Do it Best tackles lumber challenges
Overproduction, and the weather, factor into the co-op's LBM Industry update.
Indianapolis — It’s certainly an interesting time to be in the hardware and building supply industry. And at the Do it Best Market here at the Indiana Convention Center, co-op executives took turn explaining why that’s the case.
Chief among the headwinds: price deflation of dimensional lumber.
“I’m here to tell you what you already know,” said Todd Hixson, divisional manager for Do it Best during the co-op’s LBM Update panel discussion. “We’ve been plagued by overproduction across the board. Whether its lumber or panel products, they’re producing a lot more than we’re taking in.”
And as if to prove these are interesting times, Hixson added: “Whether it’s lumber or panel products, they’re producing a lot more than we’re taking in. — A year ago, they weren’t producing enough.”
During a media briefing, Do it Best’s VP of Marketing Rich Lynch added color to the pricing situation. “Pricing has been all over the board,” he said. “It’s just been such a wild ride in lumber pricing, especially. Any look at a lumber pricing chart is just staggering — how high it went and how quickly it fell.”
The LBM Update a handful of other interesting or challenging factors. The inhospitable (to home construction) weather, the labor shortage, vendor consolidation, a trend toward smaller houses – and even the need to react to the new trend of Precision Scheduled Railroading.
The Do it Best LBM team says it applies constant vigilance and years of experience to help guide members through the swings of the market. Part of the advice is to take advantage of pricing deals available at the market.
Also, Lynch pointed to a remedy to “interesting times” that has served the independent dealer faithfully throughout the years – resilience.
“The question for any operator is: ‘if I’m going to sell less wood for that house, what else can I sell to make it up.’ It just becomes an opportunity to look at your business and say, ‘What can I be doing to offer a better customer experience that will translate into sales for my business?’ Lumber operators are probably more adept at that than anybody. They roll with it because they are in the commodity business and they understand volatility really well. And they understand ebbs and flows really well.”
After a soft February and March, Jean Fahy, division manager for building materials, hit an optimistic note: “The good news is that April and May is when we really kind of ramp it up,” she said.
Josh Ratcliff, lumber sales and operations manager, offered this guidance: “I think this year is going to look like a five year average, with little bumps up and down,” he told the LBM Update crowd of Do it Best dealer. “Normally in a year, you’ll have spikes that move up, last a while, and then come back down. This year is going to trade in a more narrow range, and you’re not going to see those big spikes.”
The four-day Do it Best Spring Market runs through May 20.
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