The Southwestern Hardwood Manufacturers Club (SWHMC) joint summer meeting with the Westside Hardwood Club at The Lodge at Gulf State Park in Gulf Shores, AL, was described as successful, with an attendance of 27. The discussions were educative and those gathered at the meeting had varied reports on which lumber species were moving better than others. The attendees did, however, agree that labor was an issue and that many of them had an adequate supply of logs, even too many. Some also noted that their sales have been off and that the tie market was slow.
On the first weekend in December, the Grand Hotel in Point Clear, AL, will host SWHMC’s Christmas meeting.
The following is commentary from the SWHMC summer meeting:
Sales and Species Movements:
A wholesaler noted that flooring sales are off significantly and that Common and Better Red Oak is picking up a little.
A mill representative in Mississippi explained that they are having trouble moving residuals. As far as log supply, he has plenty, perhaps too much.
While another Mississippi mill source explained that he can’t find a home for Poplar and Gum, White Oak is good.
One source claimed that the key to his business is diversity. They cut Hardwood as a remanufacturer and OSB in addition to Southern Yellow Pine (SYP) lumber. They also cut plywood in SYP and he has a multitude of products produced through his reman plant. He said that on a scale of one to 10, his business was about a seven, with 10 being excellent.
A mill representative in Southwest Mississippi said that his industrials are doing well but his pallet cants need some improvement. He said interest rates aren’t helping but they are decreasing. He has found more inquiries and customers for 4/4 and 8/4, No. 1 and No. 2 Poplar. There have also been inquiries for 6/4 Common Ash and industrials in 3 x 3’s and 4 x 4’s.
A sawmill source in Arkansas said that his lumber inventory is the lowest that he has seen in a long time. They are low on Red Oak but better off in that species than they are in White Oak, which everyone wants. Despite this, his Select White Oak flooring products are moving well and there is a small market for 2-1/4 Red Oak flooring. His flooring products in 2-3/4, 3-1/4 and five, however, are not doing well. He explained that out of three mills, one mill was cutting pine for a little bit but has returned to Hardwoods.
Another sawmill source from South Arkansas, about 60 miles North of Louisiana, said that they live and die on Gum and Red Oak. On a scale of one to 10, he rated his market at a five. His residuals are backing up.
One wholesaler said they have moved into Cypress, which is a new product for them even though they have been in the business for a long time. He explained that while it is difficult for grade lumber, Cypress has been a good product for them despite the limited supply.
Labor Reviews:
A sawmill source from Central Tennessee noted that he is certainly having his fair share of problems regarding labor and has been trying to run two shifts for a long time.
An owner of three different companies that has around 40 employees, has been trying to hire through LinkedIn and other platforms but to no avail. They also have a billboard going into Jackson, MS, to assist them with this labor difficulty.
A sawmill spokesperson from Mississippi reported that they are having labor issues. They have also experienced some mill downtime for a couple of months due to equipment problems.
Another Mississippi mill source agreed that they, too are having trouble with employees.
A truck flooring plant spokesperson said that they laid off 75 people in April but because of a turnover and labor issues, they rehired those that wanted to come back to work.
International and Domestic Sales:
A source from a sawmill in Central Mississippi said that exporters appear to be a little bit better than domestic sales.
From Central Tennessee, a sawmill spokesperson reported that domestic sales are worse than export sales.
Railroad Affiliated Products:
An Alabama mill representative said that while their industrial markets are okay, the tie market has slackened. They have, despite the slowdown in ties, gotten some new orders.
A crosstie agent said that, as far as he knows, the market for crossties is still decent, even though he has seen the railroad tighten up a bit on the grade regarding crossties and switch ties. He is responsible for procurement West of the Mississippi River and explained that they are in good shape but still need ties. He thinks that prices will hold in the West and that the prices of ties will not decrease. He said his company is gaining market share with class 1 railroads.
Timber Mats:
A diverse wholesaler that has been a supplier of mats for many years, said that despite a high inquiry rate for the mats, they have decided to postpone orders until either later in the year, or to the first of 2025.
Assorted Business Issues:
The owner of three different companies with one facility for remanufacturing, as listed previously, had more commentary on the market, stating that trucking costs have increased and between his general liability, worker’s compensation and property, costs are steadily increasing.
An Alabama mill source said that they installed a new Hurdle mill and are paying too much for logs.
Another Alabama mill representative said that they are not making any money.
An equipment manufacturer noted that he is not as far out as he was on steel, which has taken him 24 months. For equipment inquiries, he reported that there are more for Hardwood than softwood in his area.
A truck flooring plant source said that they have had two record years and are down 30 percent this year. Their prediction is that truck flooring, which is common to see slowing down every four to five years, will start increasing come early 2025.
Learn more at www.swhmc.com.
