Has the curse of COVID-19 affected the world’s wood market and lumber supply? Absolutely — and in surprising ways.
Before the Pandemic
Prior to the COVID-19 problem, lumber mills had already decided to reduce production. They had hoped to combat continued low pricing, deal with unfavorable stumpage rates, and begin to increase profits.
Stepping on the Brake
As the pandemic reared its head in March this year, local governments became quite concerned. As a result, a construction-slowdown took place and some places, like Pennsylvania, even halted construction altogether. The global wood market saw prices really drop — they plummeted to their lowest level since February 2016. Mills slowed as they dealt with social distancing guidelines and a slump in housing demand.
An Unexpected Upturn
And yet, the housing market rebounded much faster than expected. Housing starts increased by 17.3% in June alone. And what do bored, “shelter-in-place” consumers do while the virus rages on? Begin home-improvement projects, of course. Build a deck. Fix a fence. Folks found themselves with extra time and money to spend, given their canceled summer travel plans.
Current Supply is a Challenge
Unfortunately, there is now a national shortage of lumber in general, and pressure-treated wood, in particular, is hard to come by. Dana Iverson at the Lumber Division for Allied Midwest said they are under pressure as crews struggle to harvest enough trees. “Early spring was real wet, they weren’t able to get in and properly forest materials there,” said Iverson.
A worker employed in Sioux Falls said, “Yeah, lumber is really setting us back on jobs. We can’t get green treated lumber, we’re having trouble getting cedar wood for fences. I’ve had to push customers back two to three months.”
Prices Rising in the Wood Market
As with any shortage, this low supply issue is pushing prices upward. Many in the industry feel it’s unlikely that relief will be available until late fall.