Friends and Neighbors,
Lumber trading right now is extremely volatile with no end in sight per many of our supplier partners. The cause of the spike in the lumber prices is related to increased demand around the country and uncertainty related to the expired softwood lumber agreement.
With the market growth and the tariff looming, dealers like us are taking on inventory positions that are pushing out order files at the mill level for many months so that we can make sure to cover our customers in the peak season. The tariff is aimed at balancing the pricing between US and Canadian producers that will most likely result is a retroactive tax on the Canadian goods. This has caused the producers to collect the money upfront to protect themselves when, not if, it is imposed. The struggle right now is no one knows what the amount will be so most mills and suppliers are collecting at the worst-case rate.
Since the beginning of the year, our stores have seen our cedar prices grow by more than 40%. Since the beginning of February, we have seen our lumber commodity prices increase by 20-25% with some seeing 35%+. Because we cannot sell our inventory at current market pricing and still make the profits our business needs to survive, we are selling at our replacement cost. We expect treated lumber to follow the commodity markets up at about the same rates in the next few days.
One way we continue to look out for our customers is to look at our inventory position and the price increases to see if we can cover ourselves week to week without passing on the full weight of our cost increases. The down side to this is that we cannot honor our quoted prices beyond one week.
Thank you for your understanding, we are here to help in any way that we can. If you have any questions about the market or need some clarification about a specific segment, please shoot me an email or talk with your sales person. We will continue to watch the prices and adjust up and down as the market dictates along with keeping all of you posted with our weekly lumber commodity hot sheet updates. If you would like to be added to the email list for the Lumber Commodity Hot Sheets please email Josh Bergesen at firstname.lastname@example.org . You can always find the newest lumber commodity pricing on our Blog page, through Facebook and on our Twitter feed.
Thank you for placing your trust in us and we all look forward to serving you in 2017 and beyond.