Are Loggers Making 3 Times More Money Now That Lumbers Prices Have Tripled?

under_the_hill

under_the_hill

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I've been watching lumber prices over the past year and I'm trying to figure out where the price increases are coming from. Some people say that Covid restrictions made mills run at lower capacity, especially the places the pressure treat lumber. Others have said that mills are simply holding back inventory to keep prices high and make money. Dollar inflation was another explanation I heard.

What are loggers seeing over the past year? Are you getting paid 3 times as much for logs now that lumber is 3 times as expensive? Are mills running at capacity again?
 
northmanlogging

northmanlogging

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well... get a cup of coffee and try to keep up lol

politics hooped us around here, the export market is all but gone, this is a direct result of former pres trumps trade war with china, over the summer prices nearly hit the lowest I've seen since I started logging. Several mills closed outright. One mill had had a fire and was temporarily shut down anyway, Covid didn't help them much, they are up and running again but at reduced capacity. Point being that without a strong export market, domestic timber gets flooded so prices are still down some, except cedar, cedar is going bananas. As it is, prices are still low, with the demand being what it is we can easily keep the mills slam full until the export market opens up again, which frankly isn't likely anytime soon as China is now buying wood from Russia, and Australia. Though there is still a Japan market and Korean market, its not nearly as robust as the china market was. Note: I try to avoid politics here as much as possible, however these are simple facts, If you don't believe me spend a couple hours listening to the local log buyers complain about it.

Most of the mills here are churning out wood as fast as they can, but also, logging and forestry products where considered essential, so we all kept right on working through the shut downs. Which in the end may of bit us a little bit, cause the log yards are full, and its the end of winter...

Several of the very large timber producers the SP's, and Weyco's shut down for a few months, which helped bring log prices back to something more like normal.

Couple of other things to consider, many Canadian mills are or were shut down on account of a general strike, so a lot of the wood they would of cut, has been diverted here, also keeping our log prices low. A lot of building projects were put on hold during the summer months of 2020, because of Covid, partly because permitting was a nightmare with county/city agencies being furloughed, partly because of the general lock downs, so now all them projects are finally starting to catch up, been an awful lot of framing going on in the winter months around here, and I ass-u-me around the country. this puts abnormal strain on the shipping/trucking side of timber markets, lumber yards generally stock up during the summer months, but now they are running low, and trucking in winter is a PITA to begin with, couple that with an overall lack of CDL drivers... well its just simple logistics. And you have all the homeowners, that are finally at home long enough to think about improvement projects and getting around to building that deck and rebuilding the fence, which is really driving the demand hard at the moment. Not to mention all the new projects that would normally start about now anyway, also all the damage from hurricanes, ice storms etc etc etc has been worse then normal over 2020 so folks have to rebuild too.

Last but not least, and likely the main reason for lumber being expensive, too many mills have closed over the years, and simply can not keep up with the current housing boom, they got logs, but they simply don't have the production capacity. Much like ammo, Federal/CCI etc are running 24hrs a day 7 days a week, and its simply not enough to keep up.
 
under_the_hill

under_the_hill

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well... get a cup of coffee and try to keep up lol

politics hooped us around here, the export market is all but gone, this is a direct result of former pres trumps trade war with china, over the summer prices nearly hit the lowest I've seen since I started logging. Several mills closed outright. One mill had had a fire and was temporarily shut down anyway, Covid didn't help them much, they are up and running again but at reduced capacity. Point being that without a strong export market, domestic timber gets flooded so prices are still down some, except cedar, cedar is going bananas. As it is, prices are still low, with the demand being what it is we can easily keep the mills slam full until the export market opens up again, which frankly isn't likely anytime soon as China is now buying wood from Russia, and Australia. Though there is still a Japan market and Korean market, its not nearly as robust as the china market was. Note: I try to avoid politics here as much as possible, however these are simple facts, If you don't believe me spend a couple hours listening to the local log buyers complain about it.

Most of the mills here are churning out wood as fast as they can, but also, logging and forestry products where considered essential, so we all kept right on working through the shut downs. Which in the end may of bit us a little bit, cause the log yards are full, and its the end of winter...

Several of the very large timber producers the SP's, and Weyco's shut down for a few months, which helped bring log prices back to something more like normal.

Couple of other things to consider, many Canadian mills are or were shut down on account of a general strike, so a lot of the wood they would of cut, has been diverted here, also keeping our log prices low. A lot of building projects were put on hold during the summer months of 2020, because of Covid, partly because permitting was a nightmare with county/city agencies being furloughed, partly because of the general lock downs, so now all them projects are finally starting to catch up, been an awful lot of framing going on in the winter months around here, and I ass-u-me around the country. this puts abnormal strain on the shipping/trucking side of timber markets, lumber yards generally stock up during the summer months, but now they are running low, and trucking in winter is a PITA to begin with, couple that with an overall lack of CDL drivers... well its just simple logistics. And you have all the homeowners, that are finally at home long enough to think about improvement projects and getting around to building that deck and rebuilding the fence, which is really driving the demand hard at the moment. Not to mention all the new projects that would normally start about now anyway, also all the damage from hurricanes, ice storms etc etc etc has been worse then normal over 2020 so folks have to rebuild too.

Last but not least, and likely the main reason for lumber being expensive, too many mills have closed over the years, and simply can not keep up with the current housing boom, they got logs, but they simply don't have the production capacity. Much like ammo, Federal/CCI etc are running 24hrs a day 7 days a week, and its simply not enough to keep up.
Thank you, great information.

I can understand that starting a new ammo manufacturing plant would be full of red tape, but what stops people from starting new lumber mills? Do you think new mills will pop up with prices this high?
 
northmanlogging

northmanlogging

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Thank you, great information.

I can understand that starting a new ammo manufacturing plant would be full of red tape, but what stops people from starting new lumber mills? Do you think new mills will pop up with prices this high?
more or less the same problems, machinery is expensive, all the old stuff has been scrapped or sold over seas.

not to mention all the good locations are office buildings now
Would the fire salvage be helping the glut go on a bit? Forests in W. Oregon burned last year.
that is true. at least as far as what is being allowed to get salvaged

a lot of the Aus stuff is fire salvage as well.
 
2dogs

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Around these parts log prices (redwood) are very low due to fire salvage. Black logs matter. Much of the land that burned was owned by the timber companies so those are logged first.

If you haven't been effected yet in your area diesel prices have gone up greatly. Road diesel is pushing $4.00/ gallon.
 
slowp

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You should see the sad little Ponderosa Pine that is being salvaged here. It's from a poor site, but got fried, so it is going down the road. Then, from a fire several years ago, I am seeing blued pine recently cut and decked. I wonder what the profit margin is on these?

I look at this with skepticism after working in a Doug-fir happy tree/good logging area for so long.
 
northmanlogging

northmanlogging

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You should see the sad little Ponderosa Pine that is being salvaged here. It's from a poor site, but got fried, so it is going down the road. Then, from a fire several years ago, I am seeing blued pine recently cut and decked. I wonder what the profit margin is on these?

I look at this with skepticism after working in a Doug-fir happy tree/good logging area for so long.
Ick?

Not many will even buy pine at the moment, maybe some mills over your way, but they pay less then cotton weeds for pine over here. Cotton weeds being subsistence logging only, covers fuel and mortgage, and a few bills but little else.
 
slowp

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Ick?

Not many will even buy pine at the moment, maybe some mills over your way, but they pay less then cotton weeds for pine over here. Cotton weeds being subsistence logging only, covers fuel and mortgage, and a few bills but little else.
There are some one guy milling operations scattered about. They might be doing some custom work, but I can only guess cuz I don't know. I do ride my bike past one little milling operation. Maybe I should slow down and try to see what is in his deck.

I did buy some Vaagen Bros. softwood chips to scatter around my blueberry plants. The chips smell good. Vaagens have a mill in Collville and used to have a mill in Republic. Now all that is left in Republic are concrete slabs.
 
homemade

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Thank you, great information.

I can understand that starting a new ammo manufacturing plant would be full of red tape, but what stops people from starting new lumber mills? Do you think new mills will pop up with prices this high?

No only is the equipment and location hard to come by, the time a plant does get built, skilled workers to run it, and input/output of product, the market usually will stabilize before the plant will be profitable. Then there will be a lull in housing or timber regs will slow cutting..... and the new timber mill will close because the old one that was always chugging along, will be all they need to keep up with supply and demand.

Some problems can’t be solved by throwing money at it, just need time. You can’t get the corn ready to be harvested by planting more corn.


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northmanlogging

northmanlogging

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No only is the equipment and location hard to come by, the time a plant does get built, skilled workers to run it, and input/output of product, the market usually will stabilize before the plant will be profitable. Then there will be a lull in housing or timber regs will slow cutting..... and the new timber mill will close because the old one that was always chugging along, will be all they need to keep up with supply and demand.

Some problems can’t be solved by throwing money at it, just need time. You can’t get the corn ready to be harvested by planting more corn.


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Facts.

There are several mills around here, that started out as one man and a portable mill, not even all that long ago, that now have most of a proper mill going, shipping wood all over the country etc

It is possible to work up slowly and fill a demand, and there will always be a demand for wood products. I just takes some ambition and a game plan for the long run.

One of those former portable mills, is currently expanding, adding an oversize saw, they currently have 2 saws running more or less full time, with a rotary debarker, green chain, kiln, chip storage, 2 log loaders, several of their own delivery trucks. and would probably have more shifts if they could find reliable help. I've been told they recently bought out a local lumber store chain, so not only do they mill the wood, they then sell it retail all over the state.

Sadly one of my favorite mills ended up closing a couple years ago, 2 brothers built it from scratch, literally, and was a great mill to send logs, but the brothers retired, and the dude they sold it too (for a song BTW) had a habit of not paying the loggers. So we all stopped sending wood to him. Towards the end he started calling even small timers like me and begging for logs... But can't send logs if you ain't going to send a check...

In the local papers he blamed the local homeless mission for "thefts and break ins" etc. Reality is the prick wouldn't pay anyone.

I still occasionally see one of the brothers helping fix stuff at some of the smaller mills around. Seems like retirement isn't any fun for him, as its usually an extended BS session while little to no actual progress is made until after he leaves... or maybe its me?

Most of the equipment was auctioned off, and you can still see some of it in use, like a custom chain saw mill for splitting oversize logs (12' bar on it powered by a 20hp? electric motor) thing is wicked cool, or the custom built chipper hopper... cool stuff
 
softdown

softdown

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The huge sawmills are cleaning up right now - think GP and Weyerhauser etc. The retail stores make a little more since they add maybe 25% to $6 instead of $2.50.

The suppliers are receiving less than they used to after inflation is accounted for. Once again - the money trickles up.
 
Tree Feller

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Over 3 billion dollars of the USA lumber industry is due to exports of China. During the pandemic and other reasons, China cut back on importing our lumber/ trees. That one of the main reasons!
 
Ripandsplit

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Well a lot of fellas round here making good money out of saw grade logs mainly local tho, not sure how exports is going tho I can say not as good as it was. Has been rumblings of another big chipper getting put in to but I believe it won't accept logs off small contractors , which leaves me to ponder who is buying the chip ? Export again perhaps . We shall see I suppose
 
softdown

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Over 3 billion dollars of the USA lumber industry is due to exports of China. During the pandemic and other reasons, China cut back on importing our lumber/ trees. That one of the main reasons!
Decreased demand from China should lower prices. The increased demand from new homes and home improvement frenzy had increased prices.
Supply and demand. Econ 101
 
northmanlogging

northmanlogging

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Over 3 billion dollars of the USA lumber industry is due to exports of China. During the pandemic and other reasons, China cut back on importing our lumber/ trees. That one of the main reasons!

Decreased demand from China should lower prices. The increased demand from new homes and home improvement frenzy had increased prices.
Supply and demand. Econ 101
China cut timber imports in July/Aug of 2019, months before Covid 19 was even known about.

They did so in retaliation to #45's "easily winnable trade war"

China then began buying wood from Australia, and Russia, mostly Russia, should I remind you that Covid only became a problem in FEB of 2020.

Should I mention that at least 2 mills shut their doors around here because of this? Not to mention horrible log prices, and loads off laid of employees at the mills that did manage to stay afloat, only to then get hammered by Covid.

Please try not to make **** up. (you're "other reasons" has one person to blame. it sits squarely in his lap)

Also, so far China hasn't really started buying wood from the US again, and likely never will. They are buying a little, but nothing like before Aug 2019.

Just one more thing... Not only did china stop buying wood, they sent 2 ships (entire Fecking Cargo ships) back without paying for them, both from one exporter, I know this cause the checks they were sending to me bounced, it took months to sort it out, and they are one of the mills that shut down over it.
 
northmanlogging

northmanlogging

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Has anything good come out of China? From a guy who took a huge hit due to Chinese druwall in his house. Their manufacturing pride is among the lowest.
Lithium ION batteries, LED lights, Chow Mein, Harbor Freight, A **** LOAD OF EXPORT MONEY for the US. An intercontinental rail road, Affordable tools, 1/2 the parts for a Harley Davidson. Affordable solar panels. A thriving scrap iron market.

Its on the consumer as to how much they want to spend, the fact that the market is currently flooded with cheap junk only proves that the final consumer doesn't care about quality, only function or more often form. China is merely profiting on our own poor choices, start demanding better quality and I'm sure that China, much like Japan in the 60's will respond with better products. Vote with your money etc.
 

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