Rep. Bruce Westerman: Don't blame COVID — soaring lumber costs hammering Americans were decades in the making
New home prices skyrocket amid lumber shortage
The cost of lumber is skyrocketing, causing new home prices to surge amid the coronavirus pandemic. FOX Business’ Grady Trimble with more.
When COVID-19 kept millions of Americans home, many of us spent our free time checking off home improvement projects that had been on our lists for years. Updated shelves, a new garden shed, maybe even an addition to the kitchen – there was more time than ever to do it yourself. It wasn’t just homeowners, either, as many restaurants constructed covered outdoor dining areas.
On top of all the do-it-yourself and commercial construction, U.S. housing new starts increased more than 30 percent from early 2020 to early 2021. This surge in usage, coupled with a lack of processing infrastructure, culminated in the perfect storm: skyrocketing wood costs.
Wood product prices are setting new records almost daily, and lumber prices are now up 67 percent in 2021 and up 340 percent from a year ago, according to Random Lengths, a wood products industry tracking firm.
This surge, along with increased prices for other home building components, has caused increased prices for new construction as a pent-up housing market struggles to expand. While several factors play into this dynamic, one in particular has not received nearly enough attention: a decrease in timber coming off of our national forests, particularly those in the west.
RED-HOT LUMBER PRICES MAY COOL HOUSING BOOM
U.S. Forest Service data shows just 2.5 billion board feet (BBF) were harvested in Fiscal Year 2020, down from 10.5 BBF just 30 years ago, all while we watch catastrophic wildfires scorch our western forests at an exponential pace.
I witnessed this problem in March when I traveled to South Dakota and visited Mount Rushmore Forest Products. The owners had recently made the decision to shutter one of their mills due to the lack of supply coming from the Black Hills National Forest.
Rep. Dusty Johnson, R-S.D., and I met with two of the mill’s employees, who each talked about the central role the mill had played both in their families’ lives and their community’s economy.
Near tears, a 20-year mill veteran told us about how the job had afforded him the opportunity to send his children to college; another talked of the mill’s contributions to the local high school and sports teams.
"There is nothing you can do to save this mill," one of the men told us. "But for the sake of our community, and the sake of the [Black Hills National] forest, please do everything you can to try and make sure the Forest Service allows us to continue to manage and harvest out here."
Unfortunately, these employees are not alone. A lack of supply from national forests has ripple effects across the country and our economy, forcing sawmills, plywood plants and papermills to shutter. This lack of harvesting, coupled with the 2008 recession, decimated our mill infrastructure.
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From 2004 to 2018, 991 mills closed or curtailed their operations due to a combination of economic conditions and lower supply. When they close, it’s almost always permanent. Yet mill construction and expansion are happening in the South, where mills rely on private, not public, forests for the bulk of their supply.
In fact, it feels like we hear almost daily reports of new investments being made to expand mill capacity in the South. Industry reports say the demand for new mill equipment has created deliveries as far as three years out, but replacing decades of lost infrastructure can’t happen overnight.
So why are we opening sawmills in the South but closing them in the West? Because litigious environmental groups continue hamstringing sustainable harvesting on our national forests, while the South has a vast cache of timber on private working forests.
The supply is so great that while wood product prices have more than tripled, log prices in the South have hardly budged, which creates heartburn for some forestland owners. Even a reduction in the Canadian lumber tariffs from more than 25 percent to below 10 percent has done little to ease the demand and price increases.
Scientific forest management on public lands must be our answer. Before you conjure up images of a clear-cut Sequoia National Park, that couldn’t be further from what needs to happen.
Timber manufacturers actually stand to gain the most from properly managed land, so they replant more than they log, often at a rate of more than four replanted trees to every one logged.
Look no further than one of the oldest managed forests in the U.S., that of my forestry school alma mater, Yale University, where the trees grow old, tall and resilient because of the management being conducted. This is what should be happening at national forests across America.
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Not only does management bring a myriad of environmental benefits – from pure air, to clean water, to healthy wildlife habitats and increased biodiversity – but it also mitigates the risk of catastrophic wildfires.
Forests that are managed and thinned regularly are much less susceptible to fires that turn into raging infernos. The evidence of this is clear in areas like California, where fires will tear across thousands of acres of unmanaged public land and then abruptly stop upon reaching managed private land.
It’s why I continue introducing legislation like the Resilient Federal Forests Act, because I believe we have a responsibility to make our forests just that: resilient.
We have the supply; we simply need to access it to meet the demand. By opening consistent, reliable access to national forests that need long-term, sustainable management, we can equip both existing and new facilities to ramp up production and lower wood product prices. This means the average American can go to their neighborhood hardware store and not have to pay exorbitant costs to build a new deck, and new homes can be affordably constructed to meet the market demands.
It’s time for the U.S. Forest Service to grant access to more national forest lands, making them healthier for years to come and providing price stability for future construction.
Republican Bruce Westerman represents Arkansas' 4th congressional district in the U.S. House of Representatives.
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