Lumber trader who warned of 'climate price' flags 4 ways to ease latest spike that's nearing record highs
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- Lumber prices were at $1,188 per thousand board feet Thursday, more than double November's level.
- In an interview with the Atlantic, lumber trader Stinson Dean explained how climate change impacts the price.
- He shared four supply-side factors that could help ease the spike in lumber prices.
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Lumber prices are rallying again as housing demand remains hot and supply-chain disruptions continue to drag on.
A recent survey of home builders revealed that many expect lumber prices to continue to go up in 2022. Currently, the commodity is worth $1,188 per thousand board feet, more than doubling since November, though its still off its all-time high of $1,700 in May 2021.
That's when Colorado-based lumber trader Stinson Dean described that astronomical level as a "climate price." In an interview published Wednesday in the Atlantic, he ticked off factors related to climate change that have contributed to a supply shock and sky-high lumber prices.
Winter temperatures are no longer cold enough to control the population of the mountain pine beetle, which kills trees. That spurs aggressive logging to harvest trees while they are still viable for lumber.
The dead trees that the beetles leave behind also exacerbate massive wildfires that have been ravaging Western regions more frequently amid a record drought and hotter temperatures.
And that's left key hubs like British Columbia vulnerable as fire-ravaged areas see mudslides during heavy rains that halt the production and distribution of lumber.
Dean told that Atlantic that surging lumber prices are a supply-side problem and highlighted four factors that could help bring them down.
- Opening up national forests to strategic, sustainable logging. "We have natural resources in the Pacific Northwest that we haven't tapped since 1993."
- Using southern yellow pine trees, which grow in the Southeast US and are in overabundance, to build homes. "Can we improve the way we process southern yellow pine so it [can be used for home building]?"
- Changing building codes to better utilize the lumber that's currently available. "Can we look at some Canadian species other than the spruce? Can we use ponderosa pine from Washington? Building codes are local, so it's a big decentralized issue."
- Removing the US tax on Canadian lumber. "I don't think if you just eliminated the tax tomorrow, prices would come down. But it would allow prices to get lower when lumber is cheap."