Another mill closing

[sawguy21]

NZ d-fir going to the U.S., now that amazes me too when the next door neighbor is shutting down mills due to market constraints. Bulk carriers don't operate for nothing. American softwood production took a hit in the 90's when the Clinton administration cut off the pacific north west to protect the mythical northern spotted owl. They don't have capacity to meet demand so have to import but holy moly that is really something.

[Skeans1]

My cousin worked for McMillan-Bloedel in the export division, one day she took her dad to the dock in North Vancouver. He came home almost in tears, lifts of clear straight d-fir, pine and spruce going to Japan for framing. We can't buy it.

Locally, consumers aren't willing to pay a premium for a commodity like framing lumber. It's all sold on cost, and as long as it meets the bare minimum standard, it's all treated the same. The Japanese may have stricter standards, and are therefore willing to pay more, or it's being used as "appearance" grade, and priced accordingly.

Obviously it's better if more of the processing is done locally, but that's down to local mills being able to market effectively overseas, and the respective Govt's encouraging the trading. When you get into trade wars, trade is discouraged.

NZ log and sawn timber industry isn't huge on a global scale, (only about 1%), but it's a significant part of the local economy, and our trade balance. And in that there is about $200mil of sawn lumber sent to the US annually. Now that has always surprised me, because it's not like the US is short on trees? It's all just pine and Douglas fir, not any expensive exotics, and it's all grown and harvested commercially (no cheap harvests from State owned land). Not complaining, but how does that actually work?

This is a video of packing a bulk carrier with logs (as opposed to just a container)
http://www.youtube.com/watch?v=uEjPXm0hvBI

How much of that is PLS?

[quilbilly]

We can get a container of maple loaded for overseas in well under an hour, usually 45 min. Alder about 40 and softwood 20-30. We got about 6mbf on our last alder shipment. 5mbf or so with softwood.

[Ianab]

How much of that is PLS?

They don't operate in my area, but it seems they own about 30,000 hectares around Tauranga and Timaru in the South Island which is likely growing Doug fir. That's out of 1,800,000 hectares of plantation around the country. 

But they may handle product from other sources, and are probably a significant part of the US trade. 

[Gearbox]

The Canadian lumber market has been a political football for years . sometimes we couldn't bring lumber in to Canada other times we could not bring it out . This has been going on since the 70 s that I remember .

[Okefenokee_D]

Timber market still stinks down here in the Southeast.

Really don't know the solution. Everyone floods the markets with everything even on the row crop side of farming.

But what also doesn't help is how expensive everything has gotten. A new truck is like 60k+!

Greed.

[nativewolf]

@Okefenokee_D You have to be awfully nimble in these days.  It doesn't pay to cut pine all day up here from what I've seen.  I'm shocked by how low some guys will go to make a deal happen.  Cash flow, yes.  Profit..no.

Some parts of GA and Alabama might be different.  

[GRANITEstateMP]

Cash flow is not profit.  I can't remember who I heard it from, buy by god, I remember it!

[Bruno of NH]

It's hard to find a pine door or piece of pine moulding at the box stores or lumber yards not made from pine imported from NZ.
I was told from salesmen it mills better, I say hog wash.
Back in the 50's and early 70's it was all made of d-fir or other western woods.

[Peter Drouin]

If you want wood, pay the money for it. It's that easy. making money after can be the hard part.
I have to pay the same as the big mills around me that can cut 200,000 bf a day.
With the snow, I have now Hotroding is out.  :( ;D

[nativewolf]

@Peter Drouin So you are saying those mills don't stand a chance now that they are the only thing to race

:D

[Peter Drouin]

@Peter Drouin So you are saying those mills don't stand a chance now that they are the only thing to race

:D

No, One has to just be creative. Like I have a bunch of guys with small mills around me selling lumber cheap. At give away $$. But if you want a long, come to me no one can cut 45' with in a 100 miles of me.

Look at Y,H down south with his hardwood thing. There it works up here no way, no market. I have a bunch of wholesale guys giving away kd hardwood here. I had a guy come in and want me to cut railroad ties. What are you paying? .60 a bf. 
It cost me, .50 a bf to buy the logs. No $$$$ in that.
But with my mill, I can cut 45' opens a lot of doors for me to the customers with a lot of $$$$$$$$$$$$$$$$$$$$$$$$$

The hard part on that is to find a logger that will go easy handling the log.

So now I run the price up and sit back. thinking when the snow is gone the Hot rod will be ready too. ;D

[dustintheblood]

Fortress in Thurso, Quebec just went down.  Taking the local hardwood mill offline since they now have no chip market.   

I'm thinking we are in for a good solid downturn. 

[nativewolf]

Lots of alternatives to pulp for waste from a sawmill.  Biofuel generation facilities, mulch, etc.  If the sawmill wants to be open and if the wood basket is good than a closed pulpmill shouldn't be make or break long term.  In the short term that can be a tough pill to swallow.  Hopefully the province will provide some assistance, on site heat and electricity generation looks doable here in VA.  In Ontario you might be flooded with cheap hydro, not sure.

In any case, good luck!

[nativewolf]

I guess that mostly my feeling is not to build a business based on pulpwood if you are in NA.

[dustintheblood]

NativeWolf, you hit the nail on the head.  Sawmill's have historically been dependent on pulp mills.  We just never wanted to deal with it - likely cause the complexity of a sawmill's enough to make any mans hair grow grey.  Plus, any one sawmill's not enough supply for a pulp mill.  They're two very different animals.  So, yeah it's time to figure out an alternative solution.

Province won't provide assistance since their hands are tied with the SLA.

Nope, Ontario has some of the highest cost hydro in NA.  It's outrageous what we pay!  Solar and wind chewed up the budget big time and we're paying for it up the wazoo.

Bottom line is there's a bunch of folks out of work again, and the pattern's emerging across the country.  Here's hoping the fundamentals of the economy keep on the rails so that there's hope to avert a full-on timber crash.  The last one was rough enough.

[quilbilly]

One of the mills here has put in a pellet plant for all of their chips.

We only have one close pulp Mill and the next one is about 150 miles away. A few people ship chips overseas but it's still not much of a market. western WA produces way too much timber for the one Mill. Word is they're going to try to open up another one next year but, we haven't been able to carry two pulp mills for quite a while due to the price fluctuation.

[stavebuyer]

Its not just the pulp. Sawmill waste of all kinds is falling out of demand and when you produce multiple tractor trailer loads per day you are effectively out of business if you suddenly loose an outlet.  We have one large mill that put in a pellet plant and another that went into the mulch and soils business. Neither with the expectation of profit.

[nativewolf]

So close to DC I expect mulch to be a winner winner for any mill within a 90 min drive of the beltline.  Unlike firewood it can be handled mechanically at scale.  Same for mulch around Charlotte, Atlanta, Phili, NYC, Chicago.  Columbus/Cinci/Cleavland/Pittsburgh should be able to support some decent mulch markets.  

Overall I think it is Mulch and Energy.  I've been studying gasification systems.  Lots of studying to do, brought in my braintrust to help out on that analysis.  

[dustintheblood]

Overall I think it is Mulch and Energy.  I've been studying gasification systems.  Lots of studying to do, brought in my braintrust to help out on that analysis.  

That's where my head's at.  Not for me, but for clients.
Figure out how to inexpensively dry wet chips and we're all in the $$$$