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Lumber prices could surge again due to too few lumber workers

Depressed demand for lumber is causing job losses in the industry, which could cause supply chain crunches and shortages down the line.
Lumber prices could surge again due to too few lumber workers
Posted at 10:32 PM, May 18, 2023

Maine is one of the major producers of timber and forest products — a University of Maine study estimated that pre-pandemic, Maine's industry was tied to 32,000 jobs .

But since the pandemic, demand for lumber has gone down, and so have the prices.

This is causing many to leave the industry in search of different jobs, and could have a major effect on the consumer when it comes to building or repairing homes.

The University of Maine study found the state's  logging industry supported fewer jobs and generated less economic output and labor income in 2021 compared to the five years prior.

The study shows that Maine itself generated $582 million in economic output compared to $619 million in 2017.

Dana Doran is the executive director of the Professional Logging Contractors of Maine.

He says the volatile conditions have led to contractors leaving the industry.

"In the last 3 years… about a third of the logging company has essentially walked away for a multitude of reasons, the suppressed market prices that they get paid for wasn't keeping up with inflation," Doran said. "They couldn't hire people because other industries were able to pay more than what they were willing to pay. So we've seen about a third of capacity and a third of the employment walk away within the past three years."

SEE MORE: Supply chain issues slowing down recovery from natural disasters

Scott Ferland is general manager of Maine Woods Company, which bills itself as the largest single manufacturer of hard maple lumber in the Northeast.

"We've struggled to keep a full workforce. It was a really frustrating time for different reasons, and we have yet to go back to a fully staffed production rate and I don't know when they will," Ferland said.

Doran says while prices for wood products are low, this can be a problem for the industry once demand goes up, since the industry is short on workers.

"When that demand comes back there will be issues with the supply chain with the production, with any wood product it's not produced other than with a logger at the beginning of the chain," Doran said. "If you don't have a logger to harvest the wood, if you don't have a trucker to bring it to market, there's going to be major restrictions on supply and demand you're going to see prices go sky high cause that's how the market works."

Doran says this is a global issue, which is why he thinks one solution for the wood industry is to expand to lesser-explored markets that use wood products.

"What we really need is more markets for low-valued wood, we have a market that's starting this spring that's going to make insulation for homes and businesses out of wood fiber, we see opportunities in the next few years to use wood to create biofuel. That could be transportation fuel and home heating fuel," Doran said.

"Long story short is if we have more markets, more markets create more competition for fiber, which in turns increases the price that's paid for that wood fiber, which creates a more sustainable business plan for logging contractors in the long run."

SEE MORE: The US conducts a census of its oldest trees


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