Why Dead Trees Are ‘the Hottest Commodity on the Planet’

Since 2018, a one-two punch of environmental harms worsened by climate change has devastated the lumber industry in Canada, the largest lumber exporter to the United States. A catastrophic and multi-decade outbreak of bark-eating beetles, followed by a series of historic wildfire seasons, have led to lasting economic damage in British Columbia, a crucial lumber-providing province. Americans have, in effect, made a mad dash for lumber at the exact moment Canada is least able to supply it.

Climate change, which has long threatened to overturn dependable facts about the world, is now starting to make itself known in commodities markets, the exchanges that keep staple goods flowing to companies and their customers. For years, scientists and agricultural forecasters have warned that climate change could result in devastating failures among luxury goods, such as fine chocolate and wine. Others have speculated about several grain-producing regions slipping into a simultaneous drought, a phenomenon dubbed “multiple breadbasket failures.” But for now, a climate-change-induced shortage is showing up more subtly, dampening supply during a historic demand crunch.

“There are people who say, ‘Climate change isn’t affecting me,’” Janice Cooke, a forest-industry veteran and biology professor at the University of Alberta, told me. “But they’re going to go to the hardware store and say, ‘Holy cow, the price of lumber has gone up.’”

When you ask lumber economists about this year’s astonishing price run, they tell a story that you can summarize with three D’s: DIY, demand, and demography. When the economy shut down last spring, sawmills across North America planned on a long-lasting and deep recession. They slowed production lines and paused up to a third of their lumber production, according to Dustin Jalbert, a wood-products economist at Fastmarkets.

“But then things rebounded very rapidly,” he told me. First came the DIY projects: Stuck at home, flush with cash, and with nothing else to do, homeowners embarked on gardening or deck-building projects that they had been putting off. Then, as the pandemic dragged on, demand for private indoor space increased. Many families suddenly needed more from their house than they had ever needed before. “They’re working from home, and they have kids working from home, so now they need an extra room or two,” Jalbert said. Normally, homeowners would respond to a sudden need for more shelter by trading up, moving out of their home and buying a larger one. But because everyone needed more space at the same time, home inventory strained, and home prices started to rise.

Those who braved the housing market soon discovered the final problem: demography. My generation of Americans—the core cohort of Millennials, born from 1988 to 1992—is turning 30 and entering our prime home-buying years. Millennials are passing through the U.S. economy like an elephant being digested by a boa constrictor. Just as we stretched public-school systems in the 1990s and inflated the urban apartment market in the 2010s, we are now trying to buy more houses than exist to be sold. Last year, American homes spent an average of 25 days on the market, and that number has continued to fall.

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