Why is there a lumber shortage in the U.S.?

January 13, 2021

By: The Working Forest Staff

CAPITAL PRESS — Many parts of the U.S. are facing lumber shortages — and experts say the problem is acute in the West after 2020’s devastating wildfires.

Industry experts say several events led to the lumber shortage: lockdown orders and closures, new safety protocols that slowed production at mills and a spike in home remodeling while Americans were quarantined followed by a massive wildfire season.

“The industry is normally like this fine-tuned machine. A lot of events (in 2020) disrupted it,” said Cindy Mitchell, senior director of public affairs at the Washington Forest Protection Association, or WPFA.

Cumming Corp., an international cost consulting firm, said wildfires along the West Coast “have led to a significant spike in certain material prices.”

According to the Oregon Forest and Industries Council, or OFIC, a trade group representing forestland owners and wood product manufacturers, last year’s fires in Oregon alone may have killed 15 billion board-feet of timber, enough to build 1 million homes.

The National Association of Home Builders, or NAHB, reports that between mid-April and mid-September, lumber prices soared more than 170%, adding $16,148 to the price of a typical new single-family home. Prices drifted lower at the start of fall, but they’re on the rise again.

Mitchell of WFPA and Sara Duncan, spokeswoman for Oregon Forest and Industries Council, or OFIC, both said the lumber crisis was precipitated by several events.

Some Western states temporarily shut down construction work at the start of COVID-19, which in turn meant some mills had to shut down, creating a backlog.

New safety protocols within mills slowed production.

With Americans stuck at home under shutdowns, remodeling boomed and people used up much of the existing lumber supply at a time when mill production was curtailed.

Then wildfire season hit, wiping out millions of acres of timberland.

Now, demand for building materials is even higher from West Coast communities that are rebuilding after fires.

The lumber shortage has had a variety of impacts.

Construction associations have reported contractors are showing an increased interest in alternative materials, such as metal framing.

Forestry leaders say higher lumber prices don’t mean timberland managers are hitting it big. Instead, experts say, many timber companies are facing tight margins because they had equipment and trees destroyed in fires, higher input costs, and expenses associated with labor and reforesting.

Lumber shortages also have economic consequences for fire victims.

Many U.S. insurance policies limit the timeframe a person has to rebuild a home after a fire. With limited supplies of lumber and few contractors available, many survivors may not meet their insurance rebuilding deadlines.

Some state agencies are seeking to address this. In Oregon, for example, the state Division of Financial Regulation recently negotiated agreements with several insurance companies, pushing them to extend their timelines to at least two years after the date of loss.

“The weirdness of (2020) backed up the whole forestry system,” said Mitchell of WPFA.

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