2022 Was Good For Some, Not For Others; ’23 Portends Challenges And Hope

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In assessing the Hardwood lumber market for 2022, lumber providers participating in this forecast took two approaches. One was to say that this was a successful year. The other was to say that 2022 was a great year until midway, at which point things didn’t go so well.

One participant stated, “We always like to look back on history to help us plan for the future, but our industry has faced many unprecedented events recently, so we have no real track record to gather information from.”

Another lumberman called 2022 “overall a good decent year.”

“In order for 2023 to be successful,” said still another, “the overall market and demands will need to bounce back.”
Said one lumber representative: “At the end, everything will stabilize, and it will begin to take shape.”

Joe Gori
Joe Gori

Joe Gori
Lawrence Lumber Company
Maiden, NC

2022 definitely had a great start but started taking a drastic turn towards the end of the 2nd quarter; prices started to crumble and fell very fast.

We expected prices to start falling sooner or later as they went up to record highs in 2021, but they fell much faster than anticipated. Every week we saw it falling, and you find yourself with high cost inventory that now you are having to sell at lower prices if you want to be in the market.

At the same time exchange rates with the EU and UK began to be a negative effect for the export market as the dollar is gaining strength and creating difficulties with our export customers as that is going against them.

To keep going with challenges let’s not forget freight, especially domestic freight. The cost from our yard to the ports is greater than the ocean freight to Europe or Asia, and that is also making prices higher.

So, if you see it all in a big picture, prices are falling, freight is increasing; what more challenges can we face?

But at the end, everything will stabilize, and it will begin to take shape, so it’s always like this; if there is a big increase go ahead and plan for the decrease.

The Poplar is our “Bread” quick turn around, always requested everywhere, but this year despite the price fall, Hickory has been a strong one, and a great one for us. We have great sources and the prices have been pretty stable.

Our ripping and surfacing line has also been a great addition for us. We are using it very often and have a new customer base that buys surface and ripped lumber, so this has been helping us a lot and customers have been liking our production.

As mentioned, the transportation for inland has been difficult, more for the prices that are very high, or else availability is OK, we are able to get trucks every day.

The ocean freight instead has been much better. Quicker services and booking are not rolling as much as they were, so that’s good and stable. So, we hope this keeps going, but I’m not trying to be pessimist but I’m sure rates will definitely increase soon.

The only thing about exporting that worries me are the exchange rates due to a strong dollar. I believe there will be orders to export but not as much volume. They will buy what they need, instead of taking an extra container to have in stock.

2022 Was Good For Some, Not For Others; ’23 Portends Challenges And Hope 1
Eric Porter

Eric Porter
Abenaki Timber Corp.
Kingston, NH

I believe that 2022 will turn out to be one of the most challenging years in recent memory. We started the year in great shape and continued experiencing record breaking months until about mid-June. Then everything seemed to stop and the “race to the bottom” was on. The rest of the year will be trying to hold on to whatever gains we have made in the previous 18 months. As of this writing I can say that we are hoping that we have reached the bottom as far as pricing goes and we are working to get back to positive numbers by the end of the first quarter in 2023. For 2023 our challenges will be getting the material we need at numbers that work with what we are able to get when the material is through our processes.

Transportation still remains an issue, but we have seen that open up a bit to date and we are hoping to see that trend continue.

Our customers include manufacturers of Hardwood products, distribution yards, and importers of American Hardwoods. Biggest sellers were cabinet manufacturers, flooring companies, and distribution yards as well as Asian importers.

We installed all new Messersmith boiler controls for our wood waste system in New Hampshire. They are much more efficient and user friendly as well as easier to maintain.

We are constantly dealing with lack of enough labor at both of our plants.

In shipping, the port issues and lack of containers and vessels are big issues for us.

As an exporter, we simply deal with tariffs as they happen. We have kept in touch with our local legislators and use the Hardwood Federation for help and tips.

Brandon Clark
Brandon Clark

Brandon Clark
Clark Lumber Company
Red Boiling Springs, TN

The first half of 2022 was just as good as 2021 but it has been all downhill since July. We are seeing less and less demand for lumber primarily overseas, but domestic demand has slowed also. Export freight is a major challenge at the Nashville rail yard which is another added challenge. In order to have a successful remainder of this year and 2023, we have to have a steady demand for the grade lumber that is being produced.

Domestic distribution is the strongest sector we have been selling to with domestic flooring coming in second. Crossties and cant customers have been steady as well.

A new Cleereman carriage was installed at one of our locations to replace the older one that had been running for 20 years. The upgrade will increase production by 5-8 percent without adding any employees. This will improve efficiency for that location. Two new Hurdle mills are being installed at other locations to replace older equipment there also.

Having enough employees was a struggle for 2021 and the first half of 2022 but it does seem to be getting better now. We are fully staffed at each location.

In transportation, the entire process of trying to get containers and then get them to the rail and the boat has been extremely challenging for the last two years.

Current and expected tariffs would probably finish off what is left of the export market we have now.

2022 Was Good For Some, Not For Others; ’23 Portends Challenges And Hope 2
Wendell Cramer

Wendell Cramer
W.M. Cramer Lumber Co.
Connelly Springs, NC

The first part of 2022 was exceptional with prices going up and from August until now going straight down so overall a good decent year.

The first part of the year everything was selling well except Red Oak and Cherry and now everything is pretty slow.

Having enough employees is a big problem. We are just going slower on everything.

In transportation and shipping, prices were so high early this year. They have now come down in trucking and water freight.
Export shipments need to pick up so customers can share better prices on shipments.

2022 Was Good For Some, Not For Others; ’23 Portends Challenges And Hope 3
Troy Brown

Troy Brown
Kretz Lumber Co., Inc.
Antigo, WI

Though there were challenges in 2022, it was successful. We have been able to replenish our customers’ supply requirements and retain our core customers. That always falls in the success category.

Almost all of our customers are associated with the housing industry. Lumber that is manufactured in cabinet components is solid. I think a crucial metric to watch is the impact of interest rates on the housing market. If the fed gets over-aggressive in its policy, there could be some tough sledding for housing and other industries.

We have increased our custom rip services, but we stay steady with our services and products. We believe in staying with what we know and doing it to the best of our abilities.

We are finishing the installation of a new 500HP, high-pressure steam wood-fired boiler and steam turbine. The boiler will allow us to expand our kiln-drying capacity in the future and provide steam for the co-generation of electricity for the kilns and boiler. Additionally, we will produce enough steam for another co-generation unit if necessary.

Like everyone, there are challenges for hiring, but we are 100 percent employee-owned, which helps with retention.

Our biggest issue in transportation is internal. Hiring drivers that can run over the road and a log loader is a position that has been open. This becomes more important in the winter months here in the north because that is when our timber harvesting is at its peak.

We favor fair and free trade. In theory, fair trade is unattainable, and free trade is susceptible to unfair trade practices. However, the Hardwood industry relies on export markets in the current economic environment. Therefore, back to my first statement, we support fair and free trade.

Bucky Pescaglia
Bucky Pescaglia

Bucky Pescaglia
MO PAC Lumber Co.
Fayette, MO

2022 would be considered a very successful year for MO PAC lumber Co, although the last quarter is looking to be less than stellar. The Hardwood market must overcome the uncertainty that is everywhere before it can begin to equal the successes of the past two years. We always like to look back on history to help us plan for the future, but our industry has faced many unprecedented events recently, so we have no real track record to gather information from. We are also experiencing higher production costs from increased wages, insurance, and energy costs that will impact profitability. This lack of certainty is going to create opportunities for some but will likely force others out of business.

Our mill’s production is over 90 percent Walnut and it has been selling at a record pace for the past 2 years. We do some Soft Maple, White Oak, and Aromatic Red Cedar and those items moved well through the first three-quarters of the year.

We have increased all of our wages from $4-$5 an hour in the past year which has helped us stay fully staffed for the better part of 2022 but we continue to struggle with attracting skilled labor.

Domestic truck availability has improved in 2022 but delays are the biggest issue we are having with our exports. Once we finally get the booking in place, nearly every container will get delayed from either schedule change, rail delay, port congestion, ship weight issues, or any number of other “delays” that we are given as reasons. Most shipments are ultimately delayed an average of 30 days from the original ETA.

Tariffs have their place in creating a level playing field with international business, but they can become a political tool that greatly impacts certain industries. They must be handled with tremendous care and planning to avoid disastrous repercussions.

2022 Was Good For Some, Not For Others; ’23 Portends Challenges And Hope 4
Brant Forcey

Brant Forcey
Forcey Lumber Company
Woodland, PA

2022 has been successful for our company. Only disappointment for the year so far has been that we haven’t been able to completely capitalize on the good market because of labor issues.

We are a wholesale concentration yard and also a veneer manufacturer. All of our products from KD rough lumber, to sliced veneer, and also our veneer components operation have been in strong demand equally. Only lately KD lumber has slowed some but our veneer programs remain strong.

Our newest service is our door component product and we are currently building a 20,000 square foot facility to better serve our customers with those products.

We are in the process of installing numerous end clippers, jointers and splicers in our new facility, mainly to enhance our veneer component operation.

We seem to never have enough employees at this point. We have done a lot more local advertising for employment and raised our entry level wage considerably.

Shipping is unpredictable at best right now, mainly internationally. Domestically we are able to get trucks. It may take a day or two longer than we want it to but not nearly as bad as export containers.

Tariffs are a very real problem for the future. If the deadline is only extended it won’t solve the problem. We will still have the problem to deal with down the road. We need a clear direction when it comes to the tariffs and hopefully this will happen sooner rather than later, but not likely.

Rob Paradise
Rob Paradise

Rob Paradise
Devereaux Sawmill
Pewamo, MI

2022 has been a successful year but has slowed down into the last quarter. In order for 2023 to be successful the overall market and demands will need to bounce back.

Most products seemed to be strong for the 1st half of the year, RV and flooring have fallen off while cabinetry and millwork have remained stronger, relatively speaking.

Three new kilns adding 180,000’ of kiln capacity will be fired up by year’s end.

Having enough employees had been worse but is improving. However, an additional 2-3 people would be ideal.

As for transportation, trucks are readily available.

Lack of a demand and low pricing is currently the biggest issue on the export market.

2022 Was Good For Some, Not For Others; ’23 Portends Challenges And Hope 5
Chelsea Zuccato

Chelsea Zuccato
Patrick Lumber
Portland, OR

2022 was successful for our company, but the contrasts between ‘21-‘22 are evident. In 2023 we will face many of the same challenges as the industry. The PO’s will not be falling into the laps of the sales team. Anyone hired after 2010 does not know or remember what it is like to work in a tough market. We will have to work hard, add value internally and externally, and remind ourselves why Patrick Lumber has stood the test of time for over 107 years and many market conditions. We care about our suppliers and our customers, not only when things are easy, but we show up when things are challenging.

Our Hardwood distribution customers were able to get our Clear Douglas fir rough and finished products more readily available than most other high grade softwood products. While many other products suffered price increases, lowered availability, and tariffs, Douglas fir thrived in supply in the Pacific Northwest thanks to domestic mills, and an abundance of fire salvage wood that made Douglas fir a sustainable and economical choice.

At the mill level, physical labor is always a challenge we are faced with. We continue to offer competitive benefits for all our employees that contend with major companies in our market such as Nike and Intel. We believe we offer some of the best benefits in the industry with 401k matching, PTO, paid volunteer days, healthcare, ICP bonuses; we even pay for subscriptions to applications that offer guided meditation and mental health exercises. We believe that our employees are as important as our customers; we cannot have one without the other.

Also, we installed and tested a Nyle dry kiln controller for our dehumidification dry kiln. It provides a 20 percent reduction on drying hours and increased drying quality. Additionally, we designed and installed a shade dry enclosure utilizing 80 percent reduction cloth which protects product in the green yard prone to checking, splitting and color degradation.

By Matthew Fite

Matthew Fite Staff Writer Miller Wood Trade Publications

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