Columnists, Darren Satsky, V5I4

Staying Ahead of the Market in 2019

A look back at lumber prices in June reminded all participants of the volatility seen last year. In spite of recent gains, prices ended the month way below last year’s levels. 

The current volatility was driven by production curtailments and the convergence of better weather and seasonal demand. The supply side factors that supported higher prices in the past—log availability and costs, production curtailments, and tariffs—were once again impactful.  

On the demand side, familiar challenges of weaker housing construction data, labor, and land shortages remained in place through the period. 

However, it appeared at this writing that the depressed lumber market of 2019 was near an end. Look for many lumber prices to continue to rise in the beginning of the third quarter.  


Economic growth estimates for the second quarter were tempered by the escalating trade disputes. 

Recent indications by the Federal Reserve Bank to lower interest rates buoyed the stock market in June, but likely did not have an immediate impact on second quarter economic activity. Recent labor market numbers showed some weakness. 

Looking forward, keep your eye on continued strong employment figures and low interest rates to keep the economy on track. 


Lumber markets were mixed with SPF dimension and stud prices higher and SYP dimension prices lower.  

Western SPF 2×4 dimension #2 & better prices were up over the period. Eastern 2×4 spruce moved up 11 percent. SPF 2×4 8-foot studs were up 8 percent.  

Western 2×4 #2 SYP prices declined significantly in the period, down about 12 percent. Treated SYP moved in line with the change in bright stock prices. 


Although prices have bounced off the lows of the cycle, we still think lumber is a good bargain.  

If we look historically at the previous five-year averages in June and July, we found that today’s lumber prices were below the five-year average and below prices last year at this time. 

Pay close attention to the wildfire season in the Northwest and Western Canada, the U.S.-China trade dispute, and the volume of offshore imports. All are strong indicators that will have an effect on the volatility of lumber prices.  

The best time to buy is when few are buying. It’s difficult to do this when you suspect prices will go lower. However, now that the market has made a bottom, you can buy with more confidence. Being under bought is a significant risk to your operational needs. 

Plan ahead and then buy in confidence knowing prices are still a good bargain.

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