Another mill closing

[sawguy21]

This is getting ugly. Tolko Industries, a locally owned company and major employer in the area is permanently closing the Kelowna mill in early January putting 174 people out of work which does not include the logging crews, truckers, and suppliers. This is gonna hurt! I imagine Gorman Bros, the other major mill in the area, will go after the timber licences if they have the capacity

[Ed_K]

 I see add's for a big logging contractor in Maine are having an auction soon. It is getting harder an harder to make ends meet in the logging business.

[moodnacreek]

Must be our trade wars are having effect. There is never a win-win. It has even hurt little old me. The last few years I could resell high grade red oak, not this year.

[Southside]

Sooner or later that whole China issue was going to come to a head.  Better to fight on your own timing rather than the other guys.  

[Woodpecker52]

We gave up the shirt (garment industry) off our backs, the shoes off our feet, the tools out of our hands, the furniture we sit on. >:(  When they sink our ships and bomb our shores those things made in china will not look like such a great buy!!!!! ;D

[barbender]

I remember a WWII vet saying, when he was a teenager, scrap steel was really high because it was all being exported to Japan. Then, as he said, "they sent it all back to us."😑

[mike_belben]

It is not random or coincidental.  It is intentional, planned out war by other means that must look like just the way things turned out, in order to avoid retaliation.  And its nothing new at all.  Nor is it going to stop.  Conquerors always go after their enemies markets and currency.  

Thats probably all i can really say here. 

[sawguy21]

The big problems for us are weak markets and timber supply. The pine and spruce beetles plus fires have decimated the forests forcing the mills to haul lower quality logs greater distances. In the past forests have been poorly managed allowing timber to be harvested faster than it can regenerate, it's come back to bite us. Replanting has been spotty at best.
The industry lays the blame on the provincial government and high stumpage fees, the tax they pay on every tree harvested, but that is only part of the story. If they are lowered we get accused of dumping and the fight is on in international court. There are no winners.

[nativewolf]

I really don't expect much good to come of the China Tarrif fight.  Good to bring up the issue but the handling of it has been perplexing to say the least.  The time to have dealt with it was during Reagan and then GW Senior.  Now ..very hard.  China struck back at the few things they imported, commodities and airplanes.  Boeing sunk themselves with the 737 max disaster so that left ag, oil, forestry in that order taken the whole brunt of China's ire.  And for what... we've spent $70billion on ag subsidies and to date.  I expect any agreements to actually just get us back to 2017...maybe. Technology has beens stolen, factories exported, etc.  The world is awash in wood products caused in part by tariffs on our wood allowing Russia to gain a market.  A terribly unmanaged resource but a big one.  Softwoods by the millions of acres.  Birch and Aspen too.  

It is a sad day when the US is a commodity exporter like a third world country. @sawguy21 Sorry to hear of your local mill closing, BC certainly seems to be contracting.  I see equipment and mills for sale all of the auction sites.  Long haul distance, international ruling, invasive pest, etc can all put a damper on cutting that is for sure.

All that said we may be seeing a crack open on export log sales.  We'll see.

[mike_belben]

I cant comment a whole lot on canada and im sure there are true natural factor that influence events.  I was more talking about china and their economy thats 100% managed by the communist party.  They weaponize their markets and their currency in order to weaken their perceived foes.  

Scrap booms and busts of the last 15 yrs for example,  have all been china engineered for sure.  It makes capitalist operators invest in multimillion dollar specialty equipment that they later cannot afford or sell during the bust because its industry wide.  So they go under and jobs go with it.  Sawmilling fits the same mold.  Crank up the export purchasing for a decade then cut it off by surprise.  Whos gonna buy your new mega mill if no one is buying lumber?  No one.  You go bankrupt.  Or worse, they buy it at auction price and slave wages.

[Skeans1]

@mike_belben 
Most export of wood is done in round form because it's cheaper faster and more effective then in slabbed forms. Some of the wood can't be exported such as state and fed sales here which would feed a mill like this a domestic mill but here a huge issue like up in BC it looks better up in smoke then as a usable product and as revenue.

[BargeMonkey]

 I saw an article on FB about a central NY sawmill, how they where cutting their guys back to 40hrs a week and the one guy cried how he wouldnt get his bonus this yr for a 2nd vacation. Alot of this we did to ourselves, prices could only go so high for so long. 4yrs ago I had 2 chinese guys get out of their car in my sawmill yard, broken English they wanted 20 containers of ash a month, I thought they where nuts 😂 I've got to pack 4 containers by the 13th and we are putting a skidder tire on in the morning 😂 The industry just in my area that's went overseas is huge, Amsterdam, Gloversville, GE in Schenectady. 

[donbj]

"how they where cutting their guys back to 40hrs a week and the one guy cried how he wouldnt get his bonus this yr for a 2nd vacation. Alot of this we did to ourselves,"

Good grief. Is this the American Dream?

[Ianab]

It is a sad day when the US is a commodity exporter like a third world country

I wouldn't be so quick to knock exporting primary produce. Some may argue the NZ is a bit "3rd world", but our economy is kept afloat by selling milk products, meat and wood, to anyone that will buy it. There is a natural wariness of dealing with the Chinese, but we want our electronics and cheap clothes the same as everyone else. NZ actually has a positive trade balance with China, because they like our milk powder (it's not tainted with melamine), they need wood, and are getting rich enough to be able to buy our meat.  They are also rich enough to buy NZ, but there are laws in place here that make that more difficult for them. 

America became a super power for 2 main reasons, plenty of natural resources, and not having the snot bombed out of her cities in WW2. Russia had some of the same advantages, but went down a misguided political path that didn't really work out as planned. England / Germany / Japan recovered, but didn't have the large resources and population. 

But those natural resources are still there, and seemingly underutilised. Is it better to correct a trade imbalance by restricting trade (in both directions as a "trade war" does). Or increase the value / amount of product that you sell?  

NZ has tried the restriction/tariff thing in the past. Didn't work as our market is so small we only hurt ourselves. Small population and whacky politicians means we can experiment with things much quicker than a huge economy like the US. (and roll back the mistakes and try something better) 

[Gary_C]

America became a super power for 2 main reasons, plenty of natural resources, and not having the snot bombed out of her cities in WW2.

The US became a super power long before WW2 and it was for many reasons like innovation, productivity of workers, free markets and yes, abundant natural resources. The freedom to "think out of the box" in the US along with free markets is unmatched anywhere in the world. Unfortunately after WW2 we have sold much of our intellectual property to friends and allies while China has set out to steal what we would not sell.

The Russians (Soviets) could never match free markets with a central planned economy and eventually lost a good part of their natural resources with the breakup of the Soviet Union. Even though the Russians are trying to claw back some of those natural resources by force they are still saddled with a bunch of newly rich Oligarchs that run the country and economy. Thus the Russians are still pretenders when it comes to super power status.

If the only thing that comes out of these long overdue trade talks is ending the theft of intellectual property they will be huge success.

[quilbilly]

The import/export thing gets argued a whole bunch. The only thing I can say is I don't know a single person who thinks everything should be milled domestically that only buys domestic products, whether it's clothing, utensils, etc.

We simply sell to the highest paying mill, have to or we do a disservice to the landowner and ourselves. It's a nice thought that we can mill everything domestically, but when I look at what Mills pay that don't compete with foreign buyers it is peanuts. The mountain west region gets payed far less than the pnw for raw logs. Landowners have it good here except for state enviro restrictions. Mountain west is also one of the fastest growing regions in the US too.

[nativewolf]

The import/export thing gets argued a whole bunch. The only thing I can say is I don't know a single person who thinks everything should be milled domestically that only buys domestic products, whether it's clothing, utensils, etc.

We simply sell to the highest paying mill, have to or we do a disservice to the landowner and ourselves. It's a nice thought that we can mill everything domestically, but when I look at what Mills pay that don't compete with foreign buyers it is peanuts. The mountain west region gets payed far less than the pnw for raw logs. Landowners have it good here except for state enviro restrictions. Mountain west is also one of the fastest growing regions in the US too.

Starting next month we are stuffing containers right on the landing.  Off to Vietnam, Korea, China, Pakistan, India, Germany.  

[nativewolf]

America became a super power for 2 main reasons, plenty of natural resources, and not having the snot bombed out of her cities in WW2.

The US became a super power long before WW2 and it was for many reasons like innovation, productivity of workers, free markets and yes, abundant natural resources. The freedom to "think out of the box" in the US along with free markets is unmatched anywhere in the world. Unfortunately after WW2 we have sold much of our intellectual property to friends and allies while China has set out to steal what we would not sell.

The Russians (Soviets) could never match free markets with a central planned economy and eventually lost a good part of their natural resources with the breakup of the Soviet Union. Even though the Russians are trying to claw back some of those natural resources by force they are still saddled with a bunch of newly rich Oligarchs that run the country and economy. Thus the Russians are still pretenders when it comes to super power status.

If the only thing that comes out of these long overdue trade talks is ending the theft of intellectual property they will be huge success.

I simply have 0 faith in China's ability or willingness to reign in the theft of IP.  Not that there is much to steal anymore.  I think US companies have to be much more careful allowing a chinese company any access to IP or facilities.  Fortunately for me I have no IP.  I have logs....
Russia also has lots of logs.  Logs, Diamonds, oil, gas, AL, iron, and water.  They lost a bit of oil and gas and coal but net net are a huge exporter just as in 1910. 

[sawguy21]

Raw logs leaving the country is one of the big beefs here but if that is what the market wants the mills are not going to get them anyway. The loggers and truckers are working at least in the short term.
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.

[Puffergas]

How do you stuff a container full of logs? Only the rear opens up, I thought.

IP theft, I worked for a company that almost did that. They were so excited (greed) to get some of China's business that they were going to violate employees rights and show the Chinese around to any part of the factory that they wanted to see. Finally someone stopped it. Very little common sense left.

In my opinion it boils down to how we reward an employee. A manager will get a nice bonus if they raise the bottom line by 6% this year. So they raise it by 6.19% this year but compromise something like IP to the Chinese. Bingo, he/she gets the bonus and China gets some IP. The company is happy, the employee is happy and China or what ever is happy too.

[LogPup]

Google it. They have video of it.  They have to be careful.  We had one log yard blow out both side of a container about 1 foot.  They ended up paying for the container.  Used to do a lot of containers here in upstate SC but they were having problems with brokers slow paying.

[Ianab]

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

[timberking]

Neat video.  Reminded of handling short wood with a Taylor loader and slinging off trucks onto trailers.

[Puffergas]

OK, easier than I though.

Loading Logs into 40' HC Container - part 5 - Brvno doo, Nasice, Vukojevci, Croatia - YouTube

[nativewolf]

take a heavy tracked skidsteer, grapple on front.  Grab log on one end, pick up, drive it in fat end first, repeat, add 4500bdft, close doors, repeat.  Or you can get a container loader cradle, push whole in with heavy front end loader.  

Lots of ways but speed matters, one hour to load it.