the price of lumber has gone crazy in Canada

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billshack

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Between high demand, all-time high prices and high interest from thieves, plain old lumber has emerged as the hottest commodity of this year's home, deck and fence construction season.

"In the last year, we were buying the same product right here for $10, $11 a sheet. Now, we're paying in the neighbourhood of $90 a sheet," said Garth Babcock, a construction manager for Akash Homes, which builds close to 250 homes each year in Alberta. "It's unheard of."

The two-by-fours used in construction are bought by builders in bulk, with the price for 1,000 board feet typically in the $400 range. But not anymore.

"We'd take a spike in the past, maybe $600, $800 [for] a thousand board feet. Now, it's over $2,200, and we don't know where it's going," Babcock said.

An 1,800-square-foot duplex that cost $25,000 to frame last year now costs three times as much, he said.

 

Snoonyb

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The unintended consequences of all these homeowner/DIY'S not commuting to work, time on their hands, money accumulated and projects to be completed.
 

Flyover

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@Snoonyb I figured that's part of it, plus you're at home all the time noticing all the improvements you want to make, but I thought the major part of it was supply chain disruptions caused by the pandemic, particularly supply chains originating from China (where we do in fact get a lot of our wood).

My best friend's wife's dad is in the lumber business, he's raking it in. A neighbor of mine bought a $1200 36" chainsaw and went around last year collecting and milling up people's fallen trees, is now drying them in his garage, and will sell it all and be thousands of dollars richer, even after reimbursing himself for the chainsaw, for a comparatively miniscule amount of work.
 

bud16415

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It is not just in Canada. USA prices are out of sight as well.



Down the road there was a old house they were going to level and last year they would have brought in an excavator and had it in a pile to burn or crunched up in a dumpster or five in a day. Instead we watched a crew of Amish show up and take the place apart piece by piece pulling every nail as they went. Took them a week and it was toted off on wagons. These are the same Amish that run saw mills and put out new rough sawed stuff.



I built a roof rack to haul my canoe on and it works great but is not wide enough for two boats and we also have her kayak. So the other day I went for two 2x4 to make extensions. I told the guy I needed two studs and he said 20 bucks. I told him I really wanted PT but I knew how bad he was going to put it to me. He said oh PT is only 20 cents more each. I about flipped. So I took the PTs.

It is really crazy and I always have saved and recycled lumber when I find it, but it might get harder to find.
 

oldognewtrick

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It is not just in Canada. USA prices are out of sight as well.



Down the road there was a old house they were going to level and last year they would have brought in an excavator and had it in a pile to burn or crunched up in a dumpster or five in a day. Instead we watched a crew of Amish show up and take the place apart piece by piece pulling every nail as they went. Took them a week and it was toted off on wagons. These are the same Amish that run saw mills and put out new rough sawed stuff.



I built a roof rack to haul my canoe on and it works great but is not wide enough for two boats and we also have her kayak. So the other day I went for two 2x4 to make extensions. I told the guy I needed two studs and he said 20 bucks. I told him I really wanted PT but I knew how bad he was going to put it to me. He said oh PT is only 20 cents more each. I about flipped. So I took the PTs.

It is really crazy and I always have saved and recycled lumber when I find it, but it might get harder to find.
Just get ya a little 4x8 trailer and forget about roof loading, you will thank yourself many times over.
 

bud16415

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Just get ya a little 4x8 trailer and forget about roof loading, you will thank yourself many times over.
The thought has been on my mind a lot.



I would need to put a hitch and lights hookup on both cars. I would have lots of other uses if I had a trailer now that I’m getting rid of the truck. Tonight I stopped at a small lake I want to fish on and was looking at the kayak/canoe launch area and parking and it would be a real pain with a trailer. Then there is when we do a river float the best way is to drop one car off at the takeout and then drive the other to the put in unload the boats and go. With a trailer we would on one end or the other have to leave the boats or leave a person and make double trips. Two trailers would be nice.



When I was at the lake tonight a family of 4 pulled up with a 14’ and a 10’ boat in the back of the truck and within 3 minutes they were in the water and in 5 more they were out of sight. LOL maybe I need a new truck. If lumber didn’t cost so much I would get one.

See how I brought that back on topic.
 

Spicoli43

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Supply vs. demand is always the problem, but lots of people are blaming Covid for that. It does have something to do with it, as *SOME* lumber mill workers had to take off time because they had Covid, and *A LOT* of people were told to stay home so they suddenly had time for new / existing projects. That's not all of it, though.

To say that Thousands of mill workers all of a sudden were impacted by Covid would be false. There is always greed mixed in there no matter what the situation.

I am frustrated as can be, I flat out refuse to buy the garbage that Lowe's and HD stock when prices are normal because I have to sort through 50 boards to find a few good 2x4's. Now I have to recycle old projects for new stuff, like I need to build a small table to hold a box fan and an ice bowl because I'm cutting down on AC use.

Now, flip the coin over and house prices are through the roof. The house I was a brand new Human in was built in the 50's and is "worth" $450K, rambler 3bd 2ba. It's absolutely beyond insane. The same basic build for a house built in 2006 - 2008 went for $230K with an acre in 2014.

If I sell, I will get the cash and be very happy, probably $40K over asking. If I build a shop this Summer, probably $100K over asking. Then what? Where do I go? Do I live in a Van down by the River?

Of course I could also wait until the market collapses to build the shop, but I can't build the shop then wait. I would have to sell right away.
 

Sparky617

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Home sales and home building are going full blast here in the SE USA (North Carolina). From what I'm seeing we're not alone. With people able to WFH they're looking for more space out in the 'burbs or further away figuring that they will be able to continue WFH for the future. My next door neighbor just sold his house, listed it for $575K, sold without the buyers walking inside the house the night it went on the market for $90K over asking with a substantial due diligence deposit. My wife is an agent, and asking price is just the starting point, and homes don't last on the market for more than a couple of days. Typically they are listed for the weekend and under contract with multiple offers on Monday if not sooner.
 

Flyover

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Supply vs. demand is always the problem, but lots of people are blaming Covid for that. It does have something to do with it, as *SOME* lumber mill workers had to take off time because they had Covid, and *A LOT* of people were told to stay home so they suddenly had time for new / existing projects. That's not all of it, though.

To say that Thousands of mill workers all of a sudden were impacted by Covid would be false. There is always greed mixed in there no matter what the situation.
Lumber isn't teleported from the forest to the rack at Home Depot, and Covid's impact wasn't restricted to people being sick in bed.

I'm not an expert on lumber supply chains but off the top of my head I'd guess that from tree to Home Depot, a given piece of wood changes hands five or six times, maybe more than that. Lumberjack --> company that transports felled trees to the mill --> milling --> company that stores/dries/treats milled lumber --> company that transports lumber to wholesalers --> company that ships the lumber from wholesalers to retailers --> retailers, and you can multiply this if the lumber crosses international boundaries which it often does.

Meanwhile, Covid doesn't just mean people sick in bed, it means restrictions on how many people can work in one place, how long a boat has to sit in harbor before it's unloaded, additional customs procedures, what kind of safety checks dockworkers and truck drivers and warehouse workers all have to go through each morning, etc. Long story short, it has a huge impact on throughput. It constricts the doorways everywhere.

That's on top of (or, underneath?) the supply/demand issues with housing stock and home improvement projects!
 

Spicoli43

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Ok, why doesn't it affect Fast "food" joints then? Your example is valid, just not in the perfect storm that we are in. It's too perfect.
 

Flyover

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@Spicoli43: A few possibilities come to mind:

1. Fast food is an amalgamation of lots of things coming together (lettuce from here, tomatoes from there, cheese from somewhere else, meat/soy paste or pink chicken goo with its own network of supply chains, etc.). So when one supply chain gets tied up the ops people can quickly switch to or put more pressure on another one. (Compare with treated pine 2x4 studs where you're pretty much just dealing with...treated pine 2x4 studs. There's less give in that kind of structure.)

2. Maybe fast food prices HAVE gone up, but in a way they can hide. Maybe McDonald's makes less profit on their burgers but makes more off their fries and soft drinks. Similar to #1, they can hide the rising costs by shifting where their profits go, because each menu item is comprised of a bunch of different things. Also, they can make their burgers slightly smaller (who's measuring?) or give slightly fewer fries. (This would be impossible for people selling an 8' 2x4 stud, because the customer is definitely measuring and in fact relies on the accuracy of the labeling.)

3. Unlike new homes/DIY projects, demand for fast food went down for a while as people had more time to cook, time to learn how to cook, or were scared to eat food strangers had been touching and breathing on. (Notice that meat prices at the grocery store went up a lot. I used to get bacon for $4/lb, now it's typically up above $7.)

There might be other ones too, that's just off the top of my head.
 

Spicoli43

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Yeah, good points, but around here the fast food industry has been booming. I think the last time I had FF was a Whopper several years ago, long before Covid, so I don't know about the prices, but do know I wouldn't go to those joints if I liked them based on my lack of patience and seeing their drive thru lines jam packed.

When I worked at Arby's in the early 90's, the original Roast Beef and Beef and Cheddar were supposed to be 3 oz. of "Beef" (No need to discuss what that actually looks like raw), but we were told to use 2.5 oz. That was managerial for that location though, as said manager cooked the books and embezzled. Fun stuff!

As far as lumber, all they have to do is say they have a supply issue. Who is going to go check that out with a long range scope? Nobody. They can get away with it as long as they follow the coordinated script. Like I said, there is some validity, just not to the degree they are running it. They overplayed everything related to Covid, but people aren't complaining that much if they own a house. Until the crash happens.
 

tomtheelder2020

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Re: Fast Food, supply chain employees were considered essential and continued working (resulting in high death rates) while lumber workers were not.
 

Flyover

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@Spicoli43: I have several in-laws who work in supply chain and logistics and they follow this stuff, there's a lot of shared industry knowledge. These are enormous, distributed industries; not exactly conducive to keeping big secrets.
 

Sparky617

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Regarding fast food, there is a supply chain problem/shortage right now with boneless/skinless chicken breasts and wings. Last year they had problems with no workers to handle work at the processing plants and birds being ready for slaughter/processing. The chicken we eat has been bred to grow pretty quickly something like 5 or 6 weeks from hatching to harvest and they get too big if they aren't harvested within a specific window.

Tariffs didn't help with lumber, and there have also been problems with beetle kills in the NW USA and western Canada where a lot of lumber comes from. The WSJ had a good article on lumber yesterday. I'll try to post it but it may be behind the paywall.

 

Spicoli43

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@Spicoli43: I have several in-laws who work in supply chain and logistics and they follow this stuff, there's a lot of shared industry knowledge. These are enormous, distributed industries; not exactly conducive to keeping big secrets.
That's why it's obvious. If every single State was the exact same in relation to the "pandemic", then there could be points made about the supply issue. The same would be true if Virginia was to Lumber like Idaho was to Potatoes. If 97 percent of lumber came from Virginia and they had a massive number of Covid cases, no real questions would be asked.

All the lumber at Lowe's here in Montana, or everything I have bought, is from Oregon. That's obviously different in Maine.

The prices of Wheat and Milk are kept artificially high, as the government pays farmers a form of welfare to NOT produce and flood the market. Why would you think the Lumber industry is different?

When does the Covid excuse wear off?
 

Flyover

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My understanding (which could be wrong) is most of our lumber comes from China.
 

Sparky617

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I think we're finding out the longer COVID drags on around the world how precarious the JIT (just in time) supply chain can be. I was riding my bike through a local mega car dealer (Chevy, GMC, Buick, Cadillac) lot last weekend. He had virtually no inventory. Where he would normally have 70-100 pickups he had a dozen, cars were in a similar situation. The other brands in the autopark were all in similar situation (Acura, Subaru, BMW, Porsche, Mercedes Benz) I read recently that Ford has a huge parking lot at a fair grounds or arena near one of their assembly plants full of nearly finished F-150 trucks waiting for chips to finish them so they can ship them. One $.50 part can stop the whole assembly line.

With the gas shortage in the SE last week we discover that tank farms don't sit on a lot of fuel these days what comes in today is shipped out today or tomorrow to your local stations because of the volatility of gasoline prices, they don't want to sit on inventory. So the hack hit and there wasn't much in the way of reserves. Similarly, lumber goes from the mill to the store pretty quickly. Not lumber, but I've bought drywall at Lowe's that was date stamped at the factory a week or two before I bought it. I imagine a drywall dealer would cycle through inventory even faster. Grocery stores don't have some massive storeroom in the back. Stuff comes in by truck and is on the shelves in a couple of hours. Home Depot, Lowe's, Costco, Sam's Club, etc the store IS the warehouse. They have a small receiving department but the inventory is stored above the merchandise that is ready for sale. It moves pretty quickly from the truck to the shelves.

The electrical department at my local Lowe's is pretty bare when it comes to electrical boxes. Old work boxes were non-existent. New work boxes were pretty limited in selection. Looking on line, the local Home Depot is in a bit better shape on boxes.
 

Sparky617

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My understanding (which could be wrong) is most of our lumber comes from China.
Not really, I got some primed 1x stock for a project a few months ago that came from Vietnam. Most of the framing lumber I've bought in NC is domestic or Canadian. We still have a number of mills in the SE USA and a fairly large supply of pine trees that continue to grow.
 

Flyover

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Yup, I was wrong but not way off. Most of our lumber comes from Canada, but China is the second biggest supplier.

 
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