Dermott, AR–The Turner Neal Lodge at Seven Devils Legacy property, located here, served as the venue recently for a meeting of the West Side Hardwood Club, hosted by Maxwell Hardwood Flooring.
There is no shortage of challenges in any business sector in North America currently, and the Hardwood industry is no exception. Yet, attendees offered comments of steadfast resolve, and hope, to see these challenges through to future success.
An Arkansas lumberman noted, “We just have to hang on and the market prices will be back.” He added that due to recent slowdown in demand for Red Oak, he instructed his cut-up crew to put logs that were 24-inches or bigger back under water.
A Texas lumberman commented, “We are in good shape, especially on logs. Things will turn around; it always does.” He explained that his company is in good shape because of their Hardwood/pine mix. “Last year, we ran about 50/50 Hardwood and pine. Right now, we are 90 percent pine. We just haven’t been able to get Hardwoods, although the Hardwood tie market’s good and so is the pine market.”
“Until this market gets adjusted, we are going to fight the battle, hang in there and depend on everybody for the business we can get,” a Mississippi lumber company representative noted. He added that for now, his company is specifically “trying to dodge Red Oak. There are simply some products we can’t even give away to any customers right now.”
Another comment from a Mississippi attendee whose two sawmills are each running 45 hours weekly: “We are just taking it one day at a time. We haven’t cut back on anything really. We are trying to get our log costs down but competition is not helping us with that at all.”
A different lumberman from that state explained that while his Hardwood sales were weaker the previous month or so, he had seen some positive turnaround in the couple of weeks prior to the West Side meeting. He added, “Hopefully, it will get better and stabilize.”
Lumber producers shared similar challenges in regard to fuel costs, transportation and log availability, falling demand of certain products and difficulty finding people who want to work in the lumber industry.
One representative from Mississippi, whose sawmill is running 40 hours weekly, commented, “Our biggest hindrance right now is labor. We cannot find experienced labor regarding knowing about lumber. Also, we have the bean storage industry in our area that is offering $18 an hour for shipping clerks, or doing whatever they need, and by golly, they are just not going to come and pull Red Oak off the chain for what we can pay them. Then, if we do offer more money, they won’t come do that work for us. We are constantly behind on quality control.
“Until this all gets adjusted, we are going to have to fight the battle and hang in there.”
He added that in his market, the furniture and flooring sectors have been hard hit.
A flooring representative from Arkansas stated, “We spent more than a year gathering up all the lumber we could to meet exceptional demand during COVID. It was a boom!
“We saw a slowdown in demand in early spring this year. Then the Fed did the first interest rate increase and that’s when flooring demand really kind of stopped. I kept thinking this thing will take off in June. But then interest rates increased again, and after June we saw an unprecedented fall in flooring countrywide to be honest with you because in hind sight, now we know nobody was really selling to the homeowner back in June, or February either, because they were buying it and filling their warehouses. All those people filled up their warehouses with flooring. That being said – it was our biggest, unprecedented fall. In fact, July 4th was the slowest volume week we’ve had in 20 years. We hadn’t shipped so few trucks in two decades.
“We are positioning ourselves to be in great shape though. Come spring next year, I do not think we’re going to see any kind of giant unprecedented roughness. Instead, I hopefully see volumes leveling out and running our business at full production.”
To sum up, he said “Currently, volume-wise I think we are somewhat better off, mainly because the price of regular flooring is at 2009 levels today. That is especially true of regular strip flooring. I was telling someone today that strip flooring is going in every double-wide trailer in America right now because it is cheaper than carpet and linoleum. It can’t be any cheaper than what it is fixing to be. I am dead serious and that’s an honest fact.”
Lastly, a Tennessee lumber producer said that the tie market is “doing pretty good. Normally when the lumber market takes a dip, the switch tie market fills up pretty fast, but we have had to curtail purchases nationwide on switch ties as they are, relatively speaking, a very small part of the overall tie business.
“Also, the crosstie market inventories are down some. I think as far as the ‘want’ for ties, what we are seeing from a pricing standpoint is that crossties are fairly stable and will be through the end of this year.
“We have seen tie production steadily pick up the last three months. For us personally, we have seen as much as a 25 percent increase companywide the last two months, so tie production is picking up rapidly, in my opinion.”
On the economic side, a representative for a bank in Arkansas explained he expects interest rate hikes possibly through spring of next year to be implemented to turn-around inflation, making it more expensive to borrow money – at least temporarily. He added that, “In my opinion, it’s going to be pretty good, hard interest rate hike(s) – (a rate hike was anticipated the week after the West Side meeting) – then they’ll have to aggressively drop interest rates on the other side of this inflation. Instead of it being a long, drawn-out period, I think the economy will take the inflation pain a little longer and bigger hike hit(s) will be really quick, and then fall back down due to how they are aggressively having to raise interest rates.”
This marked the 26th year that Maxwell hosted this gathering, and approximately 50 guests were in attendance this year.
The traditional catfish buffet was served followed by the round table business discussion after lunch. West Side Hardwood Club is located in Monticello, AR.
