West Coast Business Trends

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West Coast Business Trends 1
By Zach Miller

At the time of this writing lumber prices are a bit of a mixed bag, wintery weather persists in the PNW and New England while unusual tornado activity threatens the south. Producers are dealing with a litany of issues beyond weather. The following is what a few West Coast producers had to say:

Dean Garofano of Delta Cedar Specialties, Delta, BC said, “We started the year strong at Delta Cedar Specialties with a solid first quarter for Cedar shipments. Our built-up anticipation in January for a decent spring surge, has now been tempered by the lackluster March and start to April. Extreme weather, along with economic headwinds has severely impacted takeaway from distribution in February and March, leaving most of that Q1 volume still sitting in the yards.” Garofano continued, “The Cedar lumber inventory chain appears to be a little backed up currently for both distribution and manufacturers. Some good weather should be on the way soon but with the current inventory backlog, the spring season may be slow in starting and likely not able to make up all the lost ground. Timbers are still showing good life and clears have perked up again with the limited amount of sawlogs being cut; however, decking, boards and rough dimension continue to be slow movers.

“Supply wise, there are still plenty of Cedar logs available as the weak lumber markets are keeping log buyers on the sidelines. Not much good news to report on the logging side as most cut blocks and permits are still underwater despite a recent stumpage decrease. Unfortunately log values across the board have come down to more than offset these savings, while at the same time, the cost to logging continues to climb. Rising costs can be attributed to the increasing interest rates impacting equipment payments, carbon taxes, fuel and wages driven by the high inflation and lack of skilled loggers. The reality is, it will take more than some additional stumpage reductions to bring things back in line because we need the median value of logs to go up from their current levels.” Garofano finished with this, “There are plenty of changes and policies in our province that will ensure the BC coastal harvest decline continues in the years to come and particularly when it comes to Western Red Cedar. Although, until consumer lumber consumption in North America picks back up, the impacts from these reductions will not be felt on the Cedar lumber side. Certainly, looking forward to a healthier Cedar market where supply and demand can strike the right balance for all segments of our industry.”

Brent Brownmiller of the Gorman Group, West Kelowna, BC said, “Pricing is flat. We are not seeing any pressure up or down in our category. There seems to be some optimism in the market and the spring buying has definitely turned up. Business is steady. Weather has slowed certain markets, but takeoffs are increasing and rebar sales have increased. Wood product demand is shortly behind. The mood is positive. Freight challenges with rail are an issue and car supply seems to be out of balance and slowing deliveries which are needed.”

Aiden Coyles of Gilbert Smith Forest Products, Barriere, BC said, “Supply continues to outpace demand. We have seen a slight increase in demand but prices are still trending downwards due to an over abundance of inventory and very competitive business on any new orders. Most of our customers have come to terms with the idea of it being a slow year. It is likely that more hard times are ahead. Log supply in the interior is low for this time of year due to low whitewood lumber prices. Labor continues to be an issue. Transportation feels like it has finally found some normalcy.” When asked about how the first quarter of 2023 has gone for Gilbert Smith, Coyles responded, “Low and slow.”

By Zach Miller

Zach Miller Sales/Marketing Miller Wood Trade Publications

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