February 2022 Lumber & Commodity Report
by Don Magruder
The RoMac Building Supply Wood Commodity Index (Index) is a weighted index that we have been charting since 2000, and it includes a mix of the most popular wood items sold in Central Florida. The Index for February jumped 17.5 percent to $1013.61 with every item increasing in price but two. The increases are somewhat surprising given the 39.3 percent in January and the much colder, wetter weather over the last 30 days. In fact, some items already appear to be in a spring price run.
There are two portions to our Index- dimensional lumber and sheathings.
The dimensional lumber portion of the Index increased 6.0 percent with wide width 2×12 pine adding $100 to $110 per thousand or about 9.5 percent. Western Spruce #2 2×4 added $55 to $80 per thousand while 2×6 only added $35 to $50. Spruce studs were a solid $75 to $115 per thousand more with 2×4 pine dropping about 4.2 percent. Overall, the markets remain strong and at high levels despite the weather.
The sheathing portion of the Index increased a whopping 29.0 percent as demand outstripped supply due to volume and manufacturing delays as a result of maintenance issues. CDX pine plywood was up $65 to $80 while OSB sheathing increased an unimaginable $330 with much longer lead times. In dollar terms, OSB added $10.56 per sheet while CDX added $2.24 per sheet. These types of increases match the runs of 2021 and a big spring run in prices.
I keep bringing spring price runs up because the weather is about to thaw, and many of our friends north of us will start cranking up their construction activities. This does not bode well for any price retreats in the short term. Builders should have price escalation clauses in their contracts and for sure, and all old quotes and bids should be updated. Plus, now is not the time to damage relationships with suppliers – they have plenty of buyers and not enough products especially when it comes to OSB sheathing.
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.