Why Are Lumber Prices Rising Again?

On today’s show we’re talking about another spike in lumber prices that will affect housing starts and renovations all over North America.

Anyone who has built anything in the past year has suffered the sticker shock of high lumber prices. Prices back in May of 2021 peaked at over $1,700 per thousand board foot. That measurement is the commodity price for softwood lumber on the futures exchange.

Much of that price increase was driven by the pandemic and the labour shortages caused by the pandemic. Sawmill capacity was reduced during the pandemic which contributed to the shortage in the Spring of 2021. Capacity utilization of the sawmills peaked at 90% in the US in May of this year and at 88% in Canada. As demand and prices dropped in the summer, sawmill utilization fell to 80% in the US and 70% in Canada as builders used up their inventories of materials.

About 30% of the softwood lumber used in US construction comes from Canada. Almost half of that amount or 14% of the US total supply comes from British Columbia.

The month of November saw torrential rains in the interior of British Columbia. These storms exceeded previous rainfall records and created severe local flooding. That flooding washed out roads and disrupted transportation across the entire province of British Columbia.

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Host: Victor Menasce

email: podcast@victorjm.com