West Coast Business Trends

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West Coast Business Trends 1
By Zach Miller

At the time of this writing, West Coast producers are struggling with high log costs and lack of high-grade fi- ber. Labor seems to always be an issue and framing prices currently remain flat, however there are some bright spots. West Coast producers are chugging along and looking forward to a busier second half of the year, this is what a few of them had to say:

Dean Garofano of Delta Forestry Group, Pitt Meadows, BC, said, “Overall, the demand this spring improved from the early part of the year but not as strongly as some anticipated. Distributors are reporting an average take away for the most part while box stores seem to be a little busier with their core items. The resistance of reducing interest rates in both Canada and the USA is a big factor; as builders, prospective home buyers and those thinking of remodeling continue to move cautiously.”

Garofano continued, “Meanwhile at the mill level, the demand feels stronger than it actually is, due to the supply issues impacting British Columbia. We at Delta Forestry Group have been busy most of the year working hard to try and catch up to our order file. Log supply has been challenging not only in Cedar but also Hemlock which is something new. Some good news, we have had a few weeks of rainy cool weather in late May and early June, which held off the much-anticipated early fire season. This will help to keep logging going throughout the summer months. BC forestry has had a significant number of policy changes in the past few years, with little to no industry consultation, which has resulted in the BC harvest level being down to less than 60 percent from the allowable cut. Fiber supply remains the single biggest issue for manufacturers in British Columbia.”

Garofano finished with this, “A recent grass roots campaign called Forestry Works For BC was launched in May to promote the benefits of a strong BC forest sector. The campaign is focused on working with government and leaders across British Columbia on strategies to ensure BC’s forest sector is sustainable and thriving.”

John McDowell of Oregon Industrial Lumber Products (OILP), Springfield, OR, said, “Yellow Cedar supply and demand are in a close equilibrium on clears and lam stock. Knotty products are a bit slow. This is probably due to low pricing on knotty Red Cedar that is still working through the market though it sounds as if knotty Red Cedar is becoming tight as prices remain steady on all fronts. As far as Douglas Fir goes, supply of clears remains very tight with many sizes extremely difficult to find. Prices have been climbing due to this imbalance however push back has begun as prices have climbed to the point where other products make more sense.”

McDowell continued, “Customers’ moods are a bit all over the place. In some markets sales are slowing down, in others its steady. Due to high interest rates and high pricing most people do not want to carry inventories of material. Especially when expecting the traditional slowdown in sales pre-election. It appears that the log supply for Douglas Fir clears in the U.S. is limping along, but I would expect logs to become harder to come by as we progress through the summer/fire season. Large logs in Canada are supposedly few and far between due to the old growth legalities still working themselves out.”

McDowell finished rating 2024 on a scale of 1-10 “OILP’s year is a seven currently. It’s a real rollercoaster from one month to the next, both due to sup- ply and demand. Industry wise I would guess other remanufacturing plants are faring about the same. Everyone is still working on coping or battling against rising overhead costs and wood costs. The big questions are when will the slow down pre-election begin? How long will it go on for? How soon will our country embrace or at least accept the election decision so that the economy can begin to run again on all cylinders.”

Chris Bouchard of BPWood, Penticton, BC, said, “Douglas Fir timbers remain softer than I’ve ever seen since starting to sell them in 2017. My customers are buying as little as they can to keep things moving. There is little to no real momentum in the market – many see this as what we can expect from the rest of the year. This year has been a solid five out of 10 for us so far but all of the major issues remain including labor and transportation challenges.”

Mark Gray of Patrick Lumber Company, Portland, OR, said, “High grade Softwoods are seeing a healthy demand in the marketplace. Overall tight supply is resulting in upward pricing pressures. Customers seem to be happy with YTD results. Their greatest challenge is planning two- plus months ahead with inventory purchases…that’s the world we live in today. They’re used to buying exactly what’s needed, and fairly prompt, but that’s not possible as order files are extended.” Gray continued, “On a scale of 1-10 it’s been a solid 7/10, and above average…but the number one challenge is having enough supply. Summer is here and we’re expecting an uptick in business.”

By Zach Miller

Editor and fourth generation of the Miller family to work at Miller Wood Trade Publications.

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By Zach Miller

Editor and fourth generation of the Miller family to work at Miller Wood Trade Publications.

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