West Coast Business Trends
West Coast Struggles To Prepare For Unpredictable Trade Times
By Zach Miller
At the time of this writing Canadian manufacturers are on the precipice of paying a combined countervailing (CVD) and anti-dumping duty of 35.19 percent, which is having ripple effects across the North American marketplace. Whether you’re manufacturing and shipping into the U.S. or manufacturing in the U.S. and buying cuts out of Canada, the industry is shifting into unknown territory.
Dean Garofano of Delta Forestry Group in Pitt Meadows, BC, said, “Overall lumber demand has been declining in the last few months with many consumers putting off projects due to all the uncertainty with the economy and the high interest rates. Despite this, July was a strong shipping month for Delta Forestry Group with many of our customers strategically bringing in some extra volume ahead of the expected duty increase. With distribution yards mostly full now, further reduced demand heading into fall and winter and the punitive duties kicking in, we are setting up for a challenging stretch for producers trying to keep facilities running.”
Garofano divulged his concerns about shifting prices in the industry. “Lumber prices will no doubt be going up but by how much and how soon? It may be gradual, and it may be selective to certain products until demand picks up next spring. On the logging side, there are more active logging projects running now, after a very slow first half of the year. With more logs becoming available and declining lumber sales, businesses will see some downward pressure on log prices. Ultimately the market will find its footing but, in the meantime, producers will be fighting for survival. Business needs certainty and the current administrative reviews that are applied retroactively continually move the goal posts.”
At the time of this report, trade deal discussions between the United States and Canada were ongoing and Garofano stated that “reaching a deal that includes lumber is essential.”
Ryan Smith of Unity Forest Products located in Yuba City, CA, noted that the “balance between supply and demand for our products is currently stable, with 50 percent of our business stemming from domestic Incense Cedar and Pine products and the other 50 percent reliant on imported Spruce and Western Red Cedar from Canada.” He credited this dependability of their supply to “solid partnerships with suppliers that we have cultivated over the past 37 years.”
Despite this stability, Smith revealed that he had some concerns about the future of the markets due to the trade talks. “While demand is not particularly strong, there remains a decent takeaway which allows us to maintain operations. However, the fluctuating tariff talks create a sense of uncertainty for both me and my end customers, complicating our planning efforts. Unlike the unpredictable tariff challenges, the duties imposed are a constant factor that we can incorporate into our business strategy. Unfortunately, these rising costs are ultimately passed on to the end consumer, impacting their overall project costs.”
Softwood lumber representatives across the West Coast have expressed concern about price changes, trade deals, purchasing strategies and the future.
He shifted gears to describe their supply of Incense Cedar and what they expect regarding the following quarters. “In the first and second quarters, the supply of Incense Cedar logs was quite challenging. Nevertheless, we are optimistic as we anticipate a full log deck in the third quarter. With the rising costs of Western Red Cedar, we believe that Incense Cedar may emerge as a viable substitute. This shift could help stabilize demand for Incense Cedar products as we move forward, providing an opportunity for us to better meet market needs while potentially easing some of the pressures caused by the unstable prices of imported materials.”
Smith added that the current mood among their customers is “meh,” which reflects the “sense of uncertainty in the market. Consequently, I believe that by effectively projecting a positive outlook and communicating potential opportunities, we can influence this sentiment. Through proactive and strategic planning, we can identify and present options that resonate with customer needs, ultimately shifting their mood toward optimism. By focusing on clear communication and showcasing the advantages of our products, we can foster confidence and encourage more engagement in the market.”
Lucas Rodakowski of Prime Forest Products in Beaverton, OR, said, “It’s a bit of a funky market right now, we’re seeing a good bit of offshore business with pockets of domestic positivity. Mills seem to have extra wood compared to this time last year so we’re able to get some discounts. Most of the door and window guys we sell to are up from last year, but we have other customers that are down two to three percent. We feel if interest rates would come down it would be a shot in the arm for the building industry.”
Rodakowski commented that many people are employing a strategy when making purchases or they are refraining from buying outside of necessities. “Most distributors are buying hand to mouth, no one is taking large positions or blanket orders feels like more supply than demand for our products. We’re trying to buy strategically as we move out of summer and into fall.”
He rated 2025 at a “six out of 10, but it just depends on who you talk to.”
A wood processor in the Pacific Northwest said, “We’re a diversified company, so the balance between supply and demand has been spotty. The Cedars and Hemlock coming out of Canada are a mess. Domestically, Fir has loosened up and everyone seems pretty flush driving the price down a little bit, but the high-grade Fir market is strong. The mood of our West Coast customers is a little off and the phones aren’t ringing off the hook, so it’s harder to get the business but the business is out there. Our main concern is pricing with high-grade softwoods.”
The representative shared their thoughts on the outcome of the new CVD and anti-dumping duties. “It’s still too early to know what the effects will be. We tried to bring in as much fiber as possible before the new rate but after that, there are just too many unknowns.”
