FOREST INK: Cyclical nature of Canada and U.S. lumber markets

Shift reductions in some B.C. mills is not encouraging

Recent announcements about the Tolko mill closure this fall in Quesnel was not unexpected but shift reductions in some B.C. mills was not encouraging. I went to two sources in the U.S. to see what their explanation of the lumber slowdown was caused by.

Freres Lumber from Oregon and the California Farm Bureau Federation provided some background.

The north had above average snowpack in the Sierra Nevadas along with the Midwest being engulfed in the grip of a polar vortex that brought with it historical lows in temperature.

The authors point out that this type of weather always affects our markets in a very understandable way. Another factor was the longest government shutdown the U.S. has ever experienced.

First, government shutdowns influence economic activity.

Second, no housing or economic numbers can be compiled by the government if there are no government workers to compile them.

READ MORE: Restoring forestry in B.C.

The result has been a lag in housing and construction numbers.

It seems to be part of the cyclical nature of supply and demand. There was a slowdown in the increase of housing prices, sales and starts.

The slowdown was attributed to higher mortgage rates, high structural building material prices and limited availability of land and labour. All these issues led to housing affordability issues which dragged the market down.

According to California Forestry Association Vice President Steven Brink housing starts declined last fall and early winter. That contributed to a declining lumber price, although housing has rebounded slightly.

Not all markets were impacted, Ponderosa pine and sugar pine held their value well, however, White fir and Douglas fir dropped sharply (not good for B.C.).

With new home construction being very cyclical, Webb said, “there was a sense that the bubble was going to burst, so people are half-expecting it to happen.”

As well as a large influx of salvage logs on the timber market “can depress the rest of the market, because there’s all of a sudden a big volume that drops the price.”

Our close relationship with U.S. markets means our lumber markets will be impacted as well.

No doubt U.S. lumber mills will try and restrict Canadian imports by whatever means possible but there are some bright spots.

Veneer products are not as impacted as lumber and I have not heard of recent market reductions in the pulp and paper sectors.

Recent announcements about upgrades in wood pellet manufacturing in BC also indicates a healthy biomass sector.

Developing markets in other countries should help to reduce the impacts of our close relationship with the States but the recent reductions in our canola shipments to China because of the Chinese diplomat extradition to the U.S. shows how close our ties are.

In the long run I think the best solutions is to do what we can here, like encouraging the revitalization of our lumber and pulp industry on the coast, reduce log exports and increase value added industries throughout the rest of the province.

Jim Hilton is a professional agrologist and forester who has lived and worked in the Cariboo Chilcotin for the past 40 years. Now retired, Hilton still volunteers his skills with local community forests organizations.

Just Posted

Williams Lake city councillor demands 39 affordable housing units for his city

New affordable housing project slated to open in December only has eight subsidized units

B.C. offers early retirement, training fund for forest workers

Communities eligible for $100,000 for permanent closures

New McLeese Lake Soul 2 Sole Trail Race raises close to $5,000 for McLeese Lake fire hall

One hundred and 34 runners and hikers took part in the inaugural race Sept. 15

CRIMESTOPPERS: Williams Lake RCMP seek public’s assistance

Williams Lake RCMP released three names of people they are looking for

CRD board on the road travels to Tatla Lake

Broadband, plastics, cycling, grants for assistance and economic development were on the agenda

VIDEO: Drone footage documents work to free salmon at Big Bar landslide

Video shows crews working to remove rocks and wood, and transporting salmon by helicopter

Rick Mercer calls out Conservative candidate in B.C. for fake meme

‘Not true. All fake. Please Stop,’ tweeted Rick Mercer in response

Bear killed in Kimberley after chasing girl, wreaking havoc on town

This particular brown-coloured bear has been the subject of many calls this summer; very food habituated, CO says

Police investigate after intoxicated teens clash with security at B.C. fair

18-year-old woman arrested and RCMP looking at possible assault in Victoria-area fall fair incident

BC SPCA investigating after three dogs found shot dead in Prince George ditch

The three adult dogs appeared to be well cared for before being found with gunshot wounds, BC SPCA says

Boy overdosed on illicit anti-anxiety drug found on Kelowna classroom floor, RCMP say

Noah Mills, 8, ingested a pink powdery substance off his Kelowna classroom floor

Psychiatric assessment ordered for man accused in Salmon Arm church shooting

Lawyer tells court accused was diagnosed with psychosis hours after his arrest

Surrey mom allegedly paid $400,000 for son in U.S. college bribery scam

Xiaoning Sui, 48, was arrested in Spain on Monday night

Winnipeg student, killed in bus crash, remembered as passionate, kind

University of Victoria student Emma Machado, 18, was killed in the bus crash near Bamfield on Friday

Most Read