The FORT Podcast: Stinson Dean, Ali Wolf, & Dustin Jalbert
Chris is joined again by Stinson Dean (Founder of Deacon Lumber) as well as Ali Wolf (Chief Economist at Zonda) and Dustin Jalbert (Fastmarkets RISI‘s Lumber Lead) for another deep dive into the lumber industry with an emphasis on the home building and sawmill side.
On this episode, they discuss how the lumber price increase has affected the housing market, labor markets in wood products and residential employment, risks for home building & sawmills, the impact on multi-family, and a ton more.
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(02:55) – Introductions
(05:32) – Ali: How has the lumber increase affected the housing market?
(08:07) – Regional Trends on Housing Prices
(10:05) – Dustin: The State of The Union of Canadian Sawmills and Their Perspective on This Insane Price Jump
(12:20) – The Labor Markets in Wood Products and Residential Employment
National Association of Home Builders
(18:59) – Are home builders going to be building spec homes as quickly as before?
(20:29) – Data on Demand for Single-Family Homes Driven by Population Migration Over the Past Year
(21:32) – Who’s making all the money with labor shortages in sawmills and do they have incentives to go back to full capacity?
(24:12) – What’s the barrier to entry for more people starting sawmills?
(27:39) – The Logging Situation in the Pacific Northwest
(31:37) – Potential Uses for Southern Yellow Pine
(35:28) – How many homes can you project that a new sawmill would be able to supply from the get-go?
(41:35) – Builders Dealing with Lumber Thieves
(43:05) – Why do the Canadians control everything and why hasn’t private equity jumped into this? Do the Canadians have trade secrets that give them the monopoly?
(47:11) – How is risk going to reorient itself in housing?
(49:38) – How does the size of the home building companies affect the relationships with lumber vendors going forward?
(50:54) – What are the mills saying about risk management and price forecasting?
(57:54) – What do builders do with their pricing if lumber prices do come down?
(59:12) – Major Publics vs. Regional Builders and Their Ability to Compete with Each Other Going Forward
(1:07:06) – Are homes getting smaller?
(1:11:13) – How has lumber impacted multi-family?
(1:17:01) – How do we get more efficient in home building?
(1:23:35) – Why does build time keep taking longer and longer?
(1:27:34) – Are there opportunities to buy up these older sawmills and implement technology to get them going again?
(1:31:07) – How much of our lumber comes from North America and how much of the globe is using North American Lumber?
(1:41:16) – What is your prediction for 1,000 board feet of lumber in 12 months? (Recorded on 5.24.2021)
(1:43:18) – Is there a range lumber gets to where it’s actually bad for the industry?
(1:46:37) – Closing Thoughts
Episode Summary
Stinson Dean, a revered entity in the lumber trading arena, possesses a deep-seated understanding of the lumber market, meticulously navigating through its volatile pricing and supply landscapes. Ali Wolf, an esteemed expert specializing in housing market trends, brings to the table a wealth of knowledge and nuanced perspectives on the housing market, its dynamics, and underlying trends. Lastly, Dustin Jalbert, with his profound expertise in the labor market, brings forth analytical insights into labor shortages and their cascading impacts on production and market dynamics. The collective wisdom of these individuals shapes a dialogue that is both enlightening and deeply informative.
Dean initiates the conversation, delving into the complexities and volatility of the lumber market, elucidating on the sharp, unprecedented price increments and the subsequent ripple effects permeating various market stakeholders. He meticulously dissects the mechanisms of pricing, supply chains, and the myriad forces propelling lumber prices, offering listeners an intricate view into this specialized market segment. The discussion further spirals into the realms of risk management and strategy formulation amidst the turbulent market conditions, with Dean outlining the criticality of strategic foresight and pragmatic risk mitigation in ensuring trading success amidst prevailing market uncertainties.
Transitioning into the housing market, Wolf encompasses a detailed exploration of the prevailing trends, challenges, and opportunities, shedding light on the various demographic and economic factors influencing market trajectories. She meticulously navigates through the facets of demand-supply dynamics, affordability indices, and the potential future market trajectories, ensuring listeners are enveloped in a comprehensive understanding of the current housing market landscape. Furthermore, Wolf provides an enriched perspective on the interconnectedness of various market variables, emphasizing the nuanced understanding required to navigate the multifaceted housing market.
Jalbert, accentuating the dialogue with his expertise on the labor market, elucidates on the intricacies and impacts of labor shortages on production capacities and overarching market dynamics. He explores the synergies between labor availability, production throughput, and market supply, providing a thorough insight into the interconnectedness and interplay between these variables. As the discussion meanders through the various aspects of economic recovery and market stabilization, Jalbert sheds light on the potential pathways towards economic and market stability, articulating the various factors and scenarios that could potentially shape the future economic landscape and market health.
The discussion further intensifies, spotlighting global market dynamics, supply chains, and the overall economic milieu. The guests, through a lens of expertise and seasoned experiences, share predictions and insights into global market trends, ensuring listeners are imbued with a global and comprehensive perspective on market dynamics, and understanding the interplay and influences of various market segments on the global economic arena.
The FORT with Chris Powers is produced by Straight Up Podcasts