Why Is Lumber So Expensive? (Top 10 Reasons)

Why Is Lumber So Expensive? (Top 10 Reasons)

I’m sure you’ve noticed that lumber can be expensive, but why is lumber so expensive? As it turns out, there are several reasons why lumber can be quite pricey! We have compiled a list of the top 10 reasons why. Combined, all of these reasons help to explain why lumber prices vary so widely.

Here are the top 10 reasons lumber is so expensive.

Available Supply of Lumber

Available Supply of Lumber

The first and most important reason the price is so high is that the available supply of lumber is limited. In other words, we can’t grow more trees! The amount of wood we have on Earth at any given moment in time isn’t a fixed number, but it’s not infinitely large either. As a result, when there is more demand for lumber than supply, prices tend to rise. It’s simple economics.

Demand

Demand

The more people that want a product, the more expensive it usually is. In the past few years, demand for lumber has been high due to first-time homeowners and new construction. Builders want lumber to build homes and renovations, which means that they are willing to pay higher prices for it.

Lumber comes from the forest and must be transported to a mill

transported

Lumber is valuable because it can be used in a variety of ways, but like all products, it must be originated and eventually brought to market to sell. In fact, for many products, the costs of transportation and/or storage are a significant portion of the cost of that product. Lumber is certainly no exception and transportation expenses impact the price we pay at the lumber yard.

The quality and species of wood tend to vary as well

quality

It should come as no surprise that the price of lumber varies depending on both the type of wood and its quality. Koa, for example, is a high-end Hawaiian species that are typically used for high-end furniture or in the construction of ukuleles and guitars because of its beautiful grain pattern. In contrast, pine is typically used for basic construction purposes and thus can be quite inexpensive.

The width and length of the wood also impact the cost

wood

The width used for a piece of lumber can also have a significant impact on price. For example, 2x8s are typically wider than 2x6s, which makes them more expensive. In addition, longer pieces of lumber tend to be more expensive because they can’t be sold for infractions (e.g., if you need 5 feet of lumber, you don’t have the option to buy a 4′ piece and a 1′ piece).

Wood can be sold by the board foot, cubic foot, and/or by the piece

Wood can be sold by the board foot

Typically the type of unit used for pricing lumber depends on what is being sold. Commonly, you’ll hear about lumber being sold by the board foot or cubic feet (the term is often used interchangeably although technically it should be noted that a cubic foot is more of a measure of volume). Plywood, for example, is typically sold by the piece.

The cost of lumber varies depending on whether it is hard or soft

The cost of lumber varies depending on whether it is hard or soft

Good quality wood is rare and expensive. As a result, the good stuff usually costs more. This is especially true of hardwoods, as they are much harder to grow than softwoods and therefore require more resources (i.e, land and money) to produce the same amount of flooring or lumber.

Lumber that is typically used in furniture will often be hardwood and thus more expensive than softwood plywood (which may include some hard maple). Softwood plywood can be used for roof sheathing, subflooring, and other basic applications.

The grade of the lumber tends to impact the price

The grade of the lumber tends to impact the price.

If you want a quality product, it typically isn’t going to be cheap. For example, red oak and white oak are two common types of hardwood commonly used in construction; however, red oak tends to be more expensive than white oak. So why is red oak more expensive than white oak? It all depends on the grade of the lumber. Most lumber is graded according to the amount of defects present.

Lower grades have more defects, while higher grades have fewer or even no defects at all. You can usually see the quality of the lumber by looking at the grade mark. The higher the grade, the more valuable it is. Since the grading process is subjective, lumber prices will vary based on where it was purchased and graded.

Labor

Labor

Labor is one of the more obvious reasons wood prices are so high – few products require as much human input and effort as wood products. It takes considerable labor to harvest lumber, sorts it, and then turn it into a finished product. That human element makes up just a small portion of the cost, but that itself is enough to add quite a bit to the price tag of lumber.

Millwork Prices

Millwork Prices

Before lumber can be sold as a rough cut, it must be processed in a lumber mill. Each step of the processing and manufacturing has its own cost, resulting in the overall millwork price. This can include treatment, planning, ripping, cutting, and packaging. The higher quality the wood is when it leaves the mill, the more expensive it will be at retail.