Timber is one of the most sustainable and economic choices for consumer and industrial goods. The forestry-based industry is facing unprecedented shortages of timber at UK, European and global scale, with the shortages already beginning to affect supply within the UK. It is anticipated that the total shortfall will equate to up to 10% of the total market requirement. As a result, we are experiencing the highest timber prices for the last 20 years and substantial delays on delivery of some products.
Supply is currently being affected by a number of factors, including:
- Increased timber consumption by subsidised biomass industry
- Scandinavian timber flowing to construction in the US market.
- An unfavourable exchange rate caused by Brexit.
Galvanised fencing products, such as wire and stock fencing, are also being affected by price increases. The cost of zinc, which makes up 40% of the materials in the galvanising process, rose over 21% in 2017 and, due to restrictions in supply, has continued to rise in 2018. This, combined with the increasing cost of imported steel products, has affected all galvanised steel fencing products.
The galvanising and steel issues which are affecting fencing products, are also having a knock on effect to livestock equipment. Further increases are predicted to hit imminently. This, combined with the increased availability of grants in 2018 such as the Countryside Productivity Small Grant Scheme, has resulted in a dramatic increase in order volumes. The inevitable consequence of this has been a substantial lengthening of lead times; for example IAE lead times have increased to almost 100 working days lead time on bespoke orders. This could lengthen further if demand for galvanised gates and livestock equipment continues to surge, particularly in preparation for winter housing.
While some of these price and lead time increases may not be imminent they will compound the uncertainty in the agricultural market against the backdrop of Brexit, which is set to squeeze margins still further. With the combined purchasing power of over 3,000 agricultural members who farm in excess of one million hectares, AF can mitigate some of this uncertainty by helping you purchase strategically. We are working closely with our suppliers to ensure that we have access to the information which enables us to make the best purchasing decision for you. Get in touch with the team to discuss your requirements.