# Blown Away



## JerryH (Jun 17, 2014)

I was sniffing around at Lowe's yesterday and walked through the lumber department. OMG $40 for 7/16" osb! Over $8 for a 2x4! 

I'm thankful I don't have any projects in the works.


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## Vanilla (Dec 11, 2009)

This has been a big deal for a while now. People building homes are going to get some really sticker shock when they see the increase in materials cost alone.


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## DallanC (Jan 13, 2009)

Yea I know someone who was getting ready to do the lumber package order for a new home, its risen $40k since they applied for their building permit. 

People think this is a temporary thing, I don't. I think this is the new norm... from lumber to bullets to $100k trucks. No matter what the government calls inflation (and that its still low), the consumer is seeing dramatic inflation costs.

-DallanC


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## Vanilla (Dec 11, 2009)

Inflation will certainly be an issue, and maybe we’re seeing the impact already, but the lumber issue is a real supply problem from what I’ve been told.

I’ve spoken to some in the biz and they tell me the fires last year coupled with factory shut downs for covid combined to decimate the supply chain.


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## backcountry (May 19, 2016)

Lumber will be nuts for another year from market analysis and they are saying it will never likely recover to pre-pandemic levels. It sounds like a perfect storm of pandemic lumberyard shutdowns, hobby building, massive increase in home buyers, and a depleted beetle kill lumber industry (artificially deflated prices for too long) in Canada.

Its nuts.

I'm nervous as we need to buy a car soon and the microchip shortage plus rental agencies buying billions of dollars in new cars (after selling off fleets last year because of pandemic) isn't going to bode well for my household.

Everything I'm reading is we are in for a bumpy road ahead as the global supply chain remains stressed.


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## johnnycake (Jul 19, 2011)

I have to replace the front porch at my 4plex due to either frost heave or damage from one of the larger earthquakes this winter. 

It is now ~15% cheaper to do trex decking than actual wood.


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## KineKilla (Jan 28, 2011)

I work in construction and cringe every time I put a job out for bid.

I too have two decking projects that need done. I'm really regretting not doing them in 2019.

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## Vanilla (Dec 11, 2009)

After 16 years of planning to move and never doing it, we finally started talking about just doing an addition on our home instead of trying to buy a slightly bigger house in this market. Not sure which prospect is scarier!

And yes, I expect the lumber market to correct eventually, but prices won’t ever be what they were in January 2020 again.


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## taxidermist (Sep 11, 2007)

I had a few projects I intended to build this summer. I'm happy lumber is out of site in pricing!!!!!!!!!! Now I have an excuse to go fishing.


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## Critter (Mar 20, 2010)

My nephew just broke ground on a 2,000 sq ft addition in Eagle Mountain. His contractor is getting their lumber straight from the mill instead of the lumber yard and is saving quite a bit on it.

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## Fowlmouth (Oct 4, 2008)

Try finding a home builder right now that will let you pick your lot and house plan. Nope! They are all Spec homes being built and they put a price on them when completed. They call you, and 20 others that are on a waiting list and you start bidding up from the asking price. 
My daughter picked a 1/2 acre building lot, and a house plan 3 months ago and signed a contract. I hope the builder doesn't try to raise the price on her. I know from talking to Richmond Homes and Perry Homes lumber prices have increased $30k for an average home build.


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## backcountry (May 19, 2016)

Our friends recently got screwed on building plans and are now sitting on a lot. Neither party is at fault. But lumber isn't the only variable driving up costs. 

We want to do an addition but I'm guessing it will be 2023 (onwards) before the general contractors we are interested in are willing to take a small project like ours.


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## DallanC (Jan 13, 2009)

Apparently builders are cancelling contracts, then adjusting the costs. Here's an article I saw earlier today where a ladys contracted new TownHouse was cancelled and the price adjusted upwards by $151,000. Ouch!





__





$151K price jump for a townhome? Buyers speak out after Sandy developer cancels contracts






www.msn.com





-DallanC


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## Fowlmouth (Oct 4, 2008)

I forgot to mention the build time is 9-12 months, at least in Tooele.


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## PBH (Nov 7, 2007)

We got lucky. I think wormandbobber is feeling some stress from the market (he's half way done with his new house). My younger brother is just getting started on his new home -- and it's going to cost him about $200k more than it would have last year. Yikes.

We broke ground in June of 2020. We were right in front of that "bubble". We had no delays on materials, and no price increases from our original bid, which was created in late January 2020. Like I said, we got lucky. Many others did not.

My younger brother tried to use the builder that I used. My builder couldn't even give him a bid -- his framers wouldn't accept any new "custom" home jobs because they are on the duplex gravy train stretched out to the horizon. Easy money for the framers. Custom home builders are taking a hit - as mentioned before, they are dropping custom jobs.

I'm just happy that we found the lot we wanted, and decided the timing was right. Had we waited at all, we'd have been in a mess. As it is now, we're sitting in our awesome new home where the only neighbor noise we hear is the bahing of newborn sheep and the whine from the pivot slowly turning in circles. We love it.


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## Bax* (Dec 14, 2008)

I work with the big builders and one of them told me he can’t quote a price on a new home and now quotes a price range due to fluctuating lumber costs.


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## Vanilla (Dec 11, 2009)

Crazy. How do you go under contract for an undetermined price?

This bubble will burst eventually.


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## Bax* (Dec 14, 2008)

Vanilla said:


> Crazy. How do you go under contract for an undetermined price?
> 
> This bubble will burst eventually.



Yeah. Can you imagine being told that your new home will cost $500-$550K? No idea if your budget will allow for that range or not?


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## backcountry (May 19, 2016)

I'm not sure this bubble will burst though, at least not anytime soon. The market will slow but currently this isn't being driven by the factors we've seen in the last 2-3 boom/bust housing cycles. I'm trying to read as much as possible on the current trend and most experts I'm reading don't know how to judge this price spike from historical comparisons. Everything from lending trends to migration patterns make this look like a sustainable price increase for the region. I would have never guessed it in a million years that my house would double in value in less than 5 years but here we are.

I truly feel for my friends that didn't commit before March 2020. I have at least two sets of friends sitting on lots that can't afford the prices to build custom now, not to mention actually finding builders to take it on as discussed. And when they do build they are looking at 60-80% above previous estimates or half the house. Their wages didn't remotely jump enough to justify that change in mortgage.

My wife and I got lucky buying when we did in Cedar. The long term issue will be what do we do when we outgrow this place? We have a ton of equity but everything in the area is now so expensive. We can't afford to buy a bigger home that now costs the same as a beautiful 2500 sq ft home in a gated community in a resort town in the south (actual comparison to a family member owned property). Who would have ever guessed that my parents would have to sell two homes to afford a comparable home in Cedar City?


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## Vanilla (Dec 11, 2009)

Not ju


Bax* said:


> Yeah. Can you imagine being told that your new home will cost $500-$550K? No idea if your budget will allow for that range or not?


Not just 500-550. What 450-600?

Backcountry, I will readily admit I’m not well-versed here. I have not studied up on causes or projections, but my gut tells me this isn’t sustainable. People are listing very small homes for $350k and selling them for 75k over asking price after the bidding war. I just can’t see it as sustainable. And banks aren’t going to open their coffers and give mortgages for $80k over appraised value. The money has to run out eventually. And when it does...I’ll be waiting! 😂


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## Fowlmouth (Oct 4, 2008)

Right now, 1 in 5 homebuyers in Utah is a cash buyer. Mostly Investors, and those that have sold a house and need a new place to live. Some homes are bidding up more than $100k over asking price. There's a lot of people in this market with cash money apparently.


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## backcountry (May 19, 2016)

The overbids are crazy. I agree that's not sustainable. I know one local couple who was outbid even though they offered $20k over; sounds like an unusual portion of people are offering high bids with no contingencies, no site visits and forgoing inspections. I think that's also unsustainable and hopefully for buyers sake will return to normal. I know I would be hard pressed to ever skip the due diligence period. 

But the basic price pointing and appraisal values? That's where I'm seeing expert opinion that the bubble won't burst in a traditional way. The only indicator I've read that could be spelling trouble is a noticeable increase in documentation errors but they believe that's from that sudden increase in a need for underwriting (ie novice clerical errors).

I personally would rather see home prices not exceed middle class income increases so radically but this doesn't seem to be a traditional bubble. I honestly believe places like Cedar are going to be in trouble if these prices keep up. Nothing good comes from locking out middle class and "working" class first time home buyers.


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## CPAjeff (Dec 20, 2014)

My wife and I purchased our first home in 2013 for 155k. We sold it two years later for a nice profit. The current market valuation of it is $484K. 🤮🤮

3.12x increase in eight years is simply insane... I sure wish I would've held onto it for the last eight years!!


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## middlefork (Nov 2, 2008)

I have a friend who sold his house last year and was planning on starting his new one this spring. He has bought the lot but the contractor can't even get materials as they are limited by levels of past purchases of materials. Now he's sweating the tax consequences. Pretty much sucks all around.


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## johnnycake (Jul 19, 2011)

My dad just accepted an offer on my childhood home today. They got 4 offers in three days on the market in Highland. Took the one that was $75k over list, not contingent on financing (they also had an all cash offer that was $25k over list). And we're talking a place with MASSIVE yard upkeep (multiple large water features, fruit orchard, grape arbor, lots of landscaping, etc). Blew my mind. I thought for sure it would take a bit for somebody to be willing to take on all that work, but nope.


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## DallanC (Jan 13, 2009)

You should see the home in Highland that the guy who started "Coinbase" is building. Its rumored to be in the $40 million range... Its one big SOB. Probably going to be bigger than Josh James's (Domo) 40,000sq/ft house. Some people have stupid amounts of money.

-DallanC


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## taxidermist (Sep 11, 2007)

The banks are not the ones in the bidding war, it's the folks with the cash that can afford to push up the price and get the house using cash. 

One of my friends daughters placed on offer on a home that was $70K over asking price. She had some cash to offset the asking price and going with a conventional loan for the mortgage. A "verbal agreement" of acceptance of her offer was established. Within 30 minutes she was told her offer had been denied (nothing in writing) and the house was sold. I was told that someone migrating from the West (California) to Utah had paid cash for the house at $100K above asking price. It's happening in Wyoming and Montana too. The "Coaster" are selling for an enormous amount of money and paying cash with money in pocket.


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## JerryH (Jun 17, 2014)

OSB today at Lowes $48!!lol. 

I wouldn't want to be building a doghouse at today's prices.


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## backcountry (May 19, 2016)

I've got an old doghouse I'm willing to part with if you are pre-approved for a mortgage 😁


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## RandomElk16 (Sep 17, 2013)

CPAjeff said:


> My wife and I purchased our first home in 2013 for 155k. We sold it two years later for a nice profit. The current market valuation of it is $484K. 🤮🤮
> 
> 3.12x increase in eight years is simply insane... I sure wish I would've held onto it for the last eight years!!


We are getting ready to build.. and while it's an insane cost, the reason we can afford the upgrade is exactly what you said. We bought our home for $155k in 2012. It's tripled in value. My mortgage on my new home will be less than that of a first time homebuyer (for half the house). Incredibly unfortunate situation for new couples/families. 

Luckily, there are still some trustworthy builders that aren't trying to profit off of lumber. The spec homes are limited on lumber-per-month, and in some cities (all?) in Salt Lake County contracts-per-month are even limited. So spec builders have all the land, the most lumber, but are limited so they SPIKE their prices and limit your options. But a good custom builder can easily access the lumber for their current builds so they aren't as stingy. Lots are a problem though. Ivory, Nilson, and the likes are buying up massive developments. Making a FORTUNE.

Summary:
1. I don't think costs will go down much. A baby boom in late 80s/early 90s is driving builds. Shutdowns, demand, supply issues (not just production, but actual supply), diy's higher than ever (thanks pinterest), Utah's 19% population growth (holy crap), etc... You may see a 2x4 go back to $6 from $8, but the days of $3 for wood are gone. Our housing market, income to cost ratio anyway, will replicate California.
2. What's wild about this is also the state, city, and federal contracts that are being cancelled. They can no longer afford the original bids. I don't know a ton on this but find it interesting.


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## taxidermist (Sep 11, 2007)

Not only is lumber out of site, but concrete is bad too! I know a concrete contractor (flat work) and he wouldn't order concrete if he didn't have at least two trucks (16 yards) Now he was told he can only get one truck per day if he orders it a week in advance. And its still not guaranteed he will get that much. He's had to cancel future jobs because of this. It's hard to keep a 5 man crew busy everyday when your only doing 8 yards. His prices are going up to compensate for the lack of 'Mud".


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## bowgy (Oct 10, 2007)

Cement contractors like Sunroc and Western Rock are on rations for cement powder.

I thought this was funny and kind of sad.


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## DallanC (Jan 13, 2009)

Geneva Rock is down to 4 days of concrete production a week, they cant get enough supplies to run the full week.

-DallanC


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## backcountry (May 19, 2016)

What's the issue with concrete? Just can't keep up with demand or are there bigger supply chain issues?


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## taxidermist (Sep 11, 2007)

backcountry said:


> What's the issue with concrete? Just can't keep up with demand or are there bigger supply chain issues?


I was told getting the powder is one of items.


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## DallanC (Jan 13, 2009)

Feels like every aspect of our life is now being affected in a negative way due to the "close things down for 14 days to flatten the curve" ... production flat-lined, now every time you turn around there is something else coming up in short supply. I read when that stupid cargo ship got stuck in the canal, that BRP had snowmobile parts enroute and that was enough of a delay they had to either shut down production of their 2022 snowmobiles, or reorder all the parts and air freight them to Canada, which is what they chose to do.

Microchip shortage is affecting new phones, computers and now car and truck production. Vehicle prices are skyrocketing, both new and used. Now construction materials in short supply... wood, concrete, copper etc. Fuel prices are rising quickly, it makes me curious to see how much food production might be affected this summer to fall. 

Everyone BUT the government calls this "inflation".

-DallanC


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## KineKilla (Jan 28, 2011)

I do not know if the shortages or supply chain issues, excuses, reasons, etc. are a result of inflation or not but I do know that as long as people continue to pay the prices, greed will be the incentive to not fix the issue.

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## DallanC (Jan 13, 2009)

ALRIGHT DAAAAMMMNNNIIITTTTTTT... ITS GETTING SERIOUS! 



America is running low on chicken. Blame covid-19, a sandwich craze and huge appetite for wings.



-DallanC


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## bowgy (Oct 10, 2007)

DallanC said:


> Microchip shortage is affecting new phones, computers and now car and truck production. Vehicle prices are skyrocketing, both new and used. Now construction materials in short supply... wood, concrete, copper etc. Fuel prices are rising quickly, it makes me curious to see how much food production might be affected this summer to fall.
> 
> -DallanC


I have electronic equipment that I ordered a month ago, had a ship date of April 23, now it is pushed into May, One model says it will be July before it is shipped. My customers are not too happy.

The chip company in Japan burning down in March created an even bigger shortage than covid.


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## backcountry (May 19, 2016)

I do love it when folks try to blame this on one simple factor. I've seen folks on opposite aisles pin it on both Obama and Trump like it's an easy issue to dissect.

A new one to me....fly fishing equipment is having supply issues. Read an article today that not only are rods and packs flying off the shelves but stateside fly tying is being affected by a hook backorder pushing as far out as this autumn. Might be time for me to look at my needs for August before it's too late.


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## Catherder (Aug 2, 2008)

backcountry said:


> .
> 
> A new one to me....fly fishing equipment is having supply issues. Read an article today that not only are rods and packs flying off the shelves but stateside fly tying is being affected by a hook backorder pushing as far out as this autumn. Might be time for me to look at my needs for August before it's too late.



Nooooooo!!!!!!!!!, its one thing for Biden and the liburls to take away my guns, but they can't have my fishing equipment too! 

Better start hoarding.


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## backcountry (May 19, 2016)

Luckily I went through my grandfather's house and took all of his rusty old hooks. I'm sitting on a gold mine. I think I'm better off then even Coinbase or Tesla. 💰💰💰💰. 

I think I'll look into buying a second home in Bora Bora.


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## Catherder (Aug 2, 2008)

I wonder how many 1/0 Gamakatsu drop shot hooks I can get for a box of 30-06 ammo or a couple of 2X4's?


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## backcountry (May 19, 2016)




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## Animediniol (Sep 26, 2017)

backcountry said:


> View attachment 148155


It looks like a game called "fruit ninja" but it's not fruit so it will be "log ninja". LOL


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## Lone_Hunter (Oct 25, 2017)

CPAjeff said:


> My wife and I purchased our first home in 2013 for 155k. We sold it two years later for a nice profit. The current market valuation of it is $484K. 🤮🤮
> 
> 3.12x increase in eight years is simply insane... I sure wish I would've held onto it for the last eight years!!


Bought my house in the same year I think, 185K after closing. Still in same house, probably worth 350K now according to zillow. Here's the thing, if you had held onto your house, and sold it in todays market, if your staying in Utah, where would you go? Or to rephrase the question, why would you submit yourself to the insanity that is todays housing market looking for a replacement? 

A couple weeks ago, I was reading news about one house getting something like 95 bids. Lots of houses are getting out of state bids site unseen. Lots of locals will now bid on a house first, before even looking at it. It's absolutely nuts. Same news articles were citing how Utah is now the toughest housing market in the country. No thanks.

If I was to sell, It means i'm leaving Utah...... for Alaska. (that said, I think prices are up there too)


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## CPAjeff (Dec 20, 2014)

Lone_Hunter said:


> Bought my house in the same year I think, 185K after closing. Still in same house, probably worth 350K now according to zillow. Here's the thing, if you had held onto your house, and sold it in todays market, if your staying in Utah, where would you go? Or to rephrase the question, why would you submit yourself to the insanity that is todays housing market looking for a replacement?
> 
> A couple weeks ago, I was reading news about one house getting something like 95 bids. Lots of houses are getting out of state bids site unseen. Lots of locals will now bid on a house first, before even looking at it. It's absolutely nuts. Same news articles were citing how Utah is now the toughest housing market in the country. No thanks.
> 
> If I was to sell, It means i'm leaving Utah...... for Alaska. (that said, I think prices are up there too)


At the time, I had an individual who offered to rent it from me for $600 more a month than my payment. It would made sense to hold onto it and rent it out. But we’ve lived in Chicago and Dallas since then and I don’t want the hassle of living in a different state and having to worry about renters. Now, I see how short sighted I was. Investments in real estate and rental properties is now a good portion of my retirement portfolio.


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## Critter (Mar 20, 2010)

I just got my new home appraisal from the county here in Colorado. Not too bad of a increase only $10k. 

But like Lone_Hunter said, if I sell my home even for a exaggerated price where am I going to go to get one comparable? 

Right now I have a half acre, a 2 1/2 car garage, but my home is only a 2 bedroom. I could downsize my lot but I love that big garage.


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## 2full (Apr 8, 2010)

Our house is 4 bed, 3 bath, with a 3 car garage. It was built in 89 (we bought it brand new) and was probably one of the last with a large "living room" and a smaller "family room". The living room hardly gets used at all. 
We have been thinking about downsizing to a 3 bed, 2 bath, with a big "great room".
But.......I want to up grade to a 5 car garage. It's impossible to have too much garage.
I have the 3 car garage now AND 2 storage sheds for my car and 4 wheelers, jet skis, etc.

Could sell the house for a bunch, but like has been said......would have to replace it. 
Right now that would be a nightmare. Everything is paid for, so I'll wait it out. 

The bigger garage would be the most important thing


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## Lone_Hunter (Oct 25, 2017)

CPAjeff said:


> At the time, I had an individual who offered to rent it from me for $600 more a month than my payment. It would made sense to hold onto it and rent it out. But we’ve lived in Chicago and Dallas since then and I don’t want the hassle of living in a different state and having to worry about renters. Now, I see how short sighted I was. Investments in real estate and rental properties is now a good portion of my retirement portfolio.


Good point on renting. Right now that would be lucrative, but the maintenance and all that would be a hassle. I have a few inlaws that have rental properties; and I'm guessing it does well for them.

On a related note, I vaugley remember something about people who use their houses like an ATM on the equity, keep the house, then turn around and buy another. If housing ever crashes, those people are going to be in deep manure.

On another tangent thought, I'd hate to have the price of todays mortgages hanging over my head.


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## DallanC (Jan 13, 2009)

And now we have a river blockage here in the States to compound distribution chains. IDK if anyone saw this. The Mississippi river is closed due to a bridge with a catastrophic crack discovery.






-DallanC


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