Wildfires and a trade dispute with Canada are creating a US lumber shortage

Higher prices are passed on to builders and eventually homeowners

Los Angeles /
Mar.March 01, 2018 10:00 AM
(Credit: Wikimedia Commons)

A perfect storm of politics, logistics, and natural disasters has created a shortage of lumber that’s become a bona fide “crisis,” for suppliers, industry experts say.

Suppliers are having a hard time getting material to builders, and wood that does make it to construction sites comes at a premium, according to a report in the Wall Street Journal. That is making home building more expensive, and could affect what builders anticipate will be one of the busiest years for home construction in recent memory.

One Colorado-based builder told the Journal he’s spending $8,500 more on a typical home than he did a year ago.

Initially, what set prices rising were a series of wildfires last year in Canada’s forests big enough to be seen from space and a U.S.-Canada trade dispute. That disagreement had U.S. suppliers hesitant to resupply at higher prices.

Trade disputes between the U.S. and Canada date back to the 1980s, but periodic agreements have temporarily settled them. They flared up again when the Trump administration set a 20 percent tariff on Canadian lumber imports last year, after negotiations for another agreement fell apart, the Washington Post reported.

Bad weather up north late last year and a shortage of train cars and trucks to transport the lumber have compounded the situation, experts say. Rates for flatbed trucks rose 24 percent in January compared to a year earlier, the Journal reported.

“We’re in a lumber supply crisis,” Kansas City, Missouri-based lumber broker Stinson Dean said in an analyst note to investors. “None of us have experienced a market like this.” [WSJ] – Dennis Lynch


Related Articles

arrow_forward_ios
Plant Prefab CEO Steve Glenn (Plant Prefab)
Homebuilder Plant Prefab nabs Series B funding, eyes 3rd factory
Homebuilder Plant Prefab nabs Series B funding, eyes 3rd factory
California added more than 100,000 jobs for the fourth month in a row, bringing employment up to 16.35 million jobs. (iStock)
California’s hospitality industry adds jobs in May, but construction lost more than any other sector
California’s hospitality industry adds jobs in May, but construction lost more than any other sector
Rendering's of Byron Allen's future mansion. (Getty, Landry Design Group)
Media mogul Byron Allen is building a Beverly Hills megamansion
Media mogul Byron Allen is building a Beverly Hills megamansion
Relevant Group’s Grant King and Richard Heyman with the Thompson and Tommie hotels (Relevant Group)
Relevant Group lands “rescue” financing for 2 boutique hotel projects
Relevant Group lands “rescue” financing for 2 boutique hotel projects
Palari Group CEO Basil Starr and Mighty Buildings CEO Slava Solonitsyn with renderings of the project (Palari)
Developers tout 3D-printed houses in Coachella Valley as “zero net energy”
Developers tout 3D-printed houses in Coachella Valley as “zero net energy”
(iStock)
California contractors still report Covid-related disruptions
California contractors still report Covid-related disruptions
Construction on the Hotel Tower at The Grand in downtown Los Angeles (Mel Melcon/LAT/Getty)
Developers proposing fewer projects during pandemic
Developers proposing fewer projects during pandemic
Justin Myers, Vice President of Atlas Hospitality
Study: California hotel construction outlook is bleak
Study: California hotel construction outlook is bleak
arrow_forward_ios

The Deal's newsletters give you the latest scoops, fresh headlines, marketing data, and things to know within the industry.

Loading...