Random Lengths has collected feedback from the industry on pricing methodologies for Random Lengths and Random Lengths International as part of its annual methodology review.
In addition to an open consultation, we proposed one change to the Random Lengths International Price Guide. That was to change the description of green Hemlock baby squares, c.&f. Japan, to kiln-dried stock. Industry feedback strongly emphasizes that little to no green stock is sold to Japan today; it is almost exclusively kiln-dried stock. We will move forward with the price guide change, which will take effect with the May 4, 2022, issue.
The annual open consultation allowed for industry feedback from February 14 through March 15. This annual review seeks to ensure that our methodologies reflect the physical market, in compliance with the International Organization of Securities Commission (IOSCO) principles for price reporting agencies. This includes all elements of our pricing process, our price specifications, and publication frequency.
As part of the open consultation, we asked the industry specifically whether Random Lengths should add pricing for Southern Pine MSR. This marked the second straight consultation in which we asked whether to add Southern Pine MSR f.o.b. mill prices for 2400f 2×4 and 2×6 produced in the eastside zone. Production of SYP MSR has increased, with both of the above items competing with MSR grades of other species in certain regions, including the Midwest. There were several responses supportive of adding these prices. However, similar to last year, a majority of the feedback was negative toward the move, and we have decided not to add these prices.
We also asked the western veneer industry to provide feedback on whether any changes should be implemented in Random Lengths’ reporting of this market sector. Because it has been a source of various complaints from the industry over the years, we sought feedback on how our reporting should be changed to improve our coverage.
We received three responses, one suggesting elimination of Douglas Fir 1/10-inch veneer, while maintaining pricing of 1/8-inch. This suggestion was based on the opinion that there is not enough 1/10-inch veneer production to adequately report prices. The other two responses suggested that Random Lengths eliminate veneer pricing in its entirety.
One of these latter responses expressed the opinion that the veneer report “is no longer representative of the evolving marketplace for veneer, it does not adequately represent the largest volumes of products traded, it allows no discernment between quality of material processed at competing veneer production facilities, and we do not believe there are enough independent market reporters between producers and purchasers that can provide an honest view of veneer pricing.”
While this feedback is taken under advisement, we believe the veneer report today — both in 1/10-inch and in its entirety — still provides basic benchmark pricing representative of the market, and that there are adequate numbers of producers and purchasers to fairly and adequately track price trends. We will continue to report the veneer market, while remaining open to input on our coverage.
Various single responses addressing other matters were received, but are too numerous to be republished here.
You can find the current methodology for Random Lengths and Random Lengths International here.
