Lumber suppliers warn of shortages, increased prices

March 19, 2021

By: The Working Forest Staff

THE SPECTATOR — Home renovators are wise to brace for impact to their wallets as soaring lumber costs could make even the average backyard deck project about three times more expensive this year.

 

Caption: Neal Larsen manages Aitchison Lumber, located in West Hamilton.

 

“Material costs are just unbelievable. We’ve never seen anything like this,” said Neal Larsen, who manages Aitchison Lumber, located in West Hamilton.

At Hamilton Builders’ Supply Inc, for example, the price of a standard eight-foot-long two-by-four piece of spruce wood is two-and-a-half times higher than it was in 2019. Purchasing and sales manager Dave Stevens said their stock is currently in good shape but doesn’t expect that to last as renovation season begins.

The current price for customers is $10.64, up from $8.95 last August, he said.

In March 2020, the price was $4.78, and in March 2019, it was $3.97. This means the material cost of wood for an average deck project has also almost tripled.

Based on estimates generated from two online deck calculators, about 145 two-by-fours are required for the surface of an average deck measuring at just over 300 square feet. Before-tax, material costs for that portion would have run the average customer about $576 in March 2019; $693 in March 2020; and $1,543 today.

“We’ve been in business for 68 years. We have never seen prices like this before. It’s unprecedented demand,” said Matthew Presz, retail sales manager at Turkstra Lumber Company.

At Aitchison Lumber, Larsen said the “extraordinary” year at the shop — known for its specialty lumbers, including cedar — has been marked by prices that continue crawling up with each shipment.

The issue is compounded by a limited supply, especially for pressure-treated wood, low-cost lumber that contains chemicals to preserve it from rotting or insects.

“Last year, there was no pressure-treated [wood]. This year, there’s going to be nothing of anything,” said Larsen. “They just can’t get logs fast enough to mill, to be able to send out to customers. It’s crazy.”

Dan Huizinga, a manager at The Wood Shed in Smithville, said building pergolas, cabanas, or other outdoor structures to make one’s backyard a destination spot will be more challenging this summer.

“We’re already starting to see shortages coming up. And it’s only March.”

Do-it-yourself renovations or contractors may be feeling the pinch, but home builders and buyers are bracing for thousands of dollars in downstream costs from the inflated lumber prices.

“We’re all seeing the price escalations in Hamilton and surrounding regions,” said Mike Collins-Williams, CEO of the West End Home Builders’ Association. “I’m somewhat optimistic that the price pressures will dial back a bit, but I think we’re talking many months … This is not a problem that’s going to reverse itself this spring.”

Prices for Western spruce, pine, and fir lumber began skyrocketing last July and fell back down by November before making a steady climb into the new year. Eclipsing prices seen in the last 20 years, the lumber products rose more than triple pre-COVID levels, to about $1,000 (U.S.) per thousand board feet, according to a Feb. 15 CIBC report.

Amid low lumber inventories and “an inability of the industry to surge capacity” as a result of pandemic-related labour disruptions, the record prices are poised to rise, CIBC analysts Hamir Patel and Roshni Luthra wrote.

Pandemic shutdowns in the lumber industry, coupled with a mild winter that allowed residential construction to continue, exacerbated supply-chain disruptions.

Canadian lumber quantities exported to the U.S. could also factor into domestic shortages, but it is yet unclear how the recent drop in penalizing tariffs imposed in 2017 by former U.S. President Donald Trump will shake out. The tariffs are reported to have cost Canada’s softwood lumber industry about $5 billion a year.

In December 2020, these tariffs were cut to nine percent from 20 percent by the U.S. Commerce Department, following a complaint by Canada to the World Trade Organization in an ongoing fight over lumber imports that preceded Trump.

“It makes it a little bit more affordable, but it still doesn’t remove the unjustified additional tax that’s being applied. It’s a political issue with the United States, and not really a trade issue,” said Joel Neuheimer, a vice-president leading international trade and economic policy at the Forest Products Association of Canada.

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