Softwood Forest Products Buyer - January/February 2019

FORECASTS for

FORECASTS for 2019 Compiled by Joshua B. Smith (Editor’s Note: In 2019, adapting to changing markets and offering value-added services are two key focuses for companies who manufacture and distribute the wide variety of products available in the Softwood market. From upgrading facilities to expanding sales areas, members of the forest products industry look to flex their preparedness as a new year begins.) Todd Payne Seneca Sawmill Co. Eugene, OR Our top 2019 business goals include completing our multi-year, million upgrade project. Largely focused on increasing our drying capacity, the project also allowed for several automation-technology upgrades along with two key ‘facility’ upgrades – expanded log Todd Payne yard and loading/shipping areas. We are very excited to now offer a more diversified product line of quality dimension and stud lumber, both green and dry. The expanded dry production provides an opportunity to reach new markets not just on the West Coast, but equally important markets in the Midwest and East Coast. This will be a large focus as we enter 2019. We continue to monitor national economic metrics such as housing starts, mortgage rates, labor and inflation. These will be the large-scale, quantifiable drivers that influence the lumber market. Locally (Pacific NW), raw material supply and costs, low unemployment and skilled labor remain some of our biggest challenges. Truck transportation remains tight. This is a national challenge with a continued shortage of drivers––a situation that will not resolve itself in the short term. We’re seeing increased wages and local hauls as ways to retain existing drivers and to recruit new driver talent. Rail has been steady for the two Class I railroads, largely impacted by the overall health of the U.S. economy and shipment of goods and services. Local short lines have been a little more problematic as they face labor, equipment and ownership challenges. We have a diversified, loyal domestic customer base. 2018 proved to be a solid year for both our green and dry dimension/stud products. Looking closer, narrow dimension certainly had an advantage at times in both demand and price. Great people make Great products. Specializing in Eastern White Pine Lumber Mixed Truckloads • PTL • Partial Units Partial Loads • Custom Programs Custom Kiln Drying • Trucking Arrangements NELMA Patterns & Custom Patterns Double-milled with Weinig Moulder Finish 4/4, 5/4, 6/4 and Timbers • 1/2 x 6” & 8” Bevel Siding Primed D Select Boards • DPS- “Band - Tex” Finish dipriziopine.com Pictures at left: Shipping and Inventory Contriol Team - Earl Perrino, Jamie Moulton and Ian Penny Since 1938 Our Promise To You: Accurate Complete & On-Time Breadth of Selection and Mixed Loads Is Our Specialty. Always Competitive Prices: The Secret Is Our Process; The Quality Is Our Hallmark. Give Us a Try Before You Buy Great People. Great Facilities. Great Solutions. Great Pine. Siding • Clapboards • Flooring • Paneling Broadest Selection of Patterns and Textures 800-647-8989 or 603-473-2210 Route 153, Kings Hwy Middleton, NH 03887 Email Jamie Moulton jmoulton@lavalleys.com Ted Ellis Ted Ellis Idaho Timber Boise, ID 2018 provided both opportunity and challenges for all within the industry, however the pain and gain were experienced differently depending on where your organization fit within the industry. When we think about 2019 we are thankful that the inevitable correction occurred within the same calendar year which helped temper and moderate results, thus the expectations within the same fiscal year. As we prepare for what 2019 will bring, we see many reasons why the results may be different than 2018. First, we start with market levels that should be sustainable at worst with improvement if supply and demand returns to a more balanced position. Second, there are unknowns regarding weather or other disruptions (yet to be seen) that could create shortages, real or temporary, thereby creating long or short-term price gains. At this point we see signs of slightly reduced construction demand due to rising costs in labor, materials and land. Combine this Continued on page 48 Page 10 Softwood Forest Products Buyer n January/February 2019 DIPRIZIO JAN-FEB 2019.indd 1 12/4/18 2:55 PM

TP&EE Celebrates Increase in Attendance, Plans for 2020 Expo Photos by Zach Miller Aaron Schulte and Keith Trask, Hancock Lumber Company, Bethel, ME; Mathieu Laflamme and Eric Faucher, Carbotech International, Plessisville, QC; and Roger Timms, Acora Reneco, Eden, Australia Portland, OR–More than 2,900 wood products industry personnel recently registered for the fourth Timber Processing & Energy Expo (TP&EE), which was held here at the Portland Exposition Center. That number included personnel from 110 wood products producer companies representing hundreds of individual mill site operations. The event caters to producers of lumber, plywood, veneer, and engineered wood products including mass timber. Attendees came from 38 U.S. states, six Canadian provinces and 17 countries. They attended to observe 200 exhibitor companies on 62,000 square feet of booth space as well as several exhibitor setups outside the venue. “We had a slight increase in attendance from the mill companies compared to 2016,” commented Show Director Rich Donnell. “We were very enthused about that, because going into the show we were getting a lot of feedback that they were extremely busy and hadn’t really had time to think about the show yet.” But Donnell added that some companies obviously impressed upon their personnel to take a break from their work days to attend the show. Weyerhaeuser, for example, sent 135 people, Sierra Pacific Industries sent 80, Hampton Affiliates sent 60, Seneca had 35, Idaho Forest Group had 30 and Stimson had 20. Numerous other companies sent groups of 10 or so representatives. Donnell also noted that the veneer/plywood/EWP sectors had an impressive presence with attendance from two dozen companies in those fields. The next TP&EE will be held September 30-October 2, 2020 at the Portland Exposition Center. Watch for updates at www.timberprocessingandenergyexpo.com. Alexa Gilbert, KBI, Toronto, ON; Pierre Gilbert, Secovac International, Kirkland, QC; Ingo Wallocha, Valutec Wood Dryers Inc., Coquitlam, BC; Brett Madron, Idaho Forest Group LLC, Lewiston, ID; and Jeremy Howard, Nyle Systems LLC, Brewer, ME A family owned business you can trust www.vaagenbros.com Additional photos on page 28 Softwood Forest Products Buyer n January/February 2019 Page 11