7/16 OSB $31 / sheet now

[Grove Sh*tter]

Joe Lee was onto something when he projected it going up. I wouldn't have believed it when it had been hovering around $24 since the covid madness. One year ago it was <$7.

JLS, do you have any more insights on where this is going? Is it ever coming back down? I can't imagine building a spec house right now, and I know people doing it in Starkville (although college towns and a few boom towns would be an exception, I would think).

 

[DesotoCountyDawg]

It will go back down eventually but it may take a while. Stimulus money, people stuck at home wanting to improve their house, a housing market that hasn’t slowed down, sawmills dealing with covid, western timber destroyed by wildfires. It’s a lot of moving parts.

 

[dorndawg]

It will go back down eventually but it may take a while. Stimulus money, people stuck at home wanting to improve their house, a housing market that hasn’t slowed down, sawmills dealing with covid, western timber destroyed by wildfires. It’s a lot of moving parts.

All this is true plus mills have order files well into the summer at these prices, as well. Multi-family home construction is down and single family is booming. Single family requires more wood per sf than multi. Broad swathes of Millennials and older Zoomers want out of apartments and into houses.

 

[$altyDawg]

One year ago it was <$7.

This time last year I spend $8.25/sheet when my house was going up. Just the cost of OSB would have cost me $5500 more if I were building it today.

 

[mstateglfr]

We had to tear out half our basement last year to have it waterproofed, and that had the basement bathroom in it. The currently finished section still needs to be demolished so a bathroom can be built and the 17ing project be finished. We are set to demolish in 3 weeks.
Waited as long as we could before it became too chaotic and inconvenient since we were hoping the cost of everything would come back down some. Nope, that didnt happen.

 

[Jeffreauxdawg]

Pooper,

It's going to get a lot worse. OSB and plywood are sold by the MSF (1000 Square Feet) at the wholesale level. To get a per sheet price you multiply the MSF price by .032 (4*8= 32 sf).

So $31/sheet is $968.75/MSF.

Currently 7/16 OSB is 990/MSF by the truckload at the mill before freight. It will then be marked up by a big two step distributor or broker and sold to a small lumber yard or by a big lumber dealer/box store and sold to builders or do it yourself customers.

The $31/sheet price you have is probably working off old inventory costs, because today you would pay more than that for a truckload before freight, if you were a big enough buyer to have contracts even allowing you to buy. Effectively, retail/builder pricing is usually going to lag wholesale by 30-120 days depending on the situation.

Wholesale pricing in the Southeast can be seen in this chart.

View attachment 19615

Dorn is right.. Everything is booked up into the summer. A new mill is coming online in Canada in Q3, but that's not going to help much at all.

Here is a text from a friend of mine that works for a big OSB producer and distributor.

View attachment 19616

$1350/msf for a unit of 7/16 OSB to a lumberyard in East Tx. That's $43.20 per sheet wholesale. If they marked it up 15%, it would be over $50 per sheet retail.

It's going to keep going up. Lowe's and HD and local lumberyards that are part of buying groups may have old contracts that are keeping prices low for now, but it will continue to rise.

I knew $40/sheet was possible. But it is stupid. Now I am wondering if it will get to$50. For reference 5-6 years ago I was selling truckloads at $165/msf or about $5.25 a sheet wholesale.

I contracted on my new build in September and locked in the price. Currently same model/same neighborhood/same lot is up 21% and we just broke ground. Once spring demand hits, prices will climb. I may have 30% equity on a new build from a semi custom builder before I move in... Usually new builds are like new cars, you lose a little at first.

It's just gotten silly.

 

[Dawgbite]

I spent 35 years in the wood industry purchasing hardwood, pine and engineered wood. As pine and engineered panel started climbing, hardwood started falling. Green hardwood lumber fell to 1980’s prices. Hardwood lumber mills are quickly transitioning to pine production which eventually is going to cause a short supply of hardwood lumber. Everything is going to be out of balance for years.

 

[The Peeper]

For reference I paid $16.32/sheet back in July/August on a DIY project

 

[$altyDawg]

I'm guessing that when I'm ready to build my shop, it will more than likely be metal.

 

[SwampDawg]

I'm so old I remember when pine 2x4s were 25 cents.

 

[dorndawg]

I'm so old I remember when pine 2x4s were 25 cents.

25 cents per board foot maybe? I'm quite certain there wasn't any time in living memory that a 2x4x8' was $23/mbf or anything near that.

 

[dorndawg]

I spent 35 years in the wood industry purchasing hardwood, pine and engineered wood. As pine and engineered panel started climbing, hardwood started falling. Green hardwood lumber fell to 1980’s prices. Hardwood lumber mills are quickly transitioning to pine production which eventually is going to cause a short supply of hardwood lumber. Everything is going to be out of balance for years.

Do you have a sense of what pine products most Hardwood mills in your area are switching to? Many don't have kilns, and of those that do most don't have a planer operation with the right setup for pine.

 

[Jeffreauxdawg]

I spent 35 years in the wood industry purchasing hardwood, pine and engineered wood. As pine and engineered panel started climbing, hardwood started falling. Green hardwood lumber fell to 1980’s prices. Hardwood lumber mills are quickly transitioning to pine production which eventually is going to cause a short supply of hardwood lumber. Everything is going to be out of balance for years.

Good info. I will add to it.

Hardwood lumber has already been caught in the bear trap. Talked to a friend this morning that has a big millwork plant. Northern, Appalachian, and Western hardwoods have been tight for months. Now it's caught the South. He said he bought KD #1 common red oak for $900/mbf in December from a mill in Alabama. Was quoted $1400/mbf last week. There is no maple, walnut, or white oak anywhere. Everyone is on allocation.

I spent 5 years on the hardwood side of the industry and 6 on the commodity/EWP. I personally always loved the hardwood business, but it's so mom and pop/decentralized they always have supply/demand imbalances. Literally every time you get a heavy rain that lasts more than 2 days, the supply chain is screwed. If mills were switching over to cutting pine recently (I'm guessing it's just green sawmills) and ran the concentration yards out of green hardwood lumber (which takes 3-6+ months to dry) those sawmills might have put the nail in their own coffin.

I cut my teeth at a concentration yard that built 3 sawmills to feed itself in the early 2000's. They got tired of being held at gunpoint by green mills that would cut their supply chain off at the drop of a hat. I'm all for small business, but way too many hands have to touch hardwoods right now to sell a finished product.

Timber owner
Logger
Sawmill
Concentration yard
Distributor
Cabinet/millwork shop
Builder
Homeowner

Depending on the species, it might be 12-18 months to get through that supply chain just to land at the cabinet shop.

With dimensional lumber, you can go from tree to jobsite in 2-3 weeks.

 

[FISHDAWG]

Joe Lee was onto something when he projected it going up. I wouldn't have believed it when it had been hovering around $24 since the covid madness. One year ago it was <$7.

JLS, do you have any more insights on where this is going? Is it ever coming back down? I can't imagine building a spec house right now, and I know people doing it in Starkville (although college towns and a few boom towns would be an exception, I would think).

got a notice this am from a bldg material company that gypsum based products are going up another 20 % in April ... Steel going up another 15% (after several escalations already ... Fiberglass going up 12% (after 2 previous recent escalations .... I'm a professional construction estimator for the last 30 something years and have never seen it quite this bad ... some new talk of even going to allocation of materials. It's not the past recent hurricanes (which normally have a temporary effect) that's driving this .... It's from the past Covid shutdowns of these plants and mills finally catching up with us ..... long term is capacity will be 100% again in late summer / fall so by next year we should see some return to supply vs demand bringing the prices down ... it's just going to take a while

 

[FISHDAWG]

this time last year I was paying less than that for fire-treated plywood

 

[Jeffreauxdawg]

Do you have a sense of what pine products most Hardwood mills in your area are switching to? Many don't have kilns, and of those that do most don't have a planer operation with the right setup for pine.

I have seen a few green mills that can switch over to 1x and 2x pine from hardwoods. To your specific question I remember one little mill using some kind of planer-matcher to run both. They would leave the side spindles off for hardwoods to allow for random width. They made a big deal about how good their knife guy was to adjust tooling cutting angles to go from pine to hardwood.

Again, I have only heard of little mills doing this. I can not imagine anyone with kilns doing it...

 

[garddog]

OSB resins must be a ton better than it used to be if you are using it in a basement, bathroom, or for a floor. I have always used treated plywood or green sheet rock in those areas.

 

[jethreauxdawg]

Again, I have only heard of little mills doing this. I can not imagine anyone with kilns doing it...

Are you seeing small hardwood mills starting to put in their own kilns? From the very little I know about it, it appears that kiln technology is making some nice jumps and making it possible to dry a lot of hardwood faster and in a smaller footprint than before. Maybe this will help shorten the supply chain for hardwood.

 

[Jeffreauxdawg]

Yeah. The fact that it's catching up to commercial is wild. This is a residential boom. I was reading in Dodge Data that non residential starts were down 24% in 2020 and residential was up 4%. +7% for single family.

 

[Jeffreauxdawg]

I have been out of the game for a while. But generally speaking, it's much easier in my mind for a big kiln operation to add a mill or two than the other way around. The hardest part of the business will always be finding good customers to buy your various grades of KD wood. Much easier to sell the green. Plus you have to tote a lot of inventory on the balance sheet. And that's not attractive for a sawmill that sells it asap.

There is a real art and science experience required to dry hardwood lumber. When I was younger I wanted to be s kiln operator.. Even applied for a job at Sii Dry Kilns. It's just one of those things that takes years to master and starting out you are to honeycomb the **** out of some wood... It's inevitable.

In the 2000's there was a big kick to get little vacuum kilns into smaller operations, but it never caught on for any real production. It's one of those good in principal ideas, but hard to make work cost effectively. What most people went to was a self powered conventional kiln that burns wood waste from the green/dry mills to keep energy costs down. But these are big operations.

The only on place I have seen putting in small kilns is pallet mills. They are really just big ovens to heat treat though.

I'm sure hobbyists are doing all kinds of cool stuff, but it would not be scalable.

 

[Jeffreauxdawg]

OSB resins must be a ton better than it used to be if you are using it in a basement, bathroom, or for a floor. I have always used treated plywood or green sheet rock in those areas.

I think golfer was referring to all building materials getting expensive... Pex/plumbing is next. Texas blackouts and plumbing leaks have wiped out plumbing inventory all over the state.

But to answer your question. OSB is pretty badass these days Huber Advantech and Weyerhaeuser Diamond are basically waterproof subfloor options.

 

[FISHDAWG]

Yeah. The fact that it's catching up to commercial is wild. This is a residential boom. I was reading in Dodge Data that non residential starts were down 24% in 2020 and residential was up 4%. +7% for single family.

that's exactly what I'm seeing here in Atlanta ... Residential drives the material pricing - not commercial .... and it just seems backwards but that is the fact... I'm mainly used to concrete and steel construction but recently we have been chasing large mutli-family wood framed type work because there is so much of it out there

 

[Mobile Bay]

25 cents per board foot maybe? I'm quite certain there wasn't any time in living memory that a 2x4x8' was $23/mbf or anything near that.

Back when Gas was five cents a gallon and a steak dinner was a quarter, yeah I believe it. And that was in my mothers life. She is still kicking at 72.

 

[Jeffreauxdawg]

You have me wondering if a lot more residential builders are starting to use steel studs for interior walls. It was not big in TX when I was there, but with lumber prices doubling, steel is much more attractive than before.

 

[jethreauxdawg]

I’ve heard the reason anything besides wood isn’t used for studs in houses is because the subs don’t know how to work with it.

 

[Cooterpoot]

The average new home cost has gone up almost $25,000 due to lumber prices. Interest rates are slowly creeping up and Covid slowly creeping down. It'll swing the other way end of this year.

 

[Dawgbite]

All the hardwood that we were buying locally was green and unsurfaced. We had our own drying and planing operation. Several of the mills that I dealt with had both pine and hardwood operations and would rotate from one to the other as logs were aged and ready to cut. I retired last year so I’m not sure what type pine lumber they are transitioning to, I just talked to the current buyer and he saw storm clouds on the horizon. One mill had a flooring operation on site and another had regular building materials so they were already equipped. Back in the early 2000’s we were buying entire cargo ship loads of Eucalyptus out of Brazil. That was some fine wood to work with. Have bought a lot of Eucalyptus plywood from South America but it was hit and miss. South American plywood mills didn’t understand the concept of alternating the direction of the grain in the plys plus the edges splintered and feathered really bad for some reason. It was a very flat and clean knot free plywood but it was brittle. Standing Hardwood timber tracts are getting rare. Not long before I left I had a sawmill try to get me to commit to 11000 acres of cottonwood, for those of you unfamiliar with lumber cottonwood is the crap of the crap of hardwood lumber. It’s awful, it warps, it cracks, it splits, and when you cut it, it smells like cat piss. I passed but somebody bought it.

 

[dorndawg]

Back when Gas was five cents a gallon and a steak dinner was a quarter, yeah I believe it. And that was in my mothers life. She is still kicking at 72.

The lowest gasoline in 72 years was 27 cents a gallon, which is gonna be about 2.80 or a little more in 2021 dollars.

https://www.titlemax.com/discovery-...tomobiles/average-gas-prices-through-history/

 

[Grove Sh*tter]

Thanks for the good info, boys. I may buy some inventory (I don't use lumber as much in my type of industry, but it hurts my feelings to think about paying $50/ sheet in the fall if I can store it for $31 now). Yikes.

And I can't help but think that after they pump another 2 trill out next month and keep interest rates at nil, we will probably be staring at some degree of hyper inflation. Building materials, energy, food, and housewares are all on the rise already.

 

[dorndawg]

The average new home cost has gone up almost $25,000 due to lumber prices. Interest rates are slowly creeping up and Covid slowly creeping down. It'll swing the other way end of this year.

I agree there will be some headwinds by fall, but work from home is here to stay for vast swathes of the workforce. Many of these folks want/need more space. Additionally, many don't realize how large the Millennial age cohort is, almost all of whom are moving into peak homebuying years.

 

[SwampDawg]

25 cents per board foot maybe? I'm quite certain there wasn't any time in living memory that a 2x4x8' was $23/mbf or anything near that.

ok, maybe it was 50 cents for an 8 footer, but no more than that. I also remember when gas at Billups was 28cents and a quart of beer was 50. PS: I was born in 1940

 

[Jeffreauxdawg]

All the hardwood that we were buying locally was green and unsurfaced. We had our own drying and planing operation. Several of the mills that I dealt with had both pine and hardwood operations and would rotate from one to the other as logs were aged and ready to cut. I retired last year so I’m not sure what type pine lumber they are transitioning to, I just talked to the current buyer and he saw storm clouds on the horizon. One mill had a flooring operation on site and another had regular building materials so they were already equipped. Back in the early 2000’s we were buying entire cargo ship loads of Eucalyptus out of Brazil. That was some fine wood to work with. Have bought a lot of Eucalyptus plywood from South America but it was hit and miss. South American plywood mills didn’t understand the concept of alternating the direction of the grain in the plys plus the edges splintered and feathered really bad for some reason. It was a very flat and clean knot free plywood but it was brittle. Standing Hardwood timber tracts are getting rare. Not long before I left I had a sawmill try to get me to commit to 11000 acres of cottonwood, for those of you unfamiliar with lumber cottonwood is the crap of the crap of hardwood lumber. It’s awful, it warps, it cracks, it splits, and when you cut it, it smells like cat piss. I passed but somebody bought it.

Cottonwood sucks... There is a company in Lubbock Texas... O'hair Shutters that has mastered cottonwood. They buy railcars of it and dry it to make shutters. You will have better luck getting into a nuclear silo than seeing the ops st O'hair Shutters. They have the mother of all secrets in there.

Sycamore and gum also suck as well.

 

[fedxdog]

And yet our pine tree farm in Ponotoc and Union county is only getting 1/3 of what we got 5 years ago for our timber. We’re having a hard time getting anyone to bid on some thinning.

 

[karlchilders.sixpack]

Time is on your side,

unless you want it done soon/quickly.

 

[Dawgbite]

And yet our pine tree farm in Ponotoc and Union county is only getting 1/3 of what we got 5 years ago for our timber. We’re having a hard time getting anyone to bid on some thinning.

There is a reason for this. The panel mills and the pine sawmills have all consolidated over the years to the point that a large majority of production is divided between a small group of companies. All these large companies have their own timber farms and have found it more profitable to process there own timber than to buy yours. The large timber companies can meet the current demand. As long as there is no demand for the independent 20-100 acre tracts of pines, it’s worthless. This may never change. There is no telling how much land my father’s generation planted in pines thinking they were investing in their retirement and those trees are practically worthless.

 

[Jeffreauxdawg]

View attachment 19878

$50 per sheet by Mid May looks likely.

 

[Apoplectic_Objurgator]

View attachment 19878

$50 per sheet by Mid May looks likely.

Are you taking into consideration another 2T free money and 3T of infrastructure corruption? Of course labor will be cheap which Central Americans, Africans, Russians, and middle eastern asylum seekers being dumped throughout our neighborhoods.

My advice: don’t buy a house - buy Bitcoin and an AR

 

[Jeffreauxdawg]

We don't want your advice.... Your scared of your neighbor's puppy dog.

 

[SheltonChoked]

Are you taking into consideration another 2T free money and 3T of infrastructure corruption? Of course labor will be cheap which Central Americans, Africans, Russians, and middle eastern asylum seekers being dumped throughout our neighborhoods.

My advice: don’t buy a house - buy Bitcoin and an AR

S&P says the 3T infrastructure plan will create $5.6 trillion of economic growth, add 2.3 million jobs, and raise per capita incomes by $2,400 in the next 3 years. I'm not sure why you think that's a bad thing...
https://www.axios.com/biden-infrastructure-plan-economists-e2d937d5-d83b-4552-92e2-f85a4794bc2b.html

 

[Wizard.sixpack]

I'm guessing that when I'm ready to build my shop, it will more than likely be metal.

Metal has went up as well. I am looking at building a shop and priced a building. The woman at their office told me that the cost would be 20% more than what was on the sheet and would be going up another 10% April 1. She also told me it would be 3 months before I could get it built. People ain't wanting to work when they got that stimulus money.