Ernie Johnson figured $100-a-barrel oil was bound to happen someday. But the 58-year-old businessman Missoula, Mont., never thought he'd see sawdust at $100 a ton.

The price of sawdust has soared since 2006, up from about $25 a ton to more than $100 in some markets. Blame the housing slump: Fewer new homes mean fewer trees cut for use in construction, which leads to less sawdust and other wood waste, driving up the price.

"I've...