10 May May Market Report: Wood Products Prices And Shortages
You know the world is upside down when you see memes about wood products prices and shortages all over Facebook. What was once considered a widely available commodity is now experiencing a nation-wide shortage. Sorry to pass on the bad news to consumers, but price increases show no signs of abating in the short-term. The Random Lengths Lumber Composite price rose 5% last week, representing a 332% increase year over year, to a record high of $1395. OSB prices rose 1.7% in the North Central Region to a record high of $1190/msf, a 367% increase year over year. Plywood is now being used as an OSB substitute as OSB trades at higher levels than plywood in the marketplace. Traditionally plywood is considered a higher value product commanding price premiums to OSB for industrial usage.
It is important to note that OSB is not a local product; rather, it is imported from Canada or the South Eastern United States. Locally produced Douglas Fir plywood has seen greater and more consistent demand from the North Eastern U.S. as they realize the superior product qualities of traditionally manufactured plywood products. It is a breath of fresh air to see people considering locally manufactured products again.
As a general reminder, we are not a lumber producer. The name Freres Lumber Co. is a homage to our history as a lumber producer prior to the 1960’s and a recognition of the titans of industry who brought us to where we are now. We produce a small amount of lumber, in relation to our overall production, as remanufactured core products produced through our lathes. This is not dimensional lumber. Do not call us for lumber requests! We are an engineered wood products producer, producing density graded veneers for the West Coast market, commodity sheathing products for U.S. residential home and industrial consumption, and engineered Mass Timber products for large-scale wood construction. We cannot sell plywood products directly to consumers or to larger-scale contractors because we have standing commitments to consistent distribution yards we have developed over the decades.
The shortage is real and persistent. How do we get beyond panel price increases and supply shortages? We are just one company among a much larger global marketplace. Our single largest obstacle is employment. Our current commitment to increasing employment includes a new 10% across the board wage and salary increase for all employees, more than half of which reside locally — this equates to a $2.5 million increase in wages annually. We are not only trying to provide attractive wages, but lead wage rates for local employers.
Please apply locally and work locally. We are also investing heavily into advanced robotics to make positions less arduous and repetitive. We currently have nine robots in production today but have another four robots on-order for implementation throughout our facilities. These are not your grandfather’s style wood products mills, rather cutting-edge facilities for auto-mated panel construction. The transition is long, but we are committed to being the future of engineered wood products construction.
We are currently at 60% of our historical production levels. We would like to have a stable enough workforce that will allow us to run overtime production as well as add shifts throughout our facilities. We still have a referral bonus in place. Please send people our way!