What Is The Lumber Shortage? + Wood Prices Update
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Have you ever purchased lumber recently? Did you also wonder and ask someone, why is there a lumber shortage? We did, too!
This issue was thoroughly investigated by our research team. We now have less lumber than we used to. Continue reading for more information.
Factors That Cause Lumber Shortage
Wildfire Season
The fires hit Canadian lumber production and British Columbia. Large areas were also affected throughout the summer in Oregon, Washington, and Pacific Northwest.
Because wildfires cause the destruction of millions of acres forest and increase demand for building materials, they are a significant contributor.
Businesses in the country had at the start of the pandemic to adapt their operations, which led to a slowdown in production and reduced supplies.
The lack of transportation from sawmills to retailers has also increased costs. Because there were fewer trains and drivers, lumber producers had difficulty transporting their products.
The price of lumber attained a record high of per thousand board feet, a 406% increase from the it was trading the past year. There is no way to predict when lumber will drop. According to the National Association of Home Builders there has been a near increase in the price of a single-family home.
Demand For Housing And Remodeling
The unprecedented demand for housing in the country is the primary driver of the short supply. New homes are in demand, and the construction of these homes necessitates lumber. The environment might also continue to be depleted.
Nearly four million more single-family homes are required in the United States. Demand for lumber is expected to remain high so long as there is an all-time high demand for homes and current methods are not drastically altered.
Production Of Sawmills
Sawmillsin the Pacific Northwest dealt with the threat of wildfires; their southern counterparts faced a lack of available workers. Because of the pandemic, timber producers have had difficulty luring back their former workforce. Sawmills are in a bind because of rising costs and their profits.
The Supply Chain Cycle Of Lumber
Forests cover approximately 58% of North Carolina’s total land area, or 18.1 million acres. These forests are owned by three types: private individuals (75%), governments (18%) and private businesses (7%). More than 95% of the natural resources in the country come from private ownership.
43% of all trees are used in lumber. The rest of the timber can be used for paper, veneer, composites and bioenergy. The supply chain includes buyers, suppliers, loggers and the mill.
Customers hire loggers to trim the trees after they have purchased them. After the trees have been cut down, logs are made into logs that can be sorted according to their use. After being sorted, the logs are loaded onto trucks and taken to a mill where they can be turned into lumber or other products.
Lumber Shortage: The Impact
Due to rising costs and shortfalls, construction firms are having a harder time securing hardwood or softwood lumber. This problem is made worse by the scarcity of essential construction materials like concrete, steel, and PVC pipes.
Projects have been delayed, sometimes indefinitely, as a result. Project delays and increased costs have likely contributed to the recent rise in housing prices.
When Will The Lumber Shortage End?
The country’s lumber prices are expected to recover to pre-pandemic levels. This is because more supply will be available as transportation problems are solved, and sawmills keep producing.
Lumber Prices Set To Fall Soon
Although the shortage might ease in the near future, the industry’s price rise is likely to last a long time.
Climate change could make shortfalls more frequent. Extreme weather, forest fires, and bark beetle infestations make it more challenging to grow trees to produce lumber, which could keep prices high for a long time.
FAQ
Have there been lumber shortages in the past?
Due to the drastic decline in demand, many mills across the country were forced to close down in 2008. They increased production to meet the rising market demand after the recession was over. The output remained relatively steady throughout the 2010s.
How important is lumber production for the economy?
The solid wood sector industry, including lumber mills and component manufacturers, boosted the growth of the economy by billion in 2016. Toilet paper and construction materials for home improvement projects are just a few useful products that come from wood.
Conclusion
Aside from the coronavirus pandemic, some of the reasons why there is a lumber shortage include wildfires, high demand for housing, and low sawmill production.
Supply will unlikely meet demand anytime soon unless the problems causing supply constraints are resolved.
