Demand for U.S. lumber expected to plummet

SPOKANE, Wash. (AP) - The drop in new home construction has timber industry experts predicting a staggering drop in U.S. demand for lumber.

Compared with record lumber consumption in 2005, this year's demand is expected to drop by 19 billion board feet, industry leaders told several hundred logging contractors at the Intermountain Logging Conference here on Friday.

The sum is roughly equal to the annual output of sawmills in 12 Western states.

"We've never seen a decline like this in the history of the industry," Butch Bernhardt, spokesman for the Western Wood Products Association in Portland, told The Spokesman-Review newspaper in a phone interview.

The lumber business has always been cyclical, but Bernhardt said prices are hitting lows not seen since the recessions of the early 1980s and 1990s. When adjusted for inflation, they're at historic lows, he said.

In March, the wholesale price for Douglas fir was $245 per 1,000 board feet. Three years ago, the price was $422. Output at Western sawmills has dropped 20 percent from last year.

The drop in wholesale prices - what sawmills get paid - has been much sharper than the price reductions seen by customers buying two-by-fours at home improvement stores, Bernhardt said.