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THE ASTORIAN • TUESDAY, MAY 17, 2022
Timber industry grows where it thrives
By MATEUSZ PERKOWSKI
Capital Press
ROSEBURG — The timber industry
may be synonymous with the Northwest
in the popular imagination, but the eco-
nomic reality is the industry’s center of
gravity has quietly shifted to the South.
The region’s wood products manufac-
turing sector has been losing market share
to the U.S. Southeast for years and it’s not
expected to recover its momentum in the
foreseeable future.
Its thunder has been stolen by the
South’s abundant timber supplies and
looser environmental regulations, which
have fueled a boom in new production
facilities.
Those mills can buy logs at lower
prices while supplying lumber for hous-
ing construction that’s surging right in
their backyard.
“If you know the demand is in the
Southeast and the supply is in the South-
east, it’s logical that’s where you’d build
your capacity,” said Eric Geyer, strategic
business development director for Rose-
burg Forest Products. “Without any more
fi ber supply, the Northwest’s growth is
stagnant or declining slightly. It will mir-
ror the available fi ber.”
Roseburg Forest Products was
founded in Oregon more than 85 years
ago but fi ve of its 13 mills are now in the
Southeast, where it began investing about
15 years ago.
The company bought most of those
facilities, as well as 200,000 acres of for-
estland, in just the past fi ve years.
“There’s a value in diversifi cation,
both in products and in geography,”
Geyer said. “Our customers are nation-
wide, so our facilities should be in all
those locations.”
The South has increased its lumber
milling capacity by about 30% in fi ve
years, or about 5.5 billion board-feet,
mostly by building new facilities but also
by renovating older ones, according to
the Beck Group, a timber industry con-
sulting fi rm.
Lumber production in the Western
U.S. still slightly outpaced the South in
the early 2000s despite protections for
threatened species that restricted logging
on federal lands.
However, the region lost its lead
during the collapse of the housing market
after the 2008 fi nancial crisis. Since then,
the production gap has only widened.
Mateusz Perkowski/Capital Press
Logs are stacked in preparation for processing at the Freres Lumber Co. plywood mill in Lyons.
As forestland has expanded in the
South, another major North American
timber region has endured a slow-mov-
ing catastrophe that’s forced manufactur-
ing capacity to relocate.
Mountain pine beetles have devas-
tated some British Columbia, Canada,
forests, which required large-scale log-
ging of dead and dying trees to ensure the
logs retain salvage value.
That supply of damaged timber is now
dwindling but replacement trees won’t
reach harvestable age for many decades,
prompting some Canadian companies to
invest in the South.
“With the loss of wood coming from
Canada, that gap will be made up for
by the South,” said Roger Lord, presi-
dent of the Mason, Bruce & Girard nat-
ural resources consulting fi rm. “The West
doesn’t have the capacity to absorb that
volume.”
New opportunity
Meanwhile, the North American wood
supply equation continues to change.
Billions of dollars slated for thinning
and fuels reduction in national forests
were approved under a federal infrastruc-
ture bill last year, raising the possibility
of more harvests on Western public lands.
South keeps growing
To be eff ective, the federal govern-
The South produced about 21 billion
ment should avoid random acts of resto-
board-feet in 2020, up from about 12.5
ration and instead implement a coherent
billion board-feet a decade earlier.
strategy for enhancing forest resilience,
To compare, the West’s output rose
said Travis Joseph, president of the Amer-
from about 11 billion to 14 billion board-
ican Forest Resource Council, a timber
feet in that same period.
group.
“Billions of dollars
“It can’t just be a
are being invested in the
one-off
treatment,”
‘THEY’VE HAD
South. They don’t have
he said. “Our current
the spotted owl and the
system and the forest
THEIR PRIVATE
marbled murrelet and
health and wildfi re cri-
some of the others that
PROPERTY RIGHTS sis are not compatible.”
have impacted the lands
Opposition
from
TAKEN AWAY AND
here,” said Bryan Beck,
environmental groups
president of the Beck
is bound to be an obsta-
THE VALUE OF
Group. “The West has
cle, but there is a real
been a more challeng-
opportunity to reduce
THEIR LAND IS
ing place for sawmills
the congestion that’s
DIMINISHED. IF
for decades now.”
resulted from stagnat-
While the South is
ing timber harvests,
I WAS A SMALL
now the top lumber-pro-
Joseph said.
ducing region in North
“I don’t accept that
WOODLAND
America, that doesn’t
has to be our status
OWNER TODAY, I’D quo,” he said.
mean the West’s timber
industry will collapse,
While there’s a
BE HARVESTING
he said.
potential for more log-
TO CAPTURE THE
The region’s bat-
ging on federal lands,
tle-hardened sawmills
new harvest restric-
VALUE BEFORE
remain
competitors
tions by Northwest
despite the uneven play-
state governments are a
IT’S TAKEN AWAY
ing fi eld.
certainty.
FROM ME.’
“The silver lining is
Washington is ded-
the folks who are here,
icating forestland to
Rob Freres | president of
who have survived, are
storing carbon, making
Freres Lumber Co. in Lyons
very good at what they
those areas off -limits to
do,” Beck said. “They
commercial logging.
have strong manufac-
Oregon is contemplat-
turing know-how.”
ing a habitat conserva-
The South’s rise in the timber industry
tion plan for threatened and endangered
isn’t strictly a function of environmental
species that would also decrease logging
laws reducing harvest levels in the West.
on state forests.
Federal policies have long encour-
Private lands aren’t immune from
aged s outhern farmers to plant trees on
state logging restrictions, either. Earlier
marginal agricultural lands, resulting in a
this year, Oregon lawmakers approved a
surplus of inexpensive pine logs for the
compromise deal between environmental
region’s sawmills.
and timber interests to widen no-harvest
Aside from incentives that expanded
buff ers around streams.
forestland acreage, the s outhern pine is a
The long-term implications of the
fast-growing species that’s logged about
P rivate F orest A ccord are up for debate in
25 years after planting, said Tom Schulz,
the timber industry.
vice president of resources and govern-
Among critics of the legislation, it’s
ment aff airs for the Idaho Forest Group.
bound to harm landowners while causing
Tree species in the intermountain
closures and curtailments at sawmills that
West, where the company is based, are
can’t get enough logs.
typically harvested at 75 years of age, he
“They’ve had their private property
said.
rights taken away and the value of their
“Over there, you may have three crops
land is diminished,” said Rob Freres,
in that same period of time,” Schulz said.
president of Freres Lumber Co. in Lyons.
Much of the forestland near the com-
“If I was a small woodland owner today,
pany’s six mills in Idaho and Montana is
I’d be harvesting to capture the value
owned by the federal government, which
before it’s taken away from me.”
means logging projects entail strict envi-
However, that opinion is not
ronmental reviews and restrictions.
unanimous.
The forestlands in the South are
Greenwood Resources, a company
mostly on private property, which is one
that manages forestlands and owns prop-
reason the Idaho Forest Group is build-
erty in the Northwest, believes the bill
ing a mill in Mississippi that’s expected
has stabilized the regulatory outlook for
to start operating this year.
landowners.
“You do have national forests down
“It off ers more certainty for our invest-
there but they’re very small contributors
ments,” said Kevin Brown, the compa-
ny’s Pacifi c Northwest area manager.
to the overall supply,” Schulz said.
High log costs make it tougher for
Northwest sawmills to compete against
those near the wall of wood in the South,
said Chad Washington, the company’s
stewardship and community engagement
coordinator.
On the other hand, Northwest land-
owners are in a stronger position because
timber isn’t oversupplied, he said.
“Just as an increase in demand drives
prices up, so does a decrease in supply,”
Washington said.
Constraints on the Northwest wood
supply will limit the region’s milling
capacity but that doesn’t mean the indus-
try is in decline, he said.
“We’ve hit that equilibrium of out-
lets to land base,” Washington said. “It’s
a good place to be a mill owner but not to
invest in a new mill.”
When sawmills compete over a
smaller number of logs, that does tend to
boost prices in the short term.
However, long-term supply reductions
make it harder for mills to stay in busi-
ness, said Hakan Ekstrom, president of
the Wood Resources International forest
market analysis fi rm.
“Every time you have some new reg-
ulations that limit supply or make it more
expensive to harvest, you’ll likely see
some sawmills or plywood mills curtail
or shut down permanently.”
If fewer mills are competing for logs,
that prevents prices from getting bid up,
particularly for sellers with few market
options, said Brooks Mendell, CEO of
the Forisk forestry research fi rm.
“Losing mills is bad for landown-
ers,” he said. “Part of the logic of tim-
berland investment is there are multiple
independent log buyers out there.”
At current prices, the South is on
track to produce $16 billion worth of
softwood lumber in 2022, compared to
$10 to $11 billion in the West, Mendell
said.
On a national scale, lower raw
material costs mean s outhern lumber
mills can extend their reach into mar-
kets traditionally served by Northwest
facilities.
“They can produce it for cheaper
than what we can produce it for, which
gives them the ability to ship it further,”
said Doug Cooper, vice president of
resources for Hampton Lumber, an Ore-
gon-based manufacturer.
The Northwest’s iconic Douglas fi rs
have long been recognized for produc-
ing stronger and straighter boards than
s outhern pines, which does provide an
advantage in the construction industry,
he said.
Mill upgrades
Sawmills in the Northwest are
investing in new equipment that saves
on labor and maximizes the value of
each log, but the South is also upgrad-
ing its milling technology, said Steve
Zika, Hampton Lumber’s CEO.
For example, continuous drying kilns
are preventing the warping that histori-
cally impeded the desirability of s outh-
ern pine lumber, he said. “By drying the
lumber better, you get a better quality
piece out of it.”
The Northwest’s restricted wood
supply means sawmills will be put to
the test again to remain viable, but the
region’s timber industry doesn’t face an
existential threat, said Geyer of Rose-
burg Forest Products.
Ultimately, the shift in investment
toward the South doesn’t represent a
defeat for the Northwest so much as a
strengthening and diversifi cation of the
national industry, Geyer said.
The real competition is between
U.S. lumber products and imports from
China, Russia, Chile and Brazil, he
said. “They have nothing close to the
environmental restrictions or the sci-
ence-based management we have here
in the United States.”
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