Logging equipment purchases are off to a strong start, but many experts fear that the U.S. import duties will hurt the industry. Late last year, the U.S. Department of Commerce ruled that it would levy total countervailing duties (CVD) and anti-dumping duties (ADD) at 20.83% on lumber imports from Canada. Canadian lumber exporters were quick to get a jump on their prices before the duties took effect, and lumber prices have remained at record-highs ever since.
Now that several months have passed, what effects has the industry experienced? Experts are concerned for the future and warn of a supply gap if importers and exporters aren’t careful, although equipment purchases should still remain strong.
More Money for Less Lumber
Increased prices on lumber have taken a toll on the entire supply chain. From exporters to importers and the final consumer, everyone is paying more for lumber. Many experts are signaling that these prices won’t ease anytime soon, so U.S. companies are actively finding ways to help mitigate any financial risks. Luckily for United States companies, the U.S. housing market is entering a slow period, meaning lumber won’t be in as much of a demand. This could change in the coming years, however, so industry leaders must stay ready.
To help put off a potential supply gap in softwood, many importers are relying on European lumber exporters to fill the gap that higher-priced Canadian lumber once held.
Even with these high lumber prices in mind, logging equipment is off to a strong start this year, with recent data showing strong sales numbers from logging equipment finance companies and buyers alike.
A Look at the Data
Industry research firm EDA recently posted financial data for the most popular equipment types sold in the U.S. Felling equipment is highly ranked in many lists, closely followed by building equipment. These are the ten most popular equipment types from EDA’s database:
EQUIPMENT TYPE BUYERS UNITS
LOG LOADER 41,547 89,621
SKIDDER 46,872 89,598
GRAPPLE SKIDDER 24,636 60,225
CHIPPER 36,962 58,767
FELLER BUNCHER 18,252 43,563
CRAWLR DOZER (LOG) 20,806 38,263
STUMP CUTTER 23,829 33,041
SAWMILL 19,883 25,644
WHEEL LDR (LOG) 11,647 23,443
EXCAVATOR (LOG) 10,087 23,435
EDA also has data on the top logging equipment lenders and buyers for the month of February 2018:
Top Lending Companies
JOHN DEERE INDL CREDIT 78
CATERPILLAR FIN SVC CORP 46
DE LAGE LANDEN FIN SVC 25
WELLS FARGO VENDOR FIN SVC LLC 18
STEARNS BANK 15
Top Equipment Buyers
BLUE STAR EQT LLC DETROIT, MI 10
LOGGING EQUIPMENT BANDIT 5
LOGGING EQUIPMENT MORBARK 5
TREESMITHS INC SPRING BROOK TWP, PA 5
LOGGING EQUIPMENT ALTEC 5
Predictions for the Rest of the Year and Beyond
Although the lumber prices continue to remain at record highs, many industry experts predict that demand for forestry equipment will continue to rise into the next year. The U.S. will lead the pack in the demand for newer logging equipment, although nations in the Asia/Pacific region follow closely behind.
*This article first posted April 4, 2018 on our Blogger page here.