Abundance and Scarcity?

The events of the last two weeks have been a virtual confirmation of what we expected to have happen (see my earlier post) as we move through the calendar towards the end of the year. It seems to have been an exceptionally wet fall in the Ohio and Mississippi Valleys. Log and lumber supplies seem to get much lower the further south you go. To say that this industry experiences wide swings would probably be an understatement as we have been notorious for over producing whenever it was possible to do so and pricing has gotten more competitive over time. When the economy went down everyone was already operating on slim margins. Since then, most companies have been operating at a loss but pursuing a “last man standing” strategy. There aren’t as many people/companies standing now and some of the survivors will fall soon as well. There probably isn’t enough producers with enough resources out there to overproduce much at this point. Inclement weather will play a big role in availability and the buying public may get a shock that they have not prepared for, little or no supply.

I wish my vision of what was going to happen had been wrong and that everything had worked out so that we have a stable, orderly market. We expected supply dislocations in the market but we also expected customers to understand the forces at work and to be pro-active. Perhaps that is happening now but it appears likely that there will be some items that will be really high in cost or just not to be available for awhile. This would truly be a new phenomenon for our industry.

Other parts of the country are not experiencing the same set of circumstances. In the East and the North East, shortages may not be as widespread but supply will be spotty due to lack of motivation by some business owners to invest in any inventory or the available funds to do it. For our industry, periods of great abundance are almost always followed by periods of great scarcity!