Why is There a Lumber Shortage? + Wood Prices Update

lumberyard

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Have you ever purchased lumber recently? Did you also wonder and ask someone, why is there a lumber shortage? We did too! 

Our research team has thoroughly looked into this issue to find out why we don’t have access to as much lumber as we did before. Read on for some answers.

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 unprecedented demand for housing in the country is the primary driver of the short supply. New homes are in demand, and the construction of these homes necessitates lumber. And environmental resources might continue to be depleted.

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.

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

Aside from the coronavirus pandemic, some of the reasons why there is a lumber shortage include wildfires, high demand for housing, and low sawmill production. 

Supply will unlikely meet demand anytime soon unless the problems causing supply constraints are resolved.

Robert Johnson is a woodworker who takes joy in sharing his passion for creating to the rest of the world. His brainchild, Sawinery, allowed him to do so as well as connect with other craftsmen and women. He has since built an enviable workshop for himself and an equally impressive online accomplishment: an extensive resource site serving old timers and novices alike.
Robert Johnson
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