Sept Oct, 2003





In The News

Wood Prices on the Rise
The Seattle Post-Intelligencer reports a dramatic rise in wholesale lumber prices. The rise has been linked to the "continuing boom in new home construction, the harsh winter that shortened this year's building season and the military's need for wood for U.S. troops' camps in Iraq." OSB (oriented strand board) prices have risen 152 percent. Lumber used for framing is also up. And anyone buying plywood will experience a 90.3 percent rise from last year. A 4- foot-by-8-foot sheet that would have sold for $14 weeks ago is now $22 a sheet. The same with 10-foot 2x4s — up from $3.99 to $5.50. "We are at historical highs," said Sam Sherrill, executive editor at Crow Publications, a Portland publication that tracks prices in wood products. "The demand is real; it's there; it's huge," Sherrill said.

Governor Martz Urges Baucus to Take Action
In September, Montana governor Judy Martz wrote Senator Max Baucus asking him to support the Healthy Forests Initiative. In her letter she stated that this year over 600,000 acres have been lost to wildfires and the effects have been felt not only in the forests but also in the tourism industry. She also noted there could be possible effects on the health of those exposed to the smoke, especially the young and elderly. "Today, only eight independent sawmills remain in Montana. These mills provide critical economic activity in small communities by supporting good paying jobs for rural Montanans," stated Martz. "These mills also provide the infrastructure necessary to improve the condition of Montana's forests, minimizing the effects of catastrophic wildfire and lessening the impacts from the loss of tourism related dollars." She went on to point out that in a recent GAO report, 95 percent of the appealable decisions in the Northern Region were appealed. "That study closely resembles the 2002 Forest Service study that found that 100 percent of appealable decisions in our region were indeed appealed." Her appeal, like many others in of support the President’s Healthy Forests Initiative, comes as the U.S. Senate is close to attaining the necessary votes. "Unless we support changes to our current system, more Montana mills will be lost, more good paying jobs will be lost and more summers will be like the one we are experiencing," said Martz.

Boise Buys OfficeMax
On July 14, Boise announced it had reached an agreement to acquire the country’s third biggest office products retailer for $1.2 billion in cash and stock — OfficeMax. It has been speculated that Boise is getting out of the tree business. CEO George Harad would not confirm the allegation, but pointed out that since 1994 the company has evolved from "two-thirds manufacturing and one-third distribution to a business mix after this transaction that will be 20 percent manufacturing and 80 percent distribution." He also commented, "Given the size of this transaction and the impact on our business mix, once it closes we’re going to step back and look at the composition of the company."

Fire Devastation
Once again, summer fires have been devastating. One of the most recent fires outside Sisters, Oregon has consumed over 50,000 acres at a cost of over $7 million dollars — a figure that’s easy to reach when firefighting costs are approximately $1 million a day, according to Incident Commander Bob Anderson. But that’s nothing compared to the damage British Columbia experienced this year. Approximately 200,000 hectares of forest around the Kamloops and Kelowna areas burned, totalling about 57 million cubic meters of timber. It is estimated forest fires damaged trees that might have been worth $5.6 billion as finished lumber. And preliminary estimates by the Council of Forest Industries (COFI) indicate that the fires have affected 14 billion board feet of lumber — equivalent to 75 percent of Canada's softwood shipments to the United States last year. Some of the timber is salvageable but if initial estimates are accurate, Gary Crooks, a VP with Vancouver-based COFI, says it would take about three times the milling capacity currently available in the southern interior to process it. Fires were still burning in September, so it is too early to speculate on how much wood is salvageable, or to determine to what extent license holders have been affected.

Bush may support higher spending on thinning
"We will work with the Senate to make sure we've got ample funding for thinning projects," said President Bush past September in order to help break apart a Senate logjam regarding his Healthy Forest Initiative. Bush is trying to find a compromise that could give him a victory on one of his top environmental priorities. "Anytime there's a reasonable request made on any environmental matters, it ends up in the courts, in endless delays in the courts. So nothing gets done, and in this case the environment deteriorates, particularly our forests," said Bush.

Boise Makes Environmental Statement
Boise-Cascade announced in September that they would make a stand in helping to protect endangered forest areas throughout the world and old growth forests in the United States. Boise is the first major U.S. forest products company to adopt a comprehensive environmental statement for its operations, and the first distributor of wood and paper products to extend an environmental policy to its suppliers. Boise’s statement adds that it will work with environmental groups to successfully eliminate the purchase of wood products from endangered areas. Boise also committed to giving purchasing preference to suppliers who provide wood products from certified, well-managed forests whenever feasible. Among other provisions, the statement includes Boise's assurance that its purchase of logs, pulpwood and chips will strengthen efforts to thwart illegal logging. The statement was developed with input from groups including Rainforest Action Network, American Lands Alliance, and the National Forest Protection Alliance. "This statement formalizes Boise's commitment to environmental stewardship by linking the company's broad and varied environmental activities into a unified statement," said George Harad, Boise's chairman and chief executive officer. John Bender, senior vice president, Boise Building Solutions, said, "We are proud of the progress we've made, and gratefully acknowledge the support of our customers in this effort. Their dedication to constructive dialogue has helped us achieve the high standards this policy reflects."

Hurricane may take Plywood prices higher
Plywood prices have been rising steeply over the past month. But Hurricane Isabel may take those prices even higher. Analysts believe Isabel will accelerate the trend even further. "If you're already at the maximum of pricing, and then you have a hurricane...that really sends it off," said Stephen Atkinson, an analyst at BMO Nesbitt Burns. "We've never been in this territory before," said Deutsche Bank Securities analyst Mark Wilde. "It's as if we thought the highest mountain in the world was Mount Everest and all of a sudden we found one higher."

SCLC 2004 Conference
This year the Sierra Cascade Logging Conference (SCLC) will be held February 12-14, 2004 at the Atlantis Resort/Casino in Reno, Nevada, with exhibitions at the Reno/Sparks Convention Center, also in Reno. This year’s theme is "Healthy Forests and Fire Safe Communities" and people are invited to come exchange ideas on logging and related industries. Seminars and workshops have been designed to meet the broad interest of attendees under a common theme. The equipment show, as always, will be filled with displays to meet the needs of loggers, foresters, others in related fields and those who wish to learn more about our industry. Special events this year include Past President's Ax Throw, Logger's Breakfast, and Sawdust Bowl, as well as the Education Banquet/Auction. For more information you can call 530/258-2058, e-mail [email protected]  or log onto the SCLC web site at .


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This page was last updated on Tuesday, September 28, 2004