What comes to your mind when you think of lumber pricing? Is it confusion or maybe even frustration? Well, we’d like to help create a little more understanding through some education. We started in “What Factors Determine the Price of Lumber?” and continued in “How the Size of Boards Affects Lumber Pricing.” But there’s still plenty more to the many factors that go into the pricing of real lumber.
Even if it seems sometimes to be random or confusing, the truth is that there are reasons your price for the exact same board might be different today than it was last week — or will be next month. As a naturally occurring building product, wood is subject to seasonal shifts in availability — which often conflict with seasonal demand. If you understand how these issues interact, you can plan for them and leverage the timing of your lumber orders to work in your financial favor.
The Results of Seasonal Demand
You understand the basic concept of seasonal demand, don’t you? The day before any given holiday, the related decorations and specialty foods will be priced far higher than they will the day afterward. Some shoppers respond by buying certain items for next year’s celebrations nearly a year in advance, while others willingly bite the bullet and pay top dollar to acquire items prior to the special day. Still others will shop months in advance looking for sales before supplies wane and demand peaks.
A similar situation occurs in relation to decking lumber, based on demand: you’ll pay more for decking lumber in the middle of the summer than you will any other time of year. All lumber yards are lessening their supply during the summer, while demand is at its peak. Wait a few months, and prices will certainly be lower — but of course, so will the number of decking projects you have lined up. And it gets even more complicated than that, when you look at the circumstances surrounding a particular decking lumber species.
The Repercussions of Seasonal Availability
In addition to demand, there’s another major factor that influences seasonal pricing shifts, particularly when it comes to exotic hardwood decking lumber. Ipe, our top-selling decking species, offers a major case in point. For a more detailed scenario related to Ipe pricing, check out this post.
Ipe is unique in that it is limited by the Brazilian rainy season. The annual shifts in availability are often tied to the related rhythms of harvesting and shipping. For importers like ourselves, this means that the only time Ipe is available for ordering is during the low-demand winter months. Of course, that involves both the risk related to up-front payment as well as plenty of space for storing lumber for which there’s currently a low demand.
Sometimes this scenario can benefit a customer who is willing to pay for decking lumber up front; the low demand combines with high supply, and suppliers are more than willing to unload some of their inventory. Add in the potential for a harsh winter, and the overhead cost of milling the lumber may translate into higher cost as well.
Learn More About the Lumber Industry
J. Gibson McIlvain Company
As an active supporter of sustainable lumber practices, the J. Gibson McIlvain Company (mcilvain.com) is one of the largest U.S. importers of exotic woods and has provided fine lumber for notable projects throughout the world, including the White House, Capitol building, Supreme Court, and the Smithsonian museums. For more information on J. Gibson McIlvain’s lumber products and services, call Monday-Friday toll free (800) 638-9100 to speak with one of their representatives.