Interesting article on lumber prices

emoji_events [5]
Feb 24, 2021, 3:38 PM

There's a bottleneck in the supply chain and it's the mills. The demand from builders, etc. is through the roof. But mills have been bought out, consolidated, and made so efficient, their numbers have halved over the years. Plus, they 're being designed for more middle-aged wood, and not larger timber stands. PLUS, the mills can't produce enough lumber, and there's a surplus of trees, and a shortage of finished product from the mills.

Before the pandemic this problem existed in SC timber, moreso in certain areas than others. Many mills have closed in SC, meaning the logging of timber in many places has become prohibitively expensive to transport all the trees to the mills. It's a hour drive from our land to the nearest lumber mill now, and it used to be less than 30 minutes. As such, it's hard to get loggers in there to take the wood at a decent price, compared to the past.

The tree growers have been screwed here, and the system is broken really. The reason for the expensive wood is less mills. The reason for lower timber prices is the surplus of timber, because there are less mills. Meanwhile, the mills are raking in the money in the middle between forest and consumer. Loggers are also getting screwed cutting the timber, hauling it further, for less money.

Anyway, interesting to see how the pandemic has exacerbated a problem that had been building for years.

https://www.wsj.com/articles/lumber-prices-are-soaring-tree-growers-miserable-11614177282

Lumber Prices Are Soaring. Why Are Tree Growers Miserable?

Saw mill operators are harvesting gains while Southern landowners are struggling with a surplus of trees. “I’m not making anything,” said one Georgia timber veteran.