BUILDERS EXCLUSIVE - Confidential Market Update    March 2021

We understand the challenges our professional builders face in trying to run a business during these unprecedented times. In an effort to better serve you, we're providing you with insight on what's happening to supply lines behind the scenes. We hope this will help you navigate your business to a successful building season in 2021. 

The Big Picture:

Supply will continue to be a huge issue in 2021.  Prices continue to rise, and I don’t expect any supplier lead times to improve in the first half of 2021.  When lead time is not feasible, our only recourse is to look for another supplier. If  we find one, we will be a new customer and costs are likely to increase. We anticipate 2021 to be a year of continued shortages and price hikes. The further you can work and plan ahead, the more likely product will be available at the best possible price. 

While the market remains volatile, we may adjust our Quote policy as needed to ensure pricing remains fair for you, your customers, and our business as well. As always, pricing is not final until the material ships to the job site.  Why is the market so volatile?

Expectations by Product:

DESKTOP/LAPTOP USERS ONLY - Take me directly to:

Dimension Lumber

All species of dimension lumber have been hard to buy. I request quotes from different lumber mills and wholesalers. These days, one of these might quote all that I'm trying to buy, a second may have some of what I want to buy.  8-10 other sources just say “No quote” as they don’t have the product to sell.

  • 2x4 and 2x6 - All lengths are up in price, but a smaller increase than prior weeks.

  • 2x8 and 2x10  - Our price is holding for now. Last year I was able to switch from S.Y. Pine to Select Structural Hem Fir due to a big price difference. This year everything is high, and S.Y. Pine costs less than the Select Structural Hem Fir.

  • 2x12 - All lengths are up in price. In the Spring, loggers have trouble getting into the wetter areas of the south where the taller timber is. This reduces the supply and increases the prices for 2x12s. For now we will stay with S. Y. Pine, which as noted above  is the better priced option.

Treated Lumber

We brought some Treated in over the past week. As of this writing we have everything in stock. Due to the record high pricing we do not have the same inventory that we would typically carry. We will be reordering as needed; I don’t expect to see the huge demand that we saw last year. 

  • 1x6 and 1x8 are up in price.

  • 5/4x6 Patio #1-2 is up in price this week, smaller increase on the 5/4 x 6

  • 5/4x6 Premium is the same price.  

  • 2x4, 2x6, 2x8 and 2x10 are the same price as last week.

  • 2x12 is up in price. 

  • 4x4 & 6x6 are up in price,

  • 4x6 is the same price.

  • 2x6 T&G, EZV and Treated Plywood are the same price as last week

  • We're working on deck accessories - they're hard to get and much higher in price this year.

OSB

OSB is up in price, again, and almost everything we have is sold.  I have four trucks on order but they won’t ship until after the week of 4/19 (over a month away.) The trucks will ship one per week with the last truck shipping the week of 5/10 (over 2-months away.) I tried to buy more OSB from Wholesale, but they would only sell me a total of 16-units. This is not nearly enough. This OSB also costs $2-4.00 a sheet higher than our selling price. So unfortunately, we don’t have extra OSB to protect our Builders at this time.

 

The trucks on order are priced at the time of shipment, therefore I have no idea what the final cost will be. If I don’t know what I’m going to pay, I can’t sell it at today's price, unfortunately. OSB production was up slightly for 2020, and producers are working at their maximum output. The difference is in the excessively high demand, which production hasn’t been able to overcome.  

  • We are currently out of 3/4"- 4x8’ Edge Gold OSB flooring. Due to the record high pricing and difficulty obtaining this product, we will not have this in stock for the near future. 

  • We will be running out of 7/16”-4x9’ OSB soon. We don't expect to purchase more of this until the record high prices correct.

  • Both of these products must be purchased in truckload quantities and take us approximately a year to turn. You and your customers do NOT want to pay record high prices for a year!

Plywood (CDX)

CDX plywood is again way up in price, both SY Pine and Fir. There was a large increase in Plywood this week. The shortage of OSB is pushing more business to CDX Plywood which is also at maximum production. We are nearly sold out of the Fir CDX and won’t be ordering more until prices lower a bit.

Boards

With prices so high, the board mills have switched production to dimension lumber. They can produce and sell more this way, making a greater return for the board mill. With the record high prices of boards, we have changed to a higher end, nicer board product. These Gorman boards are now stocked at all four locations. We have stocked the Gorman boards in our 1x2 and 1x3 at all four locations for the past couple years. At this time these boards are available. That could change later in the spring. We will try to keep a good supply of boards available for you, but can’t control what is or isn’t available to us.

Engineered Lumber

We've had two price increases since last fall on Engineered lumber. This was the one product line that stayed consistently priced throughout 2020. As demand has continued to increase, wholesalers are actively cutting off customers from buying from them due to lack of available product. 

I don’t know how much Engineered lumber is going to continue to increase. I've bought some, yet won’t know what the pricing is until after it comes in. Like everything else, demand is higher than what production can maintain. We expect Engineered Lumber shortages throughout 2021.

Knotty Pine Paneling

We recently had an increase from our supplier and our price has been updated.  Supply and extremely long lead times will continue to be an issue for all of these products, including pre-finished and unfinished end matched paneling.

Furring Strips

1x3-8’ & 2x2-8’ furring strips are currently extremely high priced.  I don’t believe we will be buying any unless they come down.  I recently brought in some 1x4 boards that are similar to Furring strips but are an ungraded product. The boards vary in length, some are under 8’ and some are just over 8’ but they're a good price and decent-looking.

Moulding

Moulding has been increasing in price very fast.  Suppliers are experiencing shortages on products out of South America (primed especially.)  I bought extra primed products in the last month but we may run out of some products due to lack of availability. I have been working with a few new suppliers in case availability with our current supplier becomes an issue.

Polebarn Steel

Steel will be increasing on April 5th by 12-15%.  I don’t think this will be the last increase for pole barn steel, and we will most likely have a few more in the coming months.

Shingles 

CertainTeed has only been producing six colors thus far in 2021 - Moire Black, Weathered Wood, Driftwood, Burnt Sienna, Pewter, and Heather Blend.  A seventh, Georgetown Gray, has just been added to production. We should have more of Georgetown Gray in stock at the end of April or May. We anticipate having inventory of these colors going into spring. 

The following colors are not currently being produced: Atlantic Blue, Cobblestone Gray, Colonial Slate, Cottage Red, Hunter Green, Silver Birch, and Resawn Shake. It will most likely be June or July before we can buy more of these colors. While we do have some inventory of these colors left in stock, please remember, these colors will be very difficult or impossible to find.  We expect pricing to be similar to last year, but like everything else that may change.

Rollex Aluminum Soffit

Aluminum had a small increase earlier this spring.  We recently received our spring shipment and our inventory is in good shape.  I would expect more increases this year.

Ice Guard

I thought we'd found a good product with TAMKO but in 2020 they quit making all of their ice guard products until they catch up with shingle demand.  I was forced to find a new product and chose Dewitt’s Poly Pro ice shield.  This has no granules on the surface, which will hopefully make it easier to walk on, and had a good amount of tack on the samples we saw.

Vinyl Windows

  • Jeld-Wen has had lead times around 8-weeks.  I just received an email stating that their lead times have improved to 4-6 weeks with a max of 8 weeks.  Prices for our stock windows had some slight changes.  I have explored other window options for both stock and special orders with no luck.  Most companies have similar lead times to Jeld-Wen and I've not found a vinyl window company anywhere this is currently taking on new business.

 

  • Andersen Windows increased prices on February 25th, 2021. Andersen does a price increase during this time period every year. Lead times have remained fairly consistent; other than some extended times on the 100 series.

Doors 

Our door costs increased in January and another increase from our main supplier will be effective April 19, 2021.  The amounts vary by the type of door. Expect long lead times from most companies on any and all kinds of doors.

Garage Doors

Garage doors still have extended lead times and have gone up in price.

Vinyl Siding 

  • CertainTeed lead times are currently around 3-months. This was  normally 1-2 weeks.

  • Due to production issues, CertainTeed is not producing certain colors at this time

  • Our stock colors that are NOT being produced are Sable Brown, Slate, Espresso, Forest, and Melrose. In addition, there are several other non-stocked colors on production hold. This supply interruption is expected to last approximately 60 to 90+ days. 

  • Once production is resumed, it will take longer for us to get these products.

  • We have some inventory of these colors left in stock but remember, these colors will be very difficult or impossible to find. 

  • The Price of vinyl siding has gone up recently. Due to shortages of supply, more increases can be expected during 2021.

Decking

Timbertech Azek currently has 3 to 4 month lead times.  Our winter buy has arrived, so we're starting the year with a decent supply of our stock items.  Our wholesaler will have a large inventory of decking and trim boards, but if there is a run on a certain color or style, extremely long lead times may occur.  Prices have already increased this spring and may go up again.

Drywall 

Drywall is taking a week or two longer to get than usual.  A price increase has been announced for the first of April.  Drywall muds may also start having supply issues due to a latex shortage caused by the recent freeze in Texas.

Insulation

  • Fiberglass insulation is out around 8-12 weeks.  Price increases have been announced for the end of April.

  • Roxul is on allocation, meaning the company is putting limits on what our supplier is allowed to buy.  We have some Roxul on order but I’m not expecting to see more until the end of May or June.

 

DuPont Foam (Formerly Dow Foam)

Lead times are normal and pricing didn’t change much this winter.  A price increase was just announced for mid-April.

Fasteners 

Fasteners have already gone up in price this winter.  Availability may become an issue on specific items but we will have a large amount of items in stock to start the building season.

 

Builders Hardware

We have replaced all of the National Hardware with a new supplier.  This company has a much nicer merchandising setup and better availability than National.  There are many new options with this company and we look forward to selling their products.

 

Bulk Fasteners

(Nuts, bolts, and screws) We put in a new fastener island in AuGres with 64’ of products and Hale with 72’ of products.  We will be putting 64’ of products in Hillman soon, then looking at Cheboygan’s set to see if any updates are required.

Why is the Market so Volatile?

The lead story in this week’s Random Lengths Lumber Report is: “One Year into the COVID Era, Output Still Lags Demand.”  Here is some of what the article had to say.

The Short Version

When the pandemic hit last year, lumber and panel mills shut down just like everything else. Once things opened back up a bit, demand surged. People had money to spend, and consumers decided to do projects at home because they couldn’t go anywhere. This created a HUGE demand that the lumber and panel mills have not recovered from yet. It has also created many manufacturing and supply chain problems with other products that we sell.

In More Depth

Despite market disruptions due to COVID-19, (business shut downs, Stay Home orders, reduced workforce), 2020 Lumber and Panel production was very similar to the year before.

  • North American lumber output was actually 1% higher than 2019.

  • OSB production was up, under 1%

  • Plywood production had a slight decrease.

 

What changed was the unprecedented increase in demand from Do it yourselfers and Builders.

Lumber dealers, frustrated by the inability to purchase enough lumber and panels to satisfy customers, are baffled why mills haven’t ramped up production amid the record high prices. Mills counter that labor shortages are holding back productivity, not just in wood products but in all manufacturing industries. The big reason for this is the enhanced unemployment benefits that have kept a lot of employees on the sidelines.

What happens next?

Everyone keeps asking me what to expect. Unfortunately, the truth is that no one currently in this industry has ever seen anything like thisWhat I do know is that consumers will continue to monitor prices, which may impact their decisions to move forward with construction projects. If consumption begins to slow, if COVID restrictions begin to ease back into normalcy, and if labor shortages begin to improve - these conditions may stop the run up in prices that we continue to experience. In any event, these changes will take some time.

We hope this information is helpful to you in making plans for the building season. Together, we can weather this storm by continuing to support and help one another toward continued success. 

Thank you for your business and your trust. I wish you every success.

Bruce Bernard

President/CEO, Bernard Building Center

 
 
 
 
 
 
 
 
 
 
 

Bernard Building Center

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Bernard Building Center - Home

Hale

395 S. Washington (M-65)

P.O. Box 190

Hale, MI 48739

989-728-2211

Cheboygan

829 N. Huron

Cheboygan, MI 49721

231-445-9031

Hillman

27300 M-32 (M-32)

P.O. Box 398

Hillman, MI 49746

989-250-7626 

AuGres

808 E. Huron (US-23)

P.O. Box 866

AuGres, MI 48703

989-876-7114

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