage. It’s been difficult getting trucks out of Canada, which is putting pressure on transportation in the U.S. as well. Trucking in the States is better, but Canada is still an absolute mess.”

“Slow” is the word an Oklahoma lumber provider used to describe his market. “There’s been a lot of pent-up demand but over the last 30 days, it’s been kind of quiet. I think the end users are tired of, every time they turn around, prices are up. They’ve kind of pulled back.”

Nevertheless, he said the market is better than it was several months ago. The reason, he stated, is “profit margins. The market has run back up again.” He analyzed the buying patterns of his customers. “The smart buyers who bought ahead of the price increases are reaping the benefits. Business is not necessarily going gangbusters, but it will in the springtime, I think. Talking to some of our lumberyards, they have contractors coming in that have contracts to build houses. But they’re not in a big hurry because it takes so long to get a lot of the products they need. They can wait the market out, till prices come back down. And prices are easing off a little bit on everything but OSB. When they feel the time is right, probably in the next three to four weeks, they’ll jump back in to buying and we’ll see the market turn again. That’s my feeling anyway.”

He sells Doug Fir, Southern Yellow Pine and SPF, predominantly in No. 1 and No. 2, to retail lumberyards. “My customers seem to be doing well when they can get product,” he noted. “That’s the biggest problem now, getting product. It’s because of transportation and COVID and shutting down mills; they’re not running at full capacity. When you’re not running at full capacity and we have a healthy housing market, which we have right now, it’s a problem.” He said 2022 will be a good year and demand is strong. “Transportation is a problem,” he stated. “We are behind on average four weeks to get product.”

By Miller Wood Trade Publications

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

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