Over the past couple of months, lumber prices have skyrocketed across the US. The price of lumber has been unstable since the onset of COVID 19, spiking and dipping unpredictably throughout the last two years.
So, what is causing these lumber price hikes?
The primary reason behind high lumber prices in 2023 is increased import tariffs on wood products. In November 2021, the US Commerce Department increased tariffs on imported Canadian lumber. Other factors such as COVID 19, the Canadian truckers’ protest, and Canadian environmental issues have also played a role in the high prices.
This article looks at the recent surge in lumber prices and the possible reasons behind the price hikes. Read on to find out if the prices will drop soon.
What Is Lumber Used For?
Lumber is processed wood that has been turned into planks and beams. While it is mostly known for its use in the construction industry, lumber has many more uses. Here are some of the most notable ones:
Making fires and heat production is probably uncut lumber’s oldest use. Many homes in developing countries still use firewood as their main fuel source.
Industries also use lumber to produce the steam that powers light furnaces, engines, or runs steam turbines to generate power.
Sawdust is a byproduct of the lumber production process. Being a waste product, it can pollute the environment if it’s not disposed of properly.
However, sawdust is a highly valued material used in the production of wood boards. These wood boards can be used in construction or in making furniture.
To Make Pellets
Pellets are used for industrial heating purposes. They are made from sawdust, a lumber byproduct. They are also produced from branches, treetops, and discarded coconut shells.
Lumber shavings and chips can be bonded and compressed together with resin to become stiff boards.
These boards are laminated and used to install interior fixtures such as cabinets and shelves. They are also used to make furniture.
Producing Wallboard Panels
Wallboard panels improve a home’s aesthetics. They are made from wood pulp mixed with plywood and pulpboards.
They are bonded with adhesives and painted for a classic finish. Apart from aesthetics, wallboard panels also insulate a house.
Making Veneers and Plywood
Thin lumber slices are pressed and glued together to make veneers. When beaded, veneers can be used to make cabinets, doors, wall decorations, and floors.
Plywood, on the other hand, is made of three veneer layers.
The Construction Industry
In 2022, lumber is mostly used in the construction industry. Some of the vital building components made from lumber include kingposts, purlins, building beams, and columns.
Before metal scaffolding, temporary platforms used in construction were made from lumber in many parts of the world.
As a result, high-quality lumber is necessary to build long-lasting houses.
Is There a Lumber Shortage in 2023?
There’s a huge lumber shortage in 2022, not just in the US but the world over. The shortage has been ongoing since the onset of the pandemic, but its peak was earlier this year. As a result, construction and other industries that rely on lumber have slowed down.
Lumber Prices Today 2023
Lumber prices have stayed consistently over $1000 per thousand board throughout 2023. Although there was a slight dip in March, there’s a sudden spike now.
Why Is Lumber So Expensive Today?
There are several factors influencing the high lumber prices in 2023. Here’s a brief look at the main ones.
Due to its diverse uses, lumber has always been in high demand. Whether it’s making furniture, framing a new house, renovating wooden floors, or running steam engines in factories, lumber is an important raw material.
However, lumber demand is even higher than usual in 2023. The construction industry, where most lumber is absorbed, has been slow for the past 2 years due to the pandemic.
But now that things are somewhat back to normal, everyone is trying to make up for the lost time. People who held back their dreams of building new houses 2 years ago are now breaking ground; factories are also back to work.
Due to the sudden high demand, the supply is short, driving up the prices of the available lumber.
Canadian Environmental Issues
Canadian lumber mills supply more than a quarter of the lumber in the US market. Therefore, whenever there’s a problem in Canadian forests, the ripple effects are felt in American lumber prices.
Several major storms struck Western Canada between late 2021 and early 2022. leading to serious supply chain issues.
At this point, it seems like everyone is blaming everything on the pandemic. However, it couldn’t be more true in the case of lumber prices.
When the pandemic hit, many industries, including the lumber industry, closed shop. There was low domestic lumber production that lagged far behind home construction.
Although lumber companies are mostly back to work, they are yet to fill the two-year shortage.
One of the most significant factors contributing to the high lumber prices is an increase in tariffs on lumber imports from Canada. Towards the end of 2021, the US Commerce Department increased tariffs on imports from Canadian softwood producers to 17.99%, which is more than twice the previous rate.
Although the move shook up the lumber market and caused a huge price spike, American lumber millers were more accepting of the new tariffs. They anticipate the move will promote domestic lumber production.
The Canadian Truckers Protest
Apart from the high tariffs, Canadian lumber imports were also hindered by the Canadian truckers’ protest.
Canadian truckers protested for a few weeks towards the end of February, citing mandatory COVID vaccination. The few weeks without imports worsened the bad supply chain issue.
Will Lumber Prices Return to Normal?
For the past two years, lumber prices have been unpredictable. However, with American lumber mills welcoming the new tariffs on Canadian imports, there might be more domestically produced lumber in future.
Additionally, since all systems are up and running after the pandemic, the lumber shortage will be filled soon.
Who Is Cheapest for Lumber Home Depot, Lowes, or Lumber Yards?
Typically, Home Depot is the cheapest among the big box stores. However, Lowes comes a close second because they have the same suppliers.
It might also be cheaper than lumber yards if you’re buying as a homeowner who needs a limited amount of lumber.
However, contractors might get better deals in lumber yards when buying in bulk.