05 May 2017
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Why is CNN talking about Lumber?

LUMBER MARKET UPDATE

Over the last couple of months we have been discussing pricing increases related to the US-Canadian Softwood Lumber Agreement.  Important information for us industry folks but not something one might consider front page news. So you can imagine my surprise when the omnipresent public-space-muted-television set had the PIP scrolling “Trump levies 20% tariffs on Canada…”

May Lumber Market Report

While the thrill of making a news cycle did have me commenting to my lunch guest “hey look we’re on Bloomberg.”  Truthfully I knew this was old news and the lumber market had already factored retroactive increases in.  

The take-aways are simple: 1) lumber only makes up roughly 7% of the cost of an average American home, and the price increases have only directly affected Studs, SPF and Cedar imported from Canada (and indirectly affected Southern Pine and OSB from the US), so it doesn't mean the cost of a home is going up 20%, 2) the impacts of the tariffs have already been accounted for in the market (See Chart Below) but that is not to say that there will not be some “aftershocks” as the markets stabilize.

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