Its only money ????

Create a review for a woodworking tool that you are familiar with (Shopsmith brand or Non-Shopsmith) or just post your opinion on a specific tool. Head to head comparisons welcome too.

Moderator: admin

RFGuy
Platinum Member
Posts: 1427
Joined: Mon Dec 31, 2018 8:05 am
Location: a suburb of PHX, AZ

Re: Its only money ????

Post by RFGuy »

Yeah, I saw something else online that indicated the top 5 lumber producers in the USA are Georgia Pacific, Interfor, Sierra Pacific, West Fraser and Weyerhauser. So, G-P and S-P are private companies, but the rest are publicly traded companies so financials are available. So, Weyerhaeuser just reported $1.1B in profit for Q1 2021, versus $413M in Q1 2020. West Fraser reported $665M in profit for Q1 2021 compared to only $9M in Q1 2020. Interfor had record profit of $392M in Q1 2021 compared to $36.6M in Q1 2020. Wondering if price fixing is a possibility here. I mean from what I understand the landowners aren't making out right now, e.g. logs sold continue to be at the lowest price in a couple of decades. So, the owners of the trees aren't seeing any more money from this. I don't believe small sawmills and truck drivers are making that much more, other than maybe some overtime pay. It's possible that the big box stores (Home Depot, Lowes, Menards, etc.) are profiting from this, but I find it hard to believe they could get away with this due to competition between them. So, that really just leaves the large sawmills/warehousers like the top 5 listed above. Don't get me wrong, I know there is increased demand, but I don't believe the supply<->demand dynamic at present indicates a 4x run up in lumber futures prices. I do believe the vast majority of this increase in lumber prices is going directly to benefit these top 5 lumber producers. The year-on-year quarterly profit for Interfor went up like 10x, but West Fraser's went up 74x. Weyerhauser only went up like 2.5x. We'd have to get into any special one-time expenses for these companies to validate if their last year's profit was reduced for some reason. In addition, we would have to look at how much volume of product they shipped this year versus last year, but....does anyone think actual lumber demand in the USA is so high to justify a 10x or more increase in profit for these lumber companies???
📶RF Guy

Mark V 520 (Bought New '98) | 4" jointer | 6" beltsander | 12" planer | bandsaw | router table | speed reducer | univ. tool rest
Porter Cable 12" Compound Miter Saw | Rikon 8" Low Speed Bench Grinder w/CBN wheels | Jessem Clear-Cut TS™ Stock Guides
Festool (Emerald): DF 500 Q | RO 150 FEQ | OF 1400 EQ | TS 55 REQ | CT 26 E
DC3300 | Shopvac w/ClearVue CV06 Mini Cyclone | JDS AirTech 2000 | Sundstrom PAPR | Dylos DC1100 Pro particulate monitor
Hobbyman2
Platinum Member
Posts: 2094
Joined: Wed Feb 01, 2017 12:52 am
Location: Ohio

Re: Its only money ????

Post by Hobbyman2 »

I am sure there are many of us who remember when 400k would buy a country block and a new mansion with a cement pond . now ya only get a economically engineered house on a single lot . I believe economics is working against most people now. on the flip side real-estate is a good profession to be in right now .
Hobbyman2 Favorite Quote: "If a man does his best, what else is there?"
- General George S. Patton (1885-1945)
davebodner
Gold Member
Posts: 438
Joined: Sun Nov 09, 2008 4:38 pm
Location: Arlington, VA

Re: Its only money ????

Post by davebodner »

I saw an article somewhere laying out various complicated reasons for the sudden spike in prices. Sawmill capacity seems to be the controlling factor. There was a reduction in sawmills due to previous declines in demand. Now that demand has increased sawmills aren't being re-opened quickly.

1. New sawmills are complicated; it's not just a matter of dragging a power saw out into the woods. How long will increased prices last? Will prices collapse just in time for my new sawmill to go on-line?

2. Northern sawmills aren't as economically viable anymore. They traditionally sold their wood chips to the paper industry (newsprint and office paper), but there's been a permanent drop in paper demand. Southern sawmill chips get turned into toilet paper. I'm buying as much of that as ever. Until the northern sawmills find an economical use for their waste, they'll stay closed.
RFGuy
Platinum Member
Posts: 1427
Joined: Mon Dec 31, 2018 8:05 am
Location: a suburb of PHX, AZ

Re: Its only money ????

Post by RFGuy »

davebodner wrote: Wed May 12, 2021 10:28 am I saw an article somewhere laying out various complicated reasons for the sudden spike in prices. Sawmill capacity seems to be the controlling factor. There was a reduction in sawmills due to previous declines in demand. Now that demand has increased sawmills aren't being re-opened quickly.

1. New sawmills are complicated; it's not just a matter of dragging a power saw out into the woods. How long will increased prices last? Will prices collapse just in time for my new sawmill to go on-line?

2. Northern sawmills aren't as economically viable anymore. They traditionally sold their wood chips to the paper industry (newsprint and office paper), but there's been a permanent drop in paper demand. Southern sawmill chips get turned into toilet paper. I'm buying as much of that as ever. Until the northern sawmills find an economical use for their waste, they'll stay closed.
Thanks Dave. Those are some good insights, particularly the part about a drop in the market for wood chips due to a drop in demand for paper. Like I said, I have seen a few articles and YouTube vids on it, but no one really addressed the why of it. A lot of it is wild speculation and conjecture with no real analysis or data to back it up. It is unfortunate that the sky high price of lumber futures isn't trickling down the supply chain to benefit Mom and Pops farms trying to sell off trees, but from the limited data I have seen this doesn't appear to be the case. Hopefully when the new president is done with the perceived semiconductor shortage and fixing east coast gas shortages, maybe he can sign an executive order to attempt to address my perceived lack of competition amongst the large sawmills & lumber producers. Don't get me wrong, I am all for companies taking profits, but it is starting to look like price gouging to me. As one who grew up in hurricane territory, I have seen local price gouging 1st hand after every major storm unfortunately and this seems eerily familiar to me.
📶RF Guy

Mark V 520 (Bought New '98) | 4" jointer | 6" beltsander | 12" planer | bandsaw | router table | speed reducer | univ. tool rest
Porter Cable 12" Compound Miter Saw | Rikon 8" Low Speed Bench Grinder w/CBN wheels | Jessem Clear-Cut TS™ Stock Guides
Festool (Emerald): DF 500 Q | RO 150 FEQ | OF 1400 EQ | TS 55 REQ | CT 26 E
DC3300 | Shopvac w/ClearVue CV06 Mini Cyclone | JDS AirTech 2000 | Sundstrom PAPR | Dylos DC1100 Pro particulate monitor
User avatar
jsburger
Platinum Member
Posts: 5587
Joined: Fri Jul 21, 2006 4:06 pm
Location: Hooper, UT

Re: Its only money ????

Post by jsburger »

Here is an article on the subject from the local NBC affiliate in Salt Lake City KSL-TV that some of you might be interested in.

https://www.ksl.com/article/50164480/lu ... ts-hurting

There are 3 or 4 subdivisions close to me that were in early stages of construction. Leveling land, delivery of sewer and storm drain pipe, etc.. There has been no activity on any of them for a couple of months.
John & Mary Burger
Eagle's Lair Woodshop
Hooper, UT
Hobbyman2
Platinum Member
Posts: 2094
Joined: Wed Feb 01, 2017 12:52 am
Location: Ohio

Re: Its only money ????

Post by Hobbyman2 »

good post, I found this article on the furniture aspect of the trades .

These developments created an explosion in the furniture industry. One that jumped on the demand button and has been holding it down ever since. This is fantastic news for furniture companies, right? Yes. Fantastic for furniture companies that build the really good stuff out of solid wood right? Well, yes, but as the pandemic caused shutdowns, hold ups and challenges, the effects were felt in the furniture supply chain, resulting in one great big lumber shortage. https://www.dutchcrafters.com/blog/the- ... furniture/
Hobbyman2 Favorite Quote: "If a man does his best, what else is there?"
- General George S. Patton (1885-1945)
RFGuy
Platinum Member
Posts: 1427
Joined: Mon Dec 31, 2018 8:05 am
Location: a suburb of PHX, AZ

Re: Its only money ????

Post by RFGuy »

For anyone interested, I came across this interview with Bob Bauer, Executive Director of the Kentucky Forest Industries Association regarding the price of lumber. One interesting comment made was that certain sawmills are having a hard time getting employees to come back to work. Due to the federal stimulus package, unemployment has become too lucrative and is actually preventing workers going back to the sawmill to work again. Don't know how widespread this issue is, but I found it interesting as a possible explanation for supply side factors affecting the lumber shortage and subsequent price increases.

https://www.yahoo.com/news/why-lumber-p ... 37553.html
📶RF Guy

Mark V 520 (Bought New '98) | 4" jointer | 6" beltsander | 12" planer | bandsaw | router table | speed reducer | univ. tool rest
Porter Cable 12" Compound Miter Saw | Rikon 8" Low Speed Bench Grinder w/CBN wheels | Jessem Clear-Cut TS™ Stock Guides
Festool (Emerald): DF 500 Q | RO 150 FEQ | OF 1400 EQ | TS 55 REQ | CT 26 E
DC3300 | Shopvac w/ClearVue CV06 Mini Cyclone | JDS AirTech 2000 | Sundstrom PAPR | Dylos DC1100 Pro particulate monitor
RFGuy
Platinum Member
Posts: 1427
Joined: Mon Dec 31, 2018 8:05 am
Location: a suburb of PHX, AZ

Re: Its only money ????

Post by RFGuy »

Single Family Housing starts crashed last month (9.5% drop when 2% was expected), so it looks like sky high lumber prices are having an effect. Just have to wait for supply & demand to balance out to a more reasonable level. Fingers crossed that this will continue and lumber prices will correct a bit...

https://www.zerohedge.com/personal-fina ... rash-april
📶RF Guy

Mark V 520 (Bought New '98) | 4" jointer | 6" beltsander | 12" planer | bandsaw | router table | speed reducer | univ. tool rest
Porter Cable 12" Compound Miter Saw | Rikon 8" Low Speed Bench Grinder w/CBN wheels | Jessem Clear-Cut TS™ Stock Guides
Festool (Emerald): DF 500 Q | RO 150 FEQ | OF 1400 EQ | TS 55 REQ | CT 26 E
DC3300 | Shopvac w/ClearVue CV06 Mini Cyclone | JDS AirTech 2000 | Sundstrom PAPR | Dylos DC1100 Pro particulate monitor
User avatar
Ed in Tampa
Platinum Member
Posts: 5669
Joined: Fri Jul 21, 2006 12:45 am
Location: North Tampa Bay area Florida

Re: Its only money ????

Post by Ed in Tampa »

RFGuy wrote: Mon May 17, 2021 5:23 pm For anyone interested, I came across this interview with Bob Bauer, Executive Director of the Kentucky Forest Industries Association regarding the price of lumber. One interesting comment made was that certain sawmills are having a hard time getting employees to come back to work. Due to the federal stimulus package, unemployment has become too lucrative and is actually preventing workers going back to the sawmill to work again. Don't know how widespread this issue is, but I found it interesting as a possible explanation for supply side factors affecting the lumber shortage and subsequent price increases.

https://www.yahoo.com/news/why-lumber-p ... 37553.html
I know my son in law would kill to get help in his lawn care business, seems no one wants to work for $11 an hour to start. Also a chic-fil-a had to close early 6 pm because they could not get workers. Taco Bell is in the same position. My favorite restaurant has a sign for bus boys, servers, cooks and kitchen help. Owner is now doing the cooking before he was out front welcoming people and cashing them out.
Every place I go the owners are crying because they can not get workers. It seems people took off for Covid and found out they liked that life style. Farmers here in Florida are seeing produce rot in the fields not worker.
Personally I think our economy is circling the drain hole and our leadership can't or won't do anything about it because of politics.
Hobbyman2
Platinum Member
Posts: 2094
Joined: Wed Feb 01, 2017 12:52 am
Location: Ohio

Re: Its only money ????

Post by Hobbyman2 »

covid seems to be a convenient source for free money that's for sure . especially since 99.9 percent of the people who had it are still alive and well with out the vaccine . it is definitely convenient . I personally know 4 people who were diagnosed and were told to go home stay there and take vitamin d and vitamin k and shake it off .
Hobbyman2 Favorite Quote: "If a man does his best, what else is there?"
- General George S. Patton (1885-1945)
Post Reply