Lumber prices soared to a record price in September across North America. Along with increased demand, Canada also reported a lumber shortage. Black Press file photo

Lumber prices soared to a record price in September across North America. Along with increased demand, Canada also reported a lumber shortage. Black Press file photo

Lumber hitting record-high prices as supply lags behind demand

B.C.’s forest industry hasn’t been able to keep pace with the COVID-19 building boom

A record demand and reduced supplies have pushed the price of 2x4s to historic highs but the B.C. forest industry is only just beginning to fully take advantage.

The industry has been plagued by an acute lumber shortage, which has been a long time in the making.

Lumber prices across North America have nearly tripled since 2019. Based on a weekly price report by the B.C. Ministry of Forests, Lands and Natural Resources, the price of SPF (spruce, pine, fir) 2×4 lumber – as of Sept. 18 – is at $1,288 per thousand board feet, up from a 2019 average annual of $499.

Skyrocketing prices during the past four or five months have upped the cost of building an average single-family home by $10,000 to $20,000, said Brett Giese, president and owner of Crowne Pacific Development Corp. and Veyron Properties Ltd.

“We were first faced with the challenges of price increases and now, despite record high prices the situation has been compounded by a shortage of supply,” said Giese.

Calling the dilemma a “once-in-a-lifetime phenomena” Joel Neuheimer, vice-president of international trade at Forest Products Association of Canada (FPAC) said the high price is because of increased demand after the onset of COVID-19.

Home renovation and remodelling projects that people began during lockdown coincided with construction projects that typically begin in spring. This led to increased demand for lumber across North America, including the United States, where B.C. exports 65 per cent of its lumber.

But the industry was not in a position to take advantage. Baggage from previous years – mill closures and curtailments, wildfires, pine beetle infestations, complex stumpage systems and regulatory policies, and a lengthy strike – had limited B.C.’s fibre supply.

There’s also uncertainty about consistent access to fibre which creates a cost burden for the industry, said Susan Yurkovich, president and CEO of the B.C. Council of Forest Industries (COFI).

“We had a 70 million cubic meter annual allowable cut in the Interior in 2007, that’s about 50 now and expected to go down, just under 40 by 2030,” she said.

There was a lot of downtime through 2019 and 2020 as prices dropped and a lot of lumber was coming off the market as mills were shutting down due to high cost structures, said Yurkovich,

It took a while for production to catch up with the demand, resulting in a lumber shortage between June and August. The shortage fed a 15 per cent drop in B.C.’s lumber export value, costing the industry more than $1 billion. Forest ministry statistics from July 2020 showed B.C.’s export value decreased year-to-date in July 2020 ($6.1 billion) compared to July 2019 ($7.5 billion).

The supply chain was further disrupted when production halted as mills in B.C.were shut for two to three weeks after the onset of the pandemic, creating a backlog on lumber orders.

RELATED: B.C. forest industry facing uncertain future as mills close across province

RELATED: Fewer trees, higher costs blamed for devastating downturn in B.C. forestry

The price of fibre in B.C. is extremely high relative to the rest of the Canada making it a high-cost jurisdiction that typically thrives under market conditions when lumber is expensive.

So, despite the lumber shortage, B.C.’s sawmills welcome the price hike as it helps them sustain their overhead. The real problem is when the lumber price goes low, said Yurkovich.

Come winter, lumber prices might go down, said Neuheimer, adding that construction typically slows then and picks up again during spring.

Yurkovich expects the fundamentals of supply and demand to remain fairly good for a while.

“So we might see a high price environment for a while but it is a commodity, so prices go up and down,” she said.

For more news from Vancouver Island and beyond delivered daily into your inbox, please click here.

forestrysoftwood lumber

Get local stories you won't find anywhere else right to your inbox.
Sign up here

Just Posted

The plane blasted through an airport fence and down a hill, before stopping before a cement barrier on Highway 5A, right in front of a school bus. Photo submitted.
Student pilot crashes plane onto Highway 5A in Princeton

Aircraft hit pavement right in front of school bus

Interior Health nurses administer Pfizer-BioNTech COVID-19 vaccines to seniors and care aids in Kelowna on Tuesday, March 16. (Phil McLachlan/Kelowna Capital News)
69 new cases of COVID-19 in Interior Health

The total number of cases in the region is now at 9,840 since the pandemic began

Kelowna General Hospital (File photo)
Interior Health hospitals not strained by rising COVID case counts

While provincial hospitalizations rise, health care systems in the B.C. Interior remain robust, say officials

The Urgent and Primary Care Centre on Martin Street has officially opened today, March 31, 2021. (Brennan Phillips - File)
Funding denied for Penticton primary care facility

Urgent and Primary Care Centre designated a hospital, but request for $1M in funding denied

A woman wears a protective face covering to help prevent the spread of COVID-19 as she walks past the emergency entrance of Vancouver General Hospital in Vancouver, B.C., Friday, April 9, 2021. COVID-19 cases have been on a steady increase in the province of British Columbia over the past week. THE CANADIAN PRESS/Jonathan Hayward
Top doctor warns B.C.’s daily cases could reach 3,000 as COVID hospitalizations surge

There are more than 400 people in hospital, with 125 of them in ICU

Vernon Fire Rescue Services responded to a truck fire on Dallas Road in Vernon April 15, 2021. (Brendan Shykora - Vernon Morning Star)
WATCH: Vernon firefighters quick to douse fully involved truck fire

The fire was near multiple structures and spreading along the ground upon crews’ arrival

The father of Aaliyah Rosa planted a tree and laid a plaque in her memory in 2018. (Langley Advance Times files)
Final witness will extend Langley child murder trial into May or June

Lengthy trial began last autumn with COVID and other factors forcing it to take longer than expected

The corner of 96th Avenue and Glover Road in Fort Langley now has traffic signals, and new “touchless” signal activation buttons. (Matthew Claxton/Langley Advance Times)
Busy Fort Langley intersection gets ‘touchless’ crosswalk signals

The new traffic light started operation in April

Fire crews tend to a collision that is causing severe traffic delays on the William R. Bennett bridge headed east into Kelowna. (Aaron Hemens - Kelowna Capital News)
7 vehicle collision on WR Bennett Bridge under investigation

The collision backed up traffic on the William R. Bennett bridge for much of the morning

Kelowna company celebrates milestone of producing 46 million masks in under a year.
46 million masks and counting: Kelowna company reaches 1 year milstone

In under a year, Breathe Manufacturing Ltd. in Kelowna has hit production of 46 million masks for front-line workers

The organizer of a Kelowna protest against COVID-19 restrictions was fined by the RCMP for the third time Saturday, Jan. 16, 2021. (File photo)
Kelowna RCMP investigating hit and run involving 11-year-old

Police said the boy suffered minor injuries

A crossing guard stops traffic as students wearing face masks to curb the spread of COVID-19 arrive at Ecole Woodward Hill Elementary School, in Surrey, B.C., on Tuesday, February 23, 2021. A number of schools in the Fraser Health region, including Woodward Hill, have reported cases of the B.1.7.7 COVID-19 variant first detected in the U.K. THE CANADIAN PRESS/Darryl Dyck
COVID-infected students in Lower Mainland schools transmitting to 1 to 2 others: data

Eight to 13 per cent of COVID cases among students in the Lower Mainland were acquired in schools, B.C. says

Most Read