With Wholesale Lumber Prices Down Nearly 50%, Can Lower Retail Lumber Prices Be Far Behind?

Paul Jannke, Principle of Lumber for Forest Economic Advisors, says that consumers may see the price of lumber at the retail store level decline considerably in the coming months. This would be after wholesale prices declined approximately 50% in June.

Jannke added that though the wholesale price has dropped, it will take a little bit of time for consumers to see that reflected decrease in retail stores. “They will feed through into lower retail prices as well. With wholesale prices taking about 3-4 months to translate into retail prices, I would expect by August/September to see lumber prices drop by as much as 50 percent.”

Jannke points out that the COVID-19 pandemic has wreaked havoc on the lumber industry, causing severe supply constraints due to production shutdowns and combined with a surge in demand due to home construction and renovation projects, prices shot up.

“Prior to the pandemic, prices dropped to about $300 (per thousand board feet) and then we saw them shoot up above $1,600—it was more than a five-fold increase in lumber prices.” The average price of lumber in Canada rose by roughly 500 percent between 2020 and 2021.

Now with prices starting to drop, it may be safe to say that the COVID bubble has burst in the lumber industry, which for consumers is a good thing to hear.