Turnaround expected for timber industry
MONTICELLO — The timber industry has slumped slightly in thelast year, but area consultants believe the market may soon seesome gains.
“It’s like the cattle business or anything else — there arehighs and lows,” said Jimmie George, president of the LawrenceCounty Forestry Association and member of the board of directors ofthe state association.
The timber market, as a whole, saw tremendous expansion sincethe 1960s, George said, and an eventual downward turn wasinevitable.
“It’s sort of a level to downward trend, but even with thatthere have been a few ups,” he said.
George said the market for pine timber is “off some,” but not asmuch as the pulpwood and smaller woods.
“Quality hardwoods are still at a good price,” he added.
Mark Dale, a forestry consultant and owner of Total ForestryManagement, said weather plays an important role in the industry,and the area’s last three winters have been pretty dry. This meansthe supply is easier to get to and more lumber is being sent to themills. This keeps prices down, he said, because the timber isessentially based on supply and demand. Large supply, therefore,lowers demand and prices.
The market may pick up soon, George said, if the industry feelsreassured by a decision to be made soon by the Department ofCommerce. The federal department will decide whether or not toreinstate the Canadian Timber Agreement, which expired in March andlimits the number of board feet the Canadian government canimport.
“That uncertainty still remains,” he said.
The agreement is very important to the American timber industry,George said, because it “levels the playing field.”
“With the expiration of that agreement,” Dale said, “Canada cansend an unlimited supply of timber this way.”
Unlike the free market economy of the U.S., the Canadiangovernment owns all the timber land there and uses it like a laborsubsidy. When unemployment reaches a certain level or mills needmore lumber, the government puts more workers to harvesting theforests.
“This gives them an almost unlimited supply of manpower to floodthe market,” Dale said.
Both George and Dale were confident the Commerce Departmentwould see the need to continue limiting Canadian imports andpredicted a strong timber market for years to come.
“I think the outlook is very good long-term,” George said. “It’scertainly a changing environment.”
George cited increasing consumption coupled with a rapidlyexpanding world population as the main reasons for his optimism.These would offset any minor negative fluctuations. Improvementsmade with the industry will also play a role.
“I think we’ve done a real good job of growing timber,” he said.”We can grow so much more per acre now than we used to. I thinkthat has really helped. People know the value of timber now andthey’re doing a much better job of (caretaking their crops).”
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