Are Lumber Prices Still A Problem?

  • 2 min read

All we hear about is lumber prices. It’s still an issue, affecting construction costs. Even though lumber prices have gone down, it’s creating a ripple effect. Some mills are not producing as much due to lower prices. Employment costs, regulatory costs, insurance, and raw material acquisition costs have all gone up.

Impact on Lumber Yards
At the current cost per board foot, lumber yards aren’t making substantial profits. Curtailments in production are affecting builders. Northern builders are facing slowdowns and material shortages. Projects like single-family homes are experiencing a significant increase in material package costs.

Adjustments by Mills
Mills are adjusting to lower prices by metering or curtailing production to increase demand and prices. When lumber prices were high, mills could absorb increased costs. However, with lower prices, they still have to bear those costs, leading to production cutbacks.

Long-term Sustainability
Mills need to maintain profits for long-term sustainability. Operating at break-even or a loss for a few months isn’t feasible. Property taxes, equipment maintenance, and repairs need to be covered. Without proper financial management, some mills are shutting down permanently due to the unsustainable lumber price.

The lumber price issue is complex, impacting various stakeholders in the construction industry. From builders to lumber yards to mills, everyone is feeling the effects. Sustainable solutions are needed to ensure the long-term viability of the lumber industry.

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