How Lumber Market FluctuationsAffect Pallet Prices

Lumber is the single largest cost component in pallet manufacturing, accounting for 55-65% of the price of a new pallet. When lumber prices move, pallet prices follow — sometimes dramatically.

The lumber market is notoriously volatile. During the pandemic, framing lumber futures hit an all-time high of $1,711 per thousand board feet in May 2021, up from around $350 pre-pandemic. Pallet prices followed suit, with some suppliers doubling or tripling their prices virtually overnight.

By mid-2022, lumber prices had crashed back below $500, and pallet prices followed — though not as quickly as they rose. This asymmetry is common: prices rise fast and fall slowly as suppliers work through expensive inventory before passing savings along.

For pallet buyers, this creates both risk and opportunity. Locking in long-term contracts during low-price periods can save significant money if lumber rebounds. Conversely, short-term spot purchases during high-price periods can be costly.

Recycled pallets offer a natural hedge against lumber volatility. Since recycled pallets don't require new lumber, their prices are far more stable. During the 2021 lumber spike, recycled pallet prices rose only 15-20% compared to 100-200% for new pallets.

At Riverside Pallet Co., we offer price-lock agreements for qualifying volume customers. These agreements protect you from market spikes while ensuring guaranteed supply — a powerful combination in volatile markets.