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Yeah, this is strange, especially as red oak plywood is mostly the same thing as normal plywood, the red oak is just a thin veneer on the face. I've been buying
by xyzzyz 5y ago
Yeah, this is strange, especially as red oak plywood is mostly the same thing as normal plywood, the red oak is just a thin veneer on the face. I've been buying cherry lumber recently, and they went from something like $4.50/bf to $6.50/bf here. Significant increase, but not 3-fold.
Now that I think of it, it kinda makes sense: it's not the timber that's gotten more expensive, but the service of milling it. For products from relatively more expensive hardwood timber, milling costs constitute smaller fraction of the final cost, so even if milling costs triple, the final product might only go by 50%.
- ethbr0 5y agoFWIW, substitutability is a hard problem with algorithmic pricing, even for relatively stable inventory categories like big box construction retail. I'd guess (with some insider knowledge) that (1) there wasn't any prebuilt link to adjust substitute pricing & (2) Depot didn't care enough to adjust pricing. Both Depot and Lowes are in it for volume and long-term, which is why they don't do things like spike generator prices after hurricanes.
- munificent 5y agoIt's more than just that. You can see weird price changes like this because of the limits of substitution. Imagine you've got a project to build a bookcase. You're using cheaper normal plywood for hidden structural parts and nicer but more expensive red plywood for the stuff people will see. You price the whole thing out. Then the price of wood skyrockets. To keep the price of the whole project under control, you start cutting costs. You use more of the cheaper plywood for the whole project and decide to skimp on the red oak. Scale that across many projects and you get a paradoxical result where the cheapest goods in a category go up in price while the better goods don't, because people are subbing out the "cheap" stuff for the good stuff. https://en.wikipedia.org/wiki/Giffen_good https://en.wikipedia.org/wiki/Giffen_good
- abakker 5y agoA friend of mine in CT has problem now in the hardwood supply chain. The issue is that the kiln drying backlog has now caught up with hardwoods as many kilns are full of fir and pine. The supplies of paint grade poplar and soft maple are running quite low now.