Company Information

Dear Valued Customer,

We have received many calls and comments from customers questioning the price increases over the past few months, as follows are some bullet points outlining why prices are increasing.

- In 2009 over 400 hardwood sawmills closed their doors.  These are not mill curtailments; these are actual mill closures that lead to the liquidation of equipment.

- These mill closures, along with curtailments at remaining mills to slow the financial bleeding have resulted in a reduction of sawmill production totaling 3,000,000,000 board feet of annual lumber production.  This number is correct, 3 Billion board feet.

- In 2009, production contraction brought the hardwood industry from 9 Billion board feet of annual production to 6 Billion board feet of production.

- With the stabilization of Asian markets and the increase in demand for raw materials to support their growing housing markets, coupled with a 185% tariff placed on Russian logs entering China have placed additional strain on US lumber manufacturers already hamstringed by back to back years of significant financial losses due to the US economy to keep up to the demand for kiln dried lumber. 

- Unusually wet weather for the past several months in the southern half of the US where the bulk of hardwood production is centered have severely limited the ability to get logs out of the woods. 

- This wet weather has not only slowed the availability of logs but slowed the air drying and kiln drying processes of hardwood lumber.

- Log costs are up 65% in the past 90 days.  Lumber prices have risen accordingly and are driving flooring prices back to prices more in line with normal price ranges.

- Typically, from the time a Red Oak log is processed at a sawmill, until the time it is dry and ready for production at a flooring plant is 120 to 150 days.  With extended drying times of lumber and massive mill closures there is a large bubble of material shortages that we are still in the thick of.  We do not expect to see an easing of this shortage for several months.

- These shortages of raw materials caused by mill closures, logging company closures, mill curtailments, weather delays, increased export demands and an improvement in demand for lumber and flooring domestically are causing prices to return to ranges seen in years prior to the melt down of the economy and our industry.

The factors causing shortages along with limited amounts of bank financing for our industry to fuel growth are causing manufacturers to rely on profitable production to return to the demands on our industry for 9 Billion feet of annual production.  Given that we, as an industry, have sustained several years of back to back losses our ability to grow from profitable operations is crippled and will need time to strengthen with strong sales numbers.

If you have any questions please do not hesitate to call,

 

Eric Penewell
Operations Manager, Hardwood Flooring Distributors
Ph 206.622.0917 / Toll Free 800.858.0858