Southeast Business Trends – June 2022

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Market trends across the Southeast region remain strong for Hardwood lumber sales, as some sawmills are taking steps to stave off potential profit loss due to price uncertainty for the near future.

 For example, the sales manager of an Alabama-based sawmill stated, “We’re holding some inventory because we feel like prices are going to continue to creep up. We’d rather have it in the warehouse than sitting in accounts receivable. There are no signs of Hardwood going down in price, it’s going up every week, and we have plenty of warehouse space.”

His company is currently seeing top sales in 4/4 and 5/4 Red and White Oak, along with 4/4 Ash and Poplar.  He noted that their “customers don’t understand why prices are getting so high” and attributed the increase to multiple factors, including a shortage of logs and lumber going into a busier season.

An executive for a sawmill located in Arkansas corroborated strong Hardwood sales in his area, as well, particularly with 4/4 and 5/4 Red and White Oak in all grades. “We are able to get rid of everything that we end up producing,” he said. When asked how the current market compares to the past several months, he noted that sales are still strong and demand is high, even as prices have continued to rise.

He also stated that while they are starting to see some inventories fill, at the time of this writing, they have not seen drops in prices and don’t anticipate them any time soon. They are, however, noticing changes in customer demand that are subtle and growing, and could be a by-product of the higher prices. “If anything,” he explained, “we are probably seeing grading getting a tad stiffer. Customers are a little more particular on what they’re purchasing today than they were six months ago. They’re paying higher prices and supply is no longer a problem, so they expect a better product.”

Even as prior pandemic-related supply shortages seem to be stabilizing amidst continued high demand for Hardwood products, transportation hurdles remain a top concern among all lumber sources contacted. They expressed common obstacles involved with moving products—from rising fuel costs to economic uncertainty to labor shortages.

Specifically, the president of a lumber distributor in Georgia revealed that his greatest present challenge is meeting transportation demands, despite having his own trucks. “Transportation is an issue for me,” he stated. “We have our own trucks but finding qualified drivers has been a problem. I have two trucks sitting idle now because I don’t have qualified drivers. I mean…I can hire drivers but finding qualified ones that won’t wreck the vehicles is another thing.” As for current market conditions, he noted, “The market is strong but seems to be softening. Right now, we’re seeing the highest sales in White Oak, across all grades and thicknesses.”

 Another lumber source agreed, expressing gratitude for the added benefit of company-owned trucks. Even still, it isn’t always enough to satisfy his customers’ needs.  “We are moving everything that we can,” he noted, “probably our biggest problem is trucking. When we try to pick up an outside truck, it is tough. Thank goodness we have our own trucks right now, which helps, but there are times when we don’t get everything delivered so we utilize outside trucking. When it comes to the point of picking up outside truckers, that is always a challenge.” 

By Miller Wood Trade Publications

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

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