Dunn Lumber and Pinnacle Roofing explain lumber prices
LYNNWOOD – Since the beginning of the 19th century, the wood industry has played a key role in laying the foundations of Washington State’s economy. Wood prices reached record highs in the past year. The Lynnwood Times spoke to the owners of Dunn Lumber and Top roofers to understand why.
according to Market Insider, spot timber prices hit an all-time high of $1,390 per thousand board feet, up 275% over the past year. These rising costs have added $36,000 to the price of the average new single-family home based on data from the National Association of Homebuilders.
For Lynnwood-based Pinnacle Roofing, rising timber prices have forced them to lower their price estimate from the usual 30 to 60 day 14 day to 14 day estimate. Despite this minor setback, the company has experienced a 30% increase in sales in the past year, and according to Lenny Schwartz, CEO and president, the “numbers continue to rise.”
“We [keep] customers update about prices, but most are unaware and [are] still buy,” said Schwartz.
According to Schwartz, the slowdown in manufacturing activity in the second quarter of 2020 had serious consequences that “we are only now experiencing the aftermath”. The driving factors are low inventory and unprecedented disruptions in the supply chain.
“If inventory levels are healthy and predictable throughout the construction season, freight and transportation will benefit from good planning and logistics. Unfortunately, the need-it-now paradigm has also contributed to increased costs,” Schwartz said.
Pinnacle Roofing Professionals, LLC, nearing their 12th anniversary serving the Seattle Roofing Sector, specializes in roofing, solar, electrical, and chimneys, both residential and commercial.
Gradual factors have been building up for a while, says Mike Dunn, president of Dunn Lumber, where Pinnacle sources their supplies. Factors such as a beetle infestation that has gone global, and logging restrictions on forestry conservation. When the pandemic hit, there was a surge in home projects and increased demand for housing. All of these factors overwhelmed an already increasingly fragile supply chain.
The pandemic led to sawmill closures, labor shortages, limited freight wagons and containers for transportation, and wildfires. Mills that have been in operation all year can’t get enough logs or enough staff, making them unable to produce enough to meet rising demand. According to Dunn, the motivation to produce more strains is there because the prices are good, but they just can’t.
“I think in addition, you have a certain excitement to be back in life, so people pay prices that might be just astonishing in normal times,” Dunn said.
Under certain circumstances, Dunn Lumber can only hold a supply of a few weeks. While they try to “ride the market,” as Dunn said, they can only buy a certain amount at a time, from what’s limited available, and the prices change weekly.
“You pay a small margin for the work to bring it here and have it available. We [also] don’t have the space. If we could buy a hundred carloads of something, we wouldn’t be able to put it anywhere,” Dunn said.
Many Dunn Lumber distributors process their orders months in advance to make the product available to consumers. When the pandemic first hit, the company was dealing with shortages of fencing and timber, but supplies have remained relatively stable, despite only having two weeks’ worth of equipment.
“There are just too many dollars chasing too few goods,” said Dunn, who has been with Dunn Lumber for 50 years and has never seen such price increases in his career.
While Dunn Lumber gets most of their material from places like Lakeland Mill in British Columbia, plywood is still collected in the Pacific Northwest, including Oregon, where the Oregon Forest and Industries Council reported that fires in Oregon alone killed 15 million people. have cost lives. feet of wood, which is enough to build 1 million houses.
“It’s really not that surprising when you take so many people out of work and suddenly there aren’t the bodies to handle a crisis… things are going to get worse quickly,” Dunn said.
Companies like Dunn Lumber continue to source wood from British Columbia for their SPF (Spruce, Pine, Fir), species that grow inland at low temperatures. This is better for renovations and constructions because of its strength, ease of use and aversion to defects. Most of the trees grown in the Pacific Northwest are Hemlock and Douglas Fir, a faster growing tree, which is braver in grain and heavier. For this reason, Dunn Lumber stopped sourcing from local factories such as Buse in Everett and Hampton in Darrington in the 1980s.
In addition to supply and demand for panels, there is also a shortage of resin used to cure composite panels after a major resin supplier in Texas went under during the cold snap.
“I’ve seen some crazy stuff on YouTube lately where an economist outside Hampton Mill was taking pictures of piles of wood and saying, ‘This is where all the wood is and that’s why it’s so expensive.’
“First of all, that wood was being processed. It was between the point it was ground and the time it was dried and surfaced and then packaged and delivered. There is a fair amount of wood in processing at a large mill.
“And second, if you took that whole inventory, it was probably fifteen minutes into the supply chain. So much material is used every day that it looks like a lot when you see it. But you’re talking about literally billions of records in a year being produced internationally, so a few carloads isn’t much,” Dunn added.
From a retailer’s perspective, the market behaves exactly the way you’d want it to work according to Dunn.
“It’s not like food, because if it reaches a certain price, some people will starve and some people will be fed. It’s just a question of ‘Can you wait for your project, or do you have to do it now – or are you willing to do it now at these prices?’… That’s how the free market works,” Dunn said.