In mid-March, 2020, Covid-19 struck with amazing swiftness and ferocity, shutting down many sections of our State and National economies.
Many of the harvesters, mills and wood treatment facilities, although deemed “essential”, chose to close due to their perceived anticipation of a significant drop in demand. Instead of the anticipated drop, just the opposite happened, and the demand grew.
Many people were furloughed and receiving extra State and Federal Unemployment funds. With time on their hands and money in their pockets, these furloughed workers now had time to work on those home improvement projects that had moved to the top of the “to do” list. This produced a run on stores like Home Depot and Lowes all over the country. These stores experienced decimated wood product inventories and since there was no one making more, the cost of the remaining inventories increased significantly. What resulted was a “perfect storm”. No new goods were being made and put into the supply chain, while all existing inventories were being depleted rapidly. This led us to where we are now. Very little inventory priced exorbitantly high. Classic supply and demand.
During this same period, there were several other events occurring which added additional strain to the lumber industry:
As far as where we go from here, our lumber industry representative, Kevin Goff, from National Building Products in East Hartford, CT says that all eyes are on the November election. His company is forecasting a continuation of unprecedented high prices and material shortages, through at least November. Based on the outcome of the election, and the availability and effectiveness of a Covid-19 vaccine, that may provide some normalcy to the market.