Lumber prices jumped in ~2000, IIRC. A friend living on the Chesapeake Bay had acquired funding to build an aviary on his land and was excited to start.
The zoning and approval to remove two trees added a few years to the process, as he had to plant trees to replace the two he wanted to cut, and he had to find and pay ($$$) a person with land where he could then plant.
By the time his ducks were in a row, lumber prices had jumped substantially and he scraped his project.
Just got a local’s post on a FB group and someone in that exact position said they are looking into deck preservers (paint like products) to get some more time out of their aging deck. They stated they would replace it but now due to the price of wood have changed their mind and looking to extend its life. So another data point that it is working.
Can @sitchensis or anyone else explain to me (as per post #25) why, “since wood production cycles follow forest growth cycles”, it is only recently that mills are making more woodchips and fewer planks? (“Chip ‘n saw”.). I would presume planks are more valuable than woodchip products but depend on having certain tree diameters, and do not understand what The Economist is implying. Of course leftover wood would be made into other products. Why is this new?
With all this cost increase I am damned glad I snuck my roof replacement in last March–COVID restrictions had just come into play but my timing was perfect and I got my materials ordered and delivered before the prices went up. If I were trying to do that repair now I’d have to spend almost twice as much, not to mention the roof probably would have caved in under the unexpected snow load in February.
Yep. A surprising amount of that money went straight into people’s bank accounts and stayed there. Also, people haven’t been spending as much overall during lockdown, and that money has also been building. Plus, all the borrowing Trump and Biden are doing is being monetized (printed money) because the sheer size of the borrowing means there aren’t enough people or countries to buy the debt instruments. So, the treasury has been printing money (about 3.5 trillion so far, in the form of electronic transfers to bank balance sheets, not literally printing bills), then uses that money to buy debt instruments to fund the government, This is a really bad idea if it continues, and will contribute to inflation.
All the new spending Biden is throwing around will have to be financed the same way. There’s no one out there to lend the government six trillion dollars. This level of spending and borrowing is grossly irresponsible, and in my opinion will either lead to inflation or a structural decline in growth or a recession if he tries to fix the problems with taxes.
Oh, and it will help the rich get richer, because assets inflate while savings don’t. Retirees on fixed incomes and savers get hammered by inflation. The people owning the assets are protected.
Another view.
Lumber production took a nosedive during the great recession. The demand has come roaring back, and the supply can’t catch up.
I had to go to Lowe’s this morning for some spackle, and I was aghast to see that a 14" thick sheet of OSB was $40!!! I’ve got 5 or 6 sheets of 1/2" OSB left over from some projects last year - I think I need to put in a security system to protect them!!!
Forty bucks for a fourteen-inch thick sheet of OSB sounds like a bargain.
Some of it is undoubtedly the decline in the market for the byproducts. Turning wood into lumber generates a lot of scrap chips that are normally sold to pulp producers to make wood pulp for paper. A lot of paper making machinery came off line during the pandemic and hasn’t come back up yet. With decreased income for the scraps generated the lumber has to carry the whole operation.
Residual chips aren’t glamorous and don’t sell for a lot per ton, but they were a steady and consistent source of income for the sawmills. I’ve worked in pulp mills that purchased thousands of tons every day, 350 days a year.
Stupid typo - I should have gone decimal, but then it might have become a 25" thick sheet!
There isn’t a lot to explain because it’s kind of bullshit.
Yes: Mills are moving to smaller, more efficient, headsaws that utilize smaller trees. With computer and laser based measurements these headsaws can cut with the taper of the log instead of slabbing off large chunks to make flat sides. These upgrades reduce waste and make the process more efficient. The mill still has a huge incentive to make as much lumber as possible because lumber has the most value.
At the same time the secondary markets are huge even with the slowdown on print paper. My information may be out of date but I believe that in Europe they have a large demand for hog fuel to supplement coal plants to meet emissions standards.
The article is connecting a lot of weird dots that don’t make a lot of sense.
Most existing mills have already changed over to the new technology. I have trouble finding mills to send oversized logs to already.
The Slate article is a way better description of the state of the industry. With the demise of long-term timber contracts it’s hard to show enough timber under contract to get financing for improvements and upgrades. Banks just don’t give 30 million dollar loans to build biomass power plants without guaranteed supply.
An interesting point brought up on local public radio, here on the west coast a lot of that construction is folks rebuilding after the wildfires we saw out here last year. And a sad side effect of the demand driving the prices up is that a lot of people are finding that they’re underinsured on replacement costs.
And I can only guess how much this is going to raise home insurance rates.
I thought I read that Trump broke trade agreement(s) with Canada, a major lumber supplier?
Canada and the US have long feuded over lumber and aluminium tariffs and claims Canada is acting unfairly by oversupplying the US. It was an issue before and after NAFTA, is a separate section in the USMCA, and was also something Trump pulled out of his darkspace when he decided Trudeau was perceived as being overly difficult, smug or charismatic (depending on your views).