Spring has sprung and the all-time-high lumber prices continue unabated throughout the U.S. due to an imbalance in supply and demand that will most likely not be rectified until late summer or early fall if at all this year. With offerings this high, dealers are trying to keep inventories low enough to stay in the game without getting caught empty handed. The following is what a few west coast producers had to say on the state of the industry:
Dean Garofano of Delta Cedar Specialties, Delta, BC said, “Spring is here and with it comes the warmer weather and anticipated increased Cedar demand. The continuation of an anemic Cedar log market along with the insatiable appetite for Cedar lumber products has led to continued price increases for logs and lumber on a weekly basis. This unprecedented rise has many wondering just how high prices can go and how long this supply demand imbalance will last. Good questions, but for now demand continues to outpace supply with most producers struggling to keep up.”
Garofano continued, “Here at Delta Cedar Specialties, we have managed to increase our volume of logs cut in 2021 but are still unable to provide enough volume to fully fill our distribution partners’ needs. Logging permit delays have been prominent through the early spring and this has contributed to the lack of log availability. Sawmills are scrambling to keep logs in the mills and once the lumber is produced the lack of planer and dry kiln options are resulting in longer turn-around times to fill orders. Further headaches have occurred in shipping when trying to secure rail cars that have been very slow to arrive for North American destinations. For offshore shipments, container availability has also seen lengthy delays and freight costs have skyrocketed adding more challenges to the supply channel. All these elements have created a frenzied market pace and temporarily shelved any concerns or fear of a market correction.”
Garofano concluded, “Perhaps this fall buyers will become more defensive, however in the meantime with distribution yards emptying out as fast as stock arrives, there is currently no hesitation to send purchase orders.”
Leslie Southwick of C&D Lumber, Riddle, OR said, “Demand for our Doug Fir products has outpaced supply especially in 2” surfaced No. 2/Btr, No. 3 and economy products. As soon as these products are ready, they sell and ship quickly. This is also true for our Cedar products especially 2×6 decking. We are sold out for most of the year on decking products. However, if buyers are looking for Port Orford products, we do have availability in our rough sawn exposed timbers. Port Orford is a great alternative to Alaskan Yellow Cedar. Prices continue to move upwards on many products without push back from customers. There just is not enough supply to satisfy the demand, so customers have to continue to buy at current prices to fill their orders. I honestly don’t know if we will see any substantial drops in prices throughout most of 2021. We will see prices fluctuate a little downward at times as customers digest the wood they have purchased, but with so much pent-up demand for housing and commercial construction I think prices are still going to stay high.”
Southwick continued, “Most customers sentiment is similar with phrases like: ‘I have never seen anything like this.’ ‘These prices are just unreal.’ ‘We have never been busier and we just can’t keep up.’ ‘These are just crazy times.’ I think most of our customers’ main challenge is finding products that are ready for quick shipment and transportation. It is definitely a challenge to find available trucks. In some cases, it is taking weeks to find trucks and at much higher prices. We also have had customers converting multiple truck loads to a rail car just so they can get a definite ship date of their orders. I am feeling fairly confident that demand and pricing will continue to be strong, so I am still going to rate the year an 8.
John McDowell of Oregon Industrial Lumber Products, Springfield, OR said, “Supply and demand is way off for us, particularly with Doug Fir. Our inventory is not bad–a little thin, 6” and wides are very tight. The demand for Red Cedar is what’s driving Yellow Cedar for OLIP, we’re having trouble finding quality tight knot products that we feel comfortable putting our name on. We’re letting our suppliers know what we need but what you get is what you get. Our customers are cautiously buying smaller quantities, with prices so high business is great as long as you’ve got something to sell. The problem is that they’re tying up a lot of cash in a small amount of wood.”
McDowell continued, “I think there is a wage increase on the horizon, trucks have been tough to get though I don’t know why, and of course COVID is still a thing, we lost 5 days in January alone because of the virus. It seems to be affecting all facets of our business, we’re having trouble getting parts for equipment, metal for fabrication. From 1-10 I’d give this year a 5 so far, it could get better for us, just need to get these prices to come down a bit.”