When we speak with our customers and explain what our perspective is for the remainder of this year, we try to explain a few key insights we believe will hold true. 

For example, based on what we are seeing in the market, we anticipate hardwood pricing to remain strong. We do not predict a fallback in the foreseeable future. There are a few factors that we believe contribute to this position.

• Overall Eastern US hardwood sawmill production still remains below historical averages.
• Inventory replenishment and demand for US manufacturers that produce products from hardwood lumber is still relatively high.
• Overseas shipping and domestic trucking deliveries are still experiencing long shipping interval timelines which continue to disrupt the supply chain for manufacturers.
• And in general, we find that manufacturers are struggling to find raw materials of any kind and are reconsidering hardwoods as a material of choice.

In many respects, the pricing of softwood lumber products has come down. And although we find that to be true, it does not necessarily mean hardwood lumber markets will react the same way.

This has become a regular conversation with those less familiar with the subtle difference between our two marketplaces. At times, we find what impacts pricing conditions in each of the markets can be very different. And we believe this to be one of those times.

So why is the pricing of hardwood lumber market different today, and why should you not anticipate the same price drop for hardwoods in the immediate future? Here are a few things we believe to be true.

• The overall Eastern US hardwood lumber sawmill production still remains below average.  This is different than what has transpired in the softwood industry where supply has increased due to log availability being abundant and sawmill outputs being able to handle increased production due to existing mill automation. 
• The US retail home building season is at its peak and forecasts remain strong for new builds for the remainder of 2021.
• Hardwood log supply has remained relatively constant as a whole and labor issues still continue to plague all hardwood sawmills keeping production at levels comparable to the first half of the year. 

“Labor in the sawmill industry continues to be one of our main issues,” says Phil Fenwick, director of Asian sales for Baillie Lumber.  “It seems all of us in the industry cannot find enough employees to fill all the open positions in our sawmills and dry kiln facilities. This will continue to be a throttle on production and keep pressure on hardwood pricing and availability.“

With all this in mind, we constantly reach out to our customers and try to help them find ways to maximize their performance during times like this. We regularly try to provide them with updated market information and to position ourselves as a trusted supplier when it comes to hardwoods. We have found that sharing ideas such as the following really seem to help. 

Find a trusted advisor you can work with for the long term. An ideal supplier doesn’t just get you the hardwood lumber you need but also can serve as an invaluable repository of industry-related information, highlighting current and future trends that may have a marked effect on your business.

Consider buying ahead. In times of lower supply, it could make sense to buy inventory ahead of time. It might make sense to order ahead and schedule release dates with your supplier. Develop a program. This could help you secure the supply you need in advance and smooth out the peaks and valleys of availability. This is especially useful for customers that require “just-in-time” deliveries.

Consider hardwood species alternatives. If you can use alternate species in your production, it may be something worth looking into. For example, maybe you could substitute Ash for Oak or substitute Hard Maple for Soft Maple. If you are able to, considering alternative species could provide new solutions to declining supply and fluctuating pricing.

At Baillie, we are fortunate to have access to a steady supply of hardwoods and continue to work hand-in-hand with our customers to provide them the right hardwoods, at the right price and time to best meet their needs. We would be happy to be YOUR trusted resource for your hardwood lumber supply needs going forward as well.  Let us know how we might be able to help!

Brett Del Prince
Baillie Lumber
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