National Hardwood Magazine - December 2023

2024 FORECASTS Continued
Ray White
Harold White Lumber, Inc.
Morehead, KY
I wouldn’t call 2023 a successful
year by any means,
it was a pretty dismal year.
This fourth quarter, however,
has shaped up to be a very
strong quarter. I am seeing
every indication that I will be
back in the black. I believe
that there are many reasons for this, but I think that the
simplest answer is that there is a lumber shortage that
is taking place. The lumber market has been at a historical
low especially with the production of Red Oak, Hard
and Soft Maple, and other species being cut for industrial
products, while simultaneously seeing historically high
production costs. From my understanding, North American
Hardwood production has now hit a 63-year low! Attrition
rates are very high and will continue.
I sell to domestic end users and distribution yards, and
I export. I am probably still about 60 percent export and
40 percent domestic. The European Union is primarily
facing better markets. They have started switching over
to Red Oak since White Oak is so scarce and it’s jumping
in price. The EU has figured out how to stain Red Oak to
where it is a very close look to White Oak. I have as many
orders for Red Oak as I do White Oak that are going into
Europe right now.
I have started exporting finger joints. Up until this year
I have only shipped our finger joint production to the domestic
market but now, I am shipping mixed containers
with Hardwoods and finger joints.
With interest rates being at an all-time high and it being
difficult to get existing parts, the only upgrades I made
were for support equipment. We did install a fully optimized
scanning system from Corley’s Lewis Controls for
our sawmill, which was at a substantial cost.
Anthony Hammond
Roy Anderson Lumber Company, Inc.
Tompkinsville, KY
2023 sales have been
steady. Challenges for profitable
pricing has existed,
but ability to move lumber
is present. For 2024, export
markets need to improve
to help move products that
don’t historically move domestically.
We sell to flooring manufacturers, cabinet manufacturers,
millwork/moulding manufacturers and distribution
We are having a very hard time keeping employees.
We have started working with the community prison to
employ non-violent felons to subsidize our workforce,
and if it was not for them, I would not be in operation. We
are paying them the same amount of money that I would
pay anybody else to work for me and while they are on
work release their guidelines and their rules are extremely
stringent. If it wasn’t for this program, I wouldn’t be
running at 100 percent, and even with it I am still always
short, depending on how many people are eligible for
work release.
While we own our own fleet of trucks, the burden of
regulations as far as trucking goes domestically has always
been a problem, and with the exports we must deal
with the longshoreman and the railroad labor strikes. The
logistics of exporting is always difficult at best, but I have
to say it has gotten better over the last 12 months.
When it comes to tariffs, I’m not sure what the federal
government will do with a presidential year coming up. I
am also not sure what the Asian countries are going to
do, but the EU regulations that are on the table pose a
very significant threat to exporters and all lumber producers
in the U.S.A. No mill will be exempt from the overwhelming
data collection necessary to sell and buy wood
productions. So far in our dealings and negotiations as
far as the American Hardwood Export Council (AHEC)
and the USDA with the EU, they are not listening or understanding
that the problem with the illegal harvesting
and deforestation is not happening in the U.S. or Canada.
Overall, I am worried for our industry. Everything is
changing quickly, and I am not sure what the future holds.
We are a resilient industry; however who could have ever
predicated the major challenges facing us all! b
yards. Our strongest sellers have been White Oak, Ash
and Thick Red Oak.
Job inquiries have been steady, but finding qualified
employees needed to support growth has proven challenging.
Transportation has improved substantially over the
course of 2023.
At present, we do not have concerns regarding tariffs.
We suspect global economic concerns will outweigh desires
for tariffs to be renewed.b
36 DECEMBER 2023 n NATIONAL HARDWOOD MAGAZINE RealAmericanHardwood.com/industry
Bucky Pescaglia
MO PAC Lumber Co.
Fayette, MO
2023 turned out better
than what we expected at
the beginning of the year.
The year started off very
slowly, but shipments picked
up in the middle of the first
quarter and remained fairly
steady up until the time of
this writing.
75 percent of our customers are distributors, while the
other 25 percent are end users. While Walnut represents
95 percent of our production, all items across our product
mix moved well in 2023. The demand and pricing for Soft
Maple suffered throughout most of the year.
We have had problems over the past year retaining
enough employees. In order to combat this, we have
a unique work week with nine-hour workdays, Monday
through Thursday, and then just four hours on Friday.
This allows our employees to get in their 40 hours but
have a 2-1/2-day weekend. It has proven popular for the
applicants we interview. We also try to do as much cross
training as possible to avoid mental and physical fatigue.
We have noticed that container availability continues to
be a problem for us shipping out of the Kansas City area.
Brian Gibson
Cole Hardwood, Inc.
Logansport, IN
International and domestic
business landscape proved
to be exceptionally challenging.
Following the post-
COVID boom, the abrupt
fluctuations in prices, particularly
the soaring costs of
lumber and the rapid decline
in overall pricing, placed us in a precarious position.
The consistent rise in manufacturing expenses further
compounded our challenges, making profitability elusive
throughout the year.
Export markets witnessed a significant decrease in demand
during the latter half of 2023, and regrettably, I do
not foresee a substantial shift in this trend in the initial
months of 2024. Adapting to these market dynamics requires
strategic planning and a resilient approach as we
continue to face the complexities of the global economic
landscape.
RealAmericanHardwood.com/industry
There are less containers coming into this area so the
demand for empty containers can be intense. It makes
it difficult to promise a delivery date when you are not
guaranteed a container when you go to pick one up from
the depot. Schedule changes have also created logistic
nightmares.
Exports represent over 60 percent of our sales in both
dollars and footage. The whole topic of tariffs is unsettling
with the experiences we had during the most recent
trade war with China, but I am not as concerned with tariffs
as I am with the new EUDR regulations that have the
potential to cripple the U.S. Hardwood industry. This regulation
has passed so we need to be ready to find a way
to comply with it or risk losing a huge percentage of our
market. We all hope that common sense will prevail with
limiting these requirements, but we have to have a plan
in case it doesn’t. Although compliance with these new
regulations seems impossible, we can’t simply ignore it.
The European Union has much more support for climate
change policies than we have in the U.S. Keep in mind,
those same regulations will cover wood components that
are being brought into Europe from other countries, so it
won’t just affect European lumber sales. This could be
much worse than any tariff we have ever experienced. b
Cole Hardwood operates as a Hardwood lumber concentration
yard, catering to a diverse clientele of manufacturers
and distributors. The standout performers in
our product lineup this year have been the FAS/1F White
Oak and various thicknesses and grades of Hickory. Notably,
our proprietary rustic grades for Hickory and White
Oak have experienced exceptional success, serving as
a distinctive avenue to set apart our product offerings in
the market.
Cole Hardwood has recently integrated advanced
scanners, implemented in collaboration with Aiken Controls,
to assess thickness on both the green chains and
all kiln-dried lumber machines. This technological enhancement
has empowered Cole Hardwood to identify
miscuts effectively, contributing to a significant enhancement
in the quality of our kiln-dried Hardwood lumber. b
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DECEMBER 2023 n NATIONAL HARDWOOD MAGAZINE 37