Odd Lots Lots More With Stinson Dean on Crashing Lumber Prices
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Jul 5, 2024 
Stinson Dean, founder of Deacon Lumber, shares his expert insights into the recent crash in lumber prices, which have plummeted by 20% during peak homebuilding season. He explores the surprising demand dynamics in the housing market and how post-pandemic renovation trends have reshaped supply. Stinson also discusses the challenges lumber mills face with inflation and labor management. With a light-hearted touch, he contrasts today's scenario with the skyrocketing prices of 2020 and 2021, providing a fascinating perspective on the lumber industry.
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Lumber Prices Below Break-Even
- Lumber prices have fallen below break-even costs for producers, defying traditional market logic.
- This situation raises questions about the current state of the lumber market and its underlying dynamics.
Labor Hoarding and Oversupply
- Mills are hesitant to curtail production despite losses, fearing workforce loss to other sectors like Amazon.
- This reluctance contributes to oversupply, further depressing lumber prices.
Super Contango in Lumber Futures
- Lumber futures are in a "super contango," meaning future prices are significantly higher than spot prices.
- This market signal incentivizes storing lumber rather than selling it immediately.