National Hardwood Magazine - December 2021

2022 Forecasts
In The Hardwood Industry, 2021’s Success
Is Expected To Continue In 2022
Compiled by Matt Fite
Asked to assess their ups and downs in 2021, many Hardwood lumber company representatives said it was
a successful year. Looking forward to 2022, their sentiment leans in the same direction. One respondent stated,
“2022 should be a reasonably good year, albeit with some downward changes in prices more likely than continued
upward.” Another said that in 2021, “demand trends” were created that “will likely sustain, prosperous times for the
forest products industry into next year.” Still another lumberman said without qualification that he expects “a successful
2022.”
Eric Porter
Abenaki Timber Corp.
Kingston, NH
2021 has been a successful year
for us, although not without some
challenges. Labor issues have
plagued both of our production facilities in New Hampshire
and West Virginia. We have been about five people
short of full staff at both locations all year, and a lot of the
regulars are not putting in a full 40-hour shift.
Transportation is the No. 2 biggest problem, and that
has been in both exporting with container shortages and
domestic with lack of equipment to move loads. Thirdly
is the green supply line which, for us, has been tight all
year. I see these as the biggest challenges moving into
2022.
We sell to both domestic and international customers.
Our domestic business has improved this year, and up
until recently our exports have done well, too. Lack of
David Whitten
Bingaman & Son
Lumber, Inc.
Kreamer, PA
In 2021, Bingaman Export was
successful in staying ahead of the
unprecedented demand for our
products, as were most of our customers. We were unsuccessful
in increasing production and strengthening
our logistics channels.
Our end user customers fared the best, but distribution
customers also did well. All White Oak and Tulipwood
Poplar products shined.
Also this year, we connected our customers to logistics
websites that gave them shipping lines info in direct/real
time.
32 DECEMBER 2021 n NATIONAL HARDWOOD MAGAZINE
available vessels has dampened the export market as
of late.
Quality, consistency and service are the three things
we try to provide each and every time we make a sale,
and that’s not new. We are expanding our European
Beech imports in more sizes and grades.
We installed a new gas-fired boiler at our West Virginia
plant, replacing the old one to be more efficient in our
drying there. We are also in the process of putting up
some T-Sheds to improve our air-drying and the appearance
of our lumber.
As stated previously, transportation is a real problem,
and, from what I’ve heard, it is the same basically for all
of our trading partners and competitors. The politics of
actually working for a living here in the U.S. are not favorable
for a quick solution, in my humble opinion.
At this time, I think that the issue of tariffs is secondary
to the transportation and supply line issues.
With the disruption in supply chains due to COVID-19,
our maintenance people at both of our concentration
yards are buying extra parts to put on the shelf when
available. D
We have replaced and updated worn-out equipment in
almost every area of our company at all five Pennsylvania
locations, from replacing/updating sawmill equipment
such as resaw, carriage and trim saws, to adding new
boilers for KD steam, new kilns and new rolling equipment.
Domestic obstacles were finding long distance trucking,
and then working out higher costs with our customers.
Export-wise, transportation was a nightmare at
times, as bookings were canceled or rolled oftentimes
overnight after we had picked up and loaded the empty
containers. This situation has not improved – but we are
coping with it better now.
Regarding tariffs, the current and future concern is the
dramatic effects of the Chinese government policies that
gut real estate values, cut private company ownership
by starving access to capital and reduce to half the raw
material imports and manufacturer’s ability to produce by
Bo Hammond
Collins
Portland, OR
As lumber folks, we are either
inherently gifted or quickly adopt
industry practices of finding a way
to negate any positive. Quite often,
our perspective of good or bad depends on which side
of the transaction we find ourselves. With that in mind,
looking at 2021, I could certainly lament finding adequate
labor, cry over trucking woes and port delays, or wish that
I hadn’t committed to a particular price when I did; but
the reality is that pricing for our products reached some
historic levels and demand trends were created from an
unexpected catalyst that created, and will likely sustain,
prosperous times for the forest products industry into
next year.
2021 saw a growth in domestic demand from manufacturers
and distributors for our company and a reduction in
overseas business. China, in particular, has been a dominant
player in Hardwoods for the past decade, and the
ability to turn our sales focus toward domestic demand
was refreshing and honestly a positive development for
our brand and ongoing sales strategy. As much as lumber
supply was strained and we sometimes found ourselves
having to delay fulfillment of orders, we were able
to strengthen the relationships we have with key customers
in all segments of our customer base from industrial
grade buyers to cutting grade component manufacturers
to high-grade buying distributors. At a time when trade
issues seem to always be looming on the horizon, diversifying
our sales reach domestically and to alternative
global markets will be a benefit going forward.
Unfortunately, the Hardwood space has been shrinking
now for over a decade. Of course, we rebound from catastrophic
supply corrections like occurred after the great
recession and most recently in 2020, but we have not
limiting electricity consumption.
As for the bandsaw shortage, we’ve found ways to
cope.
In terms of the supply chain disruption due to
COVID-19, we’ve made strategic moves in various ways
to cope.
2022 should be a reasonably good year, albeit with
some downward changes in prices more likely than continued
upward. Domestic US/Canada demand should
remain strong as well as UK/EU and some other firstworld
smaller countries. China could be quite unstable
in 2022 as it’s a political year for the central committee,
and a tipping point if their policies of recent years will
continue stronger or somewhat abate. Our China wood
customers’ demand is less for domestic consumption
and more for export of finished product (back to the US,
UK, EU) than has existed for many years. China domestic
consumption of wood products is following the strong
decline of real estate values. D
been recovering all that we lost during those past cycles.
I wish the Hardwood space had enough room for
everyone that wanted to participate in it. If it did, then that
would mean demand for – and understanding of – the
products we make was ingrained in consumers’ minds.
Unfortunately, that isn’t where we are, yet.
I am a firm believer that things happen for a reason
and in the properly anointed timeframe. I also believe
that we must recognize this and act to capitalize on the
opportunities we are presented with…turn lemons into
lemonade, find the silver lining in the clouds. The COVID
pandemic was a catastrophic event, and I am not going
to try to make the event itself into a positive. But the catalyst
it provided to our industry, and what influences our
industry’s health, are undeniable. Prior to COVID, the
demise of McMansions had shifted home buying toward
smaller spaces. New generations, not so quick to start
families, were more content to rent within walking distance
of work and daily needs. The shutdown and need
for isolation created during the height of the pandemic
and persisting through the onset of COVID variants, reversed
those housing trends by creating a need for more
designated spaces in a home and a desire/ability to live
more rurally and still work where you want. This alone
didn’t create a lack of adequate housing, but it accelerated
the timeframe to correct it. Government subsidies,
agreed with or not, kept households whole financially,
sparking consumer spending. Our products have never
faced a better time to be valued for what they are actually
worth than right now.
Consumers with cash in hand and a reason to make
new-home or remodeling decisions are abundant right
now. The industry finally has a promotional campaign
started that can educate the general consumer about
why wood, real wood, is a better choice than fake wood
or other alternative materials. We have an opportunity
to start controlling our own destiny instead of playing the
victim of our circumstances. Even though we may be
shrinking as an industry right now, our key demand driv-
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DECEMBER 2021 n NATIONAL HARDWOOD MAGAZINE 33