The Expert Podcast

Lumber prices have gone so low that some mills are starting to cut back production because it's not really worth the investment to cut the raw materials into lumber based on the current pricing. Sometimes, that curtailment, as they call it, is resulting in higher prices again. According to the Wall Street Journal, some sawmills are cutting production in a bid to lift lumber prices. The list of sawyers who are doing this is long; you have Interfor, Canfor, and West Fraser Timber, which have announced curtailments, both temporary and permanent, in British Columbia.

They had a log strike, but also Oregon Weyerhaeuser had a strike of lumber producers. What this says is that the downtime shows that wood producers are betting that the plunge in single-family housing is not just temporary, but a trend—not a blip. They’ll have to slow down production considerably to keep lumber prices from crashing. So, the mills are taking action and actively reducing their volume to make it worthwhile to cut lumber.

This is going to have a ripple effect on the labor market, on shipping, on truck transport. Even rail yards are going to have less lumber to ship. So, the lumber price drop is having a domino effect within the industry and making it harder again for builders to get materials, even at the lower prices.

Tell us what the scenario is in your neck of the woods. Are the prices staying low, are they bouncing back up, and is there any shortage of different types of materials?