I don’t understand it, why are prices high? I can understand a few dollar markup due to the summer weather but 100’s of percent upcharge seems a little much. There doesn’t appear to be any less lumber around or a shortage according to my carpenter friends. Well prices stay like this? I would like to do some projects by myself but prices seem out of range
In: Economics
Lumber industry was shut down temporarily, slowed by COVID–in part due to expected reduced demand in the early days and also due to COVID safety protocols, etc. And then instead of a reduction in demand, there was a surge as people wanted to buy bigger homes, wanted to remodel, wanted to build decks and swingsets, etc. So less supply, much higher demand led to a surge in prices.
It’s complicated. It started before the c-thing, with a shipping strike in Asia – there wasn’t much shipping happening, then the c-thing happened and everything shut down, then as things got back going in Asia all the empty shipping container were in North America and not getting sent back because they were empty, then everyone was stuck at home and decided to improve their homes and used all the stock but they weren’t making any more lumber, then the Suez canal thing happened….so many things!
Supply and demand. People weren’t buying lumber during the pandemic, so they weren’t cutting trees. As soon as things opened up, people decided to do all the projects they’d had to put off. The customers gobbled up everything that was on hand, and the producers haven’t had time to fill the back orders. In a few months everything will settle down again.
1) COVID hit and tree cutting/processing mills were slower due to isolation protocols while others were closed from outbreaks, therefore supply was significantly decreased,
2) people stayed home, worked from home and didn’t go on vacations, therefore they renovated with their vacation cash, created necessary home offices and built their own backyard spaces, significantly increasing demand.
3) the combination of the two created the “perfect storm” that increased lumber prices 250-300% in some cases
Long story short: the mills (the places that turn timber (logs) into boards) were shut down for a period of time in the pandemic which hurt the lumber supply. Since then the lumber mills have been operating at full capacity but it takes tens of millions of dollars and years to build a new mill and so nobody was interested in doing that in the short term to respond to a temporary bubble.
That leads to a restriction in supply and prices go up because of that. The lumber futures (the commodity price people are betting on in the future) are starting to come down as supply begins to catch up with demand.
Here’s a good video that explains why this is an issue: [**https://www.youtube.com/watch?v=b1JlYZQG3lI**](https://www.youtube.com/watch?v=b1JlYZQG3lI)
Basically, the world is an intricate, interlocking system. We experienced an unexpected change (covid) that caused people to stop needing as many of certain things, which caused less ordering of things, less production of things all down the line, and a change in shipping that led to ships and shipping containers not being where they were most needed. Then we ramped up again but the basic production of certain supplies had been decreased so there’s a shortage.
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