Lumber Prices Overnight
- Thread starter karoc
- Start date
Are portable mills still backordered for months-years out? I remember reading last year that the lead times were unbelievably long.
HoosierMark
Well-known member
Wood mizer was invented here and has a large plant. Their lot is currently full of new mills and they are waiting to expand for a third time in less then 10 years. A friend told me months ago they had orders thru this fall. I assume shipping must be the issue. We have several mill owners in the area who come to you when you want logs sawn up. I have had it done multiple times in the past. Really convenient and the guy seems to stay busy. Might be a good job for someone wanting a full or part time income stream.
reader2580
Well-known member
If you live in an area where building permits are required you almost always need to use graded lumber. You can get your own lumber graded for a cost, but then are you really saving any money by buying a mill?
I was in the same boat back in may. I just want my garage done so I can start using it. In the grand scheme of things, while a 30% price jump isn't great, it isn't the end of the world either depending on scale. I just bit the bullet and bought it, especially since there was no guarantee it would actually go down. It did of course, after I purchased the majority of my wood though.
TTMotorsports
Well-known member
Lumber all year has been going crazy just like metal. A friend paid his deposit for a steel building. Permitting took so long that now the building supplier can't get him the building for the price they already got deposit on because they would lose money. He is still waiting now 9 months late. I need some new interior wall sheeting for my new shop and the old one 3 years ago I used 7/16" OSB and it was awesome. That shop had 100 sheets and it was like $830 at home depot, now that 100 sheets would be like $4500. BUT the building cost me $42K and now would be over $140K. Just like everything inflation ***** and makes your $ worth pennies.
Two years ago I priced out 40×40 pole building 24000 with out doors i put it off, so 2021 i decided to pull the trigger. I knew prices went up so I priced 36×36 with 12 foot overhang 39000 . Lumber prices were going down from 7.48 2×4 × 8 to 3.25 so I sign a contract metal was still high and still going up. Building was up in October since then 2×4s are now 6.24 metal price still on the rise. I am now in process of finishing inside my building and of course everything is high if you can find what you need.
Crying for min. Sense zip is around 45.00 sheet now and OSB is around 30.00 sheet I started to research GP Force Field 7/16 sheathing. So while at HD last week it was around 23.00 sheet looking at website cause the price tag was gone at that bend. Well I went to HD today still no price on at bend so look at website and its gone up 10.00. Just over a week, it does not make sense. I know supply/demand, I would understand that if the increase were only say dollar and change. But jumping that much, it does not make sense, what if gas took a jump like lumber. Its a commodity, lumber commodity,right? Dang to bad my hourly pay isn't a commodity. Hasn't gone up in ages
Altair Sinclair
Member
Hey, please let us know which building supplier did this, so we can avoid them.
That is not cool. Once a manufacturer quotes a price, accepts a purchase order, and takes a deposit, it is their job to hedge any pricing risk from that point until delivery. This is why futures and derivitaves exist.
Our company took a $14.2 million dollar hit due to price increases because of this exact situation this year. Even though we had record sales figures and put in record hours fulfilling those orders, we were rewarded with very little this year. Feels great.
I am pretty sure that in these unprecedented times it is only fair to pass on some of the cost to the customer, as no one has experience with the craziness that is our current economy.
ericm
Well-known member
You must not have been paying attention in the '70s and early to mid '80s. 12 and 13% inflation. Federal government wage and price freezes. Or 2008/9 when lots of people lost their jobs and houses. While the cause of todays economic issues (covid) is unprecedented the effect on the economy is mild compared to times in the past.
That said if I can ever get the permit for my shop I hope materials prices won't be too crazy.
reader2580
Well-known member
I don't know if it would fly with customers, but I would put in my contracts with customers that final price will be determined based on materials pricing at time actual production begins. The customer would then have the option for a refund of their deposit if they wish before production begins. This could benefit customers if material prices were to go down.
I was born in 1982, and graduated from college in 2009. Neither of those affected me in any way, shape, or form. Well actually we bought our first house at the real estate bottom with the help of the Obama First Time Home Buyers credit if $8k. So I lied, there was a positive effect for us! Thanks Obama! We also scored a killer deal on our current house 4 years ago right before the crazy Spike.
Cough* you could say our timing is impeccable cough*
FredWanaker
Well-known member
Yes - you were too young to have experienced the last big round of inflation. It was over by the time you were 5 or 6. Prices will probably go up another 10% - 12% if the Fed acts strong and quick. If not we will have inflation for the next 4 to 8 years, and things will cost 30% to 50% more by then. Wages won't keep up with it and more people will move below the middle class. That is how it works. As wages increase companies find it profitable to use more automation. They are already 3-d printing concrete structures. Wait until automation learns to frame and put on roofs. In fact some places use walls that were built by automation in a factory, and everything is done except make the connections when the house is "assembled."
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sjvicker
Well-known member
Woodmisers self powered one is around 12k so it going to be awhile before you’d break even on cutting non structural projects but there are much cheaper ones.
Im fortunate to have a large supply of Douglas Fir and running the numbers there is a possible break even on the machine for doing non structural projects. Especially more so because the machine still has resale value.
the challenge I see more than the break even or dealing with grading is the processing time and dry time
Altair Sinclair
Member
I would never sign a contract like that unless it guaranteed me copies of all materials invoices, and the option to purchase those materials myself.
If you're a contractor heading down this route, realize that it means the end of "it costs what I say it costs" and hiding your profit margin behind a single big lump-sum quote. You're now talking about quoting labor and materials separately. Think hard about that.
FredWanaker
Well-known member
FredWanaker
Well-known member
reader2580
Well-known member
As a manufacturer you have to figure out a way to not end up with zero profit or a loss due to rising material prices and also keep customers happy. Maybe my idea would drive customers away so it wouldn’t work. It would be easy to base the price for a steel building on the steel futures market.
I saw every materials invoice when I had a house built in 2001. I even know exactly how much the GC made because they provided invoices for their fees. A 14% fee was charged for each change order. Lumber was an allowance and I paid whatever the lumberyard charged.
Lumber has too much variation to work well with automation in uncontrollable environments such as a job site. Factory floor with good known zero points, sure, but setting walls and trusses is a different story. Well, maybe metal studs could work?
I was a framing carpenter for an outfit that used pre built wall sections swung in via crane. It worked, but there were always issues of some sort to deal with.
duneslider
Well-known member
We do open book jobs with more and more customers now. However, we also start the jobs with a predetermined profit margin. Its all out on the table and we know the percentage of the job we will make but the customer doesn't know how much it will end up costing them in the end but for some reason the "money people" like this setup more than us making an undisclosed profit margin. Go figure. We obviously do put in a higher margin when we bid fixed price jobs because we are assuming the risk. Sometimes we do good and sometimes we don't. We do like the idea of a consistent and guaranteed final margin. The customer doesn't always end up liking the open book final invoices, especially the last couple of years with prices being all over the board.
You can't have your cake and eat it too. As a contractor/business we need to make money and not lose money.
reader2580
Well-known member
My understanding is at least some highway construction contracts in Minnesota have steel price clauses in them now. Contractors lost a lot of money in the 2000s when steel prices increased dramatically from the time of the bid to actually paying for the steel.