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Harsh Winter Hurting Timber Industry
Stalled home construction, harsh conditions and less available timber are creating headwinds for production
An employee organizes stacks of lumber at the Plum Creek Evergreen stud mill. - Beacon file photo
In the face of treacherous winter weather and slowing home construction, timber companies are experiencing a frigid start to 2014.

U.S. housing starts dipped 16 percent last month to the lowest level since September, according to figures released by the Commerce Department last week. Economists have blamed the frigid, snowy winter as the primary culprit.

Last week Plum Creek, the largest timber company in Montana, reduced its weekly work schedule from 40 to 30 hours at plywood plants in Columbia Falls and Evergreen. The cuts affect 320 employees — 160 at each plant — and resulted from months of inclement weather conditions that obstructed harvest efforts and led to a shortage of Douglas fir and larch logs, according to the company.

“The weather’s been tough,” said Tom Ray, vice president of Plum Creek’s Northwest Resources and Manufacturing.

Ray said the issue dates back to the summer, when fire season halted cutting in some areas. Then came the wet fall, and once again some sites struggled to fully operate. Winter has brought more than four feet of snow across much of Northwest Montana, and Ray said the recent cold spells that pummeled the valley canceled logging operations for several days.

“We haven’t been able to deliver any logs and have been fighting this weather,” he said.

The upcoming “breakup season” — when logging operations pause during the wet spring months until roads are properly navigable and won’t be damaged by trucks — also played a factor in the decision, Ray said, describing the work-hour reductions as a “proactive step” to avoiding greater cuts during the typical shutdown period.

Ray said he expects the 10-hour reductions to end by May.

Meanwhile, Plum Creek’s other sites have enjoyed positive supplies and production, Ray said. The Evergreen stud sawmill, which reopened last year and employs roughly 30 workers, has operated a few 50-hour weeks in past months, he said.

Also, both the Columbia Falls sawmill, which employs 115, and the medium density fiberboard (MDF) plant, with roughly 170, have seen more than adequate production, Ray said.

“The markets are good for all of our products,” he said. “Just the weather has been an issue with log flow but we look forward to getting back to normal hours in the spring.”

Pyramid Mountain Lumber, Inc., which employs 150 workers in Seeley Lake, has seen similar dips related to fewer home starts, but the company has been able to maintain its 50-hour workload, according to an administrator.

“The bad weather nationally has kind of slowed down some of the activity in sales. Everybody is buried in snow,” said Gordy Sanders, resource manager with Pyramid. “But the expectation is the market will gradually improve as the weather changes. Prices aren’t bad. The biggest challenge is the availability of raw materials.”

A longstanding point of contention within the industry, availability of harvestable timber remains a persistent point of contention.

National Forest Service timber harvest volumes in Montana were 10 percent lower last year compared to 2012, according to U.S. Forest Service data. The agency continues to struggle with widespread mountain pine beetle mortality and ongoing environmental litigation involving timber production.

“We certainly have a lot of inventory, but being able to turn that into supply is always a challenge,” said Julia Altemus, executive vice president of the Montana Wood Products Association, a statewide promoter and advocate for the timber industry.

There is currently 250 million board feet of timber tied up in litigation, according to Altemus. That number is down from the recent high of 500 million board feet in 2006.

State analysts are forecasting a positive outlook for the timber industry in 2014, though there is lingering uncertainty because of the availability concerns. Todd Morgan and other economists with the University of Montana Bureau of Business and Economic Research wrote in their annual economic report that wood products prices are expected to rise this year and the housing market will enjoy a continue recovery, boosting timber needs. Yet the availability of actual logs that can be harvested is a “major challenge” to Montana mills that have unutilized capacity, and could have dampening effects on the overall forest products industry.

“Without a reliable and affordable supply of timber, mills cannot respond to increasing demand for wood products,” the BBER economists wrote.
 
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