Oregon log prices hit rock bottom, mills cut back

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forestryworks

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ASTORIA — The timber market on the North Coast has deteriorated to the point where
industry experts say they don’t even know how much a log is worth anymore.

How can you put a price on something nobody wants?

The depressed housing market has stunted demand for lumber, leaving just a trickle
of business for local sawmills and little reason for loggers to harvest additional
timber in Clatsop County.

Local sawmills have curtailed operations while the market slumps, sending workers
home for weeks at a time while the industry waits for a recovery.

But aside from some hope for construction triggered by federal stimulus funds,
there’s no reprieve in sight.

“It’s brutal,” said Jay Browning, owner of J.M. Browning Logging in Knappa and a
companion trucking business. “I really have to wonder about my company. Where will
my company be a year from now?”

Browning said his payroll went from $1 million a month at its peak to $170,000
last month. He’s had to lay off around 90 people.

“In the last four months, we’ve worked maybe four weeks,” he said. “We bought a
lot of equipment in the last year to clean up all the storm damage. Now, not all
the storm damage is going to get cleaned up because the price of lumber is less
than the manufacturing cost of the logs out there.”

But as tough as it is to be a logger right now, Browning said, it’s even tougher
owning a sawmill.

“It’s a very, very difficult market,” said Steve Zika, chief executive officer of
Hampton Affiliates, which owns a sawmill in Tillamook. “We have not experienced
anything like this before.”

Hampton is taking a lot of down time at its mills but hasn’t announced any permanent
closures.

Mills on the South Coast have taken week-long downtimes starting the end of 2008 and
continuing into this year.

“We’re balancing our supply against demand,” said Weyerhaeuser spokesman Greg Miller
about the company’s Warrenton sawmill. “The marketplace is significantly off. We’ll
continue to ship lumber orders and a small amount of the work force will remain on
hand for shipments.”

He could not comment on the long-term viability of the mill. In recent months
Weyerhaeuser has announced permanent closures of several mills in the region,
including one in Aberdeen, Wash.

With so few mills buying logs at all, the value of trees in the ground is virtually nil.

“Right now I doubt you could get a price from anybody because very few mills are taking
logs at this time,” said Ty Williams, a unit forester for the Oregon Department of
Forestry’s Astoria District. “The markets are flooded. All the wholesalers, their
warehouses are full. Mill yards are at capacity. They can’t take any more logs in their
yards. They’re starting to stack up in the woods. It’s real bleak.”

The department is putting extra effort into marketing timber for utility poles, which
could see a bump in demand as federal stimulus money funds more infrastructure and clean
energy projects.

Utility pole timber has a much higher value than lumber, but it’s also held to higher
standards of size and shape.

Only 15 percent of the available volume in the Clatsop State Forest will meet utility
pole specifications, said Williams.

The Astoria District had planned to auction a timber stand in March.

“I don’t know whether it will sell or not,” Williams said.
 
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ASTORIA — The timber market on the North Coast has deteriorated to the point where
industry experts say they don’t even know how much a log is worth anymore.

How can you put a price on something nobody wants?

The depressed housing market has stunted demand for lumber, leaving just a trickle
of business for local sawmills and little reason for loggers to harvest additional
timber in Clatsop County.

Local sawmills have curtailed operations while the market slumps, sending workers
home for weeks at a time while the industry waits for a recovery.

But aside from some hope for construction triggered by federal stimulus funds,
there’s no reprieve in sight.

“It’s brutal,” said Jay Browning, owner of J.M. Browning Logging in Knappa and a
companion trucking business. “I really have to wonder about my company. Where will
my company be a year from now?”

Browning said his payroll went from $1 million a month at its peak to $170,000
last month. He’s had to lay off around 90 people.

“In the last four months, we’ve worked maybe four weeks,” he said. “We bought a
lot of equipment in the last year to clean up all the storm damage. Now, not all
the storm damage is going to get cleaned up because the price of lumber is less
than the manufacturing cost of the logs out there.”

But as tough as it is to be a logger right now, Browning said, it’s even tougher
owning a sawmill.

“It’s a very, very difficult market,” said Steve Zika, chief executive officer of
Hampton Affiliates, which owns a sawmill in Tillamook. “We have not experienced
anything like this before.”

Hampton is taking a lot of down time at its mills but hasn’t announced any permanent
closures.

Mills on the South Coast have taken week-long downtimes starting the end of 2008 and
continuing into this year.

“We’re balancing our supply against demand,” said Weyerhaeuser spokesman Greg Miller
about the company’s Warrenton sawmill. “The marketplace is significantly off. We’ll
continue to ship lumber orders and a small amount of the work force will remain on
hand for shipments.”

He could not comment on the long-term viability of the mill. In recent months
Weyerhaeuser has announced permanent closures of several mills in the region,
including one in Aberdeen, Wash.

With so few mills buying logs at all, the value of trees in the ground is virtually nil.

“Right now I doubt you could get a price from anybody because very few mills are taking
logs at this time,” said Ty Williams, a unit forester for the Oregon Department of
Forestry’s Astoria District. “The markets are flooded. All the wholesalers, their
warehouses are full. Mill yards are at capacity. They can’t take any more logs in their
yards. They’re starting to stack up in the woods. It’s real bleak.”

The department is putting extra effort into marketing timber for utility poles, which
could see a bump in demand as federal stimulus money funds more infrastructure and clean
energy projects.

Utility pole timber has a much higher value than lumber, but it’s also held to higher
standards of size and shape.

Only 15 percent of the available volume in the Clatsop State Forest will meet utility
pole specifications, said Williams.

The Astoria District had planned to auction a timber stand in March.

“I don’t know whether it will sell or not,” Williams said.

Doug fir is worth more as firewood now than as saw logs.
 
Seems like its bad all over. . . . I havent cut a stick in about a month now. Thers just no market right now, our pine and hemlock are still movin but not for near what its worth. With the hard wood unless its a veneer log its almost better to thow it in the firewood pile right now.
 
Well maybe that explains why I saw 10 log trucks backed up waiting to unload at the Santiam mill near Lebanon yesterday!

Maybe because there is a SALE and they are stocking up while the prices are low?

Seems to me with the government's stimulus package in the works, there will be a lot of construction activity in the near future. And this will equal a need for more lumber.

If I owned a mill, I would be buying all the logs I could get right now (cheap price)...
 
I sure hope this stim bill helps. There is tons of work around me, just no market....So we wait until there is.
 
In the past, I've been dead set against "pork spending" by the government on all sorts of silly unnecessary things.

But at this point in time, I think it is necessary to get things going again. The FED Chairman thinks the same, which is interesting because bean counter types tend to be of a cost cutting nature.

FED Chairman Story...
http://www.nytimes.com/2009/03/04/us/politics/04budget.html?_r=1
 
and while this is going on in the pnw, the local Lowes is full of imported German 2x4s. The gov't shouldn't have to force them to do the right thing, but it looks like they need to.

Ian

Edit.. have you written your senators and reps about this? I just did.
 
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Well maybe that explains why I saw 10 log trucks backed up waiting to unload at the Santiam mill near Lebanon yesterday!

Maybe because there is a SALE and they are stocking up while the prices are low?

Seems to me with the government's stimulus package in the works, there will be a lot of construction activity in the near future. And this will equal a need for more lumber.

If I owned a mill, I would be buying all the logs I could get right now (cheap price)...

I think there will be a bump up,but dont expect gangbusters.That was primarily driven by the housing boom and Iraq reconstruction.Both legs of that stool are pulled out.I suspect supply will easily overwhelm demand for some time to come.
Imo,this is a bad time to stand around like a deer in the headlights.

good luck
ak4195
 
:welcome:

Been like this for over a year now. They do not mention the export log market, which is the only thing happening for logging in the PNW.
 
Seems like the log markets are down, grain markets are down, the hurt is wide spread. While hilary clinton is over in gahna pledgeing 900 million us dollars to help rebuild that country we are over here hurting.
 
log prices

I live in the nw and should be in the market for logs in a few months. Wanted to know what would be a good price to offer in this down economy.

thanks
Roadscholarcurt
 
Seems like its bad all over. . . . I havent cut a stick in about a month now. Thers just no market right now, our pine and hemlock are still movin but not for near what its worth. With the hard wood unless its a veneer log its almost better to thow it in the firewood pile right now.

Around here some hemlock and hardwood pulp is moving. Hardwood saw logs are way down, can't sell white pine at all. Low grade hardwood logs are going onto people's firewood processors, they are worth more as firewood than as logs or pulp. One local pine mill's yard is stacked full and a small local hardwood mill hasn't sawed in probably a month. It's tough all around. A forester friend of mine and I were chatting last week and he doesn't see any significant turn around for at least a year. Not complaining though, at least I still have work...

:cheers:
 
Around here some hemlock and hardwood pulp is moving. Hardwood saw logs are way down, can't sell white pine at all. Low grade hardwood logs are going onto people's firewood processors, they are worth more as firewood than as logs or pulp. One local pine mill's yard is stacked full and a small local hardwood mill hasn't sawed in probably a month. It's tough all around. A forester friend of mine and I were chatting last week and he doesn't see any significant turn around for at least a year. Not complaining though, at least I still have work...

:cheers:

That's how I see it too. Work wise, up here, people have always had too have their fingers in a few different pies. For the first time in maybe 5 years I may have too go fishing (lobstering) with my neighbor this summer. It's always been my backup work too earn a few bucks whenever I needed and there's another industry that's in the crapper at the moment. I can sure pick em! :clap::cheers:
 

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