Whether you're building a new home, fixing up an old one or battening hatches, rising plywood prices will send you lumbering.
By BENITA D. NEWTON
Published September 13, 2003
[Times photo: Ken Shimizu]
Richard Cheifez purchases plywood for house improvements at a Lowe's home improvement store in St. Petersburg. A wet South, a dry North and forest fires, high tariffs, a down dollar and rumors all are blamed for rising lumber prices.
A hot builder's market, forest fires, rainy weather and rumors of big purchases by the military have combined to create a whopping increase in lumber prices.
Tampa Bay area residents will feel the difference in their wallets if they buy a newly built house, stock up for a weekend home improvement project or shop for plywood window protection at the peak of hurricane season.
The composite price of structural panels, which includes plywood, reached $535 per thousand square feet this week, according to Shawn Church, editor of industry publication Random Lengths. That's up nearly $100 from its August average of $440, and nearly $300 from its January average of $245.
At Home Depot and Lowe's, a 4- by 8-foot, 5/8-inch-thick construction grade sheet of plywood is going for about $20, an increase of more than 75 percent over prices a few months ago.
Church said some orders made now are not expected to be received until next month, or even as late as December, which could create major problems if a hurricane blows through.
But representatives for Home Depot and Lowe's, the two giant home improvement chains, said they expect to maintain a steady stream of lumber, thanks to longterm contracts with suppliers.
It's not just do-it-yourselfers who are shelling out extra bucks. Contractors and home builders are passing the increase along to their customers.
Melissa Johnson, office manager for Bast Hardwood Floors in Tampa, said her suppliers were asking $21 a sheet for plywood Friday morning, $9 more than the company was paying four months ago.
"I have no choice but to turn around and increase my price to the customer," said Johnson, adding that it's taking significantly longer than usual to get the wood, too.
Raymond Summers, manager for Bay City Plywood in Clearwater, said he hasn't had much of a problem getting supplies so the company is trying to stockpile at warehouses for its three locations. Still, he doesn't have much hope for supplies if a hurricane makes a Florida landing.
"It seems like there's always a supply problem when hurricanes hit, no matter what you do," Summers said.
The explanation for the lumber price increase goes back a few years. Despite a sizzling home construction and remodeling market, lumber supply exceeded demand. As a result, many mills nationwide cut production or even shut down last year and early this year.
In addition, the declining dollar and higher tariffs on Canadian imports slowed the flow of lumber coming into the United States, which is exactly what the domestic lumber industry wanted, said Jay Robbins, vice president and secretary of Robbins Lumber in Tampa, which sells its product to independent suppliers.
But forest fires in the North and soggy conditions in the South caused unforeseen dips in supply.
"It all just snowballed at one time," Robbins said.
There also was the effect of lumber purchases for the military. About 666,000 sheets of plywood, worth $13.3-million, were purchased by the Defense Logistics Agency for use by troops in Iraq and to replenish the military's domestic supplies, said spokeswoman Dawn Dearden.
The purchase accounted for slightly more than 1/10 of 1 percent of the nation's annual plywood sales, but the market reacted to the purchase and to speculation that there would be more government demand to come for the rebuilding of Iraq. Dearden said no additional purchases are expected in the near future.
The increase in price has been a "blessing in disguise" for some in the lumber business, said Robbins of Robbins Lumber.
"The prices had gotten so low that it was not very profitable for many companies," Robbins said. "This bump in the market helped offset some of that."
