About a month ago, we received an email from a supplier commenting on the strengthening US dollar and it’s affects on the increasing cost of lumber. This is an upward trend that is a double-edged sword for Canada; a country reliant on exports and a robust trading partner with the US.
“The Hardwood Review Weekly has had two recent articles that offer an explanation as to why lumber has been in tight supply and prices have been on an increase. Here is a condensed version covering their basic content:
“Overproduction No Longer Inevitable – Several Reasons Why Supply Won’t Overtake Demand Anytime Soon” by Andy Johnson, Editor
Source: Hardwood Review Weekly, November 29, 2013 (Vol. 30, Issue 11)
Source: Hardwood Review Weekly, December 6, 2013 (Vol. 30, Issue 12)
Supply Side Constraints to Increasing Production:
- Fewer sawmills (many grade and tie mills have closed and were dismantled)
- Limited capital availability (credit requirements have tightened considerably for hardwood companies)
- Labour shortage (pool of qualified loggers, sawyers, graders and machine operators is quite low)
- Highly competitive timber/log markets (rapidly rising lumber prices have mills eager to buy as much raw material as they can afford)
We had the privilege of having some photos sent to us from the Solomon Islands of some locals harvesting a Narra tree. These guys sure are good at what they do, as the photos prove!