Helping Framers Know More About Lumber and OSB Costs
Is Now the Time to Buy?
When you’re months out from a big project, it can be hard to know exactly when to buy raw materials. Do you tell your customers to buy now and accept the costs of storage, or do you wait, hoping for a price drop?
Before you decide, take a few minutes to review the latest regional market reports from Idaho Pacific Lumber Company, included in this week’s and future Framing News emails. “Commodity wood products fluctuate on a daily and sometimes even an hourly basis,” says Scott Sunday, IdaPac’s VP of purchasing and sales. “So, once a week, we put out a report about what our buyers are seeing in terms of pricing for a particular commodity item that we know is used in a particular regional market.”
The reports show trends: the price at the mill for the tracked commodity items, a composite average, and the year over year change in pricing. “This is the commodity pricing only,” notes George Hull, president of Hull Associates, a long-time IdaPac customer, and an avid consumer of IdaPac’s market reports. “This is not delivered-to-your-jobsite pricing. There are a lot of things that can affect your price: storage, terms, and so on.”
Still, the index the reports provide can be a significant help. “If a builder or a framer is trying to decide the timing on purchasing the wood products for his project,” Sunday explained, that person “might look at this and say, ‘ok, these numbers have been climbing. The prices are as high as they’ve been in three years. I’m going to wait a month or two months before buying.”
Being able to give your customer a confident purchasing recommendation is the key value to these reports, said Hull. “There’s a lot of logistical issues your lumber supplier can assistant you with. You can work with companies like IdaPac to get pricing that you can give to your customer while the lumber supplier speculates on the market. Ultimately, you can save your customer money by helping them buy at the right time.”
Sunday added that that is exactly what IdaPac aims to do. “We’re completing our fourth decade in this business,” he noted. “We have a purchasing team that is very experienced. We don’t have the overhead that some of the national lumber yards do, so we’re able to share our savings with builders. And we’re employee owned. We take a lot of pride in that.”
IdaPac also takes a lot of pride in being an NFC supplier member and in being able to share its market reports with the NFC membership. “We put a lot of work into those reports!” said Sunday. “We were excited when George reached out and asked if we’d be interested in joining the National Framers Council and providing this information.”
Hull encouraged other NFC members to do the same. “Get your lumber guy engaged in this!” he urged. “Talk to your lumber supplier about becoming a member and getting in line to provide this kind of information.” The more companies involved, the stronger the NFC community – and the better the future of the industry as a whole.
“We’re excited for the long-term future of the construction industry,” Sunday said. “We believe that there is strong underlying demand that will persist for years to come. We’ll have our ups and downs, but we know that there is a whole wave of millennials out there who are going to need apartments and homes. We look forward to growing with the NFC – we believe the future is bright.”
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