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Cooler News Podcast: Commodity Pricing Update

Jeff Monroe Podcast

After a pause in consumption in 2020, demand is up, impacting stock and supply around the world. Jeff Monroe said that demand is strong, and it’s difficult to get stock at a reasonable price.

As society settled back into routine and our lives started to normalize, businesses realized that they still needed to invest and plan accordingly for the future. Regular business picked up and even surpassed previous norms, making up for the lag caused by early pandemic disruptions. The demand increase happened very rapidly.

Monroe says that both raw materials and finished goods are impacted by inflation. Current supply chain issues are rippling across the economy. “It’s spiking lead times, and folks have to redefine their supply chain,” Monroe said. “We’re fragile with how the supply chain was, and we’re realizing now that isn’t going to cut it.”

We can see a prime example of inflation with the sanctions on Russian goods. Russia is one of the world’s largest exporters of soft lumber. “Lumber has historically followed a seasonal trend, but it’s not doing that anymore,” Monroe said.

Regarding Russian lumber exports, Monroe estimated that “about 50% of that goes to China and other countries in Europe take a fair amount of it.” European spruce and European pine typically offset the US’s consumption of lumber from Georgia and Canada. With the sanctions, Europe exports less to keep the goods for local stock and use.

With the bottleneck of supply chains, it will take time for the effects of that to flow into the supply chain. It’s difficult to predict what will happen over the next month and the remainder of the year.

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