SWHMC Members Look For The Silver Lining Amid Industry Challenges
Approximately 25 people attended the roundtable meeting at the recent Southwestern Hardwood Manufacturers Club (SWHMC) Christmas meeting at the Grand Hotel in Point Clear, AL. About 50 total attendees, including their wives, were at this annual meeting.
Industry Challenges
A sawmill in Central Tennessee is having trouble moving Oak flooring, noted the company’s representative who was in attendance at SWHMC.
He reported cants are difficult to move. Also, frame stock demand was very poor at the time of this meeting. However, White Oak was reported as doing well with good demand but, in this part of the country where they have their sawmill, 60 percent of their cut is going to be Red Oak.
A speaker noted that the European market 4th quarter has showed promise, especially with FSC Certified lumber.
The European market has seen more interest in Red Oak, particularly Northern Red Oak that looks very similar to White Oak. Their rift and quartered market particularly in White Oak was still performing well at the time of this meeting.
They are pushing more Northern Red Oak than what they were in the past, which was little to none. They are now doing quite a few containers of Northern Red Oak where they didn’t play in that market before.
There is concern obviously about the EUDR being delayed and how this is all going to pan out.
A mill in Alabama is running 40 hours and they have some logs, but it may cut it close as to whether they make it through the winter.
A mill in south Tennessee that runs two shifts noted labor is an issue.
In Mississippi, a sales manager for a mill that runs two shifts said he has seen some increased demand in Mexico. Their export business continues to perform and most of their business when it comes to dollar volume is export. This lumber representative is talking about much of the product that is shipped in whether it is lumber or logs. A lot of it is being consumed internally and a lot of it is staying there in China versus being reexported.
Their export market is strong in Mexico but he, too, is worried about what kind of tariffs will be put on product coming back from other parts of the world.
An operator of a green mill in Mississippi said he has board road and a lot of ties. They are heavy to Red Oak and do get White Oak, but their wood is heavier to Red than White Oak. They have a good tie market, as well as cant market, and they are running 40 hours a week. They, too, are having trouble with labor and said it’s a constant battle.
They are producing 3 x 4 and 4 x 6 Poplar cants.
A mill in south Alabama operates about six hours daily. They have two mills, and one of the mills that specializes in Cypress is doing well. They are cutting timbers for mats, and they do some grade lumber. This particular company based in southern Alabama is not exporting, having moved out of the export market.
A pallet mill in Mississippi said they make crates and pallets. They are 80 percent hardwood, and they make some 20 percent Southern yellow pine.
He said 2024 mirrors 2023. He has a team of about 10 employees and his business has been good. He does have issues with labor, and he is having trouble moving his residuals regarding sawdust.
He said one of his problems is property insurance and the premium they want.
A representative of a mill that has both a flooring plant and a sawmill said his log supply is adequate, but he thinks he may miss some time due to the fact that his log supply is not where it normally is. He feels like he will curtail hours. His foreign business is steady, but he said he is not making any money.
A company that builds sawmill equipment that has been around over 100 years in South Central Tennessee said they’re out by 12 months regarding steel. On the Lewis side they are six to eight weeks out regarding controls, but they have been busy.
Silver Linings
An SWHMC attendee that does the procurement for two flooring plants, one in Arkansas and one in South Carolina, is running 45 hours a week. There are some problems finding low grade hardwood flooring, he said. He brings about two loads into Franklin a week and one into the facility in Arkansas.
Another mill in Alabama said they are flexible to be a grade mill or an industrial mill. They do have dryers. He’s dodged Red Oak for the most part because he has been able to do it, but he is going to start cutting Red Oak. He said his sideboards from the industrial products has been horrible as far as the market frame stock.
They like to have mats and they do have crossties because they must have that heart center.
Also, they do have quite a bit of KD inventory and are running 40 hours a week.
He said his labor has been better lately at the mill than in the last six months. His skilled labor is a concern due to most skilled positions are filled with maturing employees with few younger employees joining this particular workforce to replace the tenured ones when they step away.
A company that is headquartered in Jackson, MS, that runs a remanufacturing facility also has a brokerage arm and they are heavy to industrial products and 2024 has been pretty good for their mat business. It’s been pretty busy in 2024, and the Canadians are showing some promise regarding U.S. mats going into Canada versus Doug fir mats that have been used.
Otherwise, a green mill that primarily makes crossties has struggles with breakdowns, insurance, and has had labor issues, too. Their family has been in the lumber business for three generations.
USNR was the major sponsor for this Christmas meeting.
Learn more at www.swhmc.com.
