It was inevitable that lumber prices would eventually return to some state of normalcy. I wrote an article less than 50 days ago noting that futures and cash prices, despite having quadrupled in slightly over a year, had dropped 40% in June 2021. Pandemic measures were being lifted, the effect of stimulus payments were receding, and owing to completion or returning to work, home improvement projects were wrapping up. High prices, as they do, drew more wood into the market; mills increased weekly hours for sawmill employees and substitutes for timber, whether different types of wood or composites, were used where possible.

But over the past week or two, the delirium which began in the summer of 2020 and reached a crescendo in April and May of this year has been utterly inverted. A late July 2021 poll reported that 49% of lumber dealers were suddenly reporting excess lumber inventories. And whereas in April 2021 40% of lumber dealers had reported low stocks, in late July/early August none of the respondents indicated such. 

Lumber prices have fallen 75% since the all-time high of $1,686 per thousand board-feet on 7 May 2021. All the price gains since the summer of 2020 have been given back, and at under $500 per thousand board-feet, the front month futures price is actually below the average price of lumber back to 2017.