QUESTION 1: What affects lumber prices?  (…and how we leverage this to always offer the lowest prices!)

Lumber is generally defined as a commodity, that is, something that is sold in a raw form before any value has been added to it.

As contrasted by goods, which is something that has been finished and sold to consumers as a completed product.

Commodity examples: wheat, lumber

Goods examples: bread, wooden rocking chair

When a lumber company like our establishes our retail price for our lumber pieces, the factors affecting that price are:

• Our desired mark-up
• Our purchase price from the harvester
• Future expectation of price fluctuation
• Scarcity of the material
• Complexity of storage of the material (size, dimension, weight, climate demands)
• Complexity of delivery

Of the above factors, we only have any control over the first two.  And that is why we are able to sell at the best wholesale prices.

• Our ability to maintain a smaller footprint than a big box retailer allows us to operate with a lower mark-up
• We leverage our purchase windows and stock up when prices are low, and then draw against this inventory when prices are spiking

QUESTION 2: But what affects the lumber prices on a larger, nationwide scale?

As is the case with most markets, lumber prices are driven by both speculation and real supply/demand.

Supply and demand effects are:

• Fuel prices, therefore harvest and delivery prices
• Weather issues dictating harvest costs (true story: Two winters ago it was nearly impossible for us to buy our lumber products due to a uniquely harsh winter in the Northeast USA, making harvesting impossible)
• Low interest rates driving building booms = high demand, low supply

Speculative effects which cas inflate prices are (even if they don’t make sense):

• Geopolitical turmoil 
• Natural disasters (Why do lumber prices spike the moment a hurricane hits?  Retailers are taking advantage of the speculative fears of their buyers)
• Government overreach fears (With lumber, this is effective as the duties and tariffs related to Canada have a great impact, as much USA lumber comes from Canada)

We pay attention to every one of these factors daily in order to drive down the prices for our clients and give you the most predictable experience possible.