Lumber prices soared to a record price in September across North America. Along with increased demand, Canada also reported a lumber shortage. Black Press file photo

Lumber prices soared to a record price in September across North America. Along with increased demand, Canada also reported a lumber shortage. Black Press file photo

Lumber hitting record-high prices as supply lags behind demand

B.C.’s forest industry hasn’t been able to keep pace with the COVID-19 building boom

A record demand and reduced supplies have pushed the price of 2x4s to historic highs but the B.C. forest industry is only just beginning to fully take advantage.

The industry has been plagued by an acute lumber shortage, which has been a long time in the making.

Lumber prices across North America have nearly tripled since 2019. Based on a weekly price report by the B.C. Ministry of Forests, Lands and Natural Resources, the price of SPF (spruce, pine, fir) 2×4 lumber – as of Sept. 18 – is at $1,288 per thousand board feet, up from a 2019 average annual of $499.

Skyrocketing prices during the past four or five months have upped the cost of building an average single-family home by $10,000 to $20,000, said Brett Giese, president and owner of Crowne Pacific Development Corp. and Veyron Properties Ltd.

“We were first faced with the challenges of price increases and now, despite record high prices the situation has been compounded by a shortage of supply,” said Giese.

Calling the dilemma a “once-in-a-lifetime phenomena” Joel Neuheimer, vice-president of international trade at Forest Products Association of Canada (FPAC) said the high price is because of increased demand after the onset of COVID-19.

Home renovation and remodelling projects that people began during lockdown coincided with construction projects that typically begin in spring. This led to increased demand for lumber across North America, including the United States, where B.C. exports 65 per cent of its lumber.

But the industry was not in a position to take advantage. Baggage from previous years – mill closures and curtailments, wildfires, pine beetle infestations, complex stumpage systems and regulatory policies, and a lengthy strike – had limited B.C.’s fibre supply.

There’s also uncertainty about consistent access to fibre which creates a cost burden for the industry, said Susan Yurkovich, president and CEO of the B.C. Council of Forest Industries (COFI).

“We had a 70 million cubic meter annual allowable cut in the Interior in 2007, that’s about 50 now and expected to go down, just under 40 by 2030,” she said.

There was a lot of downtime through 2019 and 2020 as prices dropped and a lot of lumber was coming off the market as mills were shutting down due to high cost structures, said Yurkovich,

It took a while for production to catch up with the demand, resulting in a lumber shortage between June and August. The shortage fed a 15 per cent drop in B.C.’s lumber export value, costing the industry more than $1 billion. Forest ministry statistics from July 2020 showed B.C.’s export value decreased year-to-date in July 2020 ($6.1 billion) compared to July 2019 ($7.5 billion).

The supply chain was further disrupted when production halted as mills in B.C.were shut for two to three weeks after the onset of the pandemic, creating a backlog on lumber orders.

RELATED: B.C. forest industry facing uncertain future as mills close across province

RELATED: Fewer trees, higher costs blamed for devastating downturn in B.C. forestry

The price of fibre in B.C. is extremely high relative to the rest of the Canada making it a high-cost jurisdiction that typically thrives under market conditions when lumber is expensive.

So, despite the lumber shortage, B.C.’s sawmills welcome the price hike as it helps them sustain their overhead. The real problem is when the lumber price goes low, said Yurkovich.

Come winter, lumber prices might go down, said Neuheimer, adding that construction typically slows then and picks up again during spring.

Yurkovich expects the fundamentals of supply and demand to remain fairly good for a while.

“So we might see a high price environment for a while but it is a commodity, so prices go up and down,” she said.

For more news from Vancouver Island and beyond delivered daily into your inbox, please click here.

forestrysoftwood lumber

Just Posted

The District of Kitimat will be awarding business owners with a store front up to $5,000 to cover up to 50 per cent of exterior renovations. (Norhtern Development logo)
The District of Kitimat is awarding $5,000 to storefront owners for exterior renovations

The district has set aside $20,000 this year and non-profits are also eligible

Ron getting loose and sipping a glass of the family’s favourite greek amber spirit, Metaxa. (Photo supplied)
In Our Valley: Ron Lechner

Retired part-time singer and Rio Tinto lifer: Ron Lechner

Map of the road work that will be completed this summer. The streets highlighted in red are what the district planned on completing before additional funding, and the streets highlighted in orange is the road works that will be done with the additional funding. (District of Kitimat photo)
$1.1 million allocated for road work this year in Kitimat

Kitimat council has added $470,000 for more work by deferring four other projects.

Hirsch Creek Golf Course Volunteer, Augie Penner, talking about how he continues the tradition, set by Joe Atamchuck, to catch and release fry that keep spawning at the course. (Jacob Lubberts photo)
VIDEO: Kitimat golf course volunteers making moves for the fishlings

During the highwater season, salmon are known to lay their eggs in the ponds at the golf course

Ocean Wise’s cetacean photogrammetry research program uses aerial images collected by boat-launched drones to measure the body condition of whales. (Ocean Wise Marine Mammal License MML-18 photo)
LNG Canada commits $750K to whale research, conservation initiative

Ocean Wise education team will work alongside educational and Indigenous leaders in the area

People line up to get their COVID-19 vaccine at a vaccination centre, Thursday, June 10, 2021 in Montreal. THE CANADIAN PRESS/Ryan Remiorz
Vaccines, low COVID case counts increase Father’s Day hope, but risk is still there

Expert says people will have to do their own risk calculus before popping in on Papa

Thousands of protesters make their way through the downtown core during a Black Lives Matter protest in Ottawa, Friday June 5, 2020. THE CANADIAN PRESS/Adrian Wyld
MPs’ study of systemic racism in policing concludes RCMP needs new model

Chair of the House public safety committee says it’s time for a reckoning on ‘quasi-military’ structure

A case filled with packages of boneless chicken breasts is shown in a grocery store Sunday, May 10, 2020, in southeast Denver. THE CANADIAN PRESS/AP-David Zalubowski
One million chickens euthanized during labour dispute at Quebec slaughterhouse

Premier says waste amounts to 13 per cent of the province’s chicken production thrown in the garbage

Premier of Manitoba Brian Pallister speaks at a news conference at the Manitoba Legislative Building in Winnipeg on Wednesday, April 7, 2021. THE CANADIAN PRESS/David Lipnowski
Provincial leaders want more federal money for health care, plan to meet in fall

Premiers ask Ottawa to increase its share of overall health spending to 35 per cent from 22 per cent

A section of the eastern slopes of the Canadian Rockies is seen west of Cochrane, Alta., Thursday, June 17, 2021. A joint federal-provincial review has denied an application for an open-pit coal mine in Alberta’s Rocky Mountains, saying its impacts on the environment and Indigenous rights aren’t worth the economic benefits it would bring. THE CANADIAN PRESS/Jeff McIntosh
Panel says Grassy Mountain coal mine in Alberta Rockies not in public interest

Public hearings on the project in southern Alberta’s Crowsnest Pass region were held last fall

An old growth cedar stands in a cut-block within the Caycuse Valley. More than 100 prominent Canadians, have signed an open letter calling for the immediate protection of all remaining old-growth forests in B.C. (Submitted)
Brian Mulroney and Greta Thunberg among 100 celebrities pushing to save B.C. old growth

List includes Indigenous leaders, scientists, authors, Oscar winners

The border crossing into the United States is seen during the COVID-19 pandemic in Lacolle, Que. on Friday, February 12, 2021. THE CANADIAN PRESS/Paul Chiasson
U.S. border restrictions to remain in place until at least July 21

Safety minister says Canada, U.S. extending restrictions on non-essential international travel

Himalayan Life helped finance the construction of Nepal’s Yangri Academic Centre and dormitories after a 2015 earthquake devastated the valley, killing more than 9,000 people. (Screen grab/Peter Schaeublin)
B.C. charity founder pledges to rebuild Nepalese school swept away by flash floods

Six years after an earthquake killed more than 9,000 people, Nepal faces another catastrophy

Most Read