3 mills on the block

[Ron Wenrich]

This weekend, 3 sawmills in my area will be sold.  These mills produced about 2-3 million bf each.  They have been in business for about 20-25 years.  

I'm not too sure about the specifics, but log supply and soft markets are part of the problem.  Log size has continued to go down as the cutting continues in the smaller diameter classes.  This leads to lower grade yields.  The only problem is that timber prices haven't dropped with the smaller size.

After talking to a couple of lumber buyers, this problem seems to be pretty widespread.  There are few logs in the yards, and no one is really pushing production.  Could be a few more mills go on the blocks if this keeps up.

Meanwhile, the largest mill in the area keeps cutting 3 shifts and putting the lumber in inventory hoping the markets will break to the upside.  It doesn't make much sense.

[Frank_Pender]

The only thing I can figure in our area here of the Pacific Northwest is that some are better able to stand the gaff than others.  Whey/Willamette.    Some buying others out creates some of the issues also, perhaps :-/  Diversify is one answer, perhaps for some of the smaller mills and to add to that idea is one of finding nitch markets.  The nitch idea is the most challengeing for some.  It means for me to get out there and knock on doors and go to many conferences dealing with the wood products industry.  If you find a nitch market make sure you can get the product that they need.  I cought myself in my own best idea without enough of the right material one time and pertnear lost the customer.   Neck on blocks do not feel to good when they roll off, disconected.

[JoeyLowe]

I've noticed here in East Texas that a couple of mills have shut thier doors, another has laid off employees and still others have reduced production.  Makes me wonder if I did right in buying my mill.

[Bibbyman]

We have only one “mill” operation in our area and it shut down for the winter.  The story they told was that they couldn’t get enough logs.  But since some of the loggers have been bringing us logs,  we heard that their check were written on rubber and took running them through the bank a couple of times before there was enough funds to cover them. That was last summer – before they shut down.    

We’ve been buying logs from one local logger that was good enough to give us the time of day a couple of years ago and would bring us a load now and then.  Right now he has a market for stave logs,  veneer, and top grade logs but is really hurting for a place to go with his sawlogs.  One place over a 100 miles away will take them but they are  r e a l  s l o w  at mailing out the checks.

Each load he brings,  he always says how grateful he is for us to take his logs and to let him know when he can bring more.  Of course,  he can deliver more logs in one day than we can saw in a month – having several crews and at least four trucks.

We’ve now got or loglot full to the brim and I’ve had two calls this evening from people wanting to sale us more.  Mary's going to have to get her butt in gear!

[Don P]

Where's that log going when it leaves your hands Bibbyman?
It sounds like you're just scratching Mary's potential yet.

[Bud Man]

Another Ross Perot predicted sucking sound== More and more boards @ local lumber yards and chain stores are showing up with foreign stickers stuck to the ends .  Very few people watching and fewer reporting the domestic downturn of the industry.  You can bet the big dogs are doing just that, and probably buying cargo shipping co.stocks with the $'s they get from the sale of these mills.  I think It's probably a great time to be a small-time miller because the few big  mills left have no or little flexibility.  But easy ?-- No !!-- Marketing and end user identification are the key and the Net is the vehicle.    Like an expression I use often: "If it were easy they would put It  in a vending machine and wouldn't need any of us "

[Timber_Zeus]

I recently purchased rough sawn pine from a small, local, lumberyard that sells rough sawn.  It is the only yard around that sells rough sawn.  They contract out the sawing to guy that pulls his Wood Mizer right to their business.  This lumber is far superior to the conventional planed crap I've been buying at the large lumberyards.  If more homeowners owned planers and joiners, rough sawn would be a huge market.  The local yard sold me pretty much all the pine they had left and I will want more.  Unfortunately, their kiln is booked up 2-3 months out on special orders.    Maybe I will have to dry my own in my basement.  :-/

This is an example of a small lumberyard that uses a small mill and serves nich market.  They can't keep up with the demand.  Also, I am another convert from the large mills that sell crappy boards with high moisture content.  

[Ron Wenrich]

We have primarily hardwood mills.  Of those, most are the smaller mills - 2-5 MMbf.  They may have greater flexibility, but logs seem to be a problem in some areas.  Landowners are starting to sit on timber, as they should be in these economic conditions.

The mills hit the hardest are those who put out sub-par products, those that jump around from one market to the next, and those with high debt loads.  Bankers in our area still don't understand timber growing or sawmilling and are starting to get ignorant about agriculture.

Our Canadian buyer (lumber travels both ways) says that mill production has dropped 50%.  The unfortunate part is that demand has dropped 70%.  I don't know if his figures are correct, but that's the way he sees it.

What countries are your foreign woods coming from?  If it wasn't for Canadian wood, we wouldn't have any softwood dimension in the lumber yards.  The southern pines stay in the south, and the western pines stay out west.  Our pines are scant.

[Bud Man]

Ron W --The softwoods in the lumber yards and chains mostly marked Sweden,  but it's hardwoods too in the hobby shops logged and shipped from third world . The Perot referrance , in my mind , is universal in nature and relates to 100's of thousands of Americans wages decreasing. A lot of them can no longer afford premium quality anything and everything seems to be geared to cheaper, while not better ,it is becoming more acceptable.  Tons and tons of manufactures are going to plastic similiarities and composite look-a-likes with decal stuck surfaces. Look at the success's of Wal-mart and Home-Depot. The sucess of them is the end of an American life style.  The average American is likened to me,   "As a dog chasing his tail===He doesn't know whether he should bite down or turn loose and start chassing It again."          Sorry for the rambling !!

[Ron Wenrich]

No need to apologize for the ramblings.  Those are often things that make for interesting reading.

The foreign hardwoods are probably hardwoods that can't be  grown in this country.  Mahogany is one that comes to mind.

Softwoods are starting to come from Sweden because of Canadian tariffs.  That caused prices to be increased for their lumber in our stores.  The theory was that this would increase the American supply by cutting out the Canadians.  It didn't, since we have a tough time getting enough material for 1.5 million new homes each year.  Sweden has taken advantage of the market opening, since the higher price will pay for the added freight.  Free enterprise is a government program, as is free trade.

The reason that quality has slipped is because the consumer has allowed it.  If you don't buy junk, then they will stop making it.  Walmart may dictate to producers what their price will be, but it doesn't dictate to me that I have to buy it.  I support my local stores more often than the big names.  I find that if you add your extra time and hassle to going to a big chain, the locals are cost effective and sometimes cheaper.  You need to know your prices before you go shopping.

[Timber_Zeus]

I agree with the last two posts one hundred percent.  The Home-Depots and Menards of today sell tons of cheap crap.  They don't care about quality.  I encourage people not to partronize these places when there is another reasonable option.  Their presence discourages business development from small guys who care.

I know we will come full circle on this eventually and I've seen signs that it is already beginning.  Home Depot came into Duluth, MN about one year ago.   I cannot believe how much money they spent on landscaping and new building only to house poor quality inventory and employees who do not know the products.  (Not to mention how much they spend on national advertising.)  Rumor is that the store is already slated for closure.  No longer can Home Depot expand with the attitude that people will flock to their stores no matter where they're built.  

I am a little sour.  I have had to purchase items at these large stores for my new house project.  Mostly electrical and lighting.  A local fire investigator told me that some recessed lights I had installed had just caused a fire in a neighboring county and that UL had just yanked the manufacturers rating for insulation contact.   It is too late for me to remove them.  I stopped and asked the store what had happened because I noticed that they were no longer sold as a product that is approved for contact with insulation.  I was told it was because the lights don't offer a good vapor barrier, not because of fire.  I even called the lighting company and was told this "Well, you probably should have purchased our higher end model, the one you have is a very low end product."

Sorry for the ramblings.  To hell with Home Depot and Menards.  Cheers for the small guys who care!!

[Bud Man]

Zeus ==I wasn't targeting a particular store .   I was making referrance to the acceptance of the notion that the cheepest has become a way of life for shoppers.    You have to be a smart shopper because if you buy something that you bought 25 years ago that lasted 23 years and you think it's going to last another 23 years--      "Your In For A Wake-Up Call"       It may seem like a good price, but it probably is like most cars now days -it was designed to be the cheepest one of its type on the market and as such it self destructs in 3 to 5  years.     A lot of times its the best the store has to offer . There aren't going to be antiques in the future cause nothing will last long enough to reach antique status.!!

[DanG]

Maybe it's all just a swing of the pendulum.

While the big mills may be in trouble where most of you live, things seem to be booming, here.  There is a fair-sized mill in my county that seems to do pretty well, producing dimension lumber, plywood, and some engineered products. They have remained friendly to the community, offering to pressure treat for individuals for $100 per MBF.  
Georgia-Pacific is building a humongous plant about 20 miles south of me. They are in production, but still building. I don't know how big it will end up, but it is already one large beast. The railroad passes, just behind my house, so I get a daily tally of their production. The trains are getting longer and longer, with lots of wood chips, lumber, poles, and posts. It is, obviously, the result of the shutdown of St. Joe Paper Co., which owns over a million acres of timberland in this area, and has become a "land development company."  Of course, this circumstance is an exception, and doesn't indicate the condition of the industry, as a whole.

[L. Wakefield]

I recently purchased rough sawn pine from a small, local, lumberyard that sells rough sawn.  It is the only yard around that sells rough sawn.  They contract out the sawing to guy that pulls his Wood Mizer right to their business.  This lumber is far superior to the conventional planed crap I've been buying at the large lumberyards.  If more homeowners owned planers and joiners, rough sawn would be a huge market.  The local yard sold me pretty much all the pine they had left and I will want more.  Unfortunately, their kiln is booked up 2-3 months out on special orders.    Maybe I will have to dry my own in my basement.  :-/

This is an example of a small lumberyard that uses a small mill and serves nich market.  They can't keep up with the demand.  Also, I am another convert from the large mills that sell crappy boards with high moisture content.  

  This is exactly what I was talking about when I said something in another thread about if they aresqueezing you from both sides- step out of the middle. It's not easy. But it benefits everyone who can do it. Our local wholesaler turns out some very good wood indeed. But is not flexible to deal out small lots. There's another mill up the road that has learned that additional customer friendly step, and people go there a lot. It's not that the first guy is unfriendly- he's just not structured to be flexible.   lw

[Bud Man]

LW==Kinda makes you think there's alot of  $'s in the middle don't It.  

[L. Wakefield]

   I think it might have been Gordon awhile ago was talking about forest and land being wealth generators. I should search out the message- the gist was that by natural growth, wealth or income of a real sort was obtained without the landowner lifting a finger- but by processing, sales, etc this wealth is augmented. I forget the term he used for that part. The middle fellas could be seen as the milling folks- or as home depot, depending on your point of view. HD is between the wholesaler and the consumer. Sawyers are between the woodland owner and the next in line. The middle can be a cushy place or a very uncomfortable place. Most of the comments from the sawyers' point of view here is about being squeezed in that position.

  It's considered a valid marketing point that you don't just sell the product- you sell the concept of how the buyer thinks they will feel using the product. I think that is part of the reason for the success of the niche market where the wood goes direct from land to sawyer (in some places right there on the land) to the consumer. Some people get value added in knowing their material from its earliest production phases. Shopping at HD is a very alienating experience. One does not feel in touch with wood as a living product- it seems more like if they could just glue sawdust together and get you to buy that- or cardboard- they'd gladly do it.   lw