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Local timber industry bracing for tough times

Thursday, October 23, 2008 11:32 PM PDT

By Erik Olson and Andre Stepankowsky

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Weyerhaeuser Co. and other timber industry officials Thursday said lumber prices have dropped to levels not seen in a quarter century due to the slumping housing market, and they don’t expect any quick turnaround.

Weyerhaeuser predicts fewer than 500,000 housing starts this year nationwide, a 72 percent drop from the 1.8 million home starts in 2006, Fred Kuhn, mill manager of the company’s Longview-based St. Helens unit, told a group of 30 public officials and civic leaders at the Cowlitz Expo Center in Longview.

So far, the company’s new, highly efficient sawmill in Longview continues to operate, but other lumber mills in the region are shutting down.

A spokesman for Oregon forest owners and wood manufacturers says the economic meltdown is going to be harder on the state’s timber industry than was the early 1980s recession that caused a major shakeout.

Ray Wilkeson, legislative director of the Oregon Industries Council, also said the situation caused by the nation’s weak housing market will get worse before it gets better.

“The worst thing is we don’t really know when we’re coming out of it,” he told The Associated Press. “There are more foreclosures predicted. Until the housing market stabilizes and the oversupply of housing is absorbed, we’ll see new construction stay pretty bleak.”

The price of green Douglas fir 2-by-4s dropped below $150 per 1,000 board feet this week, according Wednesday’s Random Lengths lumber market report. That’s the lowest price since 1982, when the price dipped to $144 per thousand that October, said Joe Heitz, assistant editor for Eugene, Ore.-based Random Lengths.

“These are extremely weak levels. It’s very tough for mills to operate at these prices,” Heitz said by phone Thursday.

Framing lumber, which was selling for an average of $474 per 1,000 board feet four years ago, was now down to $232 last week, according to Random Lengths.

Low prices and low demand has prompted Weyerhaeuser to curtail production and send most of the workers home for a week at its lumber mill in Warrenton, Ore. The mill has avoided layoffs so far, but it plans to stop production for weeklong periods during the holidays.

Hampton Lumber has laid off 55 workers in its Willamina mill and curtailed production at its Tillamook mill.

“Nobody really wants the lumber right now,” said Steve Zika, chief executive officer of Hampton Lumber. “Prices are at historic lows. Most everybody in the industry is taking a week down here or there.

This fall was an inopportune time for Weyerhaeuser to launch its new high-tech saw mill on Industrial Way next to its existing planer mill. The consolidated mills employ about 225 workers.

The new mill is one of the most advanced in North America, requiring only 38 workers for operations while the 32-year-old Green Mountain mill in Toutle that it replaced needed 150, Kuhn said. The shutdown of Green Mountain cut 130 jobs from Weyerhaeuser’s payroll.

The start-up curve for the new mill is expected to last into the end of next year, Kuhn said.

Despite the poor lumber prices, the new mill represents the company’s commitment to Cowlitz County, Kuhn said.

“It’s Weyerhaeuser betting on us for the future,” Kuhn said.

A piece of the company past soon will disappear, though.

The company held an auction in September for all the equipment at the Green Mountain mill, and it sold at “scrap metal prices,” Kuhn said.

The mill will be demolished at the end of this year, he said.

Related articles:

New Weyerhaeuser sawmill up and running  (July 2)

Last call for Green Mountain rail route  (May 2)

Time running out at Green Mountain  (March 16)

crowsfeet wrote on Oct 24, 2008 6:44 AM:

" This is when a cellulose fiber into ethanol plant in the mint field would make Weyco happy. Trees into fuel, the future is growing. How about another hog fuel boiler with a giant turbine/generator hanging on the end of it, trees into electricity, the future is growing. "

Overeducated wrote on Oct 24, 2008 7:13 AM:

" The only good news is that due to their landfill in our county and this major mill investment, the Longview mill will probably stay open longer than the rest of Weyco's mills. Sure hope the grain terminal goes forward. "

Silly Billy wrote on Oct 24, 2008 7:18 AM:

" Good thing they built that new lumber mill that's all optimized. However, we shouldn't complain too much about it, cause the first that'll go will be you and I, just as they did up at Green Mt. -- Got Wood? "

bretharte wrote on Oct 24, 2008 7:45 AM:

" No fear, obama is here, this slump will halt Jan. 22nd. "

Lucky7 wrote on Oct 24, 2008 9:07 AM:

" Is there any industry anywhere that's not bracing for tough times? "

Mr40cal wrote on Oct 24, 2008 10:18 AM:

" Sounds like a good time to build a new saw mill at the port! "

TDN Bad Boy wrote on Oct 24, 2008 10:42 AM:

" Don't worry workers Da Tax Queen has you covered. Remember Da Tax Queen is your friend. Who needs friends like her? She is the only governor that I know who can take a $2 billion surplus and turn it into a $3.3 billion deficit and then have the nerve to blame others. Da Tax Queen is accountable for nothing. Vote Rossi and this might not happen next time. "

Kem Cho wrote on Oct 24, 2008 11:10 AM:

" Appreciate WY Mill manager's honesty. It is shame you do not hear this from corporate Weyerhaeuser. "

Roudyruss wrote on Oct 24, 2008 11:33 AM:

" Hey BB, didn't Bush Jr. do the same thing to the surpus after Clinton? "

Kelso Guy wrote on Oct 24, 2008 11:49 AM:

" bad boy you are a broken record, nice to see you keeping up with your identity though, sounds like you actually work for the McCain and Rossi campaigns,...ever thought of being a campaign guy? "

LITTLE BROTHER wrote on Oct 24, 2008 11:58 AM:

" So whats happening with our two oter local sawmills...Weyerhaeuser isn't the only game in town. Why can't we hear from our local business's . Even one is owned locally.. "

louie wrote on Oct 24, 2008 12:20 PM:

" My guess is we are in for a turndown GLOBALLY. "

pearl wrote on Oct 24, 2008 1:06 PM:

" bretharte do really think obama can solve this economic plung on the 22nd I suspect it'll take at least two or three good presidents and all obamas going to do is just kick the door open IF he can OH and by the way what if MMcain gets in America is in for a long hard time and its only going to get worse before it even starts to get better. This is going to take a long time to get the econemy back on track. "

El Gabilon wrote on Oct 24, 2008 2:16 PM:

" Vengence is mine sayeth El Gabilon. We want to see the people who caused this mess, no matter who, found, tried and if found guilty imprisoned. The fancy pants bankers and wall street wizzards need to pay for their crimes. One might start with Mr. Greenspan who failed to regulate business when in office. So do the republicans and/or democrats who supported loosening up of regulations that did not protect investors of the people. If we vote for McCain it will be because the democrats took the impeachment of George W. off the table. Of course we know that nothing will be done until the people join together and demand their elected representatives, REPRESENT THEM. As we understand it however, no snow ball ever survived in hell and the people will never get together because they are too busy listening to rhetoric, lies and bull, than demanding SERVICE. "

cheney119 wrote on Oct 24, 2008 4:23 PM:

" " Don't worry workers Da Tax Queen has you covered. Remember Da Tax Queen is your friend" There's a local crisis and this simpleton republican whats to talk politics. The reduction in housing is a disaster for lumber companies. Want to blame somebody? Why don't you look in the mirror. "

Louie wrote on Oct 24, 2008 5:30 PM:

" A new President, likely Obama, cannot do it all alone. We, "The United States of America," must make every effort to help. This means quit all the abuse of credit cards, conserve on gas, natural and petroleum based, turn lights off and thermometers down. These are just a couple of ways to be good citizens. Come together like I know we can. "

pangborn wrote on Oct 24, 2008 8:24 PM:

" All of the down turn is because of coperate greed. Coperate equals republican. "

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