'Wood' You Believe It?
Building Supply Issues Hit County
September 23, 2020
“It’s been one of those weird years.” While that sentence could apply to most anything in 2020, Mike Slaats of All Seasons Home Center is referring specifically to the lumber and building supplies shortage which has reached all parts of the country, including Valley County.
Much like the supply and demand issues that drastically impacted the food supply chain earlier this year, the building supply industry has also been hit hard by the coronavirus pandemic. With states across the nation issuing stay-at-home directives, many people found themselves with little excuse to continue putting off home improvement projects. Now, however, homeowners and contractors are finding that delays in projects lay well outside their control.
Slaats explained that suppliers don’t have much in stock at this time, and the prices are affecting distributors and store owners. Suppliers saw their stock fly off the shelves in the first half of this year as people found themselves with canceled plans and forced time at home. Do-it-yourself home improvement projects took off so much so that Home Depot reported its second-quarter sales were up 23 percent and Lowes revenue increased 39 percent in the same time period.
At the same time demand was surging, many lumber companies were shut down for COVID-19 safety precautions and with an expectation that demand would dry up. Quite the opposite happened. Imports from China were derailed and tariffs from the trade dispute with Canada impacted the lumber market. “Demand is up and supply can’t keep up,” explained Slaats. “The U.S. gets a lot of lumber and OSB from Canada and with the trade tariffs, that makes a difference. But even now, I don’t think they can keep up with the demand.”
OSB (oriented strand board) is “really hard to get” and has “at least doubled in price” over the last month or so, according to Slaats. And that’s if you can find it.
“It’s the same way with dimensional lumber,” he added. “2X4s, 2X6s, 2X8s, 2X10s, 2X12s. None of our distributors are bringing much in because prices are up.” Those distributors are not keeping much product on hand because they are waiting for prices to come back down. Lumber yards across the U.S. are reporting dramatic price increases.
Reporting out of Pennsylvania said the cost of all untreated framing lumber had gone up 50 percent in the past five to six months, as had the cost of treated lumber. The Poynter Institute reported that sheets of plywood had gone from $15 to $34 in just the last two weeks. The same article said the price of maple wood had gone to $65, up from $35. Poynter also stated the price of lumber overall has risen roughly 80 percent since mid-April. One report on local lumber prices in Wisconsin estimated that the surge in lumber prices could add an additional $30 thousand to any home build.
Lumber yards and suppliers are buying as they need, and can, right now, and prices are rising in accordance with the market. Slaats gave a rough estimate that prices on some of his lumber have gone up 25 to 30 percent recently. In addition, lead time has grown substantially on lumber and other supplies. He notes that while his primary cabinet company is still operating as close to normal as can be expected, another company’s lead time has increased from four to six weeks up to 12 to 14 weeks out.
Patience is the advice Slaats would impart on anyone planning to take on a home improvement or building project. He related an anecdotal story about an individual who had to travel to Dickinson, N.D. for fence boards. Other parts from the fence were brought in by relatives who managed to find the supplies in their area. “You’re going to have to hunt for [building supplies], you’re going to have to travel for it,” he cautioned anyone who wants to move immediately on a project.
“And I would say, if you’re looking at a project this fall, we can give you a quote price now,” Slaats added, “but that is based on today’s price and that may change in a matter of days.” He explained that he is not expecting pricing to go back down until next year. In addition to the fall building rush, usually planned to take place before winter truly hits, contractors and builders might be expecting another rush in demand as businesses look to spend grant money doled out from the CARES act. Businesses such as Treasure Trail Meat Processing in Glasgow are facing an end-of-the-year deadline for spending their money, putting further pressure on the supply chain.
Those in the building industry, like Slaats, do expect the market to settle down but caution that the recovery will take time. Big box stores like Menards, Home Depot and Lowes are limiting purchases by individual customers now, according to Slaats.
“Long-term planning, that is key,” he said. “If you want to build, you might pay more for it now, you know, a little higher price. So if you can wait on a project, you might want to think about it.”