Herk’s last newsletter was titled “Higher and Higher.” I was hoping when I was given the opportunity to give a ‘Market Update’ I would be able to write about something other than rising lumber prices. Unfortunately, looking at this month’s trading… rising prices appear to be the same old story.
This year’s building season has come upon us fast and we haven’t seen a dip in the market like we typically do in the spring. This again is nothing more than a supply and demand issue. The railway is running at capacity due to a lack in production of new rail cars and many lumberyards have been buying month to month. Longer lead times and the building season around the corner results with suppliers who simply can’t wait for a dip in pricing and are starting to order now. Most mills are also sitting comfortably with order files out 2-3 weeks. All this places the mills “in the driver’s seat.” There really doesn’t appear to be any relief in pricing and there won’t be until we stop buying or more mills start appearing.
That being said, most of the experts are predicting there won’t be much of a pull back until after the spring rush. We can pretty much expect pricing to slowly climb through spring as dealers look to cover inventories through the start of the building season. If there are any pullbacks it does not appear that they will be very substantial. I would recommend writing your contracts with clear verbiage regarding start dates and expectations of holding pricing as the market continues to climb.
Have a great spring! We are looking forward to serving you this summer.