Lumber Prices

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One of many marketing techniques used by online sellers is"surge" pricing. Its easy to program in an algorithm to raise the price when the demand goes up. Uber gets pounded on it frequently. Some call it automated gouging but its supply and demand. Same with wood, not enough supply to meet the demand. Those who want the limited supply the most pay more while the one with less need wait. When I go the farmers market and they have the first fresh strawberries of the season I know the seller with the earliest ones will charge more for the few baskets he has, I know if I wait a week or two more sellers will have them and the price will drop.
 
Funny thing. I drive by a large mill in Darrington, WA a few times a year. When I drove by it a couple months ago, there were acres of milled wood there. To see it one would ask, what shortage? I'll be going by again tomorrow and will try to remember to take a picture.
 
Retail prices still going up. .Today 2x4x8s were $12.50 each . 3 times the normal price. 12 footers were $19 @. Had to pay as the job has to get done.
 
Retail prices still going up. .Today 2x4x8s were $12.50 each . 3 times the normal price. 12 footers were $19 @. Had to pay as the job has to get done.

What gets me is if they still have the tag on the pallet the date is from early 2020 so they have stock piled quite a bit and just raising the price to make more.
 
I think it is more a case of supply chain disruption and recovery. There has been a surge in demand now but things are adjusting. The report today was the wholesale lumber prices are dropping.
So you are saying I’m not gonna be able to send a kid to one semester of college with this stack I just cut today;)
Futures markets only make the middle men money. Suppliers and consumers are just left at their mercy.
 

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The price dropped below $900/mbf yesterday at the market close, which is encouraging.
 
The question is how long does that take to trickle down, the prices shoot up quick, but much slower coming back down.
I don't think we will ever see $300/mbf again, but less than $900 is much better than $1400/mbf.
 
It will come down until the masses decide “hey lumber is affordable again” and supply goes out again, prices go back up. Will take a few iterations of this I think.
 
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I thinks folks are assuming markets are rational, they are not. All the producers wo have committed to cranking up new mills are going to be rushing product into the market to catch the crest, it usually leads to a glut and then they need to sell it for what ever they can get to cover their new fixed costs. Last thing I knew there was a shortage of truckers and that can lead to mill yards full of product.
 
Drove by the Hampton mill in Darrington on Sunday. It looked pretty normal. The yards were half-full of finished product and had lots of logs waiting for milling.
 
I was at Lowes yesterday, buying a few bags of pellets, and I decided to check out the sheathing prices.

And the sheathing prices seem to be back to what they were before the price spike caused by covid. $35 for a sheet of plywood 23/32, about the same price I remember way back in the normal days.
 
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According to Market Insider the price per 1,000 bdft is still double pre pandemic and rising again.

I think lumber prices are probably going to start coming down now that winter is coming, and houses are so expensive - even if you buy one, how much money do you have left over to fix it up.

And I am thinking sheathing may be a leading indicator in the lumber sector. I was surprised to see prices for those sheets be the same as before the pandemic. But this is just my crude rough estimate, I could be off by a few.
 
You are seeing the delay in retail pricing vs market price. Lumber was cheaper a few months ago, and that has just now made it to store shelves, it's going back up. That sheathing was bought at lower market price, now the market price is higher.
 
I think the current blip in lumber prices is to be a short one. Much of the demand is being fueled by new house builds, interest rates in both Canada and the US are beginning to rise which will slow housing starts. People will also start going back to work and will be spending less time at home doing renovation projects. I would expect to see lumber prices crash in the next 1-2 years.
 
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I don't think lumber prices are ever going below $400/mbft
 
I am not so sure, the economy is in an artificial bubble fueled by fed spending. Have a "black swan" event and the interest rates will skyrocket which would stall building. Keep in mind the Social Security checks are going to go up due to inflation the largest amount in decades. The November I bond rate will most likely be over 6%.
 
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I am not so sure, the economy is in an artificial bubble fueled by fed spending. Have a "black swan" event and the interest rates will skyrocket which would stall building. Keep in mind the Social Security checks are going to go up due to inflation the largest amount in decades. The November I bond rate will most likely be over 6%.
Problem is the 6% SS raise will be diminished by at least a 15% COL increase so a net loss of 9% or more.
 
I had been watching lumber prices around town. 2X6X10' were sitting at just under $9 each. The price dropped to $6.95 at one place so I watched other places for a few days. No movement was apparent. So, I called the $6.95 place Friday to order two units. I was a day late. The price was pushed back up to within a nickel of the rest of the yards. I am waiting once again to see if there is a drop.
 
I talked to a fence builder yesterday. He said they are back down to an increase of 70% from pre pandemic prices. Peaked at about 220%.