Tag Archives: pole building prices

Money-Saving Tips for Building Your Pole Barn

Affordable horse barnThere are two types of pole building owners: those who like to build it themselves, and those who trust expert builders to masterfully construct their dream pole barn. Hansen Pole Buildings guides both types of owners in the careful selection of materials and designs that are the right balance of luxury, utility, and affordability.

But for the sticklers who want to squeeze every last penny out of their pole barn construction, we recommend considering the following money-saving techniques to save on pole building costs.

Buying Long-Lasting, Not Cheap, Materials

It’s tempting to see how low your pole building price can go on your pole barn materials. But don’t forget: the buildings are affordable even when you spring for quality material upgrades.

  • Doors – If you want to pay less (and do less maintenance) in the long-run, choose a door that won’t warp or stick when the weather changes. Buy a frame that won’t wear away too quickly, and purchase hinges that will support the weight of your door for a long time without bending.
  • Steel – Yes, there are differences in steel quality and thickness that can affect the lifespan of your pole building. Hansen Buildings is experienced in sourcing materials and can help determine what gauge of steel your pole barn frame will support.
  • Insulation – Your type of insulation may vary depending on how you use your pole barn. Ask your pole building craftsmen or Hansen Buildings what type of insulation will hold in heat and cool air most effectively, especially if you are living in it or you plan to keep animals in it. You’ll save tons on energy and maintenance if you do.

It may raise your upfront costs of your pole barn to invest in quality materials, but you’ll thank yourself later when you don’t have high energy and maintenance bills arriving monthly.

Ensuring Proper Support Spacing

Most building designs will require supports spaced either six or twelve feet apart, but amateur builders may space supports more narrowly, upping your material and labor costs.

If you’re building a pole barn yourself, don’t stray from the recommendations provided on your design. If you’ve hired builders, be sure to check their work against your pole barn plans, and address your concerns about differences in construction as early as possible.

Performing Up-Front Façade Planning

Especially when building for residential needs, customers commonly become concerned about the outer appearance of their pole barns. When trying to achieve the look of a traditional house, clients tend to opt for expensive siding and roofing options that could, instead, be addressed during the design phase of the pole building.

Designers like Hansen Pole Buildings work with novice and veteran customers alike to produce pole buildings that match the function and aesthetic intended by the customer. Ask your pole building craftsmen about clever ways to improve the look and feel of your pole barn exterior without getting burned on pole building price, such as:

  • Changing the roof style of the building – gambrel roofs and double gables make aesthetically interesting buildings from rectangular bases.
  • Installing different door styles – sliding doors and garage doors can add a touch of country or suburb to your pole building quickly and easily.
  • Adding plenty of windows – windows vary the look of large spans of wall and, as a bonus, let in lots of natural light, which expands your already wide pole barn interior.
  • Customizing with a deck or porch – raised or flat, a quality deck is an affordable add-on that will spruce up your exterior without making expensive changes to your pole barn plans.

Selecting Appropriate Insulation

Not only do you want to buy a quality insulation, you’ll want to install it to meet your specific needs as well. Try some of these money-saving insulation solutions to save on pole barn costs:

  • Liner system – a steel liner system is easier to install and less expensive than drywall when considering the installation and painting costs, and is better suited to temperature changes in steel buildings.
  • Condensation control – whether you have insulation or not, condensation control will help keep temperatures level and humidity normalized.

Remember to carefully consider your insulation material options as well. Fiberglass is the standard and tends to be more affordable, but foam insulation may last longer despite its relative expense. Cellulose will help you insulate if you have an attic; it can be blown into attic spaces to prevent air flow from the interior of the building.

Work with Your Pole Building Experts

Above all, the best way to save money on your pole building is to set your expectations correctly with your pole building designers and builders. Quality experts and construction specialists will help you maximize the potential of your building without compromising on pole building prices. Do your research, find companies you can trust, and monitor the construction of your building to keep your pole building cost as low as possible.

Pole Building Prices: Beware when you compare

For TBF (throw back Friday) we are reposting an old post back from 2011 that has been a very popular read.

What Is the Profit Margin at a Lumber Yard and how does affect their pole building prices?

What in the heck does the gross profit margin of the average retail lumber yard have to do with the price of tea in a third world country, or for that matter your new pole building?

Keep filed away in the back of your mind – gross profit is the difference between the cost of goods sold and what they are sold for. Out of this margin, needs to be paid all of the expenses of operations – lights, phones, heat, wages, employee benefit programs, equipment and the costs of flooring inventory.

I owned and operated two lumber yards for 17 years. Our typical average gross profit was 17-20%. This is pretty much the industry standard. Hansen Buildings currently provides pole building kit packages through several lumber yard partners, we know their margins are pretty much in the same range.

Builders FirstSource is one of the lumber industry’s largest pro dealers. In the second quarter of 2011, they reported $206.4 million in sales, with a net loss of $15.5 million. In practical terms, they lost about 7.5% on every sale, with a gross profit margin in the industry average range.

The Math Behind Pole Building Prices

Hansen Buildings operates pretty much like most lumber yards, however we do not have the added burdens of numerous facilities, the huge overhead costs of large numbers of employees and equipment like delivery trucks and forklifts.  And we do not have to pay to floor millions of dollars of inventory. This allows us to keep from losing the 7.5% on every sale, like Builders FirstSource (and probably some other major lumber dealers).

This leads me to the second part of the equation.  I just have to scratch my head when a client reports to one of our Building Designers the price on exactly the same building, purchased from their local lumber yard is thousands (usually $5-6,000) of dollars less than our price.

Considering the average pole building kit package is about $15,000, for a lumber yard to be even $5,000 less than us, would mean they were selling their materials at about $2,000 below their cost!!

As I am unaware of any Federal bailout money for lumber yards operating businesses in this fashion, I can deduce the alternate provider, who is so much less expensive, will quickly be out of business, or the pole building prices being compared did not list the same features.  Or more likely, I discover is often the case, the buildings being compared were not even the same size.  Not even close.

I’m all about doing pole building price comparisons, but let’s compare apples to apples, not apples to elephants.

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84 Lumber is $5000 Less

I celebrated my 35th year in the pole building industry in January. I’ve learned a lot and forgotten probably even more in this time. One of the things I have learned is, when quoting any particular post frame building, no one is ever $100 less.

They are always $3000 or $5000 less and it is always for the exact same building.

Dry LumberIf you believe this – I have a heck of a deal on some Florida swampland for you – or Arizona oceanfront property.

Back in the early days of this blog, I wrote about the profit margins of lumber yards: https://www.hansenpolebuildings.com/blog/2011/09/pole-building-prices-beware-when-you-compare/

Hansen Pole Buildings’ Designer Mark recently quoted a pole building kit package to a builder in Ohio, at just over $20,000 which included four insulated overhead doors (two each 12’x12’ and 9’x7’).

The builder emailed back to Mark:

“Thanks for the estimate.

I can get this same building from 84 Lumber for 13,000.00 plus 2,200.00 for the garage doors. total 15,200.00

Thanks for your time”

Sounds like the $5,000 rule. Since we don’t make $5,000 of profit (or close to it) on a package such as this, I am thinking we should just close down our operations (where we buy at wholesale) and let 84® Lumber do all of the work!

The reality is – there is no way on the planet this is an apples-to-apples comparison.

For those of my loyal readers who are unfamiliar with 84® Lumber, or just enjoy a fascinating story, here is what Forbes magazine had to say about 84® Lumber in a February 9, 2015 article by Dan Alexander: https://www.forbes.com/sites/danalexander/2015/01/21/daughter-knows-best-inside-the-84-lumber-saga/

Just out of curiosity I looked at the price of the four overhead doors – our price nearly $4200. Probably one of two things – we need to order our overhead doors from 84 Lumber, or maybe there is only one of each door size instead of two!

Now we know more than just a little bit about 84 Lumber’s pole buildings. Back about seven or eight years ago, we were set up in a program with them to provide pole building kit packages for 84® Lumber western Pennsylvania and surrounding areas.

At the time, 84 Lumber was fine if customers ordered one of their dozen or so standard pole building kits, but anything custom had a delay of several weeks or longer for pricing. And if the building needed to have plans sealed by an engineer – they had no way to service the client. The standard plans they did have – relied upon the customer having to excavate out below grade, in order to pour a concrete slab!

And assembly instructions? Nada!

Appearing on the 84 Lumber website (https://84homes.84lumber.com/Pole%20barn%20prices.pdf) today was a “ballpark” price on a 40’x64’x12’ pole building featuring a 15’9” sliding door on an end and a 15’ sliding door on a side. With colored steel roofing and siding $19,952. For sake of convenience, I made both the doors 16’ in width and assumed them to be split (bi-parting) sliding doors. I also included powder coated screws and made the sliding doors all steel frame (instead of the wood components of the 84® Lumber pole building). Our price delivered – $13,868!!

Maybe this one price was a misprint…so I compared the 30’x40’x12’ with a 10’ sliding door on an end. 84® Lumber $11,913, Hansen Pole Buildings $7944.

Even adding 12 inch enclosed overhangs to all four sides, reflective roof insulation and a commercial steel insulated entry door factory finish painted with painted jambs we were still $2000 LESS!!

Oh….and we will include full sized 24” x 36” blue prints specific to exactly what is being built, showing where every piece is installed AND our 500+ page Construction Manual complete with hundreds of color photos!

Am thinking 84® Lumber might want to go back to having us provide their pole building kits!

We’ve asked the builder above to furnish us a copy of the quote from 84® Lumber…..am certain it will be fascinating!! If we get it – I will be sure to follow this blog with “the rest of the story….”

Pole Barn Price Shoppers

Why True Pole Barn Price Shoppers are Never Satisfied

I’ve learned a few things in my close to 40 years as a business owner or manager. One of the most important is, there is always some other provider who is willing to sacrifice quality and/or service to sell at a lower price.

checklistIf everyone was selling the absolute exact same product, with the absolute exact same service, then price is the only determining factor.

Commodity items would fall into the category above.

Pole buildings are not commodities. With so many differentiation’s in how the buildings are designed, what is provided for plans and instructions, the quality of the materials, the list becomes virtually endless.

The pole barn price shopper most often sacrifices features, to drive the price lower. Here are just a few of the examples (in no particular order):

  • Going “light” on wind and/or snow load requirements where permitting is either lax or non-existent.
  • Cheaping out on doors – the only moving parts on a building, do you seriously want to skimp here? Using wood framed sliding doors, instead of metal frames. Using sliding doors, when overhead doors were obviously the correct design solution. Low quality wood jamb entry doors. Not paying for wind rated overhead and entry doors.
  • Leaving off overhangs. You can’t add overhangs on later. If my choice, due to budget, is doors or overhangs – I am picking overhangs. One can always leave openings and install the doors at a later date when funds are more readily available.
  • No roof insulation. The number one complaint I get from people with existing buildings is they failed to insulate below their steel roofing and it now drips. And drips. And drips.
  • Putting up a building which is smaller than what is needed to provide a solution to the problem.
  • Using recycled utility poles or steel pipe instead of properly pressure preservative treated columns.
  • Connecting wooden components with “sinkers”.
  • Failure to provide adequate means of ventilation.
  • Not, at the least, ordering trusses to support a future ceiling – if one could ever be installed.
  • Using steel roofing with little or no warranty.
  • Skimping on trims for anywhere (most often these are base, top of wall, fascia and overhead door jamb trims) or leaving out form fitted closed cell closure strips.
  • Tearing down, moving and reassembling an existing pole building.

I am getting worn down and depressed just making this much of a list! And there are even more things which could be added. If you find yourself looking at this list and thinking you might seriously consider doing one or more of these things to trim your pole barn price – you are fooling no one but yourself. Eventually they will come back to haunt you, maybe sooner than expected.

The goal at Hansen Pole Buildings, as it should be with every other pole building kit package supplier or builder, should be to (as much as possible) keep the client from making crucial mistakes which they will regret at a later date.

As I have told more than one person, years from now when I am on my countrywide tour of people I have helped with buildings I want to pull up in your driveway and be heartily welcomed to share a cold, tall one….not chased off with a shotgun for not having done my job right.

Are Your Pole Buildings Local to Me?

Welcome to Ask the Pole Barn Guru – where you can ask questions about building topics, with answers posted on Mondays.  With many questions to answer, please be patient to watch for yours to come up on a future Monday segment.  If you want a quick answer, please be sure to answer with a “reply-able” email address.

Email all questions to: PoleBarnGuru@HansenPoleBuildings.com

 

DEAR POLE BARN GURU:Lost my house in a wildfire in California about 10 months ago, and looking at different options for re-building. Like what have seen on your website, but that’s a lot of distance between us. Would you know of any company in Southern Calif that builds these?

I am originally from MN and will probably be there end of this month, if get a chance maybe I can stop in and discuss. Thanks. CONTEMPLATING IN CALIFORNIA

DEAR CONTEMPLATING: Sad to hear of the loss of your home, it has to have been devastating. Pole buildings can be a great alternative for areas which are prone to wildfires, as steel roofing and siding obviously does not burn.

We provide building kit packages in every state in the U.S., shipping from our locations which are closest to each individual site. While our pole buildings are designed for the average building owner to successfully construct their own building, our Building Designers can assist you, should you need to find a builder.

We will hope you have the opportunity to visit our offices.

DEAR POLE BARN GURU: I see you have the pole building kit prices listed, but I assume you need to add to that price doors and windows? Is the only way to get the cost for doors and windows to complete a custom building quote? I am looking at your 36’x48’x10′, 40’x40’x12′ and 40’x48’12’ but am curious what the additional cost would be to add doors? TRYING IN TACOMA

DEAR TRYING: As the number, size and options selected for doors and windows can cause dramatic changes in costs, the best way to get things narrowed down would be to request a quote at: https://www.hansenpolebuildings.com/freequote.htm

Very often – the more you purchase, the less expensive per door or window it may be.

Shade Shelters

Welcome to Ask the Pole Barn Guru – where you can ask questions about building topics, with answers posted on Mondays.  With many questions to answer, please be patient to watch for yours to come up on a future Monday or Saturday segment.  If you want a quick answer, please be sure to answer with a “reply-able” email address.

Email all questions to: PoleBarnGuru@HansenPoleBuildings.com

DEAR POLE BARN GURU:I just want to build a carport 25′ to 30′ away from my house on the north side. Do you sell “Shade Shelters” or anything along that line? FLYING IN FLORIDA

DEAR FLYING: Post frame (pole) buildings are probably the most affordable permanent carport structure. Unlike the “fly aways” which are seemingly sold on every street corner for $799, your pole building carport will last a lifetime, and longer. All we need to know is how much area you need to cover, and what the tallest thing is which you need to park under it, and we can design your solution. Shade shelters are quickly and easily constructed, most often by homeowners just like you.

DEAR POLE BARN GURU: Hello, I am contractor assembling one of your pole building kit packages.
Would you send me details for flashing the building please?
Need:
-Corner flashing.
-End capping the cut ends at top.
-Where do the corrugated foam strips reside?
-Roof panel overhang on the sides and ends.
-Door trim flashing

Thank you, WISHING IN WASHINGTON

DEAR WISHING: All of these are covered in depth in the Construction Manual which was provided to your client after purchase. If your client has not shared it with you, you should ask him for the big white binder which was sent to him. Every piece of trim has a diagram showing what it is along with the code used by the steel company. Detailed drawings show where each piece goes on the building.

DEAR POLE BARN GURU:Hi, What is the cost per square foot…please to construct a pole barn 30 x 80  please. I thank you so very much…. CONFUSED IN CONNECTICUT

DEAR CONFUSED: There is such a myriad of possibilities in any given foot print which could cause the price per square foot to be very low – if it was a low eave height, roof only building, with no roof insulation and a non-painted roof. Or it could be very high, if it was multiple stories with a plethora of doors, windows, framed ready to be insulated and drywalled.

I liken this question to, “How much will it cost to remodel a bathroom?” It all depends on what features you pick – and add to the calculation loadings such as wind load, snow load and you have a complex formula. The corners are what cost the most, so going up in size – up to a certain width, the cost per square foot goes DOWN. So getting a price on a 30x80x10’ and then getting a price on a 30x70x20’ and wondering why a smaller footprint is “higher” – you can see how complicated it gets by changing the height. Best advice is to pick up the phone – call one of our building designers and with a few keystrokes they can tell you what making your building taller, shorter, wider, longer – any usual feature will do to the price – all in a matter of seconds And they will help you to design what you actually need to solve your “problem”, using the best design to give you the most bang for your buck. Try it….it’s quick and painless – and best of all – FREE.

Pole Barn Prices: I Feel Your Pain

Being in the pole barn blog writing business, I hear from and get a lot of feedback from clients, and potential clients. I’d like to share this with my kind readers:

Simple Pole Barn“Dear Sir;  I do appreciate you’re candid effort to offer such a deal, but I am going to be gone starting Dec 27 and won’t be back until March 9. Believe me when I say I need a pole barn. But the cost of ALL the pole Barnes that I have checked on has scared the living hell out of me. All I wanted was a simple 36×40, one overhead and one entry door. But all of them wanted me to be part of the National Debt.  I honestly don’t believe that they wanted to sell any pole Barnes. Not asking for a given, just asking for a honest LOW price. I have worked hard my whole life and don’t have a whole hell of much, but what I do have I want to try and protect it. I don’t need to hear I can do this or you need this and can do it at a affordable price. That affordable price turns out to be so outrages. It is downright pitiful that companies has to tell you all the good things and turns out to be all false. So I honestly ask YOU what kind of a low cost good Pole Barn can you offer a guy like Me. A Honest hard working man with needs like I have. Thank you for listening to me.”

I did encourage this writer to read an article I had written: https://www.hansenpolebuildings.com/blog/2013/05/pole-barn-prices/

Now I work for a living and have for the past 40-plus years, the last 33 in the pole building industry. I remember offering a constructed 24’ x 24’ garage with a 16 foot wide insulated steel overhead door and an insulated steel entry door for $3995! Just 22 years ago.

However I also know my mother bought a brand new 2880 square foot house which we moved into at Christmas of 1973 for under $30,000. My brother just sold the house for over $160,000! Of course gasoline then was under 50 cents a gallon, not hovering between three and four dollars. I held down an entry level job for $2.50 an hour….am sure you are getting the drift.

What scares me is not current pole barn prices.  I or one of my family members is a client pretty much yearly – so I also end up on the “other side of the fence”. Even though quality has increased, pole barn prices have not kept up with the rate of inflation.

What scares me – and what is going to continue to scare me – is our government printing billions (with a “B”) of dollars of funny money every month. The problem is not costs going up, it is the value of the dollar going down.

Recently I read an article saying to NOT put any money in savings account because you are actually losing money if you do. The rate of inflation is higher than most interest rates. Makes you stop and think, doesn’t it? If you need a pole building, and if you have the money for it (or can borrow at a reasonable interest rate) – buy it now. Your dollar is never going to go farther than it will right now.

The Naked Pole Building

When the construction industry imploded in 2008, pole barn builders and suppliers stripped their pole buildings down to the bare essentials (or, in some cases, to less than the bare essentials). This was done in an effort to make the pole buildings more affordable and to not be underpriced by another provider or builder.

Naked Pole BuildingEven now, as the market is improving, we still see post frame buildings being offered about as bare as a lap dancer. This trend makes it harder for other pole building providers to sell upgraded (and better) products to both builders and self contractors.

Like a Victoria’s Secret catalog, pole builders and pole building providers attract clients with the bare essentials and attractive pricing. While contracts may be signed with builders at attractive pricing, the builder is planning on covering up the pole building with a full wardrobe, including a mink coat. The price for the pole barn may be $10,000, but the builder is planning on it actually selling for $20,000, by the time he gets done with upgrades (as well as costly change orders).

When I was in the residential prefabricated metal plated roof truss industry, one of my clients was a framing contractor who used to brag about his middle name being “Extra”. While he did great work, and was always very reasonably priced, everything not spelled out initially was extra! And what were his customers to do? Once he started building, they were stuck!

Long ago, I learned no matter how low something is priced, there is always someone who is willing to cut quality and/or service to get to yet a lower price. Even scarier yet, is when the competition knowing leaves out portions of the building in order to get to a lower price!

And if you think a supplier would never knowingly leave materials off from a list, I have some ocean front property for sale in Arizona. I see materials lists prepared by lumber yards day after day – almost without exception, they are all missing or short materials.

When doing a quote comparison with another company, I have had to ask the client, “Which two walls do you want the steel on, the walls with the overhead doors, or the walls without?”  They had no idea there was not enough steel for the entire building.  Or that providing roofing material (steel or shingles) was “extra”.

How about code requirements?  Are they clearly listed on the quote, or are they somehow “hidden”, with the company merely claiming they design their buildings “stout”.

Want to do it right the first time, and know what costs truly will be?

Find a supplier who guarantees to provide a complete building package, with features spelled out (including all of the code and loading criteria), for a set price. A complicated list of materials, is nothing more than a list with prices, it is no guarantee of anything ever being able to be constructed.

Lumber Prices: You Got Wood?

Got Wood?

While very few consumers visit retail lumberyards or big box home improvement centers nearly as often as I do, if it has been over a year since your last visit, prepare for some serious sticker shock.

The sheet of 7/16” osb (oriented strand board) which retailed for a five spot and change last April? Good luck, try $16 to 20 a sheet now. Dimensional lumber prices have nearly doubled in price over the same time span!

In like a lion, out like a lamb….the tricky, ucky, surprising at-every-turn weather of March is past. For most of the country, Easter is the turning date for weather. From now until way past Labor Day we will be blessed with ideal job sites.  When it comes to building material pricing we are left with the simple elements of supply, demand, and the arm wrestling between producers and consumers.

Let’s start with supply.  Over the last year lumber production has increased by 10%, housing starts have increased by 20%. Anyone besides me see the immediate challenge in this?

sheetrock receiptWhen there is not enough “stuff” to go around, the price of the “stuff” goes up. This is why lumber prices are firm.

The talk recently on the streets is of increasing productions, however this is not like turning on a water spigot. Over the past five years, many production facilities have either been permanently closed or mothballed. Restarting a mill takes months. Georgia Pacific is investing $400 million to increase output…..it will take over a year for the improvements to be made.

The mills which survived the great recession have been living on a shoestring. Only absolutely essential maintenance was done, now it is time to pay the piper – more and more down time is needed for overdue repairs to equipment and facilities.

For consumers waiting for some sort of radical price drop….chances are better of the Houston Astros making it to the 2013 World Series. It isn’t going to happen. Need a new building in 2013?  Order it now! Lumber prices are only going up from here.

Pole Building Prices: When the Apple is a Rock

 

Baseball in the grass

In September of 2011, one of the Hansen Pole Buildings Designers – Steve, quoted a proposed pole building to be built in Oakland County, Michigan. To be used to cover four indoor baseball batting cages, the building quoted was to be 50 feet wide, 80 feet long with a 20 foot sidewall. Among its features was a full hipped roof (in lay person’s terms, it slopes in all four directions) and vinyl siding. The pole building would include two eight foot wide by 10 foot tall insulated overhead doors, a three foot wide commercial steel insulated entry door, a vented polycarbonate ridge cap as well as a 10 foot x 30 foot second floor with stairs.

How much is it?

Designed to withstand a C wind exposure, the delivered price in 2011 was $33,218.

The client calls today, pretty well prepared to order his “baseball” pole building, until he realizes our price is for a kit package, as opposed to the other prices he has been getting, which include labor and are about $36,000 and up.

Is it what he really NEEDS?

Time to get down to serious talking…..what is the real solution to the problems at hand (also known as, what are the other people quoting)?

While the 50’x80’ part seems to work, the height only needs to be 16’. Big difference right there, as the calculations for the strength of the columns needed to support a building involve the square of the height. 20 squared being 400, 16 squared is 256 – the 20’ tall building has 156% of the wind load on the columns, compared to the 16’ tall!

Looks nice…but necessary?

Full hip roof lines, while they may be esthetically pleasing, get to be fairly pricey when it comes to a 50 foot clearspan…..it turns out a gabled roof will more than meet the needs.

The vinyl siding – same issue as the full hip roof.

With a few other adjustments, the pole building (even with today’s sky high lumber prices) is just over $21,000!!!

Oh, the Exposure C for wind (a site open to the wind in one or more directions)? While I am not a gambling man, there is a pretty fair chance everyone else quoted Exposure B (a site protected from the wind in all directions). At the 90 mph (miles per hour) design wind speed, the Exposure C building has to withstand a wind force nearly 50% greater than Exposure B.

Show me an apple…not a rock

The bottom line….shopping for a pole building and really want to compare apples and apples? Email any other quotes to us; we will compare them item for item and feature for feature – for free.

If there is indeed a better buy, on an identical or better building, we’ll let you know.  It has never happened yet.

Lumber Prices to Hit All-Time Highs?

Lumber prices are expected to soar in 2013 before hitting all-time highs the following year, according to a report by the Vancouver consulting group International Wood Markets.

LumberWood Markets president Russ Taylor said the dynamics have been in place since 2008 for a so-called “supercycle” which will push lumber prices into the stratosphere. The only missing element, he said, has been a recovery in U.S. housing starts.

“We are already seeing some of this happening already. We are seeing the highest prices in six years right now – the middle of December, which is usually when you see the lowest prices of the year. The supply chain is very tight.”

The Wood Markets report covers the years 2013 to 2017, a period during which U.S. housing starts are expected to double. At the same time, North American timber supplies are expected to be constrained by issues like the mountain pine beetle in British Columbia and harvesting cutbacks in Quebec, leading to a supply-side crunch. Further, the distribution chain in the U.S. has been reduced by half because of the recent recession. Many of the companies which survived are on credit watch, Taylor said, and are unable to buy enough lumber to rebuild their inventories.

Those North American factors are playing out in a global wood products market where China is taking a stronger role. China now accounts for 25 to 30 per cent of lumber shipments from the British Columbia Interior, a market which didn’t exist the last time the U.S. housing market was strong.

Lumber prices have already jumped significantly in 2012. The composite lumber price – the price used to set the rate for the softwood export tax – is now hovering around $360 a thousand board feet, up $100 from the beginning of the year. Taylor expects a 10% increase in 2013, and a further 10% jump in 2014, which would mean a record $440 per thousand board feet of lumber.

Further, the U.S. softwood tax on Canadian lumber drops to zero above $355, which means, beginning in January, British Columbia companies will be paying no tax, an added bonus.

What does this mean to the average consumer who is looking to build a new pole building? With the cost of lumber being roughly one-half of the cost of the entire building, a 10% annual increase in lumber costs, could well impact the bottom line by five percent.  If you are considering building “now” or within the next 5 years, the best answer is:  ASAP!

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