THE SOUTHLANE

By WAYNE GARDNER executive vice president

RANDOM Lengths Year Book

lists

^* average prices per month and per year on many of the lumber items used in residential construction. Taking those published and widely recognized, authoritative figures, it is apparent that the price of 2 x 4 standard & btr. green, S4S was, in 1970, 28Vo below the price in 1955.

In January, 1971 the price was lower than 1955 by 3L%. By August of 1971 it had risen to 9/o above the 1955 price. Taking an average, one finds that the price in 1971 was 57o less than the average price of 1955. This of course takes into account inflation that has taken place in recent years and compares the 1970 and 1971 prices on the same basis as the prices in 1955.

Using the same constant dollars, it can be shown that raw land values have risen l30Vo and, construction labor has tisen 46Vo during this same 15-year period.

There have been allusions made outside the industry that lumber manufacturers and distributors collaborate on pricing. Others have said the industry is controlled by five or six giants.

Firsf, manufacturers and distributors cannot, legally or practically, collaborate or consult on pricing matters. Antitrust laws and consent decrees prohibit such activities. Plus the fact that the market is too big anyhow.

Congratulations and good luck are in order to new owner/managers: John Ramsey, Ramsey Lumber Co., Laurel, (formerly V. C. Johnston Lumber Co.) and Irvin Dellinger, Duncan Lumber Co., West Yellowstone. Commendations for confidence and foresight demonstrated by the following dealers are due for timely improvement, expansion and modernization of sales office and display facilities: Linder-Kind Lumber Co., Helena; United Building Centers, Inc., Glasgow; and Birrer Lumber Co,, Sheridan.

Dealer-Director A.A, Kind (LinderKind Lumber Co., Helena) and yours truly attended the annual meeting of National Lumber & Building Material Dealers Association at San Diego,

Second, the lumber and plywood industry is a classic example of pure competition at work. There are 10,000 or more sawmills in this country, and the largest produces only about 6Va of U.S. output. The ten largest companies produce less than 20% of the total. There are over 400 active wholesalers and stocking wholesale distributors selling to some 15,000 retail dealers and other buyers.

Largest factor in determining demand for lumber are the home builders and they number 50,000 or more. Their activities and plans exert a vast influence on prices.

To make the lumber industry the scapegoat is to ignore the fact that lumber prices did not increase as fast as inflation until recently, and now have increased only on average back to 1955 prices plus inflation. Plumbing, electrical, land and many other construction costs have gone up 50 to l00Vo in addition to inflation - which makes lumber cheap in comparison.