Lumber Pricing, Demystified (Part 1)

Lumber pricing may be more of an art than a science, but it’s definitely not without predictable (if variable) influences. We understand the frustration of lumber customers who view lumber pricing to be just as nebulous as a random grade on a research paper, with absolutely no explanation. We’ve heard you, and we’re listening.

While lumber simply has too many specifics to allow us to hand out a simple pricing sheet like many industries can, we can certainly try to help you understand what goes into the numbers that we give you when you ask for a quote. We really aren’t pulling numbers out of a hat, and yet if you came in with the same exact order tomorrow, we may well give you a very different set of numbers. We realize that doesn’t seem legit on the surface, but it is. At J. Gibson McIlvain, we want educated customers, not frustrated ones.

The Reason for Dynamic Pricing

Why is lumber pricing such a changeable thing? In answer to that question, can you think of any other products that have rapid fluctuations in pricing? Off hand, I think of gasoline and food, especially dairy and produce. Of course, the price for even an entire tank of gas or a family’s monthly grocery bill may be a tiny fraction of a single lumber order, so the shift doesn’t seem nearly as significant, from week to week. However, the reasoning is the same, at least in part, and it’s tied to the fact that all are natural resources, often from other parts of the world with various levels of governmental involvement and/or limited growing seasons.

Even still, lumber pricing is a bit more complicated than that of milk or fruit or gasoline. Whether you’re in the market for decking, millwork, hardwood lumber, or plywood, there are a plethora of variables that influence the lumber supplier’s costs. And those get passed on to you.

Picking Apart the Packs

When lumber arrives in a lumber yard, it comes in packs according to species. Within each pack, there will be a variety of grades represented — and even those grades are arguably too vague to be helpful in filling any given order. For instance, just because a board is classified as FAS doesn’t mean it’s long and clear enough to be used for millwork. Even in a container of FAS Mahogany, we’ll have a certain percentage of lower grade material that comes as a byproduct of the higher grade lumber.

Typically, as the shipment becomes picked over and less of “the good stuff” is left, the price of the remaining top-grade material will be inflated in order to cover the cost to the supplier of the generally unsellable stuff that remains. (The U.S. market generally doesn’t tolerate Common grades, but that’s another issue, for another day.) In that scenario, it’s entirely possible to purchase lumber in the same condition, from the same pack, and pay less for what you purchased when the pack is freshly opened and more for what you buy when it’s almost empty.

Learn More About the Lumber Industry

• Marine Grade Plywood Situations & Solutions
• Lumber Color Change
• Lumber Shortages Aren’t Always Due to Poor Forestry Management

J. Gibson McIlvain Company

Since 1798, when Hugh McIlvain established a lumber business near Philadelphia, the McIlvain family has been immersed in the premium import and domestic lumber industry. With its headquarters located just outside of Baltimore, the J. Gibson McIlvain Company (www.mcilvain.com) is one of the largest U.S. importers of exotic woods.

As an active supporter of sustainable lumber practices, the J. Gibson McIlvain Company has provided fine lumber for notable projects throughout the world, including the White House, Capitol building, Supreme Court, and the Smithsonian museums.

Contact a representative at J. Gibson McIlvain today by calling (800) 638-9100.