At the time of this writing lumber framing prices took a dip and quickly rebounded, Cedar products continued to gain strength driven by growing transportation uncertainty, and the inevitability of spring. With new lumber tariffs set to take affect six months from now, there are lots of moving pieces in the wood products marketplace right now, the following is what a few west coast producers had to say:
Dean Garofano of Delta Cedar Specialties, Delta, BC, said, “The demand for Cedar has been steady through winter for our DC Supreme and Superior products, so we are anticipating a strong take away, as we move closer to the busy spring season. Timber demand has peaked in early 2022 as the Cedar sawlog supply dries up and further tightening is anticipated. Moving forward, our biggest concerns revolve around overall Cedar log supply and transportation. With most Cedar manufacturers already oversold, there are mounting concerns around the ability to fill new future orders.” Garofano continued, “This has distributors nervous about filling their spring needs in what looks to be another supply and demand imbalance. Due to the flooding and cold snowy winter, logging on the West Coast is off to a very sluggish start, and it will take several months for Cedar supply to get back to any sense of normal, whatever that might be these days. Meanwhile, the old growth deferral announced by the BC Government still has everyone scrambling while we try to measure the potential impact this may have. In comparison and on a positive note, the renovation market often used as a bell weather for Cedar demand, is predicted to be strong across North America this year. After addressing the supply issues, the next obstacle is the challenge we are facing with product shipment. Trucks, rail cars, vans and containers are hard to come by and prices continue to rise. The scarcity of transport is a result of a combination of tight labor markets, COVID illness, border restrictions and backlogs in yards after the BC floods. Between supply issues and transportation challenges, it should not be surprising that Cedar log and lumber prices continue to escalate and reach new all-time highs as each month goes by. At this point, there is no indication that these factors will change any time soon.” Garofano finished on this decisive note: “However, with hard work and dedication, we will continue to face the challenges and enjoy the positive aspects of the industry which we are so passionate about.”
Leslie Southwick of C&D Lumber, Riddle, OR, said, “Demand is more in balance with our current supply than it was a few months ago. The urgency for some lumber products has quieted down as customers are beginning to receive orders that they may have placed a few weeks back. This has led to a little bit of softening in Doug Fir 2” dimension pricing. However, Doug Fir 4” and 6” timber pricing continues to increase and tends to be more stable than 2” products. Cedar pricing also seems to continue to be strong as we begin the spring season. Customers seem to be a bit cautious when they are making purchases, many customers tell us that they are not making a buy until they have a PO in hand from their customer. Our customers seem to think that the current loll in the market will be short lived as builders start to ramp up more for Spring, but many underlying conditions continue to hamper contractors and builders such as lack of labor and supply shortages of all types of building materials.” Southwick continued, “Demand for logs skyrocketed towards the end of January, which pushed pricing up for logs very quickly. We have had to be flexible and adjust our operating plans based on availability. We are fortunate that we have the ability to run three different species, which allows us to continue to operate efficiently. We have also learned to be very flexible in how we operate our manufacturing facilities based on current manpower. We have days that all of our team members are at work and days when multiple people are out for various reasons. Transportation continues to be frustrating for all parties. Some loads will sit at the mill for upwards of a month or two. Truck rates continue to rise as the cost of fuel increases coupled with the lack of drivers makes finding an available truck very difficult. Rail transportation has been more reliable over the last month, but not everyone can or wants to purchase a full rail car of material leaving them with truck transportation as the only option.” Southwick finished by saying, “I would rate our business as an 8; we had strong shipments the first half of the quarter and anticipate steady business as we head into the second quarter. Pricing is always a wild card, but demand for housing and commercial building is still forecasted to be strong, so hopefully this will continue to keep pricing at a stable level especially since log prices have been much higher than last year.”
Chelsea Brown of Patrick Lumber, Portland, OR, had this to say about supply and demand for their products, “For all items prices remain strong, supply remains challenging, so long as the demand is there. We love to promote alternative products that we have in abundance, such as our beautiful Doug Fir, when other Softwood prices scare buyers. Our customers remain optimistic about business and the strong market we are in. Everyone has their eyes on interest rates to see what will really happen to supply and demand this year.” Brown continued, “Weather, transportation, logging issues, labor – you could say all impact our business. We focus on offering competitive benefits, fair pay and opportunities, improvements to our yard so truck drivers can have better loading experiences. At Patrick, we can only control the controllable, and we do our best to constantly review and make improvements where necessary to stay competitive in this landscape. Impact of this tariff on our industry and relations with our partners to the north continues to be a challenge. Many customers read a headline about the duty rate change, and ask if pricing will improve. The simple answer is no. Unfortunately replacement costs for material continues to increase due to log, labor and logistical shortages. Managing expectations and constant communication with our customers is important so they can then explain to their customers why prices continue to increase or remain at record levels.” Brown finished by saying, “Business is good, I can’t give it a 10/10 because if we had more supply we could probably sell more!”
