John Boos & Co. and Catskill Craftsmen Respond to Significantly Higher Hardwood Prices
The St. Louis Federal Reserve tracks commodity prices and publishes producer price indices (PPIs) on its Federal Reserve Economic Data (FRED) website. Among the products they monitor are softwood lumber and hardwood lumber – two essential inputs for businesses engaged in home construction and renovation, and manufacturing of home furnishings.
Softwood lumber is the primary timber used in construction. Hardwood is primarily used in the manufacture of items such as flooring, countertops, cabinets, and furniture. According to FRED, November 2021 prices for softwood and hardwood lumber are up just under 50% from the start of the Covid-19 pandemic (i.e. April 2020). However, the price changes of these two commodities have followed very different paths. While the softwood price picture looks like a roller coaster, hardwood prices have been on a long and steady rise.
In May 2021, softwood lumber prices peaked – up 174% from April 2020. Between May and September, softwood lumber prices fell significantly, pushing hardwood prices up. coniferous work at only 29% higher than at the time of the Covid-19 epidemic. Recent increases since then have pushed softwood prices 46 above pre-pandemic levels in November.
In contrast, hardwood prices have never increased dramatically; nor did they experience a marked month-over-month decline. At their peak in October, hardwood prices were 48% higher than in April 2020. In November, they were up 47% from pre-pandemic levels.
The prolonged and steady rise in hardwood prices, along with rising costs of other manufacturing inputs, is squeezing the profit margins of manufacturers of butcher block counters (hardwood) and kitchen islands, tables , carts and cutting boards.
Illinois-based John Boos & Co. recently announced that it will increase the prices of wood products by 5% effective Jan. 1, 2022. In a letter to the company’s dealer network, the director Sales National Steve Pless explained, “The challenges associated with supply chain continue to be a nuisance and the cost of raw materials, labor and transportation continues to increase.
Another manufacturer of hardwood islands, wagons and cutting boards, New York-based Catskill Craftsmen, announced last week that it would raise prices by 20% during the year future. While Boos & Co. implemented a series of price changes throughout 2021, this is Catskill’s first increase since 2019. In an email to resellers, Ken Smith of Catskill said : “We receive material from several factories and each is operating at half capacity due to a lack of hardwood logs.
This industry news update is brought to you by the Butcher Block Co. – an e-commerce store specializing in hardwood products, such as butcher block counters and island tops, and butcher block tables, carts and cutting boards.
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