Submitted by Steven Kaszab
The softwood industry is continuing to cut back production, while the prices of those products it produces domestically continue to rise to levels not seen in many years. The Pandemic has stopped production of soft wood products, then started up again only to shrink a once massive industry. Multiple producers are limiting production while the demand for soft wood products continue to grow throughout the world.
Claims that market uncertainty is the driver of this curtailing of production in Canada and the USA. In British Columbia this decline in production amounts to over $100 million. Further reasons this decline is happening maybe the high cost of fiber (raw tree’s). What once cost $125.00 has doubled and tripled in cost. The forests these raw materials are found in have become grounds of displaced uncertainty. Weather patterns and events have become more pronounced due to the effects of climate change. Labor hour losses in the harvesting of said product, have increased to unrealistic levels making some harvesting unprofitable. So the industry claims.
When the pandemic began essential industries such as the soft wood industry continued to produce their needed products. I am an estimator for a large manufacturer, purchasing many board feet of both soft and hardwood products. I was told the industry was becoming addicted to the high prices they could pass onto retailers and builders, that there was no real shortage of product which could be found in large warehouses throughout the continent. All the industry was waiting for was increased demand at the increased costs to retail customers and the building industry. These professionals announced that those of us who are waiting to start their home renovations and builds need not wait. The costs within the retail environment will remain high until these prices become the accepted price levels. Then prices will continue rising. An addict cannot maintain the level of a substance they use, with their bodies getting used to the high they receive, they need a greater high. The soft wood industry along with their retail partners are controlling and managing prices but denying retailers product that already exists. This is called price fixing. You saw this done many times before, fixing prices industry wide in the form of bakery(bread) goods, electricity and even automobiles. Before the pandemic a dodge van costed @ $25,000-35000. Now they are prices @$50,000+. industry wide.
Should you have plans to build a deck, building or structure made of wood, purchase or order materials now at the present price available. Prices will go higher with scarcity of product. Long time ago the soft wood industry made a 2″x4″ plank costing retailers say $10.00 each , which then received a 30-300%+ markup. Now that same item costs 30-45.00 each and rising. Retailers made a bundle, and the soft wood industry realized they too should increase prices, using the pandemic as an excuse to do so. Many industries have done just that, increasing prices while using supply chain problems and inflation as excuses.
Do you enjoy eating avocado’s? Well there is a glut within that sector, where over production with limited markets (EU stopped importing) drove prices for avocado’s down. A bag of 6 sold for as little as $1.99 in Ontario. After one month that same bag’s costs have increased x3-4 times and more. The economic reasons for cheap avocado’s had not changed. Therefore retail greed-inflation is the reason prices have increased.
There are real reasons for prices to increase drastically at times as mentioned but retailers are presently targeting both businesses and individuals, hoping to reap the rewards of their price and sales increases, knowing their business model will have to change once they have entered the up coming recession many fear is coming. The recession these retailers have help to instigate. Remember, if families have limited funds, ultimately they will limit or stop buying what they do not need.