Why is There a Lumber Shortage? + Wood Prices Update

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You recently bought some lumber and found yourself wondering, “Why is there a lumber shortage?” If this matter confuses you, you’re at the right spot! I dug deep to understand the reasons behind it, and here’s what I discovered. Keep reading! 

Factors Behind Lumber Shortage

Wildfire Season

The fires hit Canadian lumber production and British Columbia. Large areas were also affected throughout the summer in Oregon, Washington, and Pacific Northwest.

wildfire

Wildfires are a major contributor because they destroy millions of acres of forest and increased demand for building materials, especially for everyone hit by wildfires.

Covid-19 Lockdowns and Safety Protocols

At the beginning of the pandemic, businesses in the country had to change how they functioned, which slowed production and reduced supplies. 

The lack of transportation from sawmills to retailers has also increased costs. Lumber producers also had trouble transporting because fewer drivers and trains were operating.

The price of lumber attained a record high of $1,686 per thousand board feet, a 406% increase from the $333 it was trading the past year. For the time being, there is no way to predict when lumber prices will go down

According to the National Association of Home Builders, there is a nearly $36,000 increase in the cost of a brand-new, single-family home.

Demand for Housing and Remodeling

The primary driver of the short supply is the unprecedented demand for housing in the country. The construction of new homes requires lumber, contributing to the depletion of environmental resources.

house construction

The United States requires the construction of nearly four million additional single-family homes[1]. Demand for lumber is expected to remain high so long as there is an all-time high demand for homes and current methods are not drastically altered. 

Sawmill Production

Sawmills in the Pacific Northwest dealt with the threat of wildfires; their southern counterparts faced a lack of available workers. 

Because of the pandemic, timber producers have had difficulty luring back their former workforce. Sawmills are in a bind because of rising costs and their profits.

Supply Chain Cycle for Lumber Explained

About 58% of North Carolina’s total land area is covered by forests, making up about 18.1 million acres. The ownership of these forests can be broken down into three categories: private individuals (75%), governments (18%), and private businesses ( 7%). 

More than 95% of the natural resources in the country come from private ownership.

Lumber uses 43% of all cut trees. The remaining timber can be used to make paper, veneer, composites, and bioenergy. A typical supply chain cycle includes the suppliers, buyers, loggers, and the mill. 

lumberyard

After buying trees, customers hire a logger to cut them down. After the trees are cut down, they are milled into logs and sorted by use. After being sorted, logs are loaded onto trucks, taken to a mill, and turned into lumber and other products.

Impact of Lumber Shortage

Construction firms have a harder time securing hardwood and softwood lumber due to rising prices and shortages. The problem is exacerbated by the limited availability of other essential construction materials, such as PVC pipes, concrete, and steel.

As a result, projects have been pushed back, sometimes indefinitely. The cost of lumber for building operations has skyrocketed, and project delays and higher costs likely cause the recent increase in housing prices. 

When Will the Lumber Shortage End?

Lumber prices in the country are expected to return to pre-pandemic levels. This is because more supply will be available as transportation problems are solved, and sawmills keep producing.

stacking lumber from the mill

Will Lumber Prices Go Down Soon?

Though the shortage may ease soon, the price surge in the industry is likely to be long-lasting.

Shortages could become a more common problem as a result of climate change. Extreme weather, forest fires, and bark beetle infestations make it more challenging to grow trees to produce lumber, which could keep prices high for a long time.

For updated wood prices, you may check the following: 

FAQ

Have there been lumber shortages in the past?

Numerous mills in the country shut down in 2008 due to the dramatic decline in demand.  After the recession ended, they ramped up production to meet rising demand in the market, and the output was relatively constant throughout the 2010s. 

What is the importance of lumber production to the economy?

The solid wood sector industry, including lumber mills and component manufacturers, boosted the growth of the economy by $3.68 billion in 2016. Toilet paper and construction materials for home improvement projects are just a few useful products that come from wood.

Conclusion

From what I know, besides the coronavirus pandemic, factors like wildfires, a surge in housing demand, and limited sawmill output have led to the lumber shortage. Based on this, it doesn’t seem like supply will catch up to demand anytime soon, unless we address these challenges.

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Robert Johnson is a passionate furniture maker & carpenter, sought after for his knowledge on the craft.
You’ve probably seen his down-to-earth wisdom in USA Today, Bobvila, Family Handyman, and The Spruce, where he has shared commentary and guidance on various woodworking topics.

Robert is the brain behind Sawinery, where he aims to share tips, tricks, and a passion for all things carpentry.

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