Building materials scarce while logs sit in the forest

Bunnings Mount Maunganui on the first day of Level 3. 28 April 2020 Bay of Plenty Times- Photograph by George Novak

Merchants are reporting panic buying of timber supplies - even as independent logging crews say they have logs piled up in the forest.

"What's happening now is similar to what happened with the toilet paper in supermarkets. The behaviour becomes a little bit erratic," says Jeff Tanner, GM and owner of Puke Pine Sawmill in Te Puke.

He said demand for wood was "unprecedented".

"I've never seen this since I've been in the business."

Wholesalers and construction companies are joining the call for calm.

One Coromandel home franchise owner said it was good that customers knew to go easy on home builders.

"We're all in this together. Going out and impulse buying, stripping out Placemakers, is not going to help."

For a month now builders have been ordering in advance at Bunnings Whangamata to get in a queue for supplies.

"It's a major, major problem," said manager Ted Littlejohn.

He says like all merchants, his business relies on the timber allocated to them and those coming in from the ports.

"I've had one Whangamata builder who had rung 10 merchants and no one had the product he wanted."

Littlejohn said timber materials for DIY such as fencing and decking was in shortest supply but other shortages included cavity and ceiling battens and now cladding like plywood panels.

He said to keep customers happy, merchants were not prioritising builders' accounts over other customers.

"It's just the acceleration in the building market in New Zealand, in a normal year you wouldn't see it.

"I think effectively it's a throwback from Covid, no one can leave the country so they're doing projects at home.

"It was an impact that the industry didn't see coming."

He said the supply chain began with forestry companies allocating logs to the timber mills, and he believed allocations were made based on forecasts four months ago - and did not anticipate the demand.

Tanner predicted the domestic market could expect an average 5 per cent increase in price: "quite moderate compared to the rest of the world".

He added: "There's no reason to be panicking here, but rather, instead ask what can we do with what we've got available and focus on that."

He said the company was "very focused" on domestic customers and was not exporting more despite prices being driven up overseas.

Tanner said the US market normally pays US$300 for 1000 feet (305m) of board. It has now soared to more than US$10,000 per 1000 feet.

"It's not as radical as that everywhere but at the top end there's a 70 per cent increase in Asia. There's shortages of wood everywhere. People are prepared to pay what it takes to get something in the door.

"A lot of it is Covid-triggered DIY, the housing crisis that was there before Covid and globally there's massive demand for wood."

Bigger forestry corporates practised sustainable harvesting to ensure forests were not overcut, but smaller wood lot owners with 30 years invested in a plantation are trying to get the best return they can.

They must log now before the rains hit and access becomes difficult.

Stock photo of Wellington harbour.

Logging crews are working full throttle and have an abundance of timber they can't get to the processing facilities fast enough.

The Puke Pine Sawmill was also operating 5am to midnight Monday to Friday and working Saturday mornings and could not keep up.

The company has 185 staff and is the second biggest employer in Te Puke.

Part of the challenge was a shortage of labour - unskilled and skilled - with the kiwifruit industry in Te Puke soaking up workers.

The fruit and timber industry also clash with their shared need for trucks, which was partly holding up supply to mills.

It is coming into peak harvest season for kiwifruit in Te Puke and the Bay of Plenty, while in the fruit bowl of New Zealand, Hawke's Bay, the season was peaking for apples.

Smaller timber harvesting companies say truck drivers are being poached to meet the demand for the fruit harvest.

"We're down 16 logging trucks just in our little area," said Blain Cox, owner of Cox Forestry Services Ltd in the Hawke's Bay.

Cox said he'd never worked as hard in his life than since Covid-19 hit.

"Forestry cutting crews at the moment have the throttle wide open and I can cut as much as I can. Logging crews have an abundance of timber cut out in the forest and can't get it to the processing facilities fast enough. Who is going to cart that wood and where is the extra wharf space?"

Chris Peak, chief of customer solutions at Mitre 10, said the company received advice from CHH Woodproducts that it cannot supply structural timber for the foreseeable future, and said it was an industry-wide issue.

"We have multiple and long-standing supplier and partner relationships and will be working hard to ensure we can continue to supply our customers with their structural timber needs."

The effects had not been felt at Mitre 10 Mega Waihi. The store had had inquiries from builders concerned about the announcement but the store wasn't experiencing any panic buying and believed it could meet needs for the foreseeable future.