Q:

What influences the cost of lumber?

A:

Quick Answer

Factors that can influence the price of lumber including the amount of new homes currently under construction, the use of pesticides, lost lumber due to lack of pesticides, and competition within the logging community. Environmental factors also exist and can play a part in pricing if the debate holds up production.

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Full Answer

The amount of new homes under construction can directly affect the price of lumber due to the supply and demand aspect of business. If there are more houses being built, demand for lumber rises, driving prices up. Once the demand has diminished, businesses lower the prices.

Certain lumber-specific pesticides were detrimental to humans and the environment. Not using the pesticides lowers the health risk but also leaves lumber susceptible to insects and fungus. Alternative options to repel insects and fungus have been found but also can drive up the price of the lumber. Costs could also increase if a shipment of untreated lumber was unusable and had to be discarded.

The logging community within the United States has had a large amount of competition from the Canadian market. The Canadian government owns most of the timber land, while the timber lands within the United States are privately owned. This makes the prices higher in the United States. Consequently, many people are purchasing lumber outside of the United States for better pricing options.

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