LUMBER INDUSTRY WOES UP HOME COSTS; FROM OWLS TO THE WEATHER, IMPACT IS FELT

First there was the spotted owl.

Then along came Hurricane Andrew.

Add the National Forest Management Act and the Federal Land Policy and Management Act.

It all adds up to a reduction in the supply of lumber and increasing costs for homebuyers.

Consumers paid $5.9 billion more for lumber and plywood in 1992 than they did in 1990.

With an average of 15,000 board feet of lumber per house, homebuyers paid $1,200 more in 1992 than in 1990, according to the National Lumber and Building Material Dealers Association (NLBMDA),

The prediction for 1993: More of the same, only worse.

New homeowners costs per home is expected to increase this year by as much as $4,000 over the 1992 figures, according to NLBMDA estimates.

Environmental issues and weather are among the leading factors in continuous increases in prices of lumber.

A judge in the Pacific Northwest last year placed an injunction on 13 national forests in Oregon, Washington and Northern California that are inhabited by the northern spotted owl.

The injunction halted harvest of 1.6 billion board feet of timber. Using the average of 15,000 board feet per house, this equals about 106,000 homes.

In another decision, about 400 million board feet in 118 U.S. Forest Service contracts that had already been awarded could not be harvested because of another animal, the marbled murrelet.

In still other U.S. forests environmentalists have protested and appealed timber cutting in national forests, thus delaying millions of board feet of lumber harvests.

Ben Mayo of Bentonville, Ark., president of the Mid-America Lumbermen's Association, a five-state trade association of retail lumber dealers, said the volume of wood withdrawn because of the spotted owl last year was enough to construct 360,000 homes, about a third of the houses built in 1992.

Weather, too, is a contributing factor in rising prices. Rains in the south and light winters in the north have affected logging operations. The NLBMDA estimates the sawmill industry has lost 25 to 30 percent of its productive capacity.

Another weather factor was Hurricane Andrew, which blasted the U.S. mainland from Florida to Louisiana in August, destroying as many as 63,000 homes and damaging thousands of other homes and buildings.

eather can also be an advantage for lumber prices.

"Right now, lumber prices here are down some," said Mark Beaudean of Southeast Missouri Builders Supply, 411 Jefferson.

He explained: "With all of the recent storms across the country, home building has been slowed. This has permitted wholesalers to build up their inventory. Most dimensional lumber is down as much as 20 to 25 percent over the past five or six weeks."

That situation may not last long.

"Wholesalers are telling us that with two or three weeks of good weather the prices could escalate again," said Beaudean. "It could be a short-term thing."

Prices of some lumber escalated as much as 40 to 50 percent in 1992, with plywood going from as low as $16 a sheet to more than $25 a sheet.

"Prices of wooden doors, roofing, and molding is still up," said Charles Leming II, general manager of Contractors Supply, Highway 74 East.

Leming, who worked with the former Leming Lumber Co. a number of years, said lumber prices tend to go up and down on a seasonal basis. Prices "tend to go up in the winter, but with Hurricane Andrew in August, lumber prices started going up earlier in the year."

Demand for lumber has increased steadily since the first quarter of 1992, said Karl W. Lindberg, president of the Southern Forests Products Association.

In Cape Girardeau, new-home permits are up slightly during the first four months of 1993 despite rising costs. A total of 32 permits were issued during January through April at an estimated value of $3.6 million, averaging $112,609 each. Twelve of the new permits came in April. In 1992, 30 permits were issued during the same period.

The steadiness of the home building market and the surge of new homes needed in the Hurricane Andrew areas have created a demand for lumber that exposes the scarcity of forest resources throughout North American, said Lindberg.

Home repair and additions have also added to the lumber need. In Cape Girardeau, permits have been issued for more than $150,000 for additions, repairs, decks, and garages or carports.

Commercially, permits have been issued for more than $2.5 million in new construction and, or, additions and remodeling.

According to one market publication Random Lengths a weekly market newsletter that tracks lumber prices, No. 2 grade southern pine two by fours, a popular item used for framing new homes, recently sold for $355 per thousand board feet, up 25 percent from $284 a year earlier.

Lindberg said that with a commodity item such as lumber any sign of scarcity or surplus is quickly translated by the marketplace into higher or lower prevailing prices.

He pointed out that the south normally supplies about a fourth of the lumber consumed in U.S. markets, but because of the supply constraints in the northwest and east, the forests of the south are currently meeting about a third of the U.S. demand.

About 30 percent of the lumber used in the U.S. is imported from Canada.

"But both were not enough to make up the shortfall from the west," said Lindberg. "The South and Canada combined can't close the gap enough to prevent a nationwide shortage. So the marketplace forced higher prices."

According to Bob John, executive vice president of the Mid-America Lumbermen's Association, retail lumber dealers in the Midwest had been trying to tell Congress and other federal regulators that the owl issue "would come home to roost" in the form of a supply pipeline that was running low due to actions of radical environmentalists and preservationist groups.

"Because of these preservationists, millions of acres of timber lands have been closed to logging," said John. "Production of lumber and plywood have been curtailed because more than 70 mills have been closed permanently. Add to this drought conditions and dangers of fires in the west that have prevented loggers from getting into the forest and you have the makings of a real lumber supply crisis."

John said there is no reason the lumber supply should be short.

"There should be an ample supply of materials since today there are more trees in the U.S. forest than at any time since the turn of the century," said John.

Last year approximately 1.6 billion seedlings were planted.

"That's nearly five million a day," said John. "That figure does not include the millions of acres of managed forests that are replaced each year through natural regeneration. Because of this aggressive replanting and management effort, the U.S. grows about a third more wood every year in every region of the country than it harvests and loses to insects and diseases combined."