more mill closings

[chet]

A giant hit to this tiny community.

https://www.ironmountaindailynews.com/news/local-news/2024/08/goodman-mill-closes-48-left-jobless/#:~:text=News%20Editor&text=%E2%80%94%20Employees%20of%20the%20Goodman%20Veneer,of%20Companies%20private%20equity%20firm.

[barbender]

Dang "private equity firm"🤬

[chet]

That was my sentiments exactly.    Just like those same interests buying up huge tracts of corperate forest lands and cutting with no reguard for the future.

[SwampDonkey]

And those PEF's know how to tap the gov funds and know the capital gains tax laws (about half the tax rate) to make their returns look good on the books. Can't go wrong with a government backed guarantee on investment and bailouts for bad decisions. 

[Ron Wenrich]

How does a private equity firm differ from a large corporate ownership?  When market conditions change or the underlying costs change and profits aren't coming in, they all will shut down. 

[SwampDonkey]

Compared to a publicly traded company. PEF's 1) make short term investments 5-7 years, 2) financials are not publicly disclosed, 3) acquire majority stake in a company giving them control over strategic decisions.

[Cdaniels1377]

I forgot you're up here in the yoop. I was told the Baraga division of Besse closed down here. I'm gonna try to get ahold of the ishpeming division to see what they're going to do with their inventory😮

[Ron Wenrich]

Generally speaking, a PEF buys up a company that is experiencing operating problems.  They then make the changes needed to make them profitable again.  They then sell the company for a profit. 

In today's market, you have a falling commodity price, and a high cost of capital.  Increasing production wouldn't be very practical, and borrowing money to keep running until markets get better isn't really a good solution. 

In this case, the private company is acting like a big corporate company.  You cut your least profitable mills to remain solvent. 

[B.C.C. Lapp]

We recently had another mill closing here.  That's the forth one in my area.  The first three were small, maybe one was sawing like 19,000 bdft a day. But this last one was Clear lake Lumber.   That was a pretty important mill for this area.  Loggers, truck drivers, mill workers, all sent home with no warning at all. 

Ive seen it bad before. The hardwood market is always changing and goes up and down routinely. But I've never seen it this bad for this long.   I wouldn't even try to sell logs right now.

[SwampDonkey]

It's a head scratcher, where the profits can be had. Same facilities, often old dinosaurs. Same markets.

[Nebraska]

I think it's the hiccups from the crazy Covid project remodeling boom. I read LLFlooring was closing 100 locations.  Modern design and its love of pure white particle board trim....as I look at lots of Red Oak from years ago. Real interest rates for the first time in almost 20 years, piled with the cumulative results of inflation.  The small guy that builds with wood is consuming less accross the board. Chinese manufactured shipped in Click Vinyl is somehow greener.  Just stinks for a small town.

[Hogdaddy]

So, have 

We recently had another mill closing here.  That's the forth one in my area.  The first three were small, maybe one was sawing like 19,000 bdft a day. But this last one was Clear lake Lumber.  That was a pretty important mill for this area.  Loggers, truck drivers, mill workers, all sent home with no warning at all. 

Ive seen it bad before. The hardwood market is always changing and goes up and down routinely. But I've never seen it this bad for this long.  I wouldn't even try to sell logs right now.

you quit logging for the time being?  @B.C.C. Lapp 

[B.C.C. Lapp]

No hogdaddy I didn't quit logging. Not sure I'd know how to quit. But I'm only contract cutting for saw mills when I can find the work.  And I'm not doing that every day.   I'm not buying any timber now at all.  I get calls sometimes from people looking to sell but I tell them I'd wait because they won't get much.   Low grade logs barely cover the cost of the logging and trucking, never mind a few bucks for the landowner and some profit for the mill.  

[Ron Scott]

Mill closings is becoming a national issue in our wood supply. Mexico alone is a big wood products buyer from the U.S. We supply 50% of their wood supply. 

[Ron Wenrich]

They're nearly doubling the tariffs on Canadian lumber.  That should impact the softwood industry, not so much the hardwoods.  A definite impact on Canadian mills.

How much of an impact on the hardwoods is the European economy?  I remember when it was a high impact.  China also was a buyer of hardwoods.  China has economic problems, as well.

[Ron Scott]

Allegheny Wood Products to sell 2,700 acres to Monongahela National Forest  WDTV | AUGUST 20, 2024    John Crites, the former owner of Allegheny Wood Products, has agreed to sell 2,700 acres of land owned by his family to the U.S. Forest Service. The land, which is located along the Blackwater River in Tucker County, will be sold to the Forest Service in addition to the Monongahela National Forest. The acquisition of the land, which borders Blackwater Falls State Park, will bring one of the most scenic areas in West Virginia into public ownership. READ MORE

The E-Forester

[Ron Scott]

Two more southern sawmills are closing THE WALL STREET JOURNAL | AUGUST 20, 2023    Lumber producer Interfor said it would close two sawmills due to decreased prices for Southern yellow pine boards. The Canadian company said log deliveries would stop immediately and operations would be wound down by the end of September at its mills in Summerville, S.C. and Meldrim, Ga., which have a combined annual capacity of 330 million board feet. They are the latest casualties of a slump in lumber prices that has prompted mill closures and curtailments from British Columbia to the Carolinas and even led to the bankruptcy of one big sawyer. READ MORE

The E- Forester

[B.C.C. Lapp]

Well, just confirmed that Matson Lumber is closing in two weeks. Completely.    Tell you what boys, if the big mills can't hold on there is no hope for the small operations.  By Nov. nobody is going to be buying timber or sawing lumber around here.

[sawguy21]

Canfor is shutting down two mills in central British Columbia, it is going to hit the forestry dependent communities hard. They have little to fall back on, it is really sad.

[BargeMonkey]

The slow downs coming. Alot of our customers here are carpenters, plumbers, trades contractors on the Island, they said it's like the switch got flipped and building has come to a halt, my buddy does cabinets on the upper east side and brownstone's in Brooklyn, he's saying it's slowing down, we aren't seeing the container traffic we where. 

[SwampDonkey]

Not hearing of any local mills here closing so far. I'm sure things have slowed on lumber. Local prices have not really gone down as much as compared to the national average. But I see Kraft pulp has been on an upward trend for the last year. 

[customsawyer]

I spoke to one of the upper management guys at the Interfor mill in Perry, GA. They were recently updated with all new equipment a couple of years ago. They produce 2x material and are selling it at $310.00/M. He said they are only profitable due to how efficient they are. The other two mills were running on older equipment and both were losing over 80k per week. Keep in mind the mill in Perry can produce over a million bf per day, so we're talking a good bit of wood. One of the problems with where those two mills were located, is that the land value has shot through the roof. To my understanding they are closing the mills completely and going to sell the land. That's two mills with in a close area that are going to be gone forever. It will be a big hit to the local loggers, land owners, and the whole economy in that area. As between the two mills they have to be somewhere close to 1.5 million bf per day worth of logs that will have no where to go. It will be interesting to see what all happens.

[YellowHammer]

Have you priced concrete lately?

Gravel is now so expensive, and so therefore is concrete, that a huge concrete company (Alabama Concrete) bought a local hardwood mill that has been in business since the 1970's, 40 MBF per day, shut it down, and is now turning the limestone mountain it sits on, into gravel.  I had one of their employees come in this weekend asking for a job.

[Peter Drouin]

310.00M Thats give away prices.
Slow here too, Everything here is payed for so Im ok
The HOT ROD is my money pit.  

[Peter Drouin]

YH, It must be slowing for you too.