Hardwood Lumber Suppliers Face Mixed Times

Armen Hareyan's picture

During the past year a friend of mine, who is a lumber company owner, has told me on several occasion about the difficult times the American hardwood lumber suppliers have been facing. This was due to the overseas competition and the economic recession that the U.S. has been facing. Today I decided to take a quick look to see what's the general news with the hardwood lumber suppliers from across the nation. My first reaction is mixed.

It is very interesting to see that some hardwood lumber suppliers have been expanding and even reporting a modest profit. However, the most lumber suppliers seem to have been suffering from the slow economic activity. People not buying houses and the rising rates of foreclosures have lowered the demand for hardwood lumber.

Clearwater Paper Corporation while reported "strong" results in the second quarter (ending June 30) said that overall lumber net selling prices fell by 17% in the quarter, compared to the second quarter of 2008, due to lower lumber prices and a lower percentage of higher-value cedar product sales. The lumber supplier said that shipment volumes declined by 26% during the quarter compared to the same quarter in 2008.

Hardwood lumber suppliers and timber suppliers in general are having difficult times in Oregon as well. Oregon Live reports that the the housing crisis has hammered Oregon's timber industry, once among the nation's top lumber producers. "Since 2005, 16 percent of Oregon's lumber and plywood mills have closed, leaving only nine sawmills operating in eastern Oregon, according to Gary Lettman, forest economist for the Oregon Department of Forestry."

Some hardwood lumber suppliers go creative and transform their businesses defying the economy. As hopes are high "the site of the former Timco Lumber Company, once the largest employer in Barnstead and one of the largest lumber companies in the Northeast, is being transformed into a wood pellet manufacturing company that will be a producer and supplier of wood pellets for private households and commercial businesses," reports Citizen.com.

A piece of good news came from Jewett-Cameron Trading Co. Ltd. While the company sales dropped 35.4 percent in the third quarter (ending May 31) the hardwood lumber supplier actually made a modest profit. CEO Done Boone told Portland Business Journal that that company's "Jewett Cameron Lumber segment reported a 4 percent increase in sales from the prior nine month period. We continue to experience healthy demand for our non-wood specialty products like dog kennels, our proprietary fence gate systems, perimeter fencing, and greenhouses, even in this difficult economic environment."

Written by Armen Hareyan

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