20 WESTERN PALLET
Beginning in about 2000, furniture production started to offshore. Since furniture production was a major market for grade hardwoods, the production of hardwood logs was curtailed. Eventually, hardwood sawmills began to go offline, idled, and permanently shut down. The graph below shows the US consumption of hardwood lumber.
Source: US HARDWOOD LUMBER CONSUMPTION AND INTERNATIONAL TRADE FROM 1991 TO 2014
With fewer logs being harvested for high dollar grade hardwoods, industrial hardwoods appear to make their first shift to a new balancing point moving from $320/MSF to $370/MSF throughout 2003. As the economy fell into the great recession, and the demand for grade material plummeted, industrial hardwoods ascended in price once again to $420/MSF settling at a new balancing point of $410/MSF.
The following graph shows the consumption of hardwood by major use categories. As you can see, the offshoring of furniture production, which drove US consumption down, also inverted the relationship between grade lumber and the downfall product of industrial grade hardwoods. This change in relationship created a severe strain on the availability of industrial feedstocks helping to create the new post-recession price points.