National Hardwood Magazine - February 2011

AJD Forest Products

AJD Forest Products Premium Kiln Dried Hardwoods Northern Red Oak is Our Specialty Lake States Largest Producer of Industrial Lumber P.O. Box 629 Grayling, MI 49738 Phone 989-348-5412 FAX 989-348-2500 Email: fred@ajdforestproducts.com Website: www.ajdforestproducts.com DRY KILNS • 2 SAWMILLS 25,000,000 BF ANNUAL PRODUCTION When Quality Counts... KITCHENS BROTHERS MANUFACTURING 990,000’ Dry Kiln Capacity 1,900,000’ Predryer Capacity PRODUCING LUMBER, DIMENSION, RED & WHITE OAK STRIP FLOORING, MOULDINGS AND CUT-TO-SIZE FURNITURE PARTS SAWMILLS AT: Utica - Hazlehurst, Mississippi and Monroe, Louisiana Sales Office: John Clark - Sales Manager - E-mail: jlc1102@aol.com Paul Ostlund - Sales Representative - E-mail: paulkbmc@aol.com P.O. Box 111 Hazlehurst, Miss. 39083 Tel: 601-894-2021 Fax: 601-894-1069 Web sites: www.kitchensbrothers.com or www.cherrybark.net SOUTHEAST TRENDS - Continued from page 6 being lower, a lot of people are choosing to double cant their Poplar so cants have flooded the market.” For the coming months the source said weather is his number one concern. In Arkansas a Hardwood supplier said he’s beginning to see log supplies get low for the winter. “I think we’ll probably be in similar shape as we were last year and we’ll probably have a run up on prices. I think we’ll see a strengthening in prices around the first quarter.” He said his inventory levels are low and his prices are holding steady. “Our green prices have held steady over the past month after declining. We’re looking to pay a little more in the next couple of months.” As for transportation issues he is concerned about fuel rate increases. “Availability of trucks has not been a problem for us yet. But I think if we were to see an up tick in the economy it would be a big problem.” Serving a broad customer base that includes distributors, and flooring and cabinet manufacturers, he said one of his export customers said that his sales activity in the U.S. is still off but sales in China are doing better. In the coming months the source expects a supply driven market. “I believe we’ll see ‘okay’ business for the next several months and it will be completely supply driven. Once we get to July 4 th holiday things will probably slow back down again and we’ll see prices decrease again because we will oversupply the market again when the weather gets better. I don’t look for demand to increase, the market has been supply driven for the past three years.” A Tennessee Hardwood supplier said his sales activity is about 50 percent better than the same time period last year. “Our export market has picked up and prices are going down,” he said. Handling Red and White Oak, Ash, Hickory, Cottonwood, Sycamore and Gum, the supplier said, “Red Oak is moving well but our lower grades are moving faster than anything. Business right now is real spotty. We broker lumber also and there is a lot of lumber that we can buy at a significantly lower price than what we sell ours for. There are a lot of companies that have to keep cash flow going and selling lumber at reduced prices is helping that process.” When asked about transportation costs he said, “We do a lot of exporting and those rates haven’t risen. A lot of our No. 1 and 2 Common used to be purchased by our domestic customers only but now most of it is going to Asia.” The source said that certified products used to be a major concern for his company, but today is different. “A couple of years ago we were really looking into it and trying to get certified. It got to be a huge deal for a while but we aren’t hearing anything about it anymore. If we were certified it wouldn’t make any difference in the way we do things. If you have a sawmill, you want the forests to be as renewable as anybody does.” He expects a pick up in customer orders over the next six months. “From what I read and hear there should be a pick up in demand for domestic and overseas. I think we bottomed out in 2009 and we’re slowly building back up. We do need to build more houses and that’s not going to get better in the short-term but I think it will continue to come up a little bit.” Reports from residential brokers indicated existing home sales weakened recently on a year-over-year basis. Many brokers, most notably in Florida, reported that the halt on distressed sales has stalled activity. District homebuilders indicated that new home sales growth and construction activity weakened further. Home prices remained below the year-earlier level, but declines moderated somewhat. Contacts noted downward pressure on prices across much of the region from distressed property sales. Despite weak buyer traffic, the outlook for sales growth over the next several months improved somewhat. • 52 Hardwoods...The All-Purpose Material

LAKE STATES TRENDS - Continued from page 6 attributes the depressed conditions to poor consumer confidence. “We’re heading back in the direction of an overproduced market,” he said. “Prices are starting to come down in species like Red and White Oak and Hard and Soft Maple, so there’s a good chance we’re going to over produce.” Handling most Hardwood species he said Black Walnut is his best moving specie and Hard Maple is his slowest. “We are having a little bit of difficulty finding Walnut and Hickory but our inventory levels are strong right now.” As for his prices the source said, “Fierce competition for the resource is keeping the price of logs at a premium.” He said he doesn’t anticipate any improvement in prices for a while. “In fact, with the snow we’re getting here, it’s only going to get tougher.” Although he isn’t experiencing any transportation difficulties currently, he expects fuel rates and truck availability to become an issue by spring. When asked about certified products the contact commented, “We don’t play that game. We are beginning to see that aspect move to the side because it’s not realistic in most applications.” Serving high-end domestic, European and Japanese markets, the contact said his clients report stable but questionable market conditions. “There is still a lot of doubt out there. Not necessarily negative doubt but certainly uncertainty in the market.” For the months yet to come, the source expects ups and downs. “We’re going to have some sunny days and we’ll have some bad ones too. When you’re talking about a market that is at 50 percent of ‘normal’ levels but still 20 percent better than the previous year, survival is the new success.” Another Wisconsin supplier said, “We’re heading into a traditional slow down. The sawmills do have logs and we’re finding a fair amount of green lumber available right now.” The contact said her local economy has picked up, although marginally. “I believe the economy has picked up just a little. Also because so many suppliers have closed, more opportunity has opened up for those of us that are left.” Handling Red and White Oak, Hard and Soft Maple, Cherry, Ash and Hickory the supplier said her products are trending more towards grade than species. “There’s not necessarily a particular species that is moving better than others, it seems to be in the grades. For us, the lower grades are moving very well on all items. Select and Better grades are moving the slowest, primarily in Red Oak and Hard Maple.” She also mentioned that while she is not having any supply issues in her immediate area, the same is not true for the region. “Talking to other people, supply is spotty in certain areas. I know the same is not true for others but right now we are getting enough green lumber into our system.” As for transportation costs, the source said, “Fuel prices have definitely gone back up again and trucks are harder to find. I don’t know if that’s a matter of the price or if it’s because there are less of them out there now like our suppliers.” Primarily marketing to secondary manufacturers the supplier said her flooring customers seem to be doing fairly well. “The flooring industry is doing fairly well right now, which is why the lower grades have been moving so well for everybody.” The source expects market conditions to gradually get better. “I think 2011 will bring about some changes, but they will be slow.” Analysts indicate that the Lake States economy as a whole has grown at a modest pace. However, both residential and commercial construction decreased. Labor markets in the region also showed signs of strengthening. In Minnesota a factory announced plans to hire 300 more employees. Among those surveyed in a business outlook poll, 34 percent expect to Please turn the page G.F. Hardwoods, Inc. “A Company You Can Depend On” 9880 Clay County Hwy. Moss, TN 38575-6332 Phone: 1-800-844-3944 Fax 1-931-258-3517 Kevin Sweezy kevin@gfhardwoods.com Kevin Sweezy Howell kevin@gfhardwoods.com White howell@gfhardwoods.com Quality Appalachian Hardwood Lumber Species Services Facilities Website: www.gfhardwoods.com • Red Oak • Poplar • Hard Maple • White Oak • Ash • Cherry • Own Trucks • Cut 4/4 through 8/4 • Grade After Kiln Drying • Computer Tally • 5 Length Separations • 600,000 B.F. Kiln Capacity • 500,000 B.F. 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