Sierra Pesnell | Times Intern
Sticker prices on lumber materials skyrocket after spike in home renovations. COVID-19 caused several lumber mills throughout the U.S. to lose employees after shutdowns occurred last March. Additionally, stay-at-home orders and inability to travel during the pandemic increased the amount of people doing home improvement projects and renovations.
Both factors contributed to the rising costs of lumber materials since the pandemic. Dr. Joseph Chang, a professor in forestry at LSU, explained that once there was an increase for lumber demand last year, mills had to call people back. People didn’t return or mills were forced to work at small capacities that ensured social distancing guidelines. “They (the sawmills) are having a difficult time to hire to increase production,” Chang said.
This resulted in a challenging period of rising demands. The 300% increase in lumber prices isn’t caused by a shortage, but by requests. May 2020 prices saw $415 as an average price for 110,000 board feet of lumber, which is the contracting size per unit. The prices contrast with the May 2021 price of $1,500 per unit.
The Natchitoches Stines demonstrates the rise in lumber costs and how it affects inventory prices. An untreated 2x4x10 pine board costs $10.46 as of June 21, while in July 2020 the same item cost $4.05.
A one-quarter inch sheet of plywood from Stines costs $38.28 today while the same sheet was only $21.72 a year ago. A one-half inch sheet of plywood is a whopping $69.88, while the July 2020 quote is $13.63. Robbie Hutchins, an area forestry and wildlife expert with LSU AgCenter, said the rise in expenses are not related to natural resource shortages. For every tree harvested in Louisiana, five – six are planted in its place.
“Even after both hurricanes within the past year, there is still an excess of timber,” Hutchins said. Several houses after Hurricane Laura and Delta haven’t been repaired and building projects are waiting on supplies.
The housing market has also been affected because of the lack of new real estate. Lumber prices are finally falling despite its high number compared to 2020. People are returning to work or traveling, requiring less demand on lumber for renovation projects. The Futures Market price on the NASDAQ for lumber predicts a price drop in July from $1,700 to $1,000 for a unit of lumber.
Samuel Burman, an associate commodities economist and writer for Capital Economics, wrote an article in April saying the price of lumber is expected to lower within the next year and a half. Burman cited two reasons for the decrease in price. First, social distancing guidelines have become relaxed, which will allow lumber producers to return to work in full capacity of production.
The rise in truckers, who transport the lumber, will remedy that current shortage. The second reason Burman wrote for a potential decrease in prices is the increase in imported lumber. U.S. tariffs could be temporarily cut, promoting imports from countries like Canada.