How Are Lumber Prices Determined?

As it is with all building projects, an important consideration is the cost to complete them. Lumber is a primary material needed for most projects. However, selecting the right lumber at a fair price can be confusing to even experienced do-it-yourselfers. There are many factors involved that each play a role in the prices you see on various lumber products. This article will serve as a quick overview of how lumber prices are determined, and what factors are involved.

Types of Lumber

There are some general rules when it comes to lumber grades that can be helpful in understanding the related cost. In general, all lumber falls into one of two categories, hardwoods, and softwoods. Hardwoods, such as oak and maple, primarily come from deciduous trees. Because these trees grow more slowly than coniferous trees, their wood tends to be denser. Hardwoods come in numerous varieties, all with their own price points. These woods are often used for things like furniture, trim, and moldings. Softwoods that include pine and cedar are popular for structural lumber such as framing and construction. These woods may also be treated for outdoor use, layered into plywood or oriented strand board (OSB), or milled differently. An example would be dimensional lumber that is milled on all four sides. All of these factors play a role in determining the cost.

Lumber Grades

Grading is a rating system that examines the number of “defects” a particular piece of lumber has. Often depending on the location of these defects, a lower grade board may be completely acceptable for various applications. Hardwoods are graded according to standards set by the National Hardwood Lumber Association. Below is a quick reference chart covering the various hardwood grades.

  • Grade Name

  • First and Seconds
  • Select
  • #1 Common
  • #2 Common
  • Abbreviation

  • FAS
  • SEL
  • #1 Com
  • #2 Com
  • Minimum Board Size

  • 6-in. x 8 in.
  • 4-in. x 6 in.
  • 3-in. x 4-in.
  • 3-in. x 4-in.
  • Usable Material on One Face

  • 83%
  • 83%
  • 66%
  • 50%

For softwoods, lumber is generally considered either dimensional lumber and appearance lumber. Dimensional lumber is graded primarily on strength while appearance lumber is focused more on defects. The below table shows the different softwood grades.

  • Grade Name

  • C Select
  • D Select
  • #1 Common
  • #2 Common
  • #3 Common
  • Description

  • Almost Totally Free From Defect
  • Similar to C Select But May Have Dime Sized Knots
  • Best For High-Quality Pine With Knotty Look. Knots Are Tight And Small.
  • Knots Are Tight But Larger Than #1 Common
  • Knots Larger Than #2 Common And May Be Loose.

Pricing Factors

Along with the grade, other defects may also lower the price of lumber. Boards that are bowed, warped, cracked, and have separated growth rings in the grain will likely be graded lower and therefore priced less. Other contributing factors include supply and demand. For example, if there is a natural disaster that wipes out a forest limiting available lumber, the prices are likely to rise. Lumber is considered a commodity and prices are prone to fluctuations much like the stock market. Furthermore, lumber is typically priced either by piece, by the lineal inch, or by the square foot. Most individuals are familiar with per piece pricing; However, it can be helpful to understand the other methods and calculations needed for price determination. A quality lumber yard should be able to explain the pricing, the reasons for it, and help answer any lumber pricing questions you may have.

Lumber One: Tough Bidders, Great Builders

At Lumber One, your building project is our top concern. We operate with a focus on honesty and integrity in all we do and strive to deliver an exceptional experience for every client. We have comprehensive services from our full-service lumber yard to contracting and genuinely care about providing you with phenomenal service and attention. Since 1962, Lumber One has delivered this level of service and will continue to do so for the next generations as well. You can rest easy knowing that at Lumber One, we do things right the first time and never cut corners. Because of this, Lumber One is a leading expert in the Minnesota residential construction field. We invite you to contact us or visit one of our two locations. We are honored to serve you!