$8 a stud?
COVID lumber prices have hit us all and we are seeing that framing lumber is up anywhere from 30-80%. This is something that has been brewing for many months and its a good illustration of how the lumber supply chain works. Unfortunately this is a perfect storm as softwood lumber prices were already reeling from new tariffs and the shutdown of mills all across North America. Now with large spikes in demand from the traditionally smaller DIY segment, the lumber industry is unable to keep up. Near inventory is all but gone and material ships out as soon as it leaves a kiln or pressure treatment plant.
My fear is that quality of the lumber may suffer as well as things are rushed through production to get to the sales rack as soon as possible. Fortunately, this market doesn't require the same due care and quality as the hardwood market but it still raises concerns.
When will the market return to normal? Its hard to say because as lockdowns loosen we will see a return of commercial demand. We may even seen an over correction in commercial business as contractors and manufacturers everywhere try to recoup losses from earlier in the year. It is doubtful that the lumber industry, plagued with significantly reduced capacity, will be able to keep up with the demand and get ahead of the backlogs until well into 2021.
COVID Lumber Prices Here to Stay?
It is safe to say that COVID lumber prices will be the new "normal" for quite a while longer with uncertainty about the virus still looming. The bigger issue is whether or not the capacity limitations of closed sawmills and treatment plants can be corrected once back logs are eliminated. The hardwood market remains tight for now but as it starts to succumb we could see even higher prices in softwoods at the beginning of 2021 when greater commercial demands hit the supply chain.