Lumber prices (FALLING!) leading inflation XI

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Forum topic by Madmark2 posted 05-05-2021 01:12 PM 8870 views 0 times favorited 259 replies Add to Favorites Watch
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3484 posts in 2079 days

05-05-2021 01:12 PM

Topic tags/keywords: lumber prices inflation grizzly

More good news from The Daily Caller:

After Skyrocketing To Record Highs, Lumber Prices Fall Back To Earth

Things change. From Fox 17JUN21:

Lumber prices plunge, Sherwood Lumber COO explains what’s driving the decline

Lumber prices down more than 40% since record high in May

Fox News 28MAY21:

Trump pins lumber crisis on Biden policies
Trump said, ‘It’s going to be ugly when you look at the cost of a house, just the materials for a house’

Washington Examiner 27MAY21:

Biden administration moving to double tariffs on Canadian lumber despite already skyrocketing timber prices …

Breitbart Newsletter 20MAY21:

Today’s manufacturing report from the Philadelphia Fed was a great indication of just how quickly businesses are shifting into an inflationary mindset. Price indicators on both sides of the factory—the intake gate where the materials arrive and the offloading docks where the products ship out—jumped to 40 year highs. The prices paid diffusion index soared 8 points to 76.8, its highest reading since March 1980. Nearly 77 percent of firms reported paying higher prices and none—zero, zilch, donut—reported paying lower.

We’ve seen spikes in prices of materials and higher-order goods in the past, including when tariffs on metals and some Chinese imports were hiked during the Trump administration, but these typically have squeezed margins rather than raised consumer prices. This time, however, businesses are succeeding in passing on higher prices. Nearly 43 percent of the firms reported increases in prices of their own manufactured goods, the highest percentage since 1981 and a big jump up from 36 percent in April. Just two percent of firms reported falling prices.

After a long dormancy, inflation expectations have roared back to life. When the Philly Fed asked businesses in February how much they thought they would increase the prices of their goods over the next twelve months, the median answer was three percent. In May, that figure jumped all the way up to five percent. The median reported inflation over the previous 12 months was 2.3 percent (up from 2.0 percent in February), which indicates that businesses think inflation is running twice as hot.

You won’t be surprised that business owners suspect that they’ll be able to raise prices more than the other guys. That’s the kind of animal spirit that drives American capitalism. So the Philly Fed found that the median expectation for broader inflation went from 3 percent in February to 4 percent in May, half the gain that the same folks said about their own prices.

As far as we can tell, we and the Wall Street Journal’s editorial page writer James Freeman were the only ones to highlight the inflationary signals in the Philadelphia Fed report. After decades of low inflation, many journalists and analysts just aren’t equipped to notice rising prices even when they heat up to temperatures unseen since the days of Jimmy Carter and Paul Volcker.

– Alex Marlow & John Carney
Breitbart News Network

Email from Grizzly:

A Message From Our President

Dear Customer,

This year has proven to be no less challenging than 2020 for businesses and customers alike. Supply chain disruptions across the globe continue to rile the manufacturing and transportation of goods in every industry. These disruptions have caused record backorders on everything from children’s toys to appliances to woodworking and metalworking machinery. There is no industry untouched by these disruptions.

The unprecedented demand for goods, coupled with the restricted supply chain over the last fifteen months has not only impacted supply speed, but now rapid increases in raw material costs and transportation expenses are causing financial impacts in every aspect of business. The price of steel is up over 30%, copper 35% and the cost of shipping has quadrupled; just about every other cost for producing and moving goods continues to rise with no signs of slowing.

Grizzly has absorbed these cost increases on most goods for as long as possible, but we can no longer hold off on increasing our prices. In some cases, these increases are significant, but I can assure you we have done everything in our power to minimize increases wherever possible before passing additional costs on to the customer.

We are committed to providing a product you can trust by supplying high-quality tools at affordable prices with outstanding customer service. We will continue to work tirelessly to increase supply and minimize cost impacts wherever we can.

Thank you for your business and ongoing support.

Best Regards,
Robert McCoy
Grizzly Industrial, Inc.


Excerpted from Fox
  • In the crazy last 100 days, the price of everything from lumber, food and gas to cars and houses has soared. Yet many interest rates are still stuck at or below 3%. 
Excerpted from Fox Tucker Carlson 08MAY21:
  • And then there’s lumber. Have you noticed lumber? Since last year, the price of dimensional lumber has gone up by almost 300%. Want a thousand board feet? That’ll be $1,359. That price has never been higher. According to the National Association of Home Builders, the cost of materials adds more than $35,000 extra dollars to the price of a new single-family home. 
Excerpted from 07MAY21 Brietbart:
  • Wood product producers shed 7,000 jobs, perhaps reflecting extremely high prices for lumber.

Excerpted from The Daily Caller: (emphasis added)

  • The consumer price index spiked 0.6% in March, the largest monthly increase in nearly a decade, the Labor Department reported last month. In particular, the costs of lumber, gasoline, steel, copper, computer chips, homes and home appliances have all substantially increased in the past few months.
  • “We are seeing very substantial inflation,” Warren Buffett, billionaire investor and chairman of Berkshire Hathaway, said at his company’s annual shareholder meeting Saturday, according to CNBC. “It’s very interesting. We are raising prices.”
  • “The costs are just up, up, up,” he continued. “Steel costs, you know, just every day they’re going up.”
  • Lumber prices hit an all-time record price of $1,500.50 per thousand board feet on Friday, according to The Wall Street Journal. The high cost of wood is expected to stay elevated for several months.
  • The high cost of wood has contributed to the rising cost of homes nationwide. Home prices rose 11.3% in March, the largest increase since 2006, real estate insights firm CoreLogic reported Tuesday.
  • Buffett noted that the cost of building homes is increasing due to lumber* and steel price increases, CNBC reported. Berkshire Hathaway owns Clayton Homes, one of the largest homebuilding companies in the U.S, paint maker Benjamin Moore and carpet manufacturer Shaw Industries.
  • “Homebuyers are experiencing the most competitive housing market we’ve seen since the Great Recession,” Frank Martell, president and CEO of CoreLogic, said in a statement last month. “Rising mortgage rates and severe supply constraints are pushing already-overheated home prices out of reach for some prospective buyers.”

-- The hump with the stump and the pump!

259 replies so far

View metolius's profile


432 posts in 2221 days

#1 posted 05-05-2021 07:52 PM

yep – we are likely in for a full market inflation ride for the next 2yrs.

-- derek / oregon

View Craftsman on the lake's profile

Craftsman on the lake

3896 posts in 4929 days

#2 posted 05-05-2021 08:01 PM

CD rates go up during inflation. If you’ve got no big ticket items to buy then it can work out… If you’ve got CD’s that is.
Around 1980, CD rates were 11%. Jimmy Carter years, very high inflation. I built my house then. It wasn’t that materials were expensive, it’s just that since no one was building there were no materials in stock. I waited for about 3 weeks for a stack of sheetrock for instance. But it was a good time to build. I put the shell up myself one summer and got it enclosed and it was probably about 40% less than a few months previous.

So with inflation, eventually people will slow spending and stuff will drop. It’s all about what the market will bear. Capitalism in motion. Under this system you gotta take the good with the bad. Still better than other methods for sure.

-- The smell of wood, coffee in the cup, the wife let's me do my thing, the lake is peaceful.

View therealSteveN's profile


10177 posts in 2065 days

#3 posted 05-05-2021 08:18 PM

Somebody voted for him is what they say.

-- Think safe, be safe

View bladedust's profile


245 posts in 3757 days

#4 posted 05-05-2021 09:51 PM

As per the Federal Reserve chair, this inflation trend is “transitory”, which the market in general is in agreement with him. I keep a very close eye on the mortgage back securities (it is my job as a mortgage originator) which dictate the mortgage rates and I can tell you the rates are stable.

Yes, inflation is up and yes rates will eventually will rise, but the Federal Reserve is buying approximately $120B monthly mortgage back securities in order to keep the rates low and there is no indication they will taper anytime this year.

Also, this inflation trend is somewhat skewed since the some commodities have increased in value from 2020 where they were artificially low. As as example, crude hit $28 a barrel in 2020 and now at $64 a barrel. It is almost triple, but $28 a barrel was artificially low due to oversupply and was around $70 a barrel in 2019. So it looks like it tripled in price, but actually just stabilized to pre COVID pricing.

I bought my first home at 14% rate and I can tell you, we will not see this again in my lifetime. When the market was at its hottest point in 2004, 2005, 2006 the rates were hovering in the 5’s to 7’s.

This current inflation environment is indeed transitory.

-- ok, is it cut once measure twice, cut twice measure once???? I know....I'll just keep cutting until it's long enough.

View Madmark2's profile


3484 posts in 2079 days

#5 posted 05-05-2021 09:54 PM

In the final analysis everything is transitory except death. The trick then is to survive the transition.

-- The hump with the stump and the pump!

View sansoo22's profile


1994 posts in 1145 days

#6 posted 05-05-2021 10:06 PM

Does the current issue with logistics supply chain attribute to some of the inflation? I used to work for an intermodal trucking company and still have some friends in that sector. They are telling me trucks, ships, trains, etc are all running extra empty routes to go collect chassis and containers that were just left at wherever their last stop was when COVID lockdowns were enforced. I know “running empty” in the shipping sector is always a bad thing as you burn fuel and man hours for no gain. Those additional costs get pushed off to your client which I assume leads to eventual higher costs for consumers. Not to mention logistics constraints leads to the supply and demand curve getting thrown off.

View Knockonit's profile (online now)


1286 posts in 1693 days

#7 posted 05-05-2021 10:12 PM

my understanding is shipping costs especially those from out of continental USA, has increased by 35 %

and more on some items.

ugly stuff.
think i’ll grow some trees, wonder if i’ll live long enough to collect, lol
Rj in az


-- Living the dream

View 1thumb's profile (online now)


724 posts in 3647 days

#8 posted 05-05-2021 10:24 PM

Fed policy since GFC hasn’t changed. They seek to temporarily inflate the perceived value of paper assets. Stocks, bonds, mortgage’s, commodities. Money printing. They can’t stop or unwind their balance sheet or all explodes in their face.

Fed chairs and economists speak to inflation via the cost of Peruvian anchovies affected by El Nino and trading down from rib eyes to ground beef, so there is no inflation, food prices are actually cheaper


View bladedust's profile


245 posts in 3757 days

#9 posted 05-05-2021 10:36 PM

Yes, shipping costs have gone up dramatically both domestically and internationally due to COVID and the supply chain shutting down. Demand for shipping has never seen such an increase since we have never been locked down at home like we were during the pandemic. Things are opening up, people are moving about and this will drive the cost of shipping down as demand for shipping basic essentials will slow.

The Federal Reserve is an interesting organization; it is assumed it’s a federal agency, but it is actually a private entity owned by BIG banks with broad financial powers. They print the money, create the T-bills and then buy them back with the money they just printed. My feelings about the Federal Reserve and how they control and manipulate the economy is a discussion for another day.

-- ok, is it cut once measure twice, cut twice measure once???? I know....I'll just keep cutting until it's long enough.

View Aj2's profile


4492 posts in 3289 days

#10 posted 05-05-2021 10:49 PM

My attempt to understand what the hell is going on has lead me to watch old videos of Milton Friedman.
What we have here is the fourth way to spend your money. And it’s the worst possible way the government takes your money and gives to someone else.
Or use it to grow government programs. He also mentions once inflation gets started its very hard to stop.

-- Aj

View Madmark2's profile


3484 posts in 2079 days

#11 posted 05-05-2021 10:54 PM

Was at Tractor Supply and their tool and hardware shelves were picked clean. All I could find was dusty new old stock.

Bought a flashlight and the included batteries had leaked and eaten the contacts away on the battery pack while sitting on the shelf!

Got the last box of #8 1-1/2” exterior wood screws they had. Many other sizes were empty or only had a box or two. Selection and quantities are low.

Everything seems to be running low and SWMBO says stock and selection are down at the grocery store.

It takes weeks to get parts you used to be able to get from stock or in a couple of days.

We’re heading for Moscow on the Hudson here …

-- The hump with the stump and the pump!

View Madmark2's profile


3484 posts in 2079 days

#12 posted 05-08-2021 01:20 PM


-- The hump with the stump and the pump!

View ibewjon's profile


3016 posts in 4284 days

#13 posted 05-09-2021 12:11 PM

TSC has never had much stock in stores near me. They all closed years back, and now are attempting to open new stores. The big box Menards, Lowe’s, and Depot all have full stock.

View TravisH's profile


800 posts in 3426 days

#14 posted 05-09-2021 02:49 PM

TSC has never had much stock in stores near me. They all closed years back, and now are attempting to open new stores. The big box Menards, Lowe s, and Depot all have full stock.

- ibewjon

Our store in almost always empty and having 10 cars in the parking lot is the equivalent of Mother’s day at the florist.

They really didn’t try to change with the times and agricultural & livestock supplies, tools, workwear & boots geared towards that crowd just doesn’t cut it anymore in many areas of the country. Rural King really took many of their remaining group of limited shoppers, in my area, as they can eat free pop corn and look at guns. Prices weren’t all that competitive either the several times I stopped in.

View controlfreak's profile


3867 posts in 1092 days

#15 posted 05-09-2021 06:18 PM

When I bought my first home I locked in at 15% and it went on to 20% later. Still in the same home but it is at zero percent now.

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