Lumber Prices vs Softwood Prices.

[Kim_Ked]

Lumber Prices vs Softwood Prices.

I'm a bit baffled. I'm no economist. I have no clue how things function in regards to the prices we see today. I'm just curious though who's making the money? I'm getting less today for roadside stud wood than I was in 2018. 66$ per ton actually today. It just went down 3$ in recent days. I can sell it no problem, guys are crying for the saw logs too, but none of the mills are paying decent money, yet when you go to buy the finished product at the local lumber yard its not even close / ton on the studs. 
Just think how many studs are on your truck at the cash register for that same 66$. If I put 66$ worth of stud wood on your pick up, it would not do your truck any good. Well, most trucks.
I know processing costs, but that hasn't changed, is it all taxes that is getting the lumber price so high?  Or are the big retailers simply price gouging with the given opportunity? The supply is there, that is not a problem as far as I can tell in my little neck of the woods anyway, folks are still cutting. Fuel is down so transportation should be cheaper... What gives? 

Couple that with the fact that my softwood and hardwood pulp is piling up now for almost a year with no potential buyers in N.S...... That will soon be a big, big, big bonfire! I'm thinking of inviting Stephen McNeil (N.S.'s Honorable PM of course) to roast, hmm, er I mean roast a marshmallow while we watch it all burn! I should have no less than 60 cord piled up by then! I'm thinking a clear night in February.

[chep]

Where are you located? I am in Vermont. Same deal

[ehp]

its the same here, lumber yard is charging huge money for boards but we donot see it , I just did a small hemlock cut and got same money as 1985 for it , bought a brandnew clark 666 skidder for $86,000 that year , How many new skidders can you buy now for that same amount of cash . Not even 1/4 of a new skidder . 

[moodnacreek]

I think it is amazing what has happened. I pay the same for logs or less and raise my lumber prices . 
this won't last. This spring I had to saw my sell pile. These are the bigger better hard wood logs I have to buy in order to get the logs I need. I never got them all done as spring orders came in.  This is how I knew not to pay to much for more. I have learned the hard way to raise prices when others do. If you keep your price low it will catch up to you and your customers get used to it. Then when you finely raise your customers freak out.  I would not want to be a logger in these times.

[Kim_Ked]

I'm in Nova Scotia. Up there in Canada eh!
Our only buyer for pulp wood got closed down as well. On our price sheets it says "Off market due to government shut down" We have no plans in place to replace this, lots empty promises and subsidies got handed out to the big players but nothing for the little guys. Just a better luck next time fellows! I'm still cutting as I have some decent old growth stands that are overdue, but with that comes tons of worthless pulp.  I have even stopped hauling it out of the woods.  I just junk it up in short pieces and use it as road material now. Some of it is huge, just not #1 building material grade so its waste. Its so sad to see it going to waste in an a world where all they do is preach and preach about sustainability and resource-fullness. There is nothing resource-full about whats happening in this province.  Its more criminal than anything!
Its like a double hit, not selling pulp, then #1 spruce prices crash. 

[mike_belben]

What makes the pulp not have any firewood value? 

[Ed_K]

 Until ALL the loggers stop selling to the lumber mills its not going to change .

[mike_belben]

Its the same with trucking.. Everyone jumps in when rates are high.  Soon as the volume slows the bid down war begins until enough go under to find equilibrium.  Its very easy to tell another guy to park it and not pay his notes, a lot harder to do it yourself.  


All a consequence of cheap lending.  


Artificially low interest rates ARE EVIL.  They entice too many people to jump in and spend a lifetime of future income on a bet that they can pay it back with interest and excess in 1/10th of a lifetime.  Then everyone has a brand new truck or skidsteer or mini ex or knuckle boom.  At a slowdown, they bid the price of good jobs down into bad ones when markets swing. 

  Cheap debt is like a worm on a hook. It looks tasty until you bite. Then he who holds the reel decides what youll do with your day. 

[mudfarmer]

Trying to get all the loggers to stop selling to mills and/or all the land owners to stop selling to the loggers and mills sounds as difficult/impossible as anything else that involves getting people to work together for their common good


On the public side of things, there have been 5 state timber sales in my region since July. Two very small jobs <20acres had no bids received before closing, next one was a big operation paying very close to 3x minimum bid and the other two the bidding has not closed yet but based on volumes they will also get hoovered up by same large operation that can afford to pay 3x minimum+. One of the small jobs I looked at and chainsaw+skidder man would be hard pressed to net $2500-3k after trucking assuming nothing broke down and they managed to get it for absolute minimum bid. If you have a skidder payment

The big operation is their own market for the low grade wood and I suspect this is their secret sauce. No such luck for most others bidding a job that is 200MBF pine saw timber and 1200 cord of pulp. We barely even have a pulp market anymore.

The trend is still the big getting bigger and the small getting pushed out. If the big mills keep the price of logs down but drive the price of lumber up it sure pencils out better for them when they are buying standing timber to cut. They don't need Jimmy Handcutter anymore and if they do he can beg for a job or to be a contract cutter for them, right?

These are the places that can and DO get million$ in government grants. Sometimes they have to put down a few mil of their own but after that it is free money from the taxpayers to buy new equipment and hire more guys to keep the cash moving. They were going to spend that money of their own anyway.


Sorry for the rant

[Magicman]

Trying to get all the loggers to stop selling to mills and/or all the land owners to stop selling to the loggers and mills sounds as difficult/impossible as anything else that involves getting people to work together for their common good

Except that it would be against the law:  Collusion occurs when entities or individuals work together to influence a market or pricing for their own advantage. Acts of collusion include price fixing, synchronized advertising, and sharing insider information. Antitrust and whistleblower laws help to deter collusion.

[mike_belben]

They dont call it collusion when canada changes inputs and outputs to control the maple syrup price or opec does similar to control the crude price.  


I dont think it falls under collusion.  Unions and trade associations are always publically trying to do the same thing.  

[bluthum]

Look at stock prices of the biggies like Weyerhauser. They are the ones raking it in more than the lumber yards. Covid 19 for workers gets a small part of the blame but the rest is blamed on supply and demand. More people at home are doing home owner stuff and many parts of the country have building booms. Go figure that.

Around here a house allegedly costs about 30% more than in spring due to material price increases. I can't vouch for that but I know I paid $20 per for spruce 2x6 x12 last week, a year ago it would have been more like $7.20 per. Osb and ply wood are up about 2.5 x over a year ago.

 Last month I bought cabinet plywood and hardwood lumber for same price as a year ago except some specialty plywood was not to be had. I haven't priced it lately but paid $47 for 3/4" prefinished imported birch. Same time domestic 7/16" syp CD plywood is $33!  Crazy times, these....

[quilbilly]

My brother works for a lumber yard, they price anywhere from 15-30% profit. Sure their price went up immediately so some of the stuff in the yard was sold for more than that, but that's the mark up for nearly all their stuff. They are just making more bc it's flying off the shelves. I am of the opinion that it's the mills making the big bucks right now. I know what I sell it for and what my brother's company buys it for. That's where the most difference is.

[Southside]

It is funny that I don't recall anyone complaining about the mills when they were selling SPF for $325 MBF and paying $275 for the logs.  I had a customer one time complain about my price, claimed I was basically burying buckets of gold in the back yard with the profit margin I must have, then got into how I would answer one day for my Earthly deeds - it was at that point that I told him there was nothing preventing him from going out and buying a mill, a kiln, handling equipment, planers, moulders, buildings, land to put it all on, hiring help, insurance, paying taxes, consumables, etc, just so he could show me "the fair way" of doing things.

A big part of the problem, and nobody wants to talk about it, is the fact there is just too much logging capacity out there, so the mills don't have to pay more - guys keep showing up with more logs.  When a 4 piece of equipment crew with 4 men running it can put out between 10 and 25 loads a day - logs, pulp, chips, there is a serious oversupply issue.  Add to that the $2 million note that same crew has to cover and they will run faster and faster every day putting out more tonnage.  What mill would ever pay more?  

[barbender]

That's what it comes down to, Southside. Oversupply on the raw log end. Our local Potlatch has been running at full capacity since before Covid hit. Some years they struggle to keep enough wood in the yard through spring break up to keep the mill running, this year they've had all the logs they can push through the mill and the yard is still full. Why would they raise the price in that situation? They're trying to get suppliers to back off a bit, guys should be happy they don't drop the price🤷🏽‍♂️ It is tough, what usually happens is we get to these periods of over capacity, then instead of losing a few, a bunch of operations go belly up. Then the markets improve, the mills are short of wood, you know what happens next. It's a vicious cycle.

[Kim_Ked]

Its the same with trucking.. Everyone jumps in when rates are high.  Soon as the volume slows the bid down war begins until enough go under to find equilibrium.  Its very easy to tell another guy to park it and not pay his notes, a lot harder to do it yourself.  


All a consequence of cheap lending.  


Artificially low interest rates ARE EVIL.  They entice too many people to jump in and spend a lifetime of future income on a bet that they can pay it back with interest and excess in 1/10th of a lifetime.  Then everyone has a brand new truck or skidsteer or mini ex or knuckle boom.  At a slowdown, they bid the price of good jobs down into bad ones when markets swing.

  Cheap debt is like a worm on a hook. It looks tasty until you bite. Then he who holds the reel decides what youll do with your day.

Its hard to fathom living in debt. 
Iv always been pretty good with managing the flow $$, It think, compared to some. The only thing I owe in this world now is a bit for my excavator. Although Iv spent a small fortune to make it new again, its not standing me a lot and for the most part its paying for itself and my Dad as an operator... But that is it!  I would never go all in on a big debt for machinery without contracts and work already in place. Me and my Dad have always cut wood, always. With saws though. When this machine came up I couldn't resist as we wanted the harvester as well as the excavator. It does very well at both jobs and takes about 20 mins to switch over. I'm thinking I should try to hire it out next season as a digger or road builder, save my stud wood for now. I cant count how many folks see it in the yard and come to ask if its for hire. 
Its just sad as I really love logging. Id rather be in that machine any day than sitting at a desk, however, sitting at a desk pays a bit better right now. Hard on the body though...


Somebody asked about why there is no value in pulpwood as fire wood. I have softwood pulp. Its spruce/fir that isn't #1, or under 4". There is no market, its garbage. There is a small market here for Biofuel using this material but at less than what its worth to even haul out of the woods per ton, it might as well lay there. I have a ton of popple trees, massive ones in big stands that I try to cut around if possible. I'm allowed to put 10% popple in if I'm selling hardwood for firewood and want to include it. Otherwise, there is no market.
I can sell hardwood for firewood all day every day, good market for this right now. (birch, maple, ash)

[ellmoe]

  I appears the $ on lumber will begin dropping. My wholesale buyer just told that that some mills are discounting squares ( 6 x 6 , etc.) 30% off list and that most 2 x is dropping also . Once the price starts falling I believe it will come down faster than when it went up.

[nativewolf]

It is funny that I don't recall anyone complaining about the mills when they were selling SPF for $325 MBF and paying $275 for the logs.  I had a customer one time complain about my price, claimed I was basically burying buckets of gold in the back yard with the profit margin I must have, then got into how I would answer one day for my Earthly deeds - it was at that point that I told him there was nothing preventing him from going out and buying a mill, a kiln, handling equipment, planers, moulders, buildings, land to put it all on, hiring help, insurance, paying taxes, consumables, etc, just so he could show me "the fair way" of doing things.

A big part of the problem, and nobody wants to talk about it, is the fact there is just too much logging capacity out there, so the mills don't have to pay more - guys keep showing up with more logs.  When a 4 piece of equipment crew with 4 men running it can put out between 10 and 25 loads a day - logs, pulp, chips, there is a serious oversupply issue.  Add to that the $2 million note that same crew has to cover and they will run faster and faster every day putting out more tonnage.  What mill would ever pay more?  

Yep, this is it in a nutshell.  And to boot the mills are more efficient, able to squeeze 2x material out of logs formally used as chips. All over there were manufacturing efficiencies, as a result the mills have an edge and then they turn around and use that edge to dump chips into the pulp mill stream.  It costs a pulp mill $5-8/ton to buy and process logs, so a mill can sell chips to the pulp mills even when the logger is cut off.  
I would guess we are somewhat 30-50% over capacity.  
Mike has an interesting point on low interest rates. If base rates were 10% loggers could not buy equipment as most would be paying 25% or more and that would be a killer, there would be no 0% interest, 0 down equipment loan.  
Still the real issue is too many loggers.  We could form an association, like doctors and lawyers, and force states to allow us to control certification.  Then control certification to limit #s.  Not a fan of this approach.  It is possible though.  

[snowstorm]

local log yard that buys for mills in quebec. sp fir studwood 5" top $ 50 a ton. 6" top 65. a few yrs back it was a higher price at a 4" top. he says one mill he deals with has 80 million ft in the yard. they saw 1 nill a day. they want to saw what they have and paid more for while they can get the big money for the lumber. thats why the price drop or so he says

[Kim_Ked]

It is funny that I don't recall anyone complaining about the mills when they were selling SPF for $325 MBF and paying $275 for the logs.  I had a customer one time complain about my price, claimed I was basically burying buckets of gold in the back yard with the profit margin I must have, then got into how I would answer one day for my Earthly deeds - it was at that point that I told him there was nothing preventing him from going out and buying a mill, a kiln, handling equipment, planers, moulders, buildings, land to put it all on, hiring help, insurance, paying taxes, consumables, etc, just so he could show me "the fair way" of doing things.

A big part of the problem, and nobody wants to talk about it, is the fact there is just too much logging capacity out there, so the mills don't have to pay more - guys keep showing up with more logs.  When a 4 piece of equipment crew with 4 men running it can put out between 10 and 25 loads a day - logs, pulp, chips, there is a serious oversupply issue.  Add to that the $2 million note that same crew has to cover and they will run faster and faster every day putting out more tonnage.  What mill would ever pay more?  

Yep, this is it in a nutshell.  And to boot the mills are more efficient, able to squeeze 2x material out of logs formally used as chips. All over there were manufacturing efficiencies, as a result the mills have an edge and then they turn around and use that edge to dump chips into the pulp mill stream.  It costs a pulp mill $5-8/ton to buy and process logs, so a mill can sell chips to the pulp mills even when the logger is cut off.  
I would guess we are somewhat 30-50% over capacity.  
Mike has an interesting point on low interest rates. If base rates were 10% loggers could not buy equipment as most would be paying 25% or more and that would be a killer, there would be no 0% interest, 0 down equipment loan.  
Still the real issue is too many loggers.  We could form an association, like doctors and lawyers, and force states to allow us to control certification.  Then control certification to limit #s.  Not a fan of this approach.  It is possible though.  

Defiantly am not a fan of the certification approach. Then you have a all the big guys with money to burn and crews that clear cut entire forests getting certifications by default because they are "important to our economy".  They will buy their way in and leave us little guys, that have made this a lifestyle over generations, out in the cold because it will likely be too expensive. Just look at fishing. Only so many licenses, yes to preserve stocks, but it leaves a lot of lifetime fisherman with no quota because only a select few licenses get it all! You got the money, you get the quota!
Then you'll have, if lucky enough to get certified, inspectors who enforce certifications poking around, charging for their own nuisance of an existence. Looking at your machines, looking at your land, taxing and charging for every little thing. I already deal with this horse [I have typed a profane word that is automatically changed by the forum censored words program I should know better] from our municipal offices, stopping in as they drive by to see what construction work or commercial machine violations they can hang a fellow out for. Is that a deck board your replacing there? got a permit for that? Are you working on commercial equipment in your yard? Got a zoning permit for that? What are you doing to your drive way? Filling holes with dirt, you got a permit for that? Oh really, you have a chicken coop with 3 hens... You got permits for this stuff bud? It never ends man.
Really.... Its getting out of hand already. A fellow should simply be able to get fair pay for the fruits of his labors and simply buy the finished product at a fair market value without the flaming hoops or 300% increase on goods at the point of retail. I cant even sell garden produce from my own *DanG yard as it violates so many laws and bylaws at a time when there is a food shortage. Providing fresh produce to the market should be encouraged!  The world needs to relax and allow folks to just make their way with what the earth has provided like we've been doing for the history of man. the governments and their permits, fees and taxes!
Sorry, on a bit of a rant there!