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August 13 Timber & log prices drop

Timber & log prices drop

 

September 9, 2013

Timber Industry Report
By Rick Sohn PhD.
Umpqua Coquille LLC

Interest rates increased last month, but real estate sales rose, as if homebuyers wanted to catch the bottom. Log prices dropped a lot, and lumber only somewhat, helping the mills. Seven-year trend of lumber, logs, housing, and mortgage statistics are shown below.

chart-sohnsept2013

Interpretation
The price of lumber has decreased, but the price of logs has REALLY dropped. Net result? Logs are more affordable, mills are breathing a sigh of relief, and are making some money.

Fire danger has decreased in areas of the Pacific Northwest where it has been raining, This will ultimately help keep log prices down since logging operations can proceed and logs become more plentiful. Fire season still has life however, and things can change with a dry September.

According to Janet Johnson, Prudential Realty, The Roseburg Real Estate market has “exploded” with more offers being written and properties coming on the market, in the last few weeks. Judie Dunken, with the Dunken Group in Portland, is similarly positioned. RMLS reports that the Portland market has closed 10% more sales than last month, and that number for July is the best since 2005. The median home sales price in Portland is up to $280,000 and the average is $326,000. Rising interest rates, now 4.40%, have not hurt the summer home market, even though they are up over a full percentage point compared to the beginning of 2013. Many people are saying that buyers seem to be jumping in, before the interest rates rise even further.

The Portland unsold inventory remains below 3 months. The time on the market is 63 days, one month less time on the market than a year ago. Compare this to Roseburg, where there are 9.5 months of unsold inventory on the market, and an average market time of 190 days – also 30 days less time on the market than a year ago. While both markets are making significant improvements, its slower in a rural area like Roseburg than an urban area like Portland. This discrepancy leads to the following conclusions (with pockets of exceptions): there is an overall sellers market in Portland, but an overall buyer’s market in Roseburg and other rural towns.

This major difference in housing markets mirrors the economic recoveries that have occurred in rural and urban Oregon. If only rural Oregon could cut – or even salvage– more timber, rather than let it burn or get devoured by massive populations of bugs, the economies could improve.

Housing starts and building permits are showing some improvement this month, but are well short of the 1 million levels, reached in the Spring of 2013. Home prices continue to rise, albeit more slowly. According to Zillow, median home price rose the most in May, where it increased $1,300 over April, and has continued trending up with lower increases since then, as shown in the chart above.

It will be interesting to see if the gradual increases in home values and the rate of sales can continue, despite the rising interest rates. If so, there is hope that the housing starts and building permits will rise once again. This would really help the overall economy. We are still at typical deep recession levels of housing starts and building permits.

Data reports used with permission of:
1) Random Lengths. Through Sept. 2012, 2”x4”x8’ precision end trimmed hem-fir stud grade from Southern Oregon mills. Starting Oct. 2012, consolidated with Kiln Dried Studs, Coast Hem-Fir 2x4x8’ PET #2/#2&Btr. Price reported is Dollars per Thousand Board Feet, generally the third week of the month. One “board foot” of product measures 12 inches by 12 inches by one inch thick.
2) RISI, Log Lines. Douglas-fir #2 Sawmill Log, Average Region 3 Southern Oregon price, reported in Dollars per Thousand Board Feet of logs, Scribner Scale. The standardized Scribner Scale includes expected saw trim waste, so a log board foot is much more wood volume than a product board foot.
3) Dept. of Commerce, US Census Bureau. New Residential Housing Starts and New Residential Construction Permits, seasonally adjusted, annual rate. Recent reports are often revised in bold. Also, major revision made each May, reaching 2 1/2 yrs back.
4) Regional Multiple Listing Service RMLSTM data, courtesy of Janet Johnston, Prudential Real Estate Professionals Broker, Roseburg, OR. Inventory of Unsold Homes (Ratio of Active Listings to Closed Sales) in Portland, Oregon, for most recent month available.
5) Freddie Mac. Primary Mortgage Market Survey. 30-year Fixed Rate Mortgages Since 1971, national averages. Updated weekly, current report is for the prior full month.
6) Mortgage-X Most recent weekly rate of 30-year Fixed Rate Mortgages, national average.
7) Zillow.com Median value of homes sold in the United States during the month, weighted according to each area population. The Median removes the effect of outlier expensive homes, with equal numbers of homes above and below the median value each month. Revisions in bold
Issue #6-8. © Copyright Rick Sohn, Umpqua Coquille LLC.

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Governor wants to help Ore. timber industry by sharing wildfire costs with industry, state

Governor wants to help Ore. timber industry by sharing wildfire costs with industry, state

By JEFF BARNARD  AP Environmental Writer

January 19, 2013

GRANTS PASS, Oregon — For years, Oregon’s major timberland owners have felt they were paying too much of the cost of fighting wildfires, especially in years when blazes stayed relatively small.

A bill in Gov. John Kitzhaber’s budget would allocate $3.6 million over the next two years to change the payment formula, so the state picks up a bigger share of the costs in years when fires don’t rage out of control. The proposal also would pay up to $6 million to keep two air tankers on call and other resources to keep minor wildfires from getting big and expensive.

“Landowners since 1993 have paid 82 percent of the cost” of putting out large fires, said Kristin McNitt, executive director of the Oregon Forest Industry Council, which represents the timber industry. “And it’s killing us.”

The governor also wants to use $4 million in lottery-backed bonds to help the U.S. Forest Service turn out more timber sales from federal lands in the dry forests east of the Cascades.

Natural Resources adviser Richard Whitman said the governor sees the two proposals as vital to maintaining the struggling timber industry in central and eastern Oregon, both as a source of jobs and as a necessary part of the infrastructure for logging that will improve forest health and reduce wildfire danger.

The region almost lost one of the half-dozen surviving mills last year, for lack of timber from national forests, Whitman said.

“If there is any further decline, it will be very hard to get back,” he said.

A wildfire policy watchdog group, however, sees the funding change as a “scam” on taxpayers that benefits the timber industry — but not the public.

Andy Stahl, director of Forest Service Employees for Environmental Ethics said any money spent on air tankers and helicopters is a waste, because there is no data to show that they are effective tools for keeping fires from getting out of control.

“At a time when we are struggling to fund schools and fund health care, why we would want to divert those dollars to some of Oregon’s largest corporations is a bit mystifying,” said Stahl. “Historic data shows no correlation between the amount of retardant dumped on a (forest) and the success rate of keeping fires small.”

The timber industry has been trying for years to change the wildfire funding formula, and last year the state Board of Forestry appointed a committee representing forest landowners, government agencies and the governor’s office, which came up with the Wildfire Protection Act.

Under the current funding formula, private landowners, whether large timber companies or homeowners with a few acres of trees, pay a tax to cover the costs of the Oregon Department of Forestry’s firefighting efforts. The tax ranges from 80 cents per acre on the wetter west side of the state, to $1.70 on the drier east side.

The first $10 million of the cost of fighting large fires is covered by private landowners. The next $15 million comes from the state general fund. After that, a special insurance policy kicks in $25 million up to a total of $50 million. In recent years, the cost of fighting large fires has averaged $8 million, so landowners have covered it alone.

The bill calls for sharing the costs evenly from the start, up to a total of $20 million. The amount the state pays would increase gradually over six years, so that at the end the cost would be split 50-50, up to $20 million. Despite the lower deductible, the cost of the insurance policy would remain at $1 million, due to increased firefighting resources, said Travis Medema, deputy chief of fire protection for the Oregon Department of Forestry.

The idea behind the state taking a greater share is that the public benefits from keeping forests green, so they provide recreation, fish and wildlife habitat, and clean water, said Whitman, of the Natural Resources Department.

As for the bottleneck in turning out more timber from national forests in eastern and central Oregon, Whitman said the problem has been a lack of funding for the Forest Service.

Sales developed collaboratively by groups that include representatives of the timber industry and conservation groups typically are not held up by court challenge. The $4 million would go to planning and laying out timber sales.

“We put money into economic development projects all the time,” Whitman said. “In terms of bang for the buck for job creation” and helping mills and logging outfits stay in business, “it looks like a pretty good investment.”

The state is still in negotiations with the Forest Service, but wants to receive payment from the sale of timber in return for the investment in preparing sales, Whitman said.

Stahl said a similar arrangement had been worked out in Arizona to promote thinning to reduce fire danger. He said it was ironic for the state to pay the federal government to log, when federal payments to timber counties to make up for reduced logging revenues have expired.

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North American lumber prices forecast to soar in 2013 and reach record highs in 2014

December 10, 2012 – Vancouver, B.C.

www.woodmarkets.comLumber Yard

With the return of a demand-driven wood products market in 2012 – due to rapidly increasing housing starts in the U.S. – it is now forecast that lumber and panel prices will move to new highs in 2013 and record highs for lumber in 2014. A North American “super-cycle” has been predicted by WOOD MARKETS since 2008 as a result of emerging supply-side constraints (mainly on forests and logs) as well as changing demand dynamics, but the global financial crisis that started in late 2008 and an unusually slow U.S. housing market recovery have delayed this event until 2012. With the expectation of strong growth in U.S. housing starts over the next five years, combined with a better balance in the housing inventory and a recovering economy, the U.S. supply chain is expected to become overwhelmed at times during the next five years, allowing wood products prices to soar. While there are a number of assumptions that are required to maintain steady economic growth, a strong wood products recovery amidst a tightening timber and mill supply base is still expected.

These and other findings on U.S. and Canadian lumber markets as well as forecasts for all engineered panels were released today by WOOD MARKETS in its 8th edition report: WOOD Markets 2013 • The Solid Wood Products Outlook • 2013 to 2017. The report examines an overall tightening of the global timber supply base, but forecasts that it is mainly in North America where scarcities will be felt. With China now importing more and more logs and lumber from North America and with U.S. demand now rebounding, some key structural constraints are expected to keep log and lumber supplies tight relative to demand growth, including:

• A collapse of the Russian logging sector in 2009 from the global financial crisis where log exports are now less than 40% of their 2007 level as they continue to decline in 2012.

• Changes to the Russian log export tax that continues to leave Russian log exports less available and expensive.

• After a “cooling-off” period in 2012, China’s requirement to feed its growing wood deficit will see a return to steady demand growth for imported logs and lumber from North America and other sources.

• The mountain pine beetle epidemic in the B.C. Interior will, by the end of the decade, kill about 60% of all the pine trees in the BC Interior. This will permanently reduce Western SPF lumber production starting in about 2014 or 2015.

• The Quebec government (which controls 90% of the forests in the province) will have reduced the timber harvest by at least 30% between 2004 and 2013, permanently reducing lumber production.

• Consequently, Canada’s lumber production will plateau by about 2015, allowing for essentially no increases in exports to the U.S. and will, therefore, see its’ U.S. lumber import market share plummet to two-thirds of its historical level. By the end of the decade, B.C. and Quebec lumber shipments will collectively be lower by some 10 billion bf as compared to peak shipments in 2004.

• The role of Timber Investment Management Organizations (TIMOs) will play out as log markets strengthen. As many large U.S. corporate forest companies with sawmills have sold their private timberlands to TIMOs, timber prices are eventually forecast to rise and be sold more on the margin, tightening the economics of sawmilling in the U.S. and potentially limiting incremental lumber production.

A key question that the report addresses is: “Where will the U.S. get its lumber after mid-decade?” This is almost the same question that WOOD MARKETS asked and addressed in its recent China Book: Outlook to 2017 but in that report, the question was: “Where will China get its logs and lumber after mid-decade?” “Both countries will need to import increasing volumes of lumber and logs that will be tied more and more to international market forces as global timber and lumber supplies tighten,” explains Russell Taylor, President of WOOD MARKETS. “U.S. housing starts are expected to rebound from 550,000 units in 2009 to the long-term sustainable level of 1.5-1.6 million starts by 2017 and Chinese housing and wood demand is expected to grow further after the new government’s economic policies are unveiled in Q2/2013. The net result is that log and lumber demand in these countries are expected to grow steadily and drive global supply and prices.”

The outcome will be rising and even record-high U.S. lumber prices. In fact, WOOD Markets 2013 is forecasting that export duties on Canadian lumber to the U.S. will essentially be at a ‘zero-rate’ for all five years of the forecast as compared to maximum duties of 5% or 15% (depending on the Canadian province) for most of the last five years. “Increasing prices will see the return of European lumber to the U.S. market – and lots of it – to fill the widening gap as Canadian lumber production and exports slow,” said Gerry Van Leeuwen, Vice President, “and, as a matter of fact, some European supplies are already starting to arrive at current prices, which are already at six-year highs!” Nevertheless, as European log costs are more than double those of North American logs, much higher lumber prices are required to attract significant volumes from Europe. So, higher prices are inevitable as the supply chain struggles to secure and move rising volumes!

Five-year forecasts on OSB and plywood also see strong prices, but not as high as what are in store for lumber. By comparison, the particleboard and MDF sector will see more limited growth, but higher demand and prices are also forecast in the report.

However, the entire “super-cycle thesis” requires strong and growing demand in the U.S. market as well as stable to increasing demand in other global markets (no global economic recession), especially in Asia. Without these conditions and the other key ingredient, increasing lumber demand, it is possible that the super-cycle could stall early or the timing may be pushed out further. In any event, the prospects of a tightening of the global timber and lumber supply are a reality and are expected to play out over the next five years!

Full details on the five-year outlook for the U.S and Canada’s consumption, imports, exports, production and price trends, etc., are available in WOOD Markets 2013 • The Solid Wood Products Outlook • 2013 to 2017. Visit http://www.woodmarkets.com/pressreleases.html

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Read of the Day: Minnesota loggers feeling pain due to cuts in demand for wood

Minnesota loggers feeling pain due to cuts in demand for wood

  • Article by: ADAM BELZ , Star Tribune
  • Updated: November 26, 2012

NASHWAUK, MINN. – Scott Pittack grew up in a logging family and has made his living in the woods.

But as he climbed down from a timber harvester at the end of a winding road in the hills, the forest behind him aflame with October color, he admitted he has his doubts about the business.

Nowadays, the industry that’s hiring on the west end of the Mesabi Iron Range, where Pittack has been cutting down trees for more than two decades, is taconite, not logging.

In the past 18 months, Pittack’s six-man operation has lost two truck drivers to mineral companies.

“I don’t blame them guys for going to the mines,” Pittack said. “There’s some days it looks pretty appealing to me.”

Lumberjacks are the foot soldiers of the forest industries, and in recent years they’ve been pounded on two sides. Not only have more than a hundred U.S. paper mills shut down in little more than a decade, as demand for paper declines in the Western world, but the collapse of the American housing market eliminated demand for building products made from trees.

As of July, the tree harvest in Minnesota had plummeted 40 percent in six years, mostly because of the departure of companies that make oriented strand board by fusing pieces of wood with glue under high pressure.

In August, two more mills announced closures, erasing a tenth of the demand that remained. Verso Paper closed its mill in Sartell two months after an explosion and fire that killed a man, saying the tepid market for its brand of magazine paper didn’t justify the expense of repairs. A few days later, privately held Georgia-Pacific announced it would shutter a plant in Duluth that made a thin, hard product called Superwood.

Over the past 10 years, 22,500 jobs in logging have disappeared in the United States, a 32 percent decline, according to the Bureau of Labor Statistics.

The economics of logging are regional. Minnesota mills mostly use Minnesota trees cut by Minnesota loggers, because shipping timber from a distance is expensive.

As mills have closed, loggers from Baudette to Bigfork to Bemidji have found themselves in a dogfight to find customers and turn a profit. Loggers in Minnesota haven’t harvested less than 2.5 million cords of timber for 30 years, but this year they might.

“The mill closures are a tough blow no matter where you’re at in the state, because it all has a ripple effect,” said Dale Erickson, 57, a second-generation logger based east of Baudette. “It’s tough right now.”

Modern techniques

Modern logging involves large machines that look like tractors, with climate-controlled cabs. The roughly 3,000 loggers in the state use joysticks and computer monitors to cut down, de-branch and in some models immediately chop the logs to length.

Pittack, 44, swung his $550,000 cut-to-length harvester into action one day this fall. It’s a John Deere tractor with tracks and what looks like a giant steel fist on the end of an arm.

The fist seized the base of an aspen tree and gave it a quick shake. A chainsaw whipped out and hacked the tree off at the base. The fist tipped the tree over and traveled the length of the trunk, shaving off branches with fixed steel blades. Then it cut three logs to length and dropped them in a pile on the ground. It all took about 20 seconds.

Pittack keeps a handheld chainsaw inside the harvester in case a tree’s branches are too big for the machine, but he rarely uses it.

His niche is harvesting diverse sections of the forest and sorting the logs for different customers. What had been a stand of 60-foot tall trees — much of it aspen — had become a debris-strewn meadow.

The elm and red pine were spared for the sake of birds, the other trees were cut and stacked by type and quality next to a road Pittack built, ready to go when there was enough to justify a trip to a mill. Pittack’s drivers hauled timber from the stand to UPM Blandin in Grand Rapids, Sappi Fine Paper in Cloquet, Hawkins Sawmill in Isle and Savanna Pallet in McGregor.

“You have to do it because you can’t market everything to one mill,” he said. “This day and age, that’s the name of the game.”

Few opportunities

In the past few years, the fortunes of timber and taconite have moved in opposite directions.

One growing company on the western range is Magnetation, an upstart based in Grand Rapids that transforms waste ore into a higher concentrate with the help of magnets.

The company opened its first plant in Keewatin in early 2009 and has grown quickly, attracting investment from Cargill. It now has 218 employees, a second plant in nearby Coleraine and a joint venture with Steel Dynamics near Chisholm.

The mining workforce is aging and retiring, part of the reason companies are hiring, said Joe Broking, the company’s chief financial officer.

“All these plants are turning over their workforce,” he said.

The logging workforce is not turning over as quickly. The market for timber s too weak.

Before the housing crash, mills would pay $60 for a cord of aspen — a stack of wood 4 feet high, 4 feet wide and 8 feet long. Today, the same amount of wood fetches $20.

Prices are so low, private landowners aren’t selling logging rights on their land. Over the past decade, logging on private land has fallen by more than half, from 2.3 million cords in 2001 to an estimated 990,000 in 2011.

Much of this is due to the exit of Vancouver-based Ains- worth Lumber Co., which closed mills in Cook, Grand Rapids, and Bemidji that made strand board for roofing, siding and concrete forms. Weyerhaeuser closed a strand lumber plant in Deerwood in 2007.

The strand board industry has moved to other states.

“It might come back, but the production is not going to be probably in Minnesota,” said Steve Vongroven, a forester for the Minnesota Department of Natural Resources based in Willow River.

The reason, Vongroven said, is that the biggest, newest and most efficient strand board plants are in the Southeastern United States. Minnesota mills may have pioneered the concept of using high-pressure and glue to turn scraps of wood into boards, but other parts of the country copied the idea and did it better. When the housing market improves, strand board production will ramp up elsewhere.

Lost tradition

Commercial logging in Minnesota started in 1839 when settlers from Illinois opened a sawmill at Marine on St. Croix. After the spring thaw, white pine logs floating down the river to the sawmills were so thick that logjams in the narrows below St. Croix Falls could back up for miles.

By 1900, Minnesota sawmills produced 2.3 billion feet of lumber — enough to build a 9-foot-wide boardwalk around the Earth along the equator, according to the Minnesota Historical Society. The growing nation demanded wood for homes, schools, factories and railroads, and by the mid-1920s loggers had pretty much wiped out the state’s majestic white pine forests.

But the forest came back, and continues to come back, in a mix that includes red and white pine, maple, spruce, balsam, birch and aspen.

Erickson, the logger from Baudette, grew up on a farm where the prairie meets the woods just below the Canadian border, about 30 miles west of International Falls.

It was a thriving Scandinavian cooperative where three large families raised wheat and grass seed in the summer. In the winter, when they weren’t milking cows, the men drove into the snowy forest to cut down trees for the paper mill in International Falls.

The mill is still there today, a steel blue collection of warehouses and towers that looks across the Rainy River toward Canada. The mill is still the Erickson family’s biggest customer.

“I’ve made my living and my wife and I have raised our family off the land,” Erickson said. “I’m actually to a point now that I could go back and start cutting some of the areas that I can remember were some of the first areas I ever helped cut when I was back in school.”

But loggers like him are becoming rare. Startup costs for the business today easily surpass $1 million — the harvesters, tracks for the machines so they don’t get stuck, $50,000 steel trailers that haul timber and only last a few years, semi trucks that pull the trailers, and $4 per gallon diesel fuel that powers it all.

Erickson’s dad founded his business in the 1930s, and Erickson started working for him full time when he graduated from high school in 1974.

“That’s what the boys up here did, for the most part,” Erickson said. “Back in them days it was easy to do. But now, for somebody to start a business, if you are not in a logging family or a line of succession somehow — whether you’re family or a valued employee –you’re not getting in the business.”

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Alaska Timber Task Force Releases Report

Alaska Timber Task Force Releases Report

By Office of Governor Parnell
October 16, 2012, Juneau, Alaska – The Alaska Timber Task Force today released its report to Governor Sean Parnell recommending steps to improve economic conditions in Alaska’s forest-dependent communities.

Created by Administrative Order 258, the nine-member Alaska Timber Jobs Task Force reviewed issues affecting Alaska’s timber industry. Largely due to declining timber volume offered for sale by the U.S. Forest Service, the Southeast Alaska timber industry has nearly collapsed.

“Inadequate federal timber sales and reckless lawsuits by environmental groups bent on stopping all logging, and wiping out Alaska jobs along the way, are unacceptable,” Governor Parnell said. “This report provides clear and reasonable steps that can assist communities, schools, small businesses, and families in Southeast Alaska.”

Key recommendations include placing up to 2 million acres of federal land in a trust managed by the state, and seeking federal legislation granting states the option of running timber sale programs on federal lands. A state-run program would operate under state forestry standards and state laws.

The report looked at the state of the timber industry throughout Alaska. The industry is small but growing in the Interior and Southcentral Alaska, largely due to a dependable supply from state-managed timberland, according to the report. The Alaska Department of Natural Resources and businesses are working together as woody biomass becomes a cost-effective heating and energy option in rural Alaska.

In Southeast Alaska, however, the downward spiral of lost jobs and closed schools has continued. Despite federal law requiring enough timber sales to meet demand, the Forest Service choked off the timber supply; two of the last three mid-sized mills have closed.

In the past decade, Southeast Alaska timber jobs declined from 1,500 to roughly 200, the region’s population dropped 12 percent, and six schools closed.

The task force provided 34 recommendations to the governor addressing short-, mid- and long-term needs to stabilize and grow the timber industry.
Expanding existing state forests and establishing new state forests. These recommendations include:

  • Revising state statutes and regulations to address the needs of small timber operators
  • Seeking state management of federal timber acreage in Southeast Alaska, or improved federal policies to meet timber supply demand
  • Seeking a 250,000-acre state-federal land exchange, with dispersal of the newly acquired lands to Southeast communities for local economic use
  • Pressing the federal government to advertise additional timber sales and exempt Alaska national forests from the 2001 Roadless Rule

The task force members include representatives from state agencies, the Governor’s Office, the U.S. Forest Service, the timber industry, and Southeast Alaska communities. The U.S. Forest Service representative was a non-voting member of the task force.

The Timber Report can be read here.

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State timber economy ready to rebuild

State timber economy ready to rebuild

Created on Wednesday, October 17, 2012 | Written by Steve Law

Oregon’s timber industry should see some growth as national housing starts pick up, but don’t expect it to come quickly.

That’s the consensus of a three-person panel at the Portland Business Alliance’s monthly breakfast forum Wednesday morning.

“The consensus is that the demand globally for wood fiber is going to continue to increase, but it’s going to be slow, it’s going to be sporadic,” said Doug Robertson, longtime Douglas County commissioner.

“I think it’s going to be choppy,” agreed Andrew Miller, president and chief executive officer of Portland’s Stimson Lumber.

Joshua Prangley concurred. “I think it’ll be a little bit lumpy.”

He’s the vice president of basic materials investment banking for J.P. Morgan Chase in Chicago.

Despite signs of life in Oregon’s timber sector, it isn’t so easy for the industry to rev up after the protracted decline caused by the Great Recession.

Miller, whose company manages 500,000 acres of private timber land, said Stimson has had trouble getting logging contractors for the past three years, because so many left the field when demand disappeared.

“The whole supply chain shrunk,” Miller said. “It will take years in some cases to rebuild capacities.”

That extends even to the homebuilding industry, Prangley said. The nation lost 2 million construction jobs, he said, and many of those idled workers left for other industries.

It’s hard to reopen a wood products mill once it closes down, said Robertson, whose county, the heart of Oregon timber country, has seen the closure of about two-thirds of its mills in the past four decades.

All three panelists are skeptical there will be any significant increase in logging in national forests, given the propensity of environmental groups to challenge timber sales in court. However, they see a window of opportunity in a proposed bill that aims to shift control of 1.4 million acres managed by the U.S. Bureau of Land Management to the state of Oregon. Those are the so-called “O&C lands,” originally granted to the Oregon and California Railroad by an 1866 federal act as compensation for building a rail line from Ashland to Portland.

Oregon Congressmen Greg Walden, R-Hood River, Peter DeFazio D-Springfield and Kurt Schrader, D-Canby, are working on the bill. Gov. John Kitzhaber recently appointed a task force, including representatives of several Oregon environmental groups, to hammer out an agreement on the package.

The idea is that the state can better manage the timber lands in a sustainable fashion than the federal bureaucracy. In recent years, the timber harvest on state lands in Oregon has been in the same neighborhood as total cuts on federal lands, though federal lands are many times larger and account for half the land base in Oregon.

“I think we’re going to make some headway” with the O&C proposal, Robertson said.

Despite signs of revival in Oregon’s wood products industry, panelists cited trends that may shift control to non-Oregon companies.

“I get calls every week from investors wanting to buy timber land,” Miller said, citing an increasing appetite among outside investment funds.

He also foresees potential new ownership of the remaining privately held timber companies in Oregon when current families decide to leave the field. When there isn’t a younger generation in the family willing or able to take over the companies, Miller said, financial institutions in Boston and Chicago might step in and acquire local companies.

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Timber Industry Withdraws Protest

Timber Industry Withdraws Protest

October 3, 2012

American Forest Resource Council

The American Forest Resource Council today announced it has withdrawn its administrative action concerning the Friese Camp Forest Management Project on the Medford District of the Bureau of Land Management.  No timber harvesting would have been stopped by the protest filed in late August.  However, AFRC elected to withdraw its appeal, rather than have agency resources expended on a formal response.

“We made our point,” said Tom Partin, AFRC President.  “We are confident that the BLM is now aware of AFRC’s concerns.”

“There is a huge problem facing BLM’s southern Oregon timber program right now,” Partin said.  “Activist organizations have stopped no fewer than 25 BLM timber sales by appeals and litigation.  Those sales contain over 90 million board feet of timber.  Every million feet of timber supports 38 jobs.  That’s almost 3,500 southern Oregonians who are suffering from underemployment at a very bad time in our state’s economy.”

All of the timber sales have already been through agency administrative processes, including reviews required by the National Environmental Policy Act and the Endangered Species Act.

“We have acted in good faith by withdrawing our protest,” Partin said.  “We challenge those holding up the BLM sale program with appeals and litigation—Cascadia Wildlands, Center for Biological Diversity, Klamath-Siskiyou Wildlands Center, Oregon Wild and the others—to withdraw their appeals and litigation now.  Our forests and our communities depend on our cooperation.”

AFRC’s action comes as Governor Kitzhaber announced he will appoint a panel to come up with a plan by December for increasing the harvest on the lands managed by BLM in southern Oregon.  According to the Oregonian, when he made his announcement, Kitzhaber said increasing logging, including allowing modified clear-cuts, will produce jobs and revenue for counties struggling to provide basic services.  AFRC is hopeful that the panel can succeed where so many efforts have failed.

The American Forest Resource Council represents forest product manufacturers and landowners throughout the west and is based in Portland, Oregon.

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