A Charlotte, N.C.-based company has launched a lumber price reporting service that it asserts is more accurate than competitors because it draws directly from actual purchase orders and invoices.
Mill2Market is a weekly service targeted at lumber dealers, distributors, wholesale buyers, and mills. As part of their subscription, firms getting the service must agree to provide data on what they actually spent to buy or sell the lumber.
The reports break down prices by dimension, green/dry status, grade, and species (starting with southern yellow pine, spruce pine fir, Douglas fir, ponderosa pine, hemlock, and larch). Price reports also are broken down by region of origin, what mill that lumber was shipped to, and delivered price at destination.
"We think we have 25% to 35% of total dimensional output [reflected in our reports]," Suzanne Hearn, product manager for Mill2Market's parent, Forest2Market, told ProSales in an interview. She said every price category for every species and grade reflects data from at least five customers.
Mill2Market aims to supplant Random Lengths as the lumber industry's premier source of pricing information. Hearn argued that Random Lengths' numbers are less reliable because they are based on telephone interviews in which producers, processors, and buyers are asked to provide the price of what they bought or sold on the open market. This approach can lead to fuzzy numbers if people have fuzzy memories, she said.
In addition, Hearn said, a large number of transactions are made privately. Random Lengths quotes open-market deals, she said, so because it tracks only a subset of the entire market it is subject to more volatility than Mill2Market's numbers.
Random Lengths president and publisher Jon Anderson told ProSales that other companies have tried to report market-weighted averages, as Mill2Market is doing, and have failed. "We're confident in what we do. We've been around a long time," he said. Anderson also questioned whether Mill2Market's product will pass muster on antitrust issues--Hearn assures it will--and whether the competitor will be able to deal with such subtle issues as quality differences within a grade.
Hearn declined to say how much a subscription to Mill2Market costs, saying only that it is "reasonable, but not what you can buy Random Lengths for." The fee varies based on reporting location and volume needs, such as whether one ships out of multiple locations, she said.