It Could Be Worse, Really
Article by Rich Donnell, Editor-in-Chief, Timber Processing June 2024
The results of this year’s U.S. Sawmill Operations and Capital Expenditure Survey have us longing for the old days, though the old days were only a few years ago, when lumber prices were setting records and the homebuilding and remodeling markets were going gangbusters.
Perhaps the negative thing about surveys in general is that when it comes to reporting the results, as we do throughout this issue, some generalization has to come with it. That is, the survey may reveal a significant percentage of lumbermen who are feeling less optimistic these days, and perhaps downright pessimistic, but that doesn’t mean there isn’t a percentage who are more upbeat.
Results of the softwood lumbermen and hardwood lumbermen are broken out into two separate stories. But in this space I’ve always liked to combine the results to provide a snapshot look at the entire U.S. lumber industry.
As usual, considerably more softwood lumbermen weighed in, but in total the number of mills represented in the results by softwood and hardwood lumbermen is around 190. These mills vary drastically in annual production, which of course is the real world.
The survey was 24 questions long, but the one multiple-choice question that it hangs its hat on each year concerns how lumbermen forecast their “lumber business situation” for the remainder of this year and into next year, as in, this case, 2024-2025.
Only 1% forecasted it as “excellent,” while 7% said “very poor.” What about the in-between? Well, 39% said “fair.” That leaves 24% who forecasted “good,” and 29% who forecasted “poor.”
Looking at the bright side—why not?—that means a quarter of the lumbermen expect at least a good business performance in the near future. Don’t let the fact that three years ago 92% forecasted at least a good business situation, and in fact of that number it was 46% who said good and 46% who said excellent.
In other words, the survey this year shows a whopping 67% of the lumbermen have fallen out of the good or excellent forecast in three years.
But at the same time—looking at the bright side again—it’s not like lumbermen have screeched to a halt when it comes to capital expenditure. For the remainder of 2024 and 2025, 26% of them have committed at least $1 million toward a mill project. And 15% of those have allocated at least $5 million. Certainly not as a robust as in recent years, but still significant.
I always keep at my side the September 2009 issue of Timber Processing, which was during the Great Recession. It was a 24-page issue with seven pages of advertisement and one of those was a mill liquidation ad. It was the thinnest issue in the magazine’s 48-year history. In our 2008 sawmill survey that April, 70% of the lumbermen said it was the worst business environment they had ever seen.
I doubt that 70% of the lumbermen responding to the current survey would say likewise about the present business environment (though the recent demise of several mills would probably have those ex-managers in agreement).
I’m not sure if comparing a current situation to an absolute worst case situation is recommended in the field of psycho-analysis, but if it helps, have at it.
Latest News
Slow U.S. Housing Recovery Spells Trouble For Canadian Lumber Producers
West Fraser Timber Co. and Canfor Corp., Canada’s largest lumber producers, are suffering from tepid demand in the U.S. where the recovery in the housing market is stuttering. U.S. housing starts fell a more-than-expected 8.8 percent last month, the Commerce...
Biewer Lumber Breaks Ground On New Mississippi Sawmill
Biewer Lumber Breaks Ground On New Mississippi SawmillGovernor Phil Bryant and officials from Biewer Lumber broke ground today on the company’s new $85 million sawmill in Newton, Mississippi. The sawmill will create 125 jobs once operational. “This is a great day for...
Oregon’s Warm Springs Forest Products Sawmill Closing
Oregon’s Warm Springs Forest Products Sawmill ClosingFifty years after acquiring a lumber mill on the Warm Springs Indian Reservation, tribal leaders announced the permanent closure and impending bankruptcy and liquidation of the Warm Springs Forest Products...
U.S. Green Building Council To Recognize ATFS Certification
This week, the U.S. Green Building Council (USGBC) announced it is encouraging more responsibly sourced building materials by giving credit for wood from American Tree Farm System (ATFS) certified forests, and other credible forest certification systems such as the...
Some SYP Independents Stay The Course
Some SYP Independents Stay The CourseArticle by Rich Donnell, Editor-In-Chief, Timber Processing April 2016 Mark Twain wrote: “The reports of my death are greatly exaggerated,” or something to that effect. The same might be said of independent southern yellow pine...
Find Us On Social
Newsletter
The monthly Timber Processing Industry Newsletter reaches over 4,000 mill owners and supervisors.
Subscribe/Renew
Timber Processing is delivered 10 times per year to subscribers who represent sawmill ownership, management and supervisory personnel and corporate executives. Subscriptions are FREE to qualified individuals.
Advertise
Complete the online form so we can direct you to the appropriate Sales Representative.