Timber managers say recovery is slow

Market conditions continue to influence Wahkiakum’s timber industry.

Recent news about rise in new home construction would seem to indicate the recession is easing. But professional timber managers and data from the US Census Bureau show that the prediction may be premature.

The 2009 Census shows housing starts down 32 percent for the year. ‘This is an indication that not only is the housing industry off, but also explains why Wahkiakum’s timber industry is in a slump. Few are buying logs. Log suppliers are fearful of cutting their trees because of the low price for their logs. .

Late last summer major timber management companies like Hancock Forest Management in Cathlamet woke up to the fact that the bottom had fallen out of their markets. They took a look at their data forecast for timber sales during a troubled housing market and the falling price of their logs and decided to close-up shop.

“Not forever,” said Hancock Forest Managements Senior Forester, Dave Boyd, “just until the markets comes back.”

Boyd said that by the end of 2008 Hancock was essentially cutting logs nobody wanted.

The housing bubble of the late 1990’s rolled into the new century. It brought with it unsustainable hope from both homebuyers and builders that the price of housing would continue to climb.

“Wahkiakum County benefited very substantially by the housing boom,” Boyd said, “because Wahkiakum has lands managed by the Department of Natural Resources and that provides quite a bit of receipts for the county.”

The bubble had ramped up timber production so much that the price of logs whizzed right past rational levels of sustainability. This kept timber prices in Wahkiakum artificially high for some time because of building that was going on outside the county.

Finally the bubble burst and the good times came to a screeching halt. Companies with logging-yards full of logs were left holding the short end of the stump, so to speak. And the price per thousand board feet dropped from a high of $1000, down to its current low of $450 per thousand board feet.

“The real story,” said Boyd, “is people saw the market tipping late last year and we were able to put one last injection of logs into the market before we decided to shut our operation down.”

There is no expectation there will be any real demand for wood products for at least another year because of the slowdown in home construction and the left over logs still on the market.

In December of 2008 Hancock Forest Management was moving 154 truckloads of timber a day. That changed at the start this year, “Because of our reputation we may be still be selling 15 to 40 truckloads of logs a day,” said Boyd.

The current mood in the timber industry is that there seems to be a slight up-tick in the market. Companies are reevaluating their positions trying to decidd if they should begin producing more logs and if so: how much?

“We’re trying to decide if the call for more logs, is real,” said Marty Wicklund, General Manager for Western Wood, “or just a little up-tick.”

Western Wood just leased the log yard next to the Hancock Forest Management offices on SR 4. Western Wood currently ships logs to South Korea and China. “We purchase logs from different suppliers,” said Wicklund, “and our main market is Korea.”

Wicklund said his company has more demand for logs than supply but that the Korean market will only take a certain kind of log. Wicklund is also uncertain about the timber market’s future.

“I’m afraid, and I call it a ‘dead cat bounce’ that what were seeing is a supply driven bump in demand for logs, not any real increase in demand,” said Wicklund.

Both Boyd and Wicklund agreed that they think the recent inching-up of demand for timber is being created because the major timber producers in America have all stopped producing logs. “It’s an interesting fragile market right now, and for now everybody is in a kind of a ceasefire,” said Boyd.