Columnists, Darren Satsky, V5I2

Staying Ahead of the Market in 2019

The lumber market’s historic volatility last year has reappeared at the beginning of the year, with some prices increasing dramatically through the first two months of 2019.  

Supply-side factors supported higher prices, as mill curtailments, log supplies, and rail car availability contributed to the winter run, while winter weather and slow job-site construction has tempered a more rapid pace. 

There’s indication for more volatility ahead as production continues to adjust to measured demand.  


 Growth estimates for the first quarter are currently around a 2.25 percent pace. Economists expect GDP growth to slow further in 2019 as the fiscal stimulus fades, the effects of bitter trade wars on consumers lingers, and global markets slow.  

Recent decisions by the Federal Reserve Bank to pause raising interest rates buoyed builder sentiment as housing affordability depends upon low mortgage rates. 


Lumber markets were broadly higher with some prices much higher than others. 

Western SPF 2 by 4 Dimension #2 & better prices were up 26 percent over the period, while Eastern 2 by 4 Spruce was higher by about 15 percent.   

Western SPF 2 by 4 8-foot studs were up about 16 percent, and Eastern 2 by 4 studs recorded increases of 10 percent. 

Western 2 by 4 #2 SYP prices increased 10 percent over the period. Treated SYP moved in line with the change in bright stock prices. 


A major challenge to consider when making your buying decisions is the volatility of lumber prices. While you can expect lumber prices to fluctuate, be careful about chasing the market higher with every rapid move. 

The time to buy is when few are buying. It’s difficult to do this when it goes against your best instincts. However, the best way to avoid being under bought is to know your inventory and upcoming needs. 

Plan ahead and buy some insurance wood knowing you cannot predict prices with certainty. You will always accrue benefits in rising markets and incur some costs in falling markets. 

The bottom line is that it is challenging to time the lumber market.  

In my view, this year’s U.S. economy will be more uncertain and riskier than last year, as the economic cycle reaches its 10th year of expansion. If you have not done your purchasing for the early spring, the most recent pullback at month’s end in SPF is an opportunity to get back into the market.  

If the market reverses course and continues higher, you may benefit from your lower cost lumber purchases.

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