Record lumber prices

An N.C. State professor said record lumber prices are due largely to Canadian lumber tariffs, lumber transportation issues and increased home remodeling and new home construction. He said it has less to do with tree or lumber production shortages.

Throughout the COVID-19 pandemic, the United States has experienced shortages of medical materials, manufacturing products and even consumer goods like toilet paper and hand sanitizer.

Now a lumber shortage is gripping the country, causing prices to skyrocket.

Lumber prices hit an all-time high of $1,686 per thousand board feet in May, an increase of 406% from the $333 it was trading at the same time last year. As a result, the price of a new single-family home rose by nearly $36,000, according to the National Association of Home Builders.

Robert Bardon, a professor of forestry and environmental resources and associate dean for extension at the N.C. State Univeristy College of Natural Resources, said the lack of lumber available in stores is due largely to a combination of Canadian lumber tariffs, increased demand for home remodeling and new home construction and hiccups in supply related to transportation.

Bardon said it has less to do with a shortage of trees or lumber production.

“At the beginning of the pandemic demand for lumber was slightly down and mill inventories were down, but in the spring of last year we saw people move on home improvement projects, purchase a home or build a new home, causing an increase in demand for lumber,” he said,

The industry, impacted by the pandemic, had to adjust operations, which at first slowed production, resulting in less supply.

“The lack of transportation to move the lumber from the mills to the dealers is also playing a role in increasing lumber prices. The pandemic reduced the number of drivers and impacted rail transportation, making it difficult for mills to ship lumber to the dealers,” said Bardon.

“As we come out of the pandemic we should see lumber prices drop to more normal levels, similar to what we saw before the pandemic. This will be most likely due to an increase in available supply as we overcome transportation issues and mills continue to produce lumber.”

He said he is unaware of similar surges in lumber prices ever occurring like the ones now.

Bardon said lumber production is important to North Carolina’s economy as part of the forest sector, which is a major contributor to North Carolina’s economic well-being.

In 2019, the forest sector in North Carolina contributed $34.9 billion in industry output to the North Carolina economy, supporting more than 148,000 full-time and part-time jobs with a payroll of about $8.4 billion. The forest sector continues to be the top employer among manufacturing sectors in the state.

In North Carolina, forest covers about 18.1 million acres of land, or about 58% of North Carolina’s land area. Ownership of these forests can be divided among non-industrial private ownership (75%), governmental ownerships (18%); and private industry (7%).

Over 95% of the timber is harvested on privately-owned land and about 43% of that is harvested for producing lumber.

Remaining timber harvested is used for making other value-added products, such as paper, veneer, composites and bioenergy.

A typical supply chain cycle involves the timber owner, the buyer, the logger and the mill. The timber owner may sell the timber by themself, or they may seek the assistance of a consulting forester. The timber is sold either through a lump sum sale process or on a per unit bases, depending on the sale conditions.

Sale notices are sent to potential timber buyers, who may work directly for the mill or maybe independent. Once a timber buyer purchases the trees they then line up a logger to harvest the trees.

As the logger harvest the trees they are brought to an area in the forest where the trees are processed into logs and are sorted based on the products they can produced. The logs are sorted and loaded on to trucks to be shipped to the mill to be processed into value-added products such as lumber.

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