COVID-19

Lumber prices climb as people stuck at home build those gazebos they’ve been putting off

Andy Uhler Jul 10, 2020
Heard on: Marketplace
HTML EMBED:
COPY
Timber on the dock of a New Zealand port in February. Demand for lumber hasn't slowed, but production has. Phil Yeo/Getty Images
COVID-19

Lumber prices climb as people stuck at home build those gazebos they’ve been putting off

Andy Uhler Jul 10, 2020
Timber on the dock of a New Zealand port in February. Demand for lumber hasn't slowed, but production has. Phil Yeo/Getty Images
HTML EMBED:
COPY

Lumber is a commodity, kinda like soybeans. Greg Kuta, president of Westline Capital Strategies, calls his job trading lumber futures risk management.

“You quote stuff 30, 60, 90, 120 days out, and you need to quantify that risk because you’re not going to deliver that wood until the job starts to come due,” he said. “So they need to lock in the risk and quantify that risk moving forward.”

There are a couple of reasons the price of lumber is at a 2½ year high. First, hardware stores are selling a lot more of it than brokers expected, as folks stuck at home tackle those long-postponed projects. And although home construction paused for a bit in March and April, it never went away. The saw mills, however, slowed down drastically.

“You did see a decrease in production,” Kuta said. “And to bring that production back online, you don’t flip light switches. Running sawmills and turning them off and then turning them back on is a slow, laborious process,” he said.

Kuta said right now, buyers are just trying to get their hands on any lumber they can, whatever the price. 

Pete Stewart, president of the timber analytics company Forest2Market, admits that high demand for lumber will lead environmental groups to worry about deforestation. But that concern could be overstated.

“In the U.S., we’re growing 15% to 20% more trees than we are consuming, which is good for the environment, good for everything,” Stewart said.

Growing more trees also will help ensure the lumber supply is healthy when those sawmills get back to running at full steam.

COVID-19 Economy FAQs

It’s still the question on everyone’s minds: What’s going on with extra COVID-19 unemployment benefits?

The $600-a-week payments have ended, officially, as of July 31. For now, there is no additional federal pandemic unemployment assistance. House Democrats want to renew the $600 payments. Senate Republicans have proposed giving the unemployed 70% of their most recent salary by this October, when state unemployment offices have had time to reconfigure their computer systems to do those calculations. Until then, jobless workers would just get another $200. But, nothing has been signed into law yet.

What’s the latest on evictions?

For millions of Americans, things are looking grim. Unemployment is high, and pandemic eviction moratoriums have expired in states across the country. And as many people already know, eviction is something that can haunt a person’s life for years. For instance, getting evicted can make it hard to rent again. And that can lead to spiraling poverty.

Which retailers are requiring that people wear masks when shopping? And how are they enforcing those rules?

Walmart, Target, Lowe’s, CVS, Home Depot, Costco — they all have policies that say shoppers are required to wear a mask. When an employee confronts a customer who refuses, the interaction can spin out of control, so many of these retailers are telling their workers to not enforce these mandates. But, just having them will actually get more people to wear masks.

You can find answers to more questions on unemployment benefits and COVID-19 here.

As a nonprofit news organization, our future depends on listeners like you who believe in the power of public service journalism.

Your investment in Marketplace helps us remain paywall-free and ensures everyone has access to trustworthy, unbiased news and information, regardless of their ability to pay.

Donate today — in any amount — to become a Marketplace Investor. Now more than ever, your commitment makes a difference.