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Lumber stacks up big profits

Despite a 46 percent jump in softwood lumber prices, many timber companies are wary to head into the forests.

Since the recession, people in the timber industry have watched everything fall except the trees. Jobs, housing starts, the price of lumber itself. That’s finally turning around.

“The lumber market throughout 2012 and into early 2013 has been in a recovery mode,” says Shawn Church, who edits the newsletter Random Lengths, which tracks softwood lumber prices in North America.

Church says the cost of softwood has gone from $284 last February to $415 today.

It’s spiked because of a growing Asian market, a modest rise in home construction and a smaller timber harvest.

Jameson French, President of Northland Forest Products, says after the recession, lumber producers just aren’t ready to cut more trees.

“So you made your business leaner and meaner. And to jump back in is going to take a lot more than the signs of housing recovery in the U.S.,” he says.

French hopes timber companies don’t rush back into the woods. He worries if they do, the industry’s soft rebound could collapse with a surplus of wood that no one wants. 

About the author

Dan Gorenstein is the senior reporter for Marketplace’s Health Desk. You can follow him on Twitter @dmgorenstein.
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