Updated Indexes from 1/14/22 below.
An Update from our Purchasing Manager, Will DeMaida (12/20/21)
The further we go into this pandemic, the more it feels like you can break it into “phases” – these can be based on national/international events (Presidential election, lock-down, vaccine distribution, etc.), or industry-specific milestones (lumber price surges, PT and White Cedar Shingle shortages, etc), and all are impacted by outside forces. Regardless, we all have been operating in each of these phases and, whether we like it or not, they’ve affected how we’ve operated. No one has ever had to deal with this before, so we’re all learning as we go.
Like now, for example – the latest issue comes to us from Vancouver, where flooding has tragically washed away sections of road and rail and has greatly impacted the availability of lumber products across the U.S., causing prices to soar. ½” fir plywood is now already more expensive than it was last winter, and prices are expected to continue to rise as the system tries to absorb the shock from the flooding and related transportation issues.
In all this uncertainty, one thing is certain – dealers in our industry will follow the herd and exhaust any supply of material during a shortage like this (just like toilet paper). Products go from little interest to overwhelming interest overnight, further driving up prices as the material goes to the highest bidder. Knowing this, and experiencing the same kind of run on similar products over the last 18 months, we’ve been forced to come up with new ways to combat these issues and keep material on the ground. Usually that comes at the expense of higher prices, but not always.
Learning from experience, planning ahead, and being flexible are the most important things we can be doing to successfully see us through to the end of this. This latest increase is just a new phase that we’ll be operating in, and we’ll approach it using all the information we have (and all that we’ve learned) to make the best decisions for our customers.
Will DeMaidaPurchasing Manager Mid-Cape Home Centers
Below you will find two graphs referencing two commodity products over the past year. The first graph, 2021 YTD Pricing of Two Commodity Products, CDX & SPF (mentioned by Will above), shows the pricing fluctuations and similar trends between the two products. As you can see, over the last 7 weeks, prices have continued to rise after taking a heavy plummet in June-July, what we don’t know yet is for how long they will continue to rise. Will they follow the same trend as earlier in the Spring? Or will the market slow in fear of that happening again? Only time can tell.
The second graph, MCHC Average Home Net Price, gives a visual comparison of two different style home builds, a Colonial and a Custom Cape. These home indexes are based on the most commonly used products. Note the rise beginning again in November.
As mentioned by Will, the best thing we can all do is plan ahead. Please reach out to your Account Manager or Mid-Cape Contact with any questions and planning for your upcoming jobs.