Like most tall tales, there’s a kernel of truth at the root of all lumber lore. That is absolutely the case in the event of lumber shortages: Overharvesting and other concerns related to unsustainable forestry management have historically been key contributors. Recent shortages in the African Mahogany and Poplar markets, on the other hand, have been proven to be attributable to economic factors inside the lumber industry, rather than a true shortage due to a lack of availability or sustainability.
The U.S. supply of Poplar can now keep up with demand thanks to government restrictions requiring good replanting ratios. So, what is it that keeps availability low and pricing high? We can blame it on the current economic fragility. Poplar is ironically renowned as a low-cost lumber. Previously a low-cost, high-volume business, the present low supply and increased pricing are contributing to the industry’s low output rates. Let’s take a look at what transpired.
Poplar demand reached an all-time low during the economic recession, when new construction was halted. Sawmills specializing in Poplar were forced to close, because they couldn’t make money without the lumber that had already been milled. Because there were fewer organizations harvesting and cutting Poplar, the national harvest fell from around 10 billion feet to around 6 billion feet. As the economy has improved, so has the number of new construction projects. The growing demand for Poplar lumber collides with low production levels, resulting in a demand that exceeds supply – not of accessible Poplar trees, but of harvested and sawn Poplar timber. What’s occurring today is that existing Poplar mills are ramping up production, and new mills are springing up to help fulfill demand.
What can we expect from abundant species like Poplar in the future? History teaches us to anticipate rather than produce. As a result of the oversupply, prices will fall. Of course, we cannot predict when this will occur, but we may draw lessons from past. A similar variation has occurred with Red Oak, but it is further along in the cycle. Because that market has seen overproduction, the supply is significantly larger than the demand, causing current Red Oak prices to resemble those seen in the 1970s.
Meanwhile, Poplar’s current pricing make it doubtful as an economy, paint-grade species, so many people are shifting to other, more expensive species. Why not get more bang for your buck if the prices are the same? The answer is straightforward: the industry’s future depends on it. If you don’t truly need A grade wood for a project, “settling” for B grade is really better for the environment – and the timber industry and economy in general. Poplar is still a useful wood that mills easily and is available in a wide range of lengths and widths. Customers of Poplar will be able to enjoy higher supply and lower pricing once again if they ride out the current market waves without jumping ship.
Continue reading with Part 2.