Loggers say wet weather made for tough year
Area loggers may want to knock on wood, hoping depressed prices and wet weather will end what's been a challenging year in the timber industry.
As Hubbard County prepares 27 new parcels of aspen, jack pine and tamarac for the upcoming January timber auction, loggers are having trouble harvesting their existing contracts.
"Oh yeah," said Hubbard County Land Commissioner Bob Hoffman. "I mean, the whole summer and fall has been very wet. We've got very few people working. Most of it's winter wood on frozen ground. They're waiting for the ground to freeze, which is currently going on right now with the colder weather."
The county board granted extensions to loggers in 2009 to finish up their contracts, but Hoffman said only a few requested them. He's not sure that option will be available for the upcoming sale.
Loggers may be sitting on some wood, he admitted. "Some is high-priced wood they can't sell," Hoffman told the Hubbard County board last week. "We gotta draw the line somewhere" in giving out extensions.
Most logging contracts run anywhere from six months to two years.
"This last week with this cold weather, it's helping freeze the ground up a little bit," said Robin Walsh, co-owner of Dick Walsh Forest Products of Park Rapids.
But the company's ability to get back into the forest recently doesn't make up for a decade-long decline in the industry, Walsh said.
"They are really depressed," he said of prices for wood. "All over. Even the paper mill that we haul to, we're basically back to the same price we were at 12 years ago. Our costs keep going up. For one thing, my employees haven't had a raise in two years and we're not able to replace our equipment the way we should be doing."
Walsh sells lumber to Norbord Minnesota in Solway, which makes Oriented Strand Board, Potlatch, Berso Paper in Sartell, Boise Cascade and another Iron Range company.
"Probably our average haul is 175 miles," Walsh said. Transportation costs eat away at his bottom line, he said.
"There is probably no normal (in the industry); wood deliveries were significantly impacted in October and November by weather," said Jack Wallingford, manager of Norbord. "So deliveries during that time frame were down.
"That would have been primarily due to the wet weather," Wallingford said. "Prior to that we would have had our deliveries for, I would say, most of the summer and early fall restricted somewhat to correct our over-inventory situation."
Wallingford refused to blame a downturn in the building industry overall.
"We were on 24 hours a day, seven days a week, so we are using the same amount historically as always. In a year we use about 300,000 cords," he said, declining to say what prices the mill is currently paying for wood.
"I know they've decreased their prices in the last six months, a couple of times," Hoffman said of Norbord. "So the bidding has been less on auctions and for the most part what I'm seeing is aspen going in the low $20s, which is more where it should be."
Wallingford said Norbord is currently accepting wood, "absolutely."
"We have bought wood all year, like I said, this summer and early fall at a reduced level but our usage is very constant and we don't anticipate buying any less or more historically this winter than past winters," Wallingford said.
But when asked if loggers are holding on to their timber until prices go up, Wallingford said, "There are all kinds of issues and I'm certainly not going to challenge anyone's issue because everyone's situation is different.
"Who we deal with, who has what contracts, how much they paid for wood, those are all individual issues and they could be very conflicting because the circumstances for one logger could be totally different than for another."
Walsh said some loggers are hanging on for dear life.
"Some of the little loggers just aren't logging right now," he said. "They have the option since their equipment's paid for, to find another job. Quite a few guys I know are working on the pipeline. They're just gonna hold out and wait for prices to get better."
As the county readies the 940 acres for the Jan. 5 sale, Hoffman said he doesn't know how many bidders he'll get.
"We normally have around 30" bidders, he said. "It's been down around 15 I think the last couple of times."
Robin and brother Steve have diversified their business and now haul woody biomass to two plants in the state.
"It's keeping us going," Robin Walsh said.
"It's a very tough situation with plant closures and especially in this region. There's been a substantial change in the market and that's impacted everybody in the logging community, some worse than others, there's no doubt about it," Wallingford said.