Rising Lumber Costs and MDF Supply ShortagesBy Katie Van Blargan
While we’ve heard the age old saying “not in my lifetime” hundreds of times, we never thought we’d experience anything with a lifetime impact like COVID-19. This pandemic has touched just about every industry, including ours. While the mill industry has experienced increased demand for products, it’s been challenged with rising costs, supply chain issues, and labor shortages.
Increase in Home Improvement Projects
As COVID forced many to work from home and spend endless hours confined to their houses, home improvement projects and spending soared. People started to realize that their kitchens, bathrooms, family rooms and home offices needed a makeover. This desire led to numerous projects for our craftsman customers – from complete renovations to “fixing” DIY mishaps! While our customers are working hard to make their clients dreams come to life, the industry is trying to keep up and stay on top of orders. The high demand and dwindling supplies of 2022 resemble the days when the housing market peaked in 2006 (only to later crash in 2007).
Keeping Up with Product Demand
Meridian Products had been fortunate for quite some time, with materials and parts for our products readily available without much issue. Unfortunately, however, it now appears that the need for lumber, MDF, and drawer box parts is outweighing the current supply. When the pandemic started in early 2020, many believed the housing market would mellow out. Taking this prediction into consideration, many leading mill companies slowed production to avoid the stock piling of wood. Now, these companies are striving to rebuild the supply to meet the demand for their products. If we’re lucky, the industry will level out and remodeling will become more cost effective for both our craftsman, customers, and their clients.
Impact of Material Shortages
- Lumber: We’ve seen a substantial increase in wood pricing industry wide. Last year at this time, we were looking at approximately $333/ thousand lineal board feet. Fast forward 365 days, and that price has increased to $1,686/ thousand lineal board feet. According to statistics from the National Association of Home Builders, these skyrocketing lumber prices have added nearly $36,000 to new home construction.
- MDF: MDF is an outsourced material and many vendors have made the decision to stop delivering to the East Coast. This action has left cargo ships waiting to be unloaded on the West Coast and increased container shipping costs from approximately $3,500/container to approximately $18,000-$20,000/container. This in turn has astronomically increased the price of MDF. Unfortunately, given the high demand for this product and the supply chain issues that remain, we anticipate this shortage impacting us into the 3rd or 4th quarter of 2022.
- Drawer Box Locks: Fortunately, our supplier Blum US has invested significantly in expanding its facility as they strive to meet customer orders or provide alternatives. They too are being impacted by the same material and labor shortages Meridian Products is experiencing. While infuriating, it’s understandable for the times we are in. Just as we appreciate our customers’ loyalty and dedication, we remain committed to our vendors as well.
Impact of Labor Shortages
Losses in the work force have been substantial since COVID reared its ugly head. Whether by choice, by force, or by illness, every business is feeling it, including Meridian Products. The combination of a decreased workforce, supply shortages, increased demand, and natural disasters, have caused delays in every aspect of our industry. Regrettably, there is nothing we can do but keep our fingers crossed and pray the storm passes quickly.
With students returning to in-class learning, folks heading back to the office, and masks being put away, we can be hopeful that our industry will soon rebound. We’ve waded through the worst of COVID *knock on wood* (pun intended) and the creative solutions and efficiencies we’ve developed throughout this time will stay with us and result in less stress and reduced lead times. This in turn will encourage our next generation of “dust eaters” to begin!