Retail greed-inflation is the reason prices have increased

BY STEVEN KASZAB

The softwood industry is continuing to cut back production, while the prices of those products it produces domestically continue to rise to levels not seen in many years. The pandemic had stopped production of soft wood products, then started up again only to shrink a once massive industry. Multiple producers are limiting production while the demand for soft wood products continues to grow throughout the world.

Claims that market uncertainty is the driver of this curtailing of production in Canada and the USA. In British Columbia this decline in production amounts to over $100 million. Further reasons for this decline may be the high cost of fibre (raw trees). What once was priced at $125.00 has doubled and tripled in cost.

The forests these raw materials are found in have become grounds of displaced uncertainty. Weather patterns and events have become more pronounced due to the effects of climate change. Labour hour losses in the harvesting of said product have increased to unrealistic levels making some harvesting unprofitable, so the industry claims.

When the pandemic began, essential industries such as the soft wood industry continued to produce their needed products. I am an estimator for a large manufacturer, purchasing many board feet of both soft and hardwood products. I was told the industry was becoming addicted to the high prices they could pass on to retailers and builders, that there was no real shortage of product, which could be found in large warehouses throughout the continent.

These professionals announced that people wanting to start their home renovations do not have to wait. The costs within the retail environment will remain high until these prices become the accepted price levels. Then prices will continue rising. An addict cannot maintain the level of a substance they use, with their bodies getting used to the high they receive, they need a greater high.

The soft wood industry along with their retail partners are controlling and managing prices, but denying retailers products that already exist. This is called price fixing. You saw this done many times before with: bakery goods, electricity and even automobiles. Before the pandemic, a Dodge Van was priced at $25,000 – $35,000. Now they are priced at $50,000+ industry wide.

Prices will rise with scarcity of product. A long time ago the soft wood industry made a 2”x4″ plank costing retailers $10.00 each, which then received a 30-300%+ mark-up. Now it costs $30.00 – $45.00 each and rising. Retailers made a bundle, and the soft wood industry realized they too should increase prices, using the pandemic as an excuse to do so. Many industries have done just that, increasing prices while using supply chain problems and inflation as excuses.

Do you enjoy eating avocados? Well, there is a glut within that sector; where over production with limited markets (EU stopped importing) drove prices for avocados down. A bag of six sold for as little as $1.99 in Ontario. After one month that same bag’s costs have increased 3-4 times and more. The economic reasons for cheap avocados had not changed. Therefore retail greed-inflation is the reason prices have increased.

There are real reasons for prices to increase drastically at times as mentioned, but retailers are presently targeting both businesses and individuals, hoping to reap the rewards of their price and sales increases, knowing their business model will have to change once they have entered the upcoming recession many fear is coming. The recession these retailers have helped to instigate. Remember, if families have limited funds, ultimately they will limit or stop buying what they do not need.