High demand drives bidders to timber auction

By Jean Ruzickajruzicka@parkrapidsenterprise.com Monday’s Hubbard County timber auction drew a “tremendous turnout” to bid on the 22 parcels, all of which sold in the first round of bidding, Natural Resource manager Chip Lohmeier told commissioners at Tuesday’s meeting. The auction totaled $810,268, with aspen prices up 25 percent from January, 60 percent from 2014. Birch’s weighted average price also increased commensurately, Lohmeier reported. Jack pine moved up 35 percent from last year and Norway pine saw logs increased by 47 percent, 422 cords valued at $92,526 at Monday’s auction. Approximately 30 arrived for the auction, now being held in the board’s meeting room at the courthouse. “We saw new faces and some we hadn’t seen in a long time,” Lohmeier said. He attributes the renewed interest to the falling price of diesel and 50 percent of the auction sites being summer accessible. “Mills are screaming for wood,” he said, noting the mills were behind the push for the summer accessibility. “It’s good for the county, but bad for loggers,” Robin Walsh of Dick Walsh Forest Products said of the bids. “It is not a sustainable price,” he said, citing aspen selling for over $51 weighted average price. The reason stumpage is going up is a lack of wood, Walsh explained, not on the part of the county, but state and federal. Minnesota put up 800,000 cords of wood, but it could be a million or more, he said. Since 2008, the state has lost five mills. Wood was being imported from Canada for milling, he explained. The existing mills subsequently increased production via upgrades to meet increased demand. “But mills can’t afford this high priced wood,” he predicts. “Mills aren’t making profits, nor are loggers. “It’s good for landowners, but bad for consumers.”
Two years ago, Hubbard County doubled allowable cuts due to old aspen, he said of the county’s 10-year plan. Aspen and birch are generally cut at 40 years. The best economic value of Norway is generally at 70 years, he explained. It’s uncertain as to if the “price of board will go up,” he said. “Right now, the price is dropping. “I was shocked the bids went as high as they did,” Walsh said of this week’s timber auction. “I would have bid on more cords,” he said. “We need the wood.” Dick Walsh Forest Products currently employs 15. Prior to the “market crash” in 2006, the company had 35 employees. “Unless you’re born into this, it’s hard to get into,” the third generation logger said of the cost of equipment. His grandfather, Charles, lost an arm in a sawmill accident but, undeterred, went to work in the forest cutting pulp. Walsh and brother Steve are partners in the business initiated by their father, Dick Walsh, in 1962. Robin Walsh began his logging career peeling poplar by hand at 8. “I started dropping trees at 12.” Now, with modern technology, every piece of wood finds a use. Un-merchantable timber becomes chips, the biomass bound for Benson to be used for green energy production. Dead wood becomes fire wood. Walsh was headed to an auction Friday in Becker County, predicting a scenario similar to Monday’s. The Department of Natural Resources auction will be held in May. “We’ll see if the trend continues.” But the demand for wood won’t wane, he forecasts. “We’ve been managing forests for over 100 years,” Walsh said of the natural resource. Nationally sales of newly built, single-family homes rose 7.8 percent in February, according to the U.S. Department of Housing and Urban Development and the U.S. Census Bureau. Single-family housing starts nationally are expected to double this year, compared to 2010 figures.By Jean Ruzickajruzicka@parkrapidsenterprise.comMonday’s Hubbard County timber auction drew a “tremendous turnout” to bid on the 22 parcels, all of which sold in the first round of bidding, Natural Resource manager Chip Lohmeier told commissioners at Tuesday’s meeting.The auction totaled $810,268, with aspen prices up 25 percent from January, 60 percent from 2014. Birch’s weighted average price also increased commensurately, Lohmeier reported. Jack pine moved up 35 percent from last year and Norway pine saw logs increased by 47 percent, 422 cords valued at $92,526 at Monday’s auction.Approximately 30 arrived for the auction, now being held in the board’s meeting room at the courthouse.“We saw new faces and some we hadn’t seen in a long time,” Lohmeier said.He attributes the renewed interest to the falling price of diesel and 50 percent of the auction sites being summer accessible.“Mills are screaming for wood,” he said, noting the mills were behind the push for the summer accessibility.“It’s good for the county, but bad for loggers,” Robin Walsh of Dick Walsh Forest Products said of the bids. “It is not a sustainable price,” he said, citing aspen selling for over $51 weighted average price.The reason stumpage is going up is a lack of wood, Walsh explained, not on the part of the county, but state and federal.Minnesota put up 800,000 cords of wood, but it could be a million or more, he said.Since 2008, the state has lost five mills. Wood was being imported from Canada for milling, he explained.The existing mills subsequently increased production via upgrades to meet increased demand.“But mills can’t afford this high priced wood,” he predicts. “Mills aren’t making profits, nor are loggers.“It’s good for landowners, but bad for consumers.”
Two years ago, Hubbard County doubled allowable cuts due to old aspen, he said of the county’s 10-year plan.Aspen and birch are generally cut at 40 years. The best economic value of Norway is generally at 70 years, he explained.It’s uncertain as to if the “price of board will go up,” he said. “Right now, the price is dropping.“I was shocked the bids went as high as they did,” Walsh said of this week’s timber auction.“I would have bid on more cords,” he said. “We need the wood.”Dick Walsh Forest Products currently employs 15. Prior to the “market crash” in 2006, the company had 35 employees.“Unless you’re born into this, it’s hard to get into,” the third generation logger said of the cost of equipment.His grandfather, Charles, lost an arm in a sawmill accident but, undeterred, went to work in the forest cutting pulp. Walsh and brother Steve are partners in the business initiated by their father, Dick Walsh, in 1962.Robin Walsh began his logging career peeling poplar by hand at 8. “I started dropping trees at 12.”Now, with modern technology, every piece of wood finds a use. Un-merchantable timber becomes chips, the biomass bound for Benson to be used for green energy production. Dead wood becomes fire wood.Walsh was headed to an auction Friday in Becker County, predicting a scenario similar to Monday’s. The Department of Natural Resources auction will be held in May. “We’ll see if the trend continues.”But the demand for wood won’t wane, he forecasts. “We’ve been managing forests for over 100 years,” Walsh said of the natural resource.Nationally sales of newly built, single-family homes rose 7.8 percent in February, according to the U.S. Department of Housing and Urban Development and the U.S. Census Bureau.Single-family housing starts nationally are expected to double this year, compared to 2010 figures.