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Who is Getting Rich Off of High Lumber Prices?!?
#1
I fully appreciate lumber prices are not sexy. Therefore, the interest in this thread will be pretty.... low  tinybiggrin This guy in the video has done a great job of breaking it down. Or you can read what I have paraphrased from him and other sources. 



If you have needed to purchase common lumber at a big-box store recently or priced building a new home or an addition, you will have noticed lumber prices have risen to insane  and and levels. By me, the cost of a common grade 2x4 quadrupled. From around $2.25 per to $8.50 per. I have never seen that high of a price before. 

Obviously, one asks why this is? It must be a shortage of trees, right? Nope. More standing timber now than has been for 100 years. Prices for timber are historically low. 
https://www.fia.fs.fed.us/library/brochu...Metric.pdf

Maybe the cost of shipping the trees/lumber has risen? The price of gasoline fluctuates but there has been no shortage of fuel especially in the US. Prices are lower now than in the past. Truckers are not getting rich. 
https://www.eia.gov/dnav/pet/hist/LeafHa...us_dpg&f=m

The guys cutting down the timber are not getting rich. There may be overtime with an increase in demand but don't expect chainsaw wielding lumberjacks moving uptown any time soon. 

Well, it must be the retail stores right? Home Depot must be making a killing. Nope. They sell on margin. They are charging a high price because they are paying a high price.

What does that leave? The lumber mills? Yes. However, the vast majority of lumber mills in the US are specialty mills. They do not supply lumber for the big box stores or the home building industry. 

There are only 5 REALLY big mills which do that. Weyerhauser, West Fraser, Georgia Pacific, Sierra Pacific, and Interfor.  Of those, only three are publicly traded and publish their financials. Sales for those three are indeed up (~10%-15%) but their costs have been flat even with increased new housing starts.   

BUT, their share prices have skyrocketed. Between 2019 and 2020, Weyerhauser has increased 147%, West Fraser increased 279%, and Interfor increased 459%.

So the VAST majority of the increased cost for lumber is going to shareholders. This is Wall Street making a killing. No real market forces at work here. Just manipulation.
#2
Timber prices going up?  Why not, everything else is.  Meat, tissue paper, paper towels, etc.  
My average grocery bill has gone up $30 a week for the same items I always buy.  Sigh...

I hear the housing industry is booming. I guess they can charge whatever price they want.  tinyok
#3
(04-20-2021, 08:52 PM)Mystic Wanderer Wrote: Timber prices going up?  Why not, everything else is.  Meat, tissue paper, paper towels, etc.  
My average grocery bill has gone up $30 a week for the same items I always buy.  Sigh...

I hear the housing industry is booming. I guess they can charge whatever price they want.  tinyok

In this case, those making the money are wall street. Not those involved with the lumber or home building. Another case of wealth transfer. 

Although, to be fair, it is voluntary. No one has a gun to anybody's head making them buy a new home. I guess the homebuyer just takes out a bigger mortgage. And guess who that helps?
#4
(04-20-2021, 08:52 PM)Mystic Wanderer Wrote: Timber prices going up?  Why not, everything else is.  Meat, tissue paper, paper towels, etc.  
My average grocery bill has gone up $30 a week for the same items I always buy.  Sigh...

I hear the housing industry is booming. I guess they can charge whatever price they want.  tinyok

BTW, thanks for reading/replying. I didn't think anyone would.
#5
We started looking for something to buy last summer when I got laid off. I eventually retired. Housing skyrocketed. Just waiting it out until the bubble bursts. 

I have seen people post outrageous prices for lumber. OSB plywood 7/16 for $90. 

I hope it goes down within the next year.  

Thanks for posting.
The Truth is Out There, Somewhere
#6
(04-21-2021, 01:59 AM)kdog Wrote: We started looking for something to buy last summer when I got laid off. I eventually retired. Housing skyrocketed. Just waiting it out until the bubble bursts. 

I have seen people post outrageous prices for lumber. OSB plywood 7/16 for $90. 

I hope it goes down within the next year.  

Thanks for posting.

I feel your pain. Hope it smooths out soon.


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