Northeast Business Trends – December 2022

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Across the Northeast region sources said, at the time of this writing, that the market hasn’t been doing well, and they are worried about where the market will land once it starts to level out.

In Pennsylvania, a sawmill representative said that the market is proving to be very challenging right now, and that it’s worse than it was six months ago. “A combination of factors is making it challenging, like it always is. The market overheated and it hasn’t found its new footing for where it will be moving forward. We are scrambling and I’m not sure where it’s going to settle out,” he said.

He said his sawmill produces Hard and Soft Maple, Cherry, Red and White Oak, Ash, Yellow Poplar, as well as a little bit of odd species, in thicknesses that range from 4/4 through 12/4 in No. 3 Common to FAS and everything in between.

His company sells to a variety of customers, including distribution yards, end-use manufacturers, and occasionally to traders. They also sell locally to smaller users that buy smaller lots, less than a truckload. Of the comments that he’s heard, his customers are over stocked. “They are holding off purchasing to adjust their inventories,” he said.

He said that while trucking is better than it was six months ago, ocean and rail freight are terrible. “Vessels keep being removed from service. There are some bad delays on export shipments,” he added.

He said that while labor shortages are an ongoing struggle, it is better than it was six months ago.

“We hope it improves rather than gets worse, but I’m not optimistic,” he stated.

In Maine a lumber spokesperson said that the market is terrible for his company, with it being much worse than it was six months ago. “There is no more speculation in the marketplace right now. Interest and mortgage rates are high, and nobody is willing to speculate on the business they will have in the future. Everyone has a backlog. It’s difficult to find anyone that is buying lumber right now,” he said.

His company deals with Hard and Soft Maple, Ash, and Yellow Birch, in grades anywhere from pallet to prime FAS with thicknesses in 4/4 through 8/4. “None of them are selling well, I’ve never seen it so bad,” he remarked.

He said that his company primarily sells to kitchen cabinet and flooring manufacturers, distribution yards and wholesalers. He’s noticed that his customers have started to slow, noting that, “I’ve heard of a couple layoffs at kitchen cabinet companies. I think everybody I’ve talked to echoes my sentiments as to where the market is right now.”

He said that transportation isn’t an issue right now. “I’m getting calls left and right from trucking companies looking for work and I have nothing for them. We haven’t sold any lumber in quite a while,” he said.

Labor shortages have always been a problem for his company he said. “It seems to be a blessing in disguise, as it limits our production. The last thing we need right now is any extra production,” he lamented.

In Maryland, a lumber representative said that oversupply has forced the market into a freefall. “A year ago, the prices were going up, they were double what they are now. Six months ago, it was good, we were rolling. We are less than half of what we were a year ago,” he said.

His company mostly deals with Poplar, Red and White Oak, and a little bit of mixed Hardwood, in grades No. 1 Common, No. 2 A and B Common and FAS 1. “No. 1 Common and No. 2 A and B Common has gotten so terribly cheap that we are putting it all in pallets. We are just selling the FAS and Better as far as selling it as grade. We sell a little bit of No. 1 Common as grade, but very little,” he remarked.

He said they sell mainly to the railroad and pallet industries, as well as distribution yards, wholesalers, and exporters. “They don’t know where the market is going to stop. As soon as they find out where the bottom is, they will be ready to start buying again.”

Trucking is one of the least of their problems, he said. They have also been blessed that they do not currently have any issues with labor shortages. “During Covid we didn’t shut down. We lost money staying open, we knew we were losing money on everything, but we did that to keep our crew together,” he said.

He said that he wonders where things will level out, “A lot of supply comes from Amish Mills and they have a lot going on in the winter, so that will slow down production,” he remarked.

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By Miller Wood Trade Publications

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

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