As if the region’s timber industry weren’t under enough pressure, with slumping demand from housing dragging wood prices lower, some home builders are eyeing new supply from Europe and Russia.
Looking for new suppliers is a consequence of the recently signed U.S.-Canada lumber agreement, which imposes fees and quotas on softwood exports to the U.S. when prices fall below a certain point. Builders are showing opposition to the agreement by making business ties elsewhere, according to a rare A2 story on the industry in the Wall Street Journal (subscription required):
Jerry Howard, chief executive of the National Association of Home Builders, says the agreement will unfairly raise prices and add volatility to supply, and it is forcing his industry to look for new sources of lumber.
‘If I don’t get the price of milk at one store that I want, I go to another store,” says Mr. Howard, who traveled to Sweden and Russia last fall to begin courting lumber suppliers there.
The group’s initiative is the latest salvo in a decades-long dispute. In past years, the trade group had pushed for an end to U.S. import duties on Canadian wood and urged Canada to continue fighting those duties.
After the U.S. and Canada signed their lumber accord last year, Mr. Howard says, the builders “were upset that the Canadians caved in. We supported them the best we could. We continue to tell them we prefer to do business with our neighbors to the north. But we also want to put our members in the best possible business climate.”
When the dispute flared up in the past, Mr. Howard said, the group responded by encouraging members to use alternative framing materials, such as steel. The latest strategy is to try to diversify their sources of lumber.