Timber Industry Report
By Rick Sohn, PhD.
Umpqua Coquille LLC
The proof is finally in the pudding, with a few new hires and/or more hours at most local mills in Southern Oregon. Demand and prices are generally holding. Four-year trends of lumber, logs, housing, and mortgage statistics are shown below.
Information and interpretation.
The latest round of mortgage interest rate drops certainly got the attention of many. The rate has steadily dropped for a year, with one small exception, from a “high” of 4.55% last July. The newly posted June rate of 3.68%, the lowest in decades. There is also a trend toward higher single family housing starts at present, with Random Lengths reporting a 3.2% rise from April to May. New home sales are up to 369,000, up 7.6% according to the Financial Times. It is factors like these which are strengthening the demand picture for wood products and causing shifts and hours to be added at local mills. Lumber prices are also strong, compared to log prices.
Checking with some local mills, hours and employment are inching up slightly — the first time in several years. Mills are very hesitant to add employees. According to Valerie Johnson, DR Johnson Lumber has added a shift of about 23 people to open up Umpqua Lumber (at Round Prarie on Interstate 5), for drying lumber. Logs are not yet being processed there at this time. Blaine Keller indicates that Keller Lumber is now running the headrig (which processes logs) 2 days per week, instead of only 1 day per week. C&D Lumber markets have been “finicky” according to Brad Hatley, general manager. They have added just a few people in April and a few for the summer. Capacity is actually being added to run some extra lumber, which can be air-dried, rather than kiln-dried, for a lower overall production cost.
According to JR Adams, Nordic Veneer has added 3-4 people to help run and still give employees vacations, as well as running most weekends. This is a marked improvement over running short weeks and needing no one to fill in for vacations. According to Hank Snow, VP of Human Resources at Roseburg Forest Products, production is up slightly at Coquille ,Riddle and Dillard Plywood plants, as well as the Engineered wood Products plant in Riddle and the Sawmill in Dillard. For the first time in years, 50 summer interns have been hired to fill in for vacations. 221 employees on layoff at the beginning of the year, have all have been given an opportunity to return to work and most have. An additional 119 new employees have been added, some as replacements for terminations or retirements.
Although the added jobs are just a few, this trend is very encouraging for the timber economy of Southern Oregon.
Data reports used with permission of:
1Random Lengths. 2”x4”x8’ precision end trimmed hem-fir studs from southern Oregon mills. Price reported is Dollars per Thousand Board Feet generally for the second to last week of the month. One “board foot” of product measures 12 inches by 12 inches by one inch thick.
2RISI, Log Lines. Douglas-fir #2 Sawmill Log Average Region 5 price. Current report is for the prior month. Dollars per Thousand Board Feet of logs are reported using standardized log measurements from the “Scribner log table.”
3 Dept. of Commerce, US Census Bureau. New Residential Housing Starts and New Residential Construction Permits, seasonally adjusted, annual rate. Current report is for the prior month. Recent reports are often revised in bold. Also, major revision made each May, reaching 2 1/2 yrs back.
4Regional Multiple Listing Service RMLSTM data, courtesy of Janet Johnston, Prudential Real Estate Professionals Broker, Roseburg, OR. Inventory of Unsold Homes (Ratio of Active Listings to Closed Sales) in Portland Oregon, for most recent month available.
5Freddie Mac. Primary Mortgage Market Survey. 30-year Fixed Rate Mortgages Since 1971, national averages. Updated weekly, current report is for the prior full month.
Issue #5-6. © Copyright Rick Sohn, Umpqua Coquille LLC. For permission to reprint for nominal fee, Email [email protected]
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