Associate Editor
Confusion, Concern And ICE Raids Freeze Spring Expectations
In the Northeast, positive outlooks have been few and far between despite some booms in the Pine business, especially as complaints about labor mix with rising tensions about recent ICE raids on mills.
A lumber representative located in the Adirondack Mountains in New York, about an hour and a half away from the Canadian border, has been in the forest products industry for 37 years and noted that the blue-collar markets “are very bad. There is no question about it,” he said. “There is a city north of us, not far from the Canadian border, Plattsburgh, NY, and it is very noticeable that Canadian traffic is down.
The stock market, which is down quite a bit right now, is like a roller coaster and what I’m afraid of is if it takes a consistent dive, we’re going see the second and third home people pull the reins back.” At the time of this writing, custom building is popular with “second and third home people.”
He mentioned that the market “hasn’t changed” in his area and that he “works with a smaller, specialty-type mill and I talked to a couple of the high-end builders here just recently. One person I know there is going crazy selling Pine right now, so that’s a good problem because it’s my Pine that he’s selling.”
They “strictly” offer Eastern White Pine primarily in 4/4 and 8/4. They are a NELMA grading agency. “The upper grade market is beyond strong,” he explained. “There was a little radar blip this past fall into early winter, but that strength has grown since January. Everybody is looking for Selects, whether they’re D and Better or Cs. That hasn’t changed. 4/4 Selects are selling the best right now. A lot of the folks who buy that are priming it.”
A softwood lumber representative in New York commented that he doesn’t have high hopes for 2025 and believes that it could be a “toilet flush.”
In addition to reman companies and wholesale distribution warehouses, they sell their products to retail yards and pallet manufacturers. They also work with timber and have timber framing customers. “We used to do a lot more timbers for the framing industry but we’re down to a small scale now because of production, a decrease in people and demand. Timber frame homes are going well.”
“I’ve been so depressed the last month,” he continued. “I have a very good relationship with Canadian provinces such as Ontario, Quebec, Nova Scotia and New Brunswick and the door shut in my face. It is major right now.
They’ve been struggling in Ontario, since last year because of the economy. They aren’t in our interest rate system, but the dollar exchange has been strong. Our dollar is stronger than the Canadian dollar. As far as the economy, people aren’t spending because their interest rates were up, and their sales were slower and that’s a key factor. I noticed it started to creep down last spring. I’m very well connected there, and manufacturing is down now with this whole tariff thing. Nobody seems to have any details about what is going on and it is very frustrating. It’s chaos and that is part of the strategy. It is working in Canada because they are freaking out; people don’t know what to do. At the rate we’re going now, 2025 is going to be a toilet flush. It’s not good. It was obvious that it was not going to be good going into this year. It’s really trying, let’s put it that way.”
He even had some details about the hardwood industry, stating that while he’s “not working for a hardwood mill,” he keeps “in touch with what is going on in the hardwood market and I’m thanking the wood gods that I’m not in the hardwood market. A lot of mills here are having a very big struggle and there are a few closures.”
As for labor issues, they have been “struggling for years before the pandemic,” he noted. “Labor has been a big part of it with production waiting for parts and the cost of goods. It just seems to get worse. There’s nobody out there and I’m not kidding. I hear it everywhere. I don’t care if it’s in Minnesota, or New York, the labor force is not good and it’s going to be much worse.”
“We had a mill 60 miles west of us that used to be Tupper Lake Hardwoods and they’re now Tupper Lake Pine Mill, owned by Matra out of Quebec, that just had an ICE raid a few weeks ago. They took nine employees away and just disappeared. I read three press releases about it and talked to the general manager. I know him and he said that ‘we had all the I’s dotted, and T’s crossed and yet we are freaking out because nine people were taken away and we have not been able to reach them.’ It’s heartbreaking. I know ICE went to a NELMA mill as well that same week and took one person away for two hours only to come back and say, ‘we made a mistake; we’re all set.’ Thank God that person didn’t get taken away.”
“The logger situation is just not good either because we’re aging out and there are not enough loggers. The pulp markets are now dictating them, and they are really bad. People are thinking it’s a little rosy out there. It’s not rosy,” he said.
The lumber source had more opinions about the marketplace, leading into the size of businesses in the industry itself. “I do get on a soap box and say, ‘smaller is smarter’ and I’ll say that until the day I drop. Being too big is not good because it hurts markets and there is no need for it to be monstrous,” he explained. “It really has been a cause and effect for our industry. The big guys aren’t having an easy time. I hate to say ‘cutback;’ I don’t ever want to say that, but people need to so they can survive sometimes. It’s not comfortable but it’s necessary. I will say this, that there were a lot of people in January thinking that April was going to see the turnaround.” The lumber source has reached out to his many contacts, several of which are worried because they were hoping for a “spring uptick. We can’t depend on the fall to be strong or January or February because things are changing. Historical patterns have been tossed out the window. What I keep telling people, is that I’m still out on the ship looking to discover America. We get out on that boat, hoping to find that country and don’t find it but find a different one instead. It’s uncharted waters.”
In Maine, a lumber source said that “things are starting to get busier. I would say the market has been average, but things are getting a little bit better. The tariffs won’t affect White Pine in a big way, but it is affecting the market, and everybody is just waiting to see what is going to happen. I think it is going to have a heavy effect on the dimension softwood market. It’s got everybody on their toes.” Their marketplace is better than six months ago.
They are in the Eastern White Pine business, offering 4/4 and 5/4 boards and pattern stock in addition to selling “a lot of NELMA grades.” All his products are “doing fairly well. There isn’t much supply of the Select in the market, which makes it very high in demand. Premium and Standard pattern stock are very good right now. Low grade is decent right now compared to a year ago.” Over the last year, he explained that there has been “100 million feet of Eastern White Pine taken off the market. The market is probably the same but because the supply was taken away, the market is a little bit better. There are less players and less production; inventory is tighter.”
They sell to “direct retail,” wholesale distribution yards, brokers, manufacturers and buying groups. With “probably” 10 percent of their business exported, specifically the lower grades, they “sell to Canada and overseas,” he added. They have had conversations regarding their Canadian customers about how to “keep this going” and that they might have to “mitigate the costs between the mill and the customer. It’ll be interesting.”
“It has gotten better for my customers,” he said. “We’re across the country, so we get different looks at the Midwest versus the South and Northeast. The Northeast has been busier than everywhere else, but I think all of it has been muted a bit in the winter. We had a real winter that effected business and with interest rates still high, it was just a little bit of a longer winter than we like to see and I think that retail, in general, in the past several months, has weaned down their inventory to just conserve cash, which has been a big difference than what’s happened in the past few years, so it put some heat on the mills but I think that the spring is going to be a little bit better. We’ll see if it can hold up with all the macro-economic issues that we have going on.”
Labor has “always been an issue but we’re doing okay,” he explained. “We do struggle from time to time. I know other people are struggling with labor. It’s really the post-Covid costs that caused the tougher times for the sawmills. It’s not just labor; it’s insurance, cost of raw material and that the cost of everything has gone up. This has made it challenging for sure.”
A lumber representative in New Hampshire ranked the market at a “medium” because it is “not as strong as it was last year.” They attributed this drop in strength to the tariffs, saying that they have caused people to “hold back. I think the residential side of things and the consumer side of it is down and the building side is up. As far as the wealthier areas around here, they’re fine. The middle and lower classes are saving their money. It wasn’t like that last year.”
The source believes that it is the same as six months ago.
The main species they handle are Eastern White Pine, Hemlock, Douglas Fir and Western Red Cedar. “For Pine, we do rough green lumber in 1-inch, 2-inch and custom sizes. We’re doing some Select and Premium and we dry 8/4 through 16/4. I think the Eastern White Pine is doing the best.”
Their customers consist of selling to “retailers who sell to homeowners,” in addition to lumber yards and to builders.” While they don’t export, the source said, “everybody has a different outlook, but I think there are more varying opinions than there was. There are more negatives scattered in now where I wouldn’t have heard that a year ago. I like to think I’m always wrong. I feel negative now and I’m hoping I’m wrong.”
