Newhouse, Westerman Lead Forum on Skyrocketing Lumber Prices and the Impacts on American Forests
“A nationwide problem that’s been years in the making”
Washington, June 29, 2021 | Elizabeth Daniels (202-280-8720)
WASHINGTON, D.C. – Congressional Western Caucus Chairman Dan Newhouse (WA-04) and House Natural Resources Ranking Member Bruce Westerman (AR-04) led a forum on skyrocketing lumber costs and potential solutions to the resulting impacts on American forests and communities.
"Today’s forum highlighted an issue impacting rural communities and forests in the West and across the country: skyrocketing lumber prices and public land mismanagement," said Chairman Newhouse. "I believe we must look to our public lands as the answer to our issues surrounding supply and demand. With proper forest management, we can achieve both utilization and revitalization of our national forests. Our witnesses today testified to what we know to be true: By working together, we can expand our resources to both stabilize lumber prices and restore the resiliency of our nation’s forests. The two are not mutually exclusive – in fact, they are dependent upon one another."
"While the lumber price crisis has been years in the making, like our forum title suggests, it is being exacerbated today by the ongoing failure to properly manage our national forests and, consequently, invest in new sawmill capacity and infrastructure," said Ranking Member Westerman. "Declining management of our federal forests, particularly out west, in recent decades has not only shut down hundreds of mills and eliminated thousands of family-wage jobs, but has also fueled the present wildfire crisis wreaking havoc on our western landscape year after year. We must take bold, aggressive action to improve the health of our national forests."
Congressional Western Caucus Members and House Natural Resources Republicans heard from four witnesses during the forum:
"As the country and the economy slowly return to normal, sawmills have continued to manufacture lumber as quickly as possible to meet ongoing high demand," said Ms. Dauzat. "However, we are constrained by current manufacturing limits, and increasing production is more complicated than simply deciding to make more lumber. Sawmill infrastructure declined significantly when the Great Recession began in 2007. In the South, for example, the total number of pine mills operating in 2007 was 276. In 2017, the total was only 240. In fact, production of Southern Yellow Pine’s previous peak was 19 billion board feet in 2005. The industry did not return to this level until 2019. Meanwhile, housing starts grew almost 200 percent between the fourth quarter of 2010 and first quarter of 2021."
"This is a very complex issue with a lot of stakeholders, including loggers, growers, truckers, sawmillers, lumber retailers, home builders and home owners," said Mr. Thomas. "Southern tree growers are actually facing a very different issue. ...The reason we have low prices is due in part to our ability to grow trees fast in the South, and this has been confounded by government policy concerning tree planting back in the late 1980s."
"According to the American Forest & Paper Association, one-third of the United States, or approximately 766 million acres of land, is forested," said Mr. Fowke. "Privately-owned forests account for approximately 58 percent of that and supply 90 percent of the wood harvested in the United States. On the other hand, U.S. state, tribal, and federal forests comprise 42 percent of our forestlands and supply a mere 8 percent of the wood used by the forest products industry. We are not doing a very good job of managing this critically important, sustainable, renewable resource. As the U.S. housing market continues to grow to meet our nation’s housing demand and make up for a decade of under building, demand for lumber and other building materials will increase. Moreover, global demand for lumber is also increasing, especially in China. Unless additional supply can be brought into the market, there will be ongoing upward pressure on prices."
A perfect storm of new home building, remodeling, and home improvement projects during the COVID-19 pandemic created an unprecedented demand for new lumber, along with other materials like steel, concrete and copper. The increased demand has driven up prices and resulted in shortages of these materials.
Unprecedented stress on the supply chain, coupled with a lack of sawmill infrastructure and federal trade, labor, transportation, and timber harvesting policies, have all contributed to the current lumber shortage. No single policy can stabilize lumber prices, but Congress can take important action – like incentivizing better forest management and utilization of our national forests – to address this issue and reduce prices for the average consumer.
These actions are not only important to stabilize lumber prices, but they are also vital to restoring the health and resiliency of our national forests. Last year, 10.3 million acres burned in another historic wildfire season. Actively managing our national forests with tools like thinning, prescribed burns and timber harvesting is critical to reducing the likelihood and severity of catastrophic wildfires.