Lumber prices

[nativewolf]

Yep, I have been amazed at the discipline of the mills.  A few mothballed mills are coming back online but no big building plans that I have heard of.  They know it is a cycle and are probably don't think they can respond fast enough to get a mill built to capture any of it.

Southside's right too of course, the production capacity is just nuts.  Only mills and lumber yards are benefiting this cycle.  

[WDH]

In the South, new mills have been recently built and others de-bottlenecked.  Capacity is increasing down here. 

[Wudman]

So if pine mills are getting rich(and they are) why aren't people joining the party?  Certainly there are no impediments such as onerous permits, regulations, insurance edicts, and workman's compensation attorneys that make it so unattractive an endeavor that even greed is an insufficient motivator?

If you built a mill could you find anyone worth hiring to work in it or has it become beneath our dignity to actually produce something besides computer code?

Bingo.......If I had the guts, I would be there.  I ask myself everyday why I am selling $20 pine stumpage instead of buying $20 pine stumpage.  With my luck, the world would turn upside down when the saw went into the first log.  The lack of labor has kept me from pursuing a number of ventures.  I still have a few ideas floating in my head that I know would work, but it is hard to step away from a steady paycheck (with insurance and benefits) when you are the sole provider for the family. 
Wudman   

[Djs5017]

we've seen a lot of peaks in the last hundred years and they all have a commonality.  record highs come just before crashes so don't go spending dollars you can't chance. not being political, its just statistical.  when you get to the top rung of a ladder the odds of you going down are better than of going up, and the odds of going down fast are pretty good, especially if anything comes flying out of left field.


price rises right now are a correction from money printing.  the goods are repricing to correct for a new lower dollar value because the goods still have the same intrinsic value but the money doesn't so the goods are worth more of the lesser money.  money is just a place holder for hours of labor.


 do not be fooled into thinking this is inflation from economic growth, it is absolutely not.  there is rapid economic contraction hidden beneath the veneer of rising prices. when free money stops being mailed out and/or fed bond purchases is ended, it will all come crashing down.  that could be next month, next election or next decade but its coming and it will wipe out everyone who plays the hand wrong.

Bingo. While nominal prices of lumber may crash as well, lumber will still have intrinsic value. Purchasing a sawmill, for instance, is a diversification play into commodities. If the dollar is weakening, you don't want to own them. Converting them into a machine that can produce real goods and service in the future seems like a good bet. If for no other purpose than to provide yourself and your community with building materials in a post dollar world, it's a valuable machine to own.

[Djs5017]

I was reading a article in risk journal my work subscribes too.  

It says the Fed has inflation still below 2%, which is their target, but it just redefined the allowable inflation target to 2.5%.  However, they did not adjust their "basket of goods" that predicts inflation.  Many of us know, the price of goods has gone up more than 2% in the last year.

The same article also said with the price of lumber where it's currently at 12/2020, it adds 18-22K to the price of an average house from the same time in 2019.  Assuming a 200K house, just the lumber upcharge is adding 10% in overall cost.  Then factor all the other things that go into a house build and your looking at around a 20% increase in price in just one year.  

That's a lot more than the 2% they say is currently happening.

There is going to be some tough days ahead...no question about that.

theres a lot i wanna say but it all makes me sick.  


sound currency has no inflation target or need for bureaucratic meddling.  ours has simply become unsound.  you better not be a saver these next few years. its a silent destruction that people can feel but not always articulate or understand.  but everyone can see that $100 grocery cart shrinking in height, weight and quality.

Aside from lumber prices and general boredom, I think the currency decay and stimmies are the primary driver behind Woodmizer's 10 month back order on mills. I know, because I'm the guy who didn't want to stare at a cash account losing its buying power... and then said: "I have woods, I like sawdust, and an LT35 looks like a cool machine to own!"
Dustin

[Southside]

Finding help is a full time job in itself.  Had an employee tell me yesterday that they "need to work less" as there are "too many life things to do".  Constant govt money being passed out at every level is going to destroy the workforce as a whole.  

[Billbob]

So if pine mills are getting rich(and they are) why aren't people joining the party?  Certainly there are no impediments such as onerous permits, regulations, insurance edicts, and workman's compensation attorneys that make it so unattractive an endeavor that even greed is an insufficient motivator?

If you built a mill could you find anyone worth hiring to work in it or has it become beneath our dignity to actually produce something besides computer code?

"If you built a mill could you find anyone worth hiring to work in it or has it become beneath our dignity to actually produce something besides computer code?"

That. Right. There.

[Nodak Andy]

One thing that I haven't seen mentioned here in this thread that I believe plays a large role in our current lumber prices is interest rates....  Interest rates, until recently have been insanely low(and they still are low relatively speaking)...   One of my co-workers refinanced his house about 6 months ago.  His bank did it, with no closing costs, no appraisal, and a 2% interest rate on a 15 year fixed loan.....  

I recently read an article, and I forget where it was, that laid it all out and it made fairly good sense to me.  Some of the stuff they said I couldn't be sure of, as I don't live anywhere even remotely close to a big production mill, but it made sense.  The basic breakdown of the article stated this :  In the last 18 months or so, lumber prices have gone through the roof because of two things.  
1st-  covid shutdowns affected mills, construction companies and basically everyone else in the world....  with production from mills being down, this drove prices up due to lower supplies of lumber.  Looking back now, tarriffs most likely played a role in driving prices up as well.  

2nd-  Seeing the extreme rise in retail lumber prices, mills figured that housing starts would slow down because people wouldn't be willing to pay that extra 10-20k for lumber to build a house, so they slowed down production (this is the part I don't know how to verify because I don't live anywhere near a production mill).  What they didn't account for was that interest rates have been SO LOW.  People are looking at the plans for the new house, figuring in the extra cost of lumber and looking at interest rates and it doesn't bother them because with those low interest rates, their monthly payments will still be what they consider affordable.  

To be honest, I find that last paragraph to be very possible, mainly because of what I see with people around where I live and their boat payments( I use the boats example because my side business is associated with the fishing industry).... It seems that folks these days just don't care about the total purchase price of a boat.  As long as they can afford the monthly payments, they will buy a $120,000 Ranger boat to go catch walleye for 5 months of the year until the lakes freeze...  I've seen MANY people who have no business buying a $120k boat get one because the dealerships are willing to do 20 and 30 year loans on them, so that makes the monthly payment affordable....  It's really quite crazy.

I wish I could remember where I read that article as I'm sure I'm missing something, but it all made pretty good sense to me.  My wife and I are having a house built this summer, and we are having to deal with the lumber price jumps.  The crazy thing is, I think we are going to see lumber prices drop pretty soon.  Just in the last few months the interest rates on a 15 year loan have come up almost 1/4%... eventually it will get high enough that folks will not be comfortable with their estimated monthly payments including that extra 10-20k in lumber and things will slow down  and drive the price of lumber down...  

Sorry if I'm rambling...  this is just what it looks like to me and I could be completely wrong.  

[mike_belben]

In a capitalistic free market economy, interest is the necessary charge a lender must require to bear the risk of the borrower's default.   The higher the risk the higher the interest must be.  Any deviation from that simple rule will produce economic disaster in time.  More risk, more charge for me to take the risk.


When the federal reserve [guaranteed repayer] pushes local lending interest rates down by manipulating the overnight and interbank interest rates, they are causing the lenders of the entire nation to mis-price local lending risks. Shaky borrowers should be paying TEN percent or more to account for their high default rates.  Many borrowers should be paying loan shark rates because theyre just plain bums who manipulate the bankruptcy system over and over.  They only repay those they fear will physically hurt them.


Super low rates causes everyone.. Especially the shaky borrower, to borrow cheap money.  It causes the banks to be fully lent out to volatile borrowers and eventually it causes huge shakeups where many banks lose much money and govt is begged to step in ala 2008. Like ford/chevy/dodge begging for tarp funds etc.  Well stop selling zero percent interest cars dummies.



Its a setup designed to fail and bring about socialism.  Interest rates have been falsified continually by the fed since the greenspan put of oct 1987.  It is a component of an attack strategy on america.   Lenin said debauch the currency in 1919.  On the 100th anniversary covid did just that.  The continual crises, the drugs, the death by taxes and regs and codes, the political civil war, the everyone must be a manager culture, the televised decay and a hundred other demoralizing elements.  It all adds up. Its called encirclement.  Aka we are surrounded.  Brezhnev said "the situation is normalized."

Normalization is the 4th and final stage of subversion and thats why "new normal" is the buzz phrase it is now.. Because we all must be convinced to peacefully accept this is how its gonna stay.  I am only in better shape for this condition than others because ive been preparing a decade for it.   Its gotten awfully hard to prepare now.

[moodnacreek]

And we will hang our self's with our own rope.

[Magicman]

 

 
Here is a new home just being completed that was built entirely with framing lumber and timbers that I sawed in November.

There is another that the foundation slab has been poured and construction will begin soon.

[Walnut Beast]

Was it used green. No code ?

[mike_belben]

Thats a beautiful thing lynn.. You are definitely part of the solution. 


How did the builders get around the stamp/grade/code situation?

[Magicman]

The framing lumber was stickered and air dried.  There was no stamp/grade requirement.

Several years ago when the number of homes built with my sawn framing lumber reached 20, I quit keeping a count.

[Ed_K]

 Sorry Mudfarmer for not getting back to your question. The last quote I got was $240. for #1 sawlogs. I watch the price on the stock market down in N.Y. and yesterday a Thousand B.F. of spf went to $1139.40  . And the talkers on Blomburg are saying interest rates are going to go up soon.

[Mattjohndeere2]

The framing lumber was stickered and air dried.  There was no stamp/grade requirement.

Several years ago when the number of homes built with my sawn framing lumber reached 20, I quit keeping a count.

Magician, working on a similar project with my own house up here in upstate ny. Trying not to buy anything since the dang price is so high. One of the hemlock logs I sawed I found powderpost beetles. They've been emerging this week and I'm finding them on other peices of wood. I have timbor on the way, other than that and kiln sterilizing, have you had to deal with beetles in any of your ventures?

[Magicman]

I generally never see the lumber that I saw after I leave the site.  I can only give some generalized recommendations regarding proper lumber care.

[BandsawBen]

I cut out a house this winter for a family member. He helped sticking and stacking as it came off the mill. It was mostly hemlock and some pine for board and battens. The logs were free to him, his father cut them with a clark cable skidder. His quote from the local lumber company was around 20k for the framing materials. (Probably way more now) My bill to him was 2300. He was pretty happy with that price. He is still a little nervous about the price of everything else but,

 is gonna press on. Hes 26 and this is gonna be his 1st house. Picture is some of his nice hemlock logs in queue. Local building code currently allows for unstamped rough cut lumber. Iam sure with as many mills around now that will probably change soon.

[Don P]

Just some more grading and code stuff. To my knowledge no building code excludes rough sawn lumber, planing is not a requirement. Grading rules do stipulate the amount of skip, tearout, etc on lumber that is planed but again do not require planing. Bear in mind that if you go to full dimension you probably need to look at your fasteners and go up in size to get proper penetration.

It is a good idea to borate lumber even if it is kiln dried, it is just another layer of protection and cheap protection at that.