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  • Writer's pictureDon Magruder

August 2021 Lumber & Commodity Report


By Don Magruder


The RoMac Building Supply Wood Commodity Index (Index) for August 2021 dropped by 55.0

percent to $430.94 per thousand as the big correction in sheathings and spruce finally hit

the wood markets. The sales declined in the Big Box retailers as the spike in the

coronavirus Delta variant is slowing sales. Since last August, this Index is down 41.5

percent and since January, the Index has dropped 49.9 percent. The markets are at or

close to the bottom, and these numbers are the lowest prices of the year. The correction in

the last 30 days will be filtering down to your local suppliers over the next few weeks as

inventories are replenished, and shipments arrive from the longer lead times attributed to

trucking.


There are two variables that builders should be wary of 1.) Hurricane season is upon us,

and it is getting active, and 2.) The Delta variant is creating manufacturing issues once

again. While no one expects the record pricing that has been seen over the last year,

there is a good chance these factors coupled with a devastating fire season out West

could strengthen the markets quickly. Additionally, trucking remains a concern.


The dimensional lumber portion of the Index dropped 34.5 percent to $433.06 per

thousand. Also, $200 drops were common in spruce as well as with wide with pine. 2x4

pine increased a few dollars with 2x4 treated wood only retreating 12.6 percent as treaters

are delayed a little from the markets. Overall, it was a significant correction that will soon

be seen on the ground for builders.


The sheathings part of the Index was brutal as declines were significant. The overall

sheathing portion dropped 63.5 percent or $748.38 per thousand. On average the drop

was $23.95 per sheet. Compared to August 2020, one year ago, the sheathing portion of

this Index is down 37.0 percent. Once again, it is a good bet that we are close to the

bottom and a bad hurricane could quickly pop these markets off the bottom.


There are a lot of unknowns and volatility in the markets. The declines are so sudden and

dramatic that it will take local dealers and lumberyards a few weeks with lead time and

trucking issues to incorporate in new pricing. Builders should see some good declines, but

on the other hand, builders should be cautious in bidding on future projects at these numbers. Circumstances could change in a month- be cautious.


The RoMac Wood Commodity Index is a weighted lumber and sheathing composite based on usage in Central Florida. By using wholesale pricing, the Index is a good indicator of the pricing direction for the next 30 days.


Don Magruder is the Chief Executive Officer of RoMac Building Supply in Central Florida, he is a former president of the Southeast Mississippi Home Builders Association and a past Associate Vice President of the Home Builders Association of Lake County.

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