While looking back at how the Hardwood market fared throughout 2023, lumber providers came to a general consensus that while this year posed its challenges, it was a profitable year nonetheless. One participant stated, “2023 was definitely not the year we wanted but we were able to be profitable.”
Another participant said, “2023 has exceeded our expectations, 2024 has a similar uncertainty to last year’s planning due to geopolitical and economic conditions.”
Participants also shared their concerns over how tariffs and the European Union’s new regulations will affect sales in the coming year, with one stating, “The EU regulations that are on the table pose a very significant threat to exporters and all lumber producers in the U.S.A.”
Abenaki Timber Corporation
2023 was a challenging year. I would say it was successful in footage produced and shipped but the invoice values were way down due to the rapid drop in kiln-dried prices. Our sales in dollar value will be down from 2022 but we were able to keep our market share in overall footage produced and sold.
We serve a variety of manufacturers, distribution yards, wholesalers, brokers and the export markets worldwide. I would not be able to single out any sector that was better than another.
Abenaki still produces the native American Hardwood species found in the Northeast and Appalachian regions as well as importing European Beech and some European Oak.
We did do some control updating at both of our facilities and replaced some rolling stock but no new major equipment was added in 2023.
Our key employees have proven reliable and consistent throughout the year. If we could add one or two at each facility, we wouldn’t hesitate to do so.
Shipping was a major improvement in 2023 over 2022.
We are more concerned as a company with the implied certification regulations that Europe is adding than we are with any tariffs currently.
Wolverine Hardwoods, Inc.
Considering the market changes we experienced, I would say we were very successful throughout 2023. Maintaining and growing relationships with customers is a big key to being successful in the future.
Most of our customers are end users, whether large manufacturers or smaller distribution level guys. White Oak and Red Oak have moved well for us this year.
In 2023 we introduced plywood, MDF and ripped to width lumber.
We purchased two 50,000 feet SII dry kilns, which has increased our ability to kiln dry our own lumber by 25 percent. We also purchased a new electric forklift.
For the most part we have been blessed with a great core group of employees. I have been thoroughly impressed with our crew and how they have come together this year as a team.
We have three amazingly, dedicated, local owner operators and a couple brokers we work closely with to ensure our customers get the products they need in a timely manner.
We do not export anything directly, so we are not currently concerned with tariffs.
Clark Lumber Company
Red Boiling Springs, TN
2023 was definitely not the year we wanted but we were able to be profitable. The hardest part of 2023 was the inventory adjustments early in the year. It took several months of production to overcome the pricing adjustments.
In order to be successful, 2024 needs to have steady demand for all production items and price stability and hopefully a small price increase would be best.
Our grade lumber sales to distribution yards were strong, as well as our sales to moulding manufacturers, while our sales to flooring manufacturers was average. The pallet cant sales to the main line railroads was strong, while our sales to the small treatment plants was average, yet sporadic. All of our products moved at normal rates.
We did not add any services or products in 2023 but spent more effort going direct to customers, putting less reliability on brokers.
We installed a new optimized edger in November at one of our facilities. We also began building a new grading and sorting line at that same facility. This project will last into the first and, likely, second quarters of 2024.
Finding enough qualified employees is always a challenge but we do feel fortunate to have a good crew right now at each facility. We have spent a lot of time and money on automation in the last few years and that has paid off by allowing us to retain the vast majority of our employees and keep production at the desired level.
Shipping always has its own challenges, but we have not had any changes that have affected our ability to deliver loads to the customers.
We have not had issues with shipments to Vietnam, but China is always a concern with the potential for tariffs and market uncertainties. The European Union has been down on shipments for some time but does seem to be increasing at a small percentage.
Kendrick Forest Products
2023 was an interesting year. The first half of ‘23 was still pretty good, while the second half of the year wasn’t as strong but still looks like it will end better than we were expecting. Challenges we must overcome to be more successful in 2024 would be labor, inflation cost and fuel cost, all while most American Hardwood prices have not kept up with the cost of inflation.
Our customers are a mix of distributors and factories. Our Walnut and White Oak lumber items have been the strongest sellers for us in 2023.
We recently started taking a higher-grade log and producing Walnut graded under Oak rules. This has allowed us to tap into other markets while still being able to offer our same consistent standard NHLA grade lumber as well.
This year was a year focused on growing our rolling stock, especially our semis & log trucks. This allowed us to have more control over our product and better serve our customers.
We have been fortunate that we have many long-term employees with a nice mix of the younger generation to teach and help grow. Wages are an important part but there also needs to be a fun working environment, and a good relationship with the employees which we have. Our employees aren’t just employees, they’re more like family to us. When you can treat someone like family, I think they’re more inclined to work hard and stick around.
Trucking in general has loosened up, but the cost of fuel is keeping rates elevated.
Harold White Lumber, Inc.
I wouldn’t call 2023 a successful year by any means, it was a pretty dismal year. This fourth quarter, however, has shaped up to be a very strong quarter. I am seeing every indication that I will be back in the black. I believe that there are many reasons for this, but I think that the simplest answer is that there is a lumber shortage that is taking place. The lumber market has been at a historical low especially with the production of Red Oak, Hard and Soft Maple, and other species being cut for industrial products, while simultaneously seeing historically high production costs. From my understanding, North American Hardwood production has now hit a 63-year low! Attrition rates are very high and will continue.
I sell to domestic end users and distribution yards, and I export. I am probably still about 60 percent export and 40 percent domestic. The European Union is primarily facing better markets. They have started switching over to Red Oak since White Oak is so scarce and it’s jumping in price. The EU has figured out how to stain Red Oak to where it is a very close look to White Oak. I have as many orders for Red Oak as I do White Oak that are going into Europe right now.
I have started exporting finger joints. Up until this year I have only shipped our finger joint production to the domestic market but now, I am shipping mixed containers with Hardwoods and finger joints.
With interest rates being at an all-time high and it being difficult to get existing parts, the only upgrades I made were for support equipment. We did install a fully optimized scanning system from Corley’s Lewis Controls for our sawmill, which was at a substantial cost.
We are having a very hard time keeping employees. We have started working with the community prison to employ non-violent felons to subsidize our workforce, and if it was not for them, I would not be in operation. We are paying them the same amount of money that I would pay anybody else to work for me and while they are on work release their guidelines and their rules are extremely stringent. If it wasn’t for this program, I wouldn’t be running at 100 percent, and even with it I am still always short, depending on how many people are eligible for work release.
While we own our own fleet of trucks, the burden of regulations as far as trucking goes domestically has always been a problem, and with the exports we must deal with the longshoreman and the railroad labor strikes. The logistics of exporting is always difficult at best, but I have to say it has gotten better over the last 12 months.
When it comes to tariffs, I’m not sure what the federal government will do with a presidential year coming up. I am also not sure what the Asian countries are going to do, but the EU regulations that are on the table pose a very significant threat to exporters and all lumber producers in the U.S.A. No mill will be exempt from the overwhelming data collection necessary to sell and buy wood productions. So far in our dealings and negotiations as far as the American Hardwood Export Council (AHEC) and the USDA with the EU, they are not listening or understanding that the problem with the illegal harvesting and deforestation is not happening in the U.S. or Canada.
Overall, I am worried for our industry. Everything is changing quickly, and I am not sure what the future holds. We are a resilient industry; however who could have ever predicated the major challenges facing us all!
Roy Anderson Lumber Company, Inc.
2023 sales have been steady. Challenges for profitable pricing has existed, but ability to move lumber is present. For 2024, export markets need to improve to help move products that don’t historically move domestically.
We sell to flooring manufacturers, cabinet manufacturers, millwork/moulding manufacturers and distribution yards. Our strongest sellers have been White Oak, Ash and Thick Red Oak.
Job inquiries have been steady, but finding qualified employees needed to support growth has proven challenging.
Transportation has improved substantially over the course of 2023.
At present, we do not have concerns regarding tariffs. We suspect global economic concerns will outweigh desires for tariffs to be renewed.
MO PAC Lumber Co.
2023 turned out better than what we expected at the beginning of the year. The year started off very slowly, but shipments picked up in the middle of the first quarter and remained fairly steady up until the time of this writing.
75 percent of our customers are distributors, while the other 25 percent are end users. While Walnut represents 95 percent of our production, all items across our product mix moved well in 2023. The demand and pricing for Soft Maple suffered throughout most of the year.
We have had problems over the past year retaining enough employees. In order to combat this, we have a unique work week with nine-hour workdays, Monday through Thursday, and then just four hours on Friday. This allows our employees to get in their 40 hours but have a 2-1/2-day weekend. It has proven popular for the applicants we interview. We also try to do as much cross training as possible to avoid mental and physical fatigue.
We have noticed that container availability continues to be a problem for us shipping out of the Kansas City area. There are less containers coming into this area so the demand for empty containers can be intense. It makes it difficult to promise a delivery date when you are not guaranteed a container when you go to pick one up from the depot. Schedule changes have also created logistic nightmares.
Exports represent over 60 percent of our sales in both dollars and footage. The whole topic of tariffs is unsettling with the experiences we had during the most recent trade war with China, but I am not as concerned with tariffs as I am with the new EUDR regulations that have the potential to cripple the U.S. Hardwood industry. This regulation has passed so we need to be ready to find a way to comply with it or risk losing a huge percentage of our market. We all hope that common sense will prevail with limiting these requirements, but we have to have a plan in case it doesn’t. Although compliance with these new regulations seems impossible, we can’t simply ignore it. The European Union has much more support for climate change policies than we have in the U.S. Keep in mind, those same regulations will cover wood components that are being brought into Europe from other countries, so it won’t just affect European lumber sales. This could be much worse than any tariff we have ever experienced.
Cole Hardwood, Inc.
International and domestic business landscape proved to be exceptionally challenging. Following the post-COVID boom, the abrupt fluctuations in prices, particularly the soaring costs of lumber and the rapid decline in overall pricing, placed us in a precarious position. The consistent rise in manufacturing expenses further compounded our challenges, making profitability elusive throughout the year.
Export markets witnessed a significant decrease in demand during the latter half of 2023, and regrettably, I do not foresee a substantial shift in this trend in the initial months of 2024. Adapting to these market dynamics requires strategic planning and a resilient approach as we continue to face the complexities of the global economic landscape.
Cole Hardwood operates as a Hardwood lumber concentration yard, catering to a diverse clientele of manufacturers and distributors. The standout performers in our product lineup this year have been the FAS/1F White Oak and various thicknesses and grades of Hickory. Notably, our proprietary rustic grades for Hickory and White Oak have experienced exceptional success, serving as a distinctive avenue to set apart our product offerings in the market.
Cole Hardwood has recently integrated advanced scanners, implemented in collaboration with Aiken Controls, to assess thickness on both the green chains and all kiln-dried lumber machines. This technological enhancement has empowered Cole Hardwood to identify miscuts effectively, contributing to a significant enhancement in the quality of our kiln-dried Hardwood lumber.
Patrick Lumber Company
2023 has exceeded our expectations, 2024 has a similar uncertainty to last year’s planning due to geopolitical and economic conditions. Interest rates and the election cycle figure to be most relevant in forward planning. Patrick Lumber plans to further invest in our people, processing and remain focused on our core businesses.
The upper grades of softwoods, especially Vertical Grain clears were the best movers in 2023 for our distribution customer base. Contemporary design elements in high-end home construction across the USA were in favor. Timber frame construction, which we highlighted in our headquarters building in Philomath, also has a strong showing in 2023.
In 2023, we expanded our low grade customer base in several softwood categories including southern yellow pine. We continued expanding the Hardwood lumber business, especially West Coast Hardwoods like Oak, Maple and Alder.
We purchased 10 acres next to our Philomath kiln and re-saw facility late in 2022 and began production in early 2023 of West Coast Hardwoods. We continued to add to the mill installing more equipment. In 2024 we plan to complete installation of a Salem headrig which should increase production 10x. Our customers are showing high levels of interest in the West Coast Hardwoods that have been historically slash burned in the forest or sent to the pulp markets.
We continue to look for quality employees in all of our main business units. The strong support for wood products in Benton County home of Oregon State University, a land grant school, has helped in recruiting.
Losing ocean service to Europe from Portland and then Tacoma has increased the shipping costs for European customers. Along with the strong USD$ this has been the biggest impact.
Right now, we don’t have any concerns with tariffs, we are dealing with them just like everyone else. Therefore, it’s a level playing field and has no impact.
MacBeath Hardwood Company
Overall, 2023 was not without its challenges, but all in all it was a successful year. Looking ahead to 2024 I think the main challenge will be the availability of lumber. Specifically, the availability of the items most desirable. As it becomes more difficult for sawmills to produce grade lumber profitably in general, naturally there will be less of the few items that everyone wants. It seems as though the majority of the demand for Hardwood products is focused on a minority of the growing stock in the woods, which throws things out of balance for sawmills and log producers. This certainly isn’t a new challenge for 2024, but an ongoing challenge for the industry as a whole. The challenges that steep price adjustments in both directions present will be something that we all become more acquainted with in the coming year.
A nice side effect of an economy that is moving very slowly is the availability of transportation. The cost of freight domestically and the availability of equipment necessary for export, as well as the cost to move that equipment have both improved over the course of this year, and outside of seasonal events that have an effect on flatbeds, I don’t see the ratio of trucks to loads tightening as we enter the new year.
Robinson Lumber Company
New Orleans, LA
The year 2023 brought a mix of challenges and achievements for Robinson Lumber Company. While our export sales to Asia and Europe faced some setbacks, our North American sales remained robust, ensuring that the year could still be counted as a success. With export sales presenting a hurdle, we are placing our hopes on the strength of the North American market to drive our success in 2024.
At Robinson Lumber, we primarily serve manufacturers who possess a keen eye for yields. Once they witness the value we offer in terms of wood quality and precision, they return for more. Notably, our sales to flooring customers experienced significant growth this year, especially in our value-added sorted to width and ripped to width strips. Among our products, White Oak shone the brightest in 2023.
Our commitment to continuous improvement is exemplified by ongoing investments in our flagship yard located in New Albany, IN. Recently, we doubled the yard’s size and introduced the state-of-the-art Combi-CSS Slip Loader. This new addition enhances our ability to stage and load containers and flatbeds efficiently and safely. We also have plans to expand our kiln capacity in the near future.
The American Hardwoods industry is intricately linked to the global demand for wood products. However, we’ve observed increasingly frequent supply and demand imbalances, resulting in sharp price fluctuations. These market dynamics can challenge the maintenance of consistently profitable operations.
For over 130 years, Robinson Lumber Company has not merely survived; we have thrived, grown and diversified. As we look ahead to 2024, we embrace the unique challenges that lie ahead with confidence and a commitment to innovation and adaptation. Thank you for your ongoing support and partnerships. We are excited to face the opportunities and challenges of the future.
Simon Lussier, Ltd.
Overall, it was an okay year. Much better than what we had anticipated but definitely not as profitable as the last couple years. We must overcome short term green lumber supply issues, so we have enough kiln-dried lumber to start off the new year and to continue to push sales.
Most of our customers are furniture manufacturers and stair builders. The most popular products have been 4/4 through 8/4 Yellow Birch and Hard Maple.
This year we have introduced European steamed Beech to our domestic customers and are still testing the market.
We have installed a new kiln which added 100,000 board feet measure to our capacity.
Thankfully this year was good to us and we did not have as much turnover as previous years.
We have not had or expect any problems regarding tariffs from Canada