Lumber prices are falling fast

[TreyRo]

BIL got his quote for his house build and it rose $6k from where it was 2 months ago. Lumber yards are fighting to make good profit.

We are re-bidding in a few weeks, as ours came at the price hike. I'm not real optimistic.

[texan16]

Exactly it’s dropping at wholesale level, not at the retail level. I will bet the mills and warehouses are plum full.

My neighbor has his own logging outfit and they work all over east Texas. Anyrate, he was telling me just the other day that all the mills/warehouses he takes his lumber are full to the top and/or overflowing and it is almost impossible to find anyplace that will buy his truckloads. He said it freakin brutal because he has bills to pay, equipment to work on/fix, employees to pay and they cant sell the lumber.........he said as of right now its almost better for him to stay at home and not even work....but he wont.

Crazy situation.

[Maddox]

My neighbor has his own logging outfit and they work all over east Texas. Anyrate, he was telling me just the other day that all the mills/warehouses he takes his lumber are full to the top and/or overflowing and it is almost impossible to find anyplace that will buy his truckloads. He said it freakin brutal because he has bills to pay, equipment to work on/fix, employees to pay and they cant sell the lumber.........he said as of right now its almost better for him to stay at home and not even work....but he wont.

Crazy situation.

We put off cutting last year and may this year because of this.

[Etxbuckman]

Can somebody explain to me how this works? Obviously there's not a supply problem, so what's driving the cost up at a retail level?

[Shane]

There was a supply problem. Trump's tariffs on Canadian lumber and then COVID-induced shutdowns of some mills cut supply. Then demand increased on top of that when people started doing home projects during COVID shutdowns, then more increased demand when people started wanting to get out of insane COVID shutdown big cities so they started building houses in the country.... Supply is finally beginning to catch up with increased demand, but the mills are still charging high prices, I guess because people are paying them.

[Etxbuckman]

There was a supply problem. Trump's tariffs on Canadian lumber and then COVID-induced shutdowns of some mills cut supply. Then demand increased on top of that when people started doing home projects during COVID shutdowns, then more increased demand when people started wanting to get out of insane COVID shutdown big cities so they started building houses in the country.... Supply is finally beginning to catch up with increased demand, but the mills are still charging high prices, I guess because people are paying them.

Ok I see. So there's not a supply problem now, but there was previously and it's just kind of working it's way out. Got it.

[Shane]

Ok I see. So there's not a supply problem now, but there was previously and it's just kind of working it's way out. Got it.

Hopefully it'll work it's way out soon. Kinda seems like the mills are gauging still though.

[cj7zrcool]

Can somebody explain to me how this works? Obviously there's not a supply problem, so what's driving the cost up at a retail level?

IMO....just because East Texas & Louisiana mills have some yellow pine lumber back in inventory doesn't mean that there's not still supply issues. Trucking & rail are a bear and this is compounded for SPF, Fir, & Western Red Cedar lumber that comes from Canada & the northeast. Print has tumbled dramatically on most cuts and species over the last three weeks and will probably be down again Friday, but there are rumblings that it will rebound some by mid-July. OSB and other structural panels (plywood, etc) are still somewhat difficult to source and pricing on those commodities will likely continue to rise through the summer. It'll all find it's new trading level soon, but it won't be like it was pre-COVID. New home buyers (especially those from other regions) have proven that as long as interest rates are reasonable, they're willing to pay out the nose for their new home and that certainly hasn't gone unnoticed by mills, futures traders, and others in the industry.

[Smart]

2x4x8 yellow pine $5.92 at Lewisville Home Depot...down from $8.25 plus. Treated 2x4x8 $5.98...

[rolylane6]

2x4x8 yellow pine $5.92 at Lewisville Home Depot...down from $8.25 plus. Treated 2x4x8 $5.98...

I wish Lowe's would follow. Just in Decatur Lowe's and 2x4x8 still 8 n change

Sent from my SM-N970U using Tapatalk

[Texas Grown]

2x4x8 yellow pine $5.92 at Lewisville Home Depot...down from $8.25 plus. Treated 2x4x8 $5.98...

Thank you for the update. I was wonder-n about that.

[Dusty Britches]

Ok I see. So there's not a supply problem now, but there was previously and it's just kind of working it's way out. Got it.

It's the processing supply problem. Plenty of trees but the mills shut down due to some sort of health concern. The mills did not all come back on line at the same time and they had an excessive supply so they stopped buying from logging companies. Logging companies shut down, some permanently, because they couldn't get paid for their product (similar to negative oil prices last year). Meanwhile, mills started back up and could not keep up with the demand pull because everyone was at home working on home projects and new home construction.

The supply - demand push - pull is working like a Slinky. Eventually it will even out but many companies along the route will not survive.