First off, I should point out that my comments extend only to unseasoned, 'mixed hardwood.' Once you get into varying levels of seasoning, or type-specific types of wood, then you are getting into specialization and variables that make things slightly more complicated.
LLigetfa said:
While that may hold true in the US for gas and oil, it doesn't necessarily extend to other commodities.
I would say that commodities that do not conform to this general economic principle are the rare exception, not the rule. In fact, what makes a 'commodity' a 'commodity' is that the goods are essentially identical no matter from whom you buy them; the only appreciable difference is the price, which is directly tied to the supplier's cost of producing the good.
The cost of wood is tied to the cost of oil in two ways. One is that the producer surcharges his fuel consumed at time of processing and the other is market demand.
I can agree with you that if the cost to produce a cord of wood was $150 because the cost of fuel was high at the time, the temptation is there to sell that cord for no less than $150, plus an undetermined amount of profit. However, if a new producer starts cutting and selling wood this season at $100/cord because of lower fuel prices, then there is no way that the already existing producer is going to sell that wood at $150, even though that's what it cost him to produce it.
When oil goes up, more people switch to wood, increasing demand on a limited supply. If supply surpasses demand, the price may go down but since oil is still fickle, people are still buying wood becuse they don't want to get caught short should oil go back up and demand shoot up for wood. You can buy your oil "just in time" but good luck buying your wood that way.
You are correct, and there are some folks who don't want to get caught short by a sudden re-spike in the price of fuel oil. However, the vast majority of people, human nature being what it is, don't plan that far ahead. Just ask people who sell shovels and snowblowers and air conditioners.
The other thing to consider is that wood price is a very regional thing, not subject to global pricing like oil. Chances are your oil doesn't come from the same county as your wood.
It is certainly true that a cord of wood in rural Maine probably costs something different than, say, a cord of wood in the Pacific Northwest. However, wood producers still have local competition no matter where they are located, and competition is what will play a large role in driving the retail cost of the wood.
It costs more to transport wood than oil,
My intuition tells me this is, at best, a dubious assertion. It also flies in the face of your assertion that wood is, by its nature, a local product. I am skeptical that the cost of transporting 1 million BTU's of cordwood to your house is more than the transport of the equivalent BTU's worth of fuel oil to your house's storage tank. (Natural gas may be a different story, though.)
there is not a multi-national corporation in charge of wood distribution, and the USDA will not put transport restrictions on oil because of disease outbreaks.
I believe that these two factors have a negligible impact on the price of a cord of wood.
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