Snow Job

The entrepreneurial talents of a guy marketing Boston snow at ShipSnowYo.com have been described as “brilliant”. He might well be the same guy whose earlier venture at marketing knotholes smacked of lapsed lumber wholesaler talents gone bad.

“The service started as something of a joke, but by mid-February it had reportedly sold around one hundred 16.9-oz. plastic bottles filled with snow, which were frozen in dry ice and shipped around the country, at a cost of $19.99. For $89, customers will get a much bigger dose of snow, six pounds, from Massachusetts packed in a Styrofoam container and shipped overnight. That’s enough to make 10 to 15 snowballs.”

Frozen

The Disney movie it ain’t! In reality some of the coldest, nastiest winter weather on record in much of the Northeast and Southern U.S. could lend more unpredictability to lumber markets in the ensuing weeks and months. With the Framing Lumber Composite Price at $357 today, for the first time since 2013 traders are beginning to ponder the Prevailing Monthly Price calculation. If the next two Composite Prices (Fri 2/27, Fri 3/6) average less than $351, a 5% export charge would be triggered for April on Canadian softwood lumber shipments to the United States.

For now, polar bears – those not hibernating around Hudson Bay – are reportedly migrating toward Nashville. All the love of Valentine’s Day and lumber offerings full of heart centre seem a distant memory. Understandably, customers in the frozen parts of this continent seem less than enthusiastic about answering phone calls, unless you’re the service call in response to a power outage or frozen pipes.

“In the case of lumber folk, hibernation is tied to market temperature. That is, sluggishness tends to set in as the market cools.”
– From Going to Sleep – article written by Ernie Harder (23 October, 1990) holds relevance to today’s picture and winter weather stopping for the moment at least markets.

#BOSnow

Extreme weather is old news to New Englanders. Even though it’s only mid-February, the month’s snowfall in Boston broke the old record, set in 2005. The new record: 115 centimetres, according to the National Weather Service. In spite of it all, Massachusetts public safety official Kurt Schwartz says the state is prepared. “We’re just gonna keep on doing what we’ve been doing since January 25th until we dig down and can see green grass somewhere.” Source

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Digging out in Boston (18 Feb 2015) – submitted by R. Falletta

Kindergarten Crunch

I don’t buy lottery tickets. Unless, as it turns out, the prize is a place in kindergarten this September for our five-year-old.

We learned yesterday there are 101 other families in our tiny downtown catchment area who also have children turning five this year. Over the past three months, we all hand-delivered applications for our in-catchment children to attend kindergarten at Elsie Roy Elementary School in September, 2015. In a long-awaited email confirming lottery results, the school’s principal first explained that of only 44 available kindergarten spaces, 31 went to students with siblings already in attendance at Elsie Roy. That left 13 spaces for the remaining 71 kindergarten applicants. By my calculation, that meant a 16.84% chance of ‘winning’ one of those spaces in the draw (an 83% chance of not winning). Why did we bother crossing our fingers, I wondered? We did not beat the odds. Our daughter’s number on the waiting list for kindergarten was accompanied by an encouraging “regardless of the (overflow) school your child attends next year for kindergarten, we are confident that his or her school experience will be a positive one.”

As the city rubber-stamps seemingly every new condo tower proposal in the name of increasing density, perhaps more classrooms could be incorporated in the plan. While it’s reported a new elementary school at International Village will open in 2017, a kindergarten capacity of 60 suggests that for many more families, the lotteries will continue.
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Flogging Blogging

The perils of blogging on things related to the wood business are many. Chief one – guard against dangers of a boring post! Thankfully, being sentenced to 1,000 lashes has not been a  risk – so far. According to a Valentines Day report out of Saudi Arabia, a planned flogging of blogger Raif Badawi has been postponed for a fifth consecutive week. Evidently Amnesty International said through Twitter that Badawi has been spared lashes for unknown reasons. Meanwhile, he’s serving 10 years in prison, along with the sentence of 1,000 lashes for blog posts criticizing the government. When he was sentenced in 2012, his wife and children fled Saudi Arabia and later settled in Sherbrooke, Quebec. Prime Minister Stephen Harper has spoken out against the flogging. Nice to know that the Prime Minister established that precedent. It’s assumed he’d come to the defence of any bloggers in these parts who might come under threat of flogging for railing against winter snows and unpredictable markets.

Phobias

They are said to be irrational fears. They are often misconstrued or misunderstood. I heard somebody actually define homophobia as the fear of owning a home. Close enough some might add, with enough evidence in play this week to dispute any notion that lumber super cycle delays stem from a lack of household formation rooted in fears of owning a home.

A report today at HousingWire.com quotes Realtor.com’s chief economist Jonathan Smoke: “The story about millennials not forming households and getting into homebuying is more of a 2012 and early 2013 story. It’s outdated. Our view of 2015 is informed by strong trends and indicators of what’s happening today with millennials.” CNBC confirms millenials are indeed flying the coop. “If you see these numbers with what we saw in household formation at the end of the year, we’re starting to see millennials spread their wings and fly,” said Diane Swonk, Mesirow Financial’s chief economist. “We saw household formation at the end of 2014 surge 1.7 million units after being below 400,000 for much of the recovery. Household formation is key to getting more spending in the U.S. economy.” Meanwhile on this side of the border, The Globe and Mail reports only in Greece do households have more debt than in Canada.

Where’s the evidence of phobia or fear of debt in all this we might ask. I couldn’t actually find a “phobia name” for financial fears. Closest might be “peniaphobia”, which is the irrational fear of poverty. What’s irrational about that, some might question. I’ve heard it said that the fear of debt is called experience. Lumber traders have been known to find peniaphobia to be an effective motivating factor in marketing of lumber – even overcoming any indications of hylophobia, that irrational fear of wood…

household formations

New Trends

At the beginning of a new year, it’s fashionable to draw attention to or define new trends in business. From the standpoint of lumber trading these days, it may be that not all seem relevant to our own day-to-day trading.  However, of the Top 10 Business Trends for 2015 recently identified by Ian Altman at Forbes, three in particular seem pertinent:

  1. Role of Salespeople Will Evolve
    Altman says customers today value “subject matter experts”. Consultative skills lead to better alignment between buyers and sellers, and “put both parties on the same side of the table.”
  2. Divergent Customers – Price vs. Value
    We’re told price and value are two competing initiatives for 2015. According to Altman, anything that appears to be a commodity will be under increased pricing pressure. Differentiation is key. And the need to “figure out a way to deliver the commodity more efficiently than others in your market” might be considered most applicable to lumber distribution.
  3. Content Marketing Trends/Impact
    “Content Marketing” is a tired term. But I do like how the author spells it out: “You need to be comfortable giving away your best stuff”. He adds that top performers will integrate valuable information in virtually every sales interaction.

 

~Save the Date~

nawlaThe North American Wholesale Lumber Association (NAWLA) Regional Meeting in Vancouver is set for Thursday, April 2nd at the Vancouver Club. The Organizing Committee promises a star-studded line-up of speakers – stay tuned for announcements. NAWLA Executive Director Marc Saracco will open the meeting in the Grand Ballroom at 3:30 pm. Cocktail Social to follow at 5:30 pm. Organizing Committee Member Tom Davis at Taiga confirms ample security will be in place this year. A limited number of pre-sale tickets is available exclusively on-line through NAWLA here.