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.
Dang "private equity firm"🤬
That was my sentiments exactly. :veryangry: Just like those same interests buying up huge tracts of corperate forest lands and cutting with no reguard for the future.
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. ffcheesy
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.
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.
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😮
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.
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.
It's a head scratcher, where the profits can be had. Same facilities, often old dinosaurs. Same markets.
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.
So, have
Quote from: B.C.C. Lapp on August 18, 2024, 01:05:20 PMWe 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
No hogdaddy I didn't quit logging. Not sure I'd know how to quit. LOL 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.
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.
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.
Allegheny Wood Products to sell 2,700 acres to Monongahela National Forest (https://safnet.us1.list-manage.com/track/click?u=7e60c7a60d4d1bb40706127b4&id=cfe37327d1&e=4ff6a0ca18)
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 (https://safnet.us1.list-manage.com/track/click?u=7e60c7a60d4d1bb40706127b4&id=dfb1370074&e=4ff6a0ca18) |
The E-Forester
Two more southern sawmills are closing (https://safnet.us1.list-manage.com/track/click?u=7e60c7a60d4d1bb40706127b4&id=b73e20cc85&e=4ff6a0ca18)
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 (https://safnet.us1.list-manage.com/track/click?u=7e60c7a60d4d1bb40706127b4&id=1fb339580a&e=4ff6a0ca18) |
The E- Forester
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.
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.
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.
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.
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.
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.
310.00M Thats give away prices.
Slow here too, Everything here is payed for so Im ok :wink_2:
The HOT ROD is my money pit. ffcheesy ffcheesy ffcheesy ffcheesy
YH, It must be slowing for you too.
should increase business for him, I would guess.
One of my customers worked for years for a company that built and maintained gas stations. He said it was common for a big convenience store company to walk in and write a check on the spot to the small mom and pop businesses and buy them out. That check being $1.2 million or more that they could cash THAT DAY.
I can see with some mills selling out, that may be the most profitable business decision where real estate prices are sky high. Especially if you have older equipment, buildings, or management wanting to retire.
Gravel went up about $30 a load this year. But my cement bill for the shop was about the same as 5 years go. $45 less actually. Depends on where you are. Up here gravel isn't scarce any steep sloped hill is full of it. So prices creep up a lot slower. Woods ground doesn't seem to go up much around here because most lots have no mature timber, 40 years old or younger mostly. Aspen and some dominant fir might be the size of telephone poles, but nothing else is.
Concrete here is over $200 per yard. Used to be $60.
Yes, our sales are slowing, the customers are scared as all get out and are only buying what they need. Prices of everythng are going up, including the price of high grade lumber. Veneer walnut logs are $5 per bdft here, I just bought about $20K in the last month or two, and I have two customers asking for zero knot 8/4 walnut, no sapwood, and I just bought a pack of lumber for $8.90 per bdft because I'm out! Yes, a pack or wood for $9K, but I should be able to sell it for $20K and with these two customers already lined up, will make my money back by next week, and the rest should be profit.
Basically, here, the low grade is getting to be really low grade, nobody wants it, I can't move it and the high grade is getting extremely hard to find, and the price is high. If I can't find the logs, I'm having trouble finding the lumber. I have 53 species now, and I have to buy stuff I can't make, and it took me three weeks to get an order of 8/4 high grade, C and D grade KD white pine shipped by truck from Maine. I used to be able get it no trouble and now it takes me three weeks?? I don't have white pine in this area so can't buy logs. There may be some prices of wood going down, but I'm not seeing it in high grade simply because the producers are drying up, the customers still must have some of it, and I'm about the only game in town. Another local hardwood competitor just shut down their walk in retail sales a couple weeks ago and their wood was priced higher than mine, but a lower grade..
Supply and demand, and people are running scared. But my insurance keeps skyrocketing, my other costs also, I could easily see mills shutting down and selling out. Right now my property is worth way more than my operation but I'm not selling my home place. Well, $5 million and yes, maybe. I'll throw in the sawmill with the land.
it is funny. we have tons of sand, but no gravel. sand is cheap, rock not so much. last concrete I bought was 110 a yard a few years back. we are paying the freight on the rock from 2 hours away in the flint hills.
Super bad everywhere. Just about everyone is sitting on the sidelines waiting for lower interest rates. Darwin is king right now
I had some ask If I want to sell my land. They don't care about the sawmill. I can get good $$$ for it. But, where am I going to go? I did get some customers from a sawmill that burned down 30 miles from me.
Quote from: SwampDonkey on August 18, 2024, 02:25:20 PMIt's a head scratcher, where the profits can be had. Same facilities, often old dinosaurs. Same markets.
Often it's the debt they are carrying that makes the difference. At least between still making a small profit even in the lean times, or building up even more debt until the bank gets nervous. All it takes is for interest rates to spike upward, which they have in recent years, and that nice black spreadsheet the accountant keeps starts looking red.
Concrete in Alabama seems to be much higher than in AR/MO. We are looking closer to 150/yd give or take some for 3.5kpsi concrete before additives. Are you getting a high break strength?
Yes, I always add fiber and extra cement. I haven't seen $150 per yard in quite some time! The fiber was supposed to add $10 per yard and the extra Portland cement was another few bucks, I'm not sure. I poured my slab several months ago, last winter, so they added some catalyst. Either way, it was $200 per yard by the truckload. It was brutal, especially since they didn't add enough catalyst and I had to run my big diesel heaters to try to get it to cure. That was the most expensive slab I've ever had done.
The good news is that I have my own gravel pits here on the property for river rock, but it is unsorted. However, it is saving me a ton of money right now.
Here in NW Arkansas its been around $150 but at times impossible to get. Walmart has been building a new corporate campus for a couple of years and they had every concrete truck in the area running 24-7.
Seeing some cross laminated timber (CLT) construction. Right now more expensive than steel and concrete but if it takes off there will be a big demand for SYP.
They've never spiked here, maybe up to 5%-6% from near nothing. The 1980's with 18% interest makes it look quite manageable. Banks still don't offer a consistent saving account interest, they give it to you short term and have you open a new account, then it plummets in 6 months. I don't know what is up with that, just pay it on the existing account. Is their some kind of government scheme they've hatched to make money? Who knows. There are some folks better at money management than others. But working with the same capital and markets deals the same cards. Being short term seems to be where the money is.
Meanwhile postage rates went up 8% this year and slated to rise 25% next January. It's getting ridiculous. All my packages now come 3rd party. FedEx used to hand off parcels to Canada Post, now they come to the door.
Quote from: YellowHammer on September 09, 2024, 09:53:00 PMYes, I always add fiber and extra cement. I haven't seen $150 per yard in quite some time! The fiber was supposed to add $10 per yard and the extra Portland cement was another few bucks, I'm not sure. I poured my slab several months ago, last winter, so they added some catalyst. Either way, it was $200 per yard by the truckload. It was brutal, especially since they didn't add enough catalyst and I had to run my big diesel heaters to try to get it to cure. That was the most expensive slab I've ever had done.
The good news is that I have my own gravel pits here on the property for river rock, but it is unsorted. However, it is saving me a ton of money right now.
Sounds like not much competition on the cement market there?
Quote from: SwampDonkey on September 09, 2024, 02:52:52 PMGravel went up about $30 a load this year. But my cement bill for the shop was about the same as 5 years go. $45 less actually. Depends on where you are. Up here gravel isn't scarce any steep sloped hill is full of it. So prices creep up a lot slower. Woods ground doesn't seem to go up much around here because most lots have no mature timber, 40 years old or younger mostly. Aspen and some dominant fir might be the size of telephone poles, but nothing else is.
Went up 25$ a load here 150
Keep in mind the post I made earlier about them selling the wood at $310.00/M. It is kiln dried and planed. Also keep in mind that they are sawing 1 9/16"x3 5/8" or so and selling it as a 2x4. So after you take into account that they are selling 3.5bf and getting to call it 5.33bf then the numbers are a little different. They are getting around $420.00/M for the actual wood they are cutting. I still think it's to cheap but it is what it is. Just wanted to point this out. I know I was contacted to do some resaw work for West Fraser here in Dudley, GA. and all of the work was based off of 5.33 bf for their 2x4.
Also keep in mind there is recovery of clean planer chips and clean sawdust for the pulp market. That's how mills run up this way and waste wood is pelletized at some mills here.
It's still too cheap, even when selling air. I get more than that just for cutting customer's logs. I don't charge for air, I'm Just too honest.
Old saying; liars can figure but figures don't lie. ffcheesy
Jake, I didn't realize that they were figuring 5.33 on their 2x4's. I don't know what they actually saw their boards at, but I'd bet it is only a 1/4" over finished dimensions.
Just the way the industry is setup.
Hard to get fasteners and brackets to fit the framing and such if the pieces are not those reduced dimensions.
They have them. Just get the ones for LVLs. ffsmiley
Barbender they don't even go a 1/4" over. I think it's a 1/16" on thickness and 1/8" on width. They are also only drying to get it below 20 percent moisture. Normally around 18 or 19 percent. Most of them run what is called continuous kilns and the wood is dried in about 24 hours. The West Fraser mill in Dudley, GA. is all in a climate controlled building. The only part outside is where the logs are. Once the log hits the trough then it's inside. The log will blow through the mill faster than you can walk, and will be stacked on sticks before you can walk to the other end. It is automated and optimized. Of course they spent over 240 million to put that mill in. The Inerfor mill in Perry, GA. is supposed to be even faster. All of the lumber is graded to SPIB standards. Which don't set the bar very high.
The prices I spit out earlier is for #2 lumber. They get a little better for Prime.
Quote from: Peter Drouin on September 18, 2024, 05:29:50 AMThey have them. Just get the ones for LVLs. ffsmiley
Not available at any hardware store around here. Be special order as LVL use is used minimally here. Used as carrying beam wood in modern truss work in homes. I have 2 of them beams in the house. Not building an entire house with it.
Jake, whatever their overage is (actually it would be underage in this case, wouldn't it?😊) I bet they have it figured in 1/64 increments, right to a science. A small measurement makes a massive financial difference with the volume those monster mills are producing.
Quote from: SwampDonkey on September 16, 2024, 02:11:39 PMAlso keep in mind there is recovery of clean planer chips and clean sawdust for the pulp market. That's how mills run up this way and waste wood is pelletized at some mills here.
Similar here. I reckon the only thing that's not used is the pine scent, and if they could bottle and sell that, they would. At the smaller local mill, the bark goes for landscaping, the sawdust and planer shavings as animal bedding, the slab wood as firewood. (it's not great firewood, but it's cheap and they drop it off by the truckload, so it all gets sold. Those byproducts aren't making any huge profit, but it's a few more $ for each log they process, and that can be the difference between making a profit and a loss.
But several medium sized mills have closed around the country in the last few weeks. High wholesale electricity prices over Winter have been blamed as the last straw. The largest mills have co-gen plants, burning their waste wood, so haven't been affected, or maybe are even making a profit by selling excess generation back to the grid at high demand times?
Quote from: SwampDonkey on September 18, 2024, 05:10:08 PMQuote from: Peter Drouin on September 18, 2024, 05:29:50 AMThey have them. Just get the ones for LVLs. ffsmiley
Not available at any hardware store around here. Be special order as LVL use is used minimally here. Used as carrying beam wood in modern truss work in homes. I have 2 of them beams in the house. Not building an entire house with it.
Most lumber yards have them around here. I have seen houses with all LVL for floor joses.
Things are bad around here. IFG won't buy a private log. The prices from the other guys aren't worth taking. We've been on wildfires for couple months and all the loggers I've talked to are hoping to stretch out season because they have no logging to go back to. Someone has to survive but it's gonna get lean in the meantime.
Not good.
Another bites the dust, pixelle in Chillicothe Ohio. Been a pulp mill for 214 years, as of today they have 44 days till close.
Well, an Ohio senator put the equity firm on blast so it's pushed out to the end of the calendar year. Hopefully another buyer will take over, gonna crush this area.
Here they keep dropping their rates. I think the latest rate drop recently is 35%. That's because industrial rates supposedly have been higher than in any other province. All residential has gone up and going up some more. Notice I have here is 9.7% increase. We are up to 14.76 cents/kwh now.
I worried for the few mills we have left here , things are not good for them and the future does not look great for quite a while . I hope I'm wrong and it turns around fast
Interesting news for us in VA, big hardwood mill cut off all loggers and is cleaning up all logs on yard. Rumors are the largest companies on east coast are preparing to shutter 20 mills, one mill of 100k bdft is down to buying 4 trucks a day to keep a skeleton crew busy. Nowhere to put lumber.
This will roil markets, stave will find itself with no supply.
Quote from: ehp on April 29, 2025, 12:24:36 AMI worried for the few mills we have left here , things are not good for them and the future does not look great for quite a while . I hope I'm wrong and it turns around fast
Has China cut Canada off?
Right here has not sold anything to China in a long time, but there have been a few from there now looking to buy veneer here, Only problem is not many guys trust dealing with them
Land owners here need to understand standing timber price has gone down , Had another bush come this way today but at the price they think its worth it can stay standing
QuoteQuote from: Peter Drouin on 19/09/2024, 06:08:53
Most lumber yards have them around here. I have seen houses with all LVL for floor joses.
Not here, 100% special order at that magnitude. Plus we have a truss plant here that supplies all the new construction going on. You check the websites of those places, no LVL stocked at any, including Homedepot.ca
Wooden I-beam plant here went bust 25 years ago, needed decent black spruce 2 x 4 for the tops and bottoms. The vertical wood I think came from LP. Spruce sawmill was on the same site as I beam plant. She all went down. Had operated 25 years. Wood supply ran out locally and market down turn, had to pay too much for wood to get it into the mill. Wasn't sustainable as a second large sawmill near there also was closed and moved to Maine 10 years ago.