A Journey to the Heart of the Lumber Shortage By Henry Grabar / Slate.com The late-pandemic supply chain crisis never smelled quite as good as it did on Wednesday morning in Searsmont, Maine. The air on the 80-acre campus of Robbins Lumber was thick with the scent of eastern white pine—the tallest trees in the Maine forest— being sliced into boards. Yet the warehouse, a cavernous hangar designed to store pallets of finished lumber for shipment, was virtually empty. The company cannot keep wood on the shelves. “Traditionally, these tiers are about four deep with lumber on both sides—you can hardly get a unit of lumber down the middle,” said Alden Robbins, the company’s vice president. “Look at it now. We’re running at about a quarter of our inventory, and we’re running at full speed, that’s how much demand there is. And if we produced 10 times as much as we produce, we could sell it all right now.” That morning, the price of lumber futures on the Chicago Mercantile Exchange surged above $1,500 for the first time, a 300 percent rise from this time last year. Two-by-fours are suddenly very, very expensive, sending the cost of building a new home up by about $36,000 on average, according to the National Association of Home Builders. Lumber companies are reporting record profits. Inside the mill, pine logs are stripped, cut, and sanded into lumber over a production line that spans hundreds of yards of belts, chains, and band saws spinning at 100 miles an hour. The machinery roars and whines, and the planks turn and tumble from one stage to the next with the deep, constant clattering of a supersized bowling alley. As the empty warehouse attests, the lumber run-up is great news for the sawmill, which the Robbins family founded on the St. George River in 1881. Alden Robbins runs the company with his brother and sister; he went to high school with many of his employees, and the sawmill manager’s mom was his babysitter. “It’s going to allow mills to reinvest,” Robbins said of the price surges. But it’s also been tough to see shortages irritate the company’s longtime buyers and force locals to bail on a new deck or even a new home. “I get asked that from customers who say, ‘Why can’t you get me more product? Why don’t you just build another sawmill?’ “ On the demand side, the lumber issue is relatively straightforward: Americans are flush. Interest rates are low. Wealthier households are buying pandemicPage 14 proof second homes or diving into long-awaited renovations. Younger families are trying to buy starter homes and settle down. Many multifamily builders have turned to timber as well, which is now commonly used to frame five- or six-story buildings. All that has created enormous demand for wood. But the case of lumber supply is a little more perplexing. True, shipments from Canadian forests, which contribute about one-third of U.S. lumber consumption, have been constrained by tariffs, beetle infestations, and wildfires. But there is plenty of wood on both sides of the border, and fast-growing pine in the U.S. South is actually cheaper than it’s been in two decades. Instead, the culprit is the decade of instability and low prices that followed the Great Recession, when America stopped building homes, leaving the lumber trade out to dry. The stunted recovery stripped the industry’s crucial middlemen—the mills themselves—to the bone. Building a new deck is expensive now because mills can’t ramp up to meet the demand surge—or won’t, nervous they’ll get caught with millions in underused machinery when prices crash back to earth. Nowhere more so than Maine, the nation’s most forested state, where wood and paper make up about 10 percent of the economy. The long-term decline of New England paper mills has taken the bottom out of the timber market here. Lumberjacks like Andrews have nowhere to go with anything that’s not a grade-A saw log; sawmills have nowhere to send the scraps that remain when a cylindrical log is cut into rectangular boards.
15 Publizr Home