Midwest Business Trends
Midwest Business Trends West Coast Business Trends By Paul Miller Jr. Vice President By Zach Miller The Softwood market has been relatively stable in South Dakota, a wholesale distributor contact said. “What has hampered us over the last four months has been the rapid decline in commodity pricing, which has caused some apprehension on the part of our customers,” the source commented. Those retail lumberyards have been reluctant to stock their usual inventory “because they don’t want to be caught with high-priced wood in a falling market, so they’ve been buying hand to mouth, so to speak.” His company’s top-selling Softwood is SPF, along with White Fir and Southern Yellow Pine. It carries an array of grades, from Hi-line and other structural grades to machine-stress-rated. 2x4s, for example, are available in seven grades. The construction industry among the Upper Midwest’s seven states has been good, though low crop prices for three consecutive years have hindered purchas- DC PREMIER our premier line of appearance timbers and 2” dimension ASK FOR IT BY NAME Think quality, think Delta DC SUPERIOR our superior line of STK kiln dried fascia, decking, siding and boards 604 589 9006 Continued on page 56 DC SUPREME our supreme line of STK green fascia, decking, siding and boards deltacedar.com DC SELECT our select line of std&btr no hole green decking and boards 2018 was a wild ride for manufacturers, ending with lagging housing starts, subdued lumber prices, and higher than normal inventories, the exact opposite of how the year started. With these issues in mind, producers contemplate where the market stands and what is to come for the wood products industry in 2019. The following is what a few of these producers had to say: Dean Garofano of Delta Cedar Specialties, Delta, BC said, “2018 for Delta Cedar was overall a good year with our sales revenue up slightly from 2017. The first six months were very steady for all products and we struggled to keep up with our timber and clear orders. With the exception of timbers, demand did wane as the year went on particularly in tight knots and it feels more like a traditional winter Cedar market this year compared to the uncharacteristically active winters of the past few years.” Garofano continued, “The large drop in commodity lumber along with the high values of Cedar has contributed to Cedar buyers pausing to see where things might go. Although there are some factors that are concerning there is some good news for those that want to see stability rather than reduced inventory values. Distributors inventories for the most part are in line and although there have been more Cedar logs available this past fall and winter there does not appear to be an oversupply. In fact this is really more reflective of a normal winter for Cedar where mills tend to try and build some log inventory through the winter months to ensure they do not run out during prime season.” Garofano finished, “It is always difficult to predict where prices are going and it is understandable that buyers would be cautious this winter. 2019 may not be what the last couple years were but the trend for Cedar log volumes is for them to decline over the longer term and the U.S. economy is expected to continue growing after an anticipated somewhat flat 2019. This may all indicate an uneventful 2019 for Cedar which may be just what the doctor ordered and welcomed by many.” Darren Duchi of Siskiyou Forest Products, Anderson, CA said, “The balance of supply and demand has shifted from what has been status quo for the past 4-5 years. There appears to be more sellers than buyers, which means we are no longer chasing but being chased. There is a much higher demand for manufactured products, so where it used to be that the mills had the power the last four years or so, that is starting to come off a bit which is opening up some opportunities for us.” Duchi continued, “Our market has always been best when there is excess wood on the market. Our customer base is pretty positive looking ahead into 2019. We’ve Continued on page 57 Page 38 Softwood Forest Products Buyer n January/February 2019
NAWLA TRADERS MARKET - Continued from page 1 pitcher), education session with Alex Chausovsky (of ITR Economics), 10 Group Meetings, local entertainment and amenities, and many Learning Lounge sessions on the tradeshow floor each day.” Learning Lounge presenters and their presentations included: Alden Robbins, Robbins Lumber Inc., Greg Martin, Vaagen Bros. Lumber and Caitlin Tebb, Fred Tebb & Sons Inc., Environmental Stewardship: Are You Doing It?; Devin Stuart, Roseburg Forest Products, Internships: Recruiting for the Future; Kristie McCurdy, Boise Cascade, Chelsea Brown, Patrick Lumber Co., Tina Breen, Manufacturers Reserve Supply, Aly Kingsley, Wildwood Trading Group, Jennifer Coskren, RISI and Michelle Maller, Oregon State University, Panel: Women in the Lumber Industry; David Jones, Ph.D, Benchmark International, Test Your (Tree) Knowledge; Lisa Ritchie, Affinity HR Group, Recruiting and Retaining Entry-Level/Hourly Positions and Millennials in Lumber; Dan Semsak, Pacific Woodtech Corp., Ian McLean, Spruceland Millworks and Patrick Adams, 526 Media Group, Panel: Looking at Trends in the Lumber Industry; and Victor Gonzalez and Arturo Sanchez, Omni Transloading and Logistics, Challenges in Lumber Logistics. The 2019 NAWLA Traders Market is set for Oct. 16-18 in San Antonio, Texas. Learn more at www.nawla.org. n WRCLA - Continued from page 1 industry. “There are some real constraints and challenges ahead for the industry,” said Broschart in his presentation. “There is a lot of volatility which makes the market really challenging. It’s hard to say what prices are going to do. At these current levels a lot of the mills in western Canada, who are facing duties, are having a hard time justifying operating in this environment.” Following the industry forum, LMC Dealers entered the Expo floor where they had the opportunity to meet with their LMC team and more than 90 different suppliers. For many dealers, this event is an important time to reconnect. “It’s all about the relationships and what LMC brings to those relationships, that’s the best thing,” said Wally Morse of Wm B Morse Lumber. “We always have people come every year.” “I’ve attended this show many years in a row—it’s a wonderful show,” said Kim Packovick of Kimal Lumber Company. “I love the networking; I love the fact that I can reconnect with all our LMC friends and our traders. It’s unique to the industry.” The final day of the event opened with a presentation from Danushka Nanayakkara-Skillington, AVP of Forecasting and Analysis for the National Association of Home Builders. Andy Toombs, LMC Senior Vice President of Purchasing, said, “We had excellent attendance and support from the LMC members working with our staff and key supplier partners to renew and build new programs for 2019 and beyond.” Continued on page 40 fusion like those facing the WRC industry: tariff-inflated prices tilting the playing field, distributor consolidation, inventory management, nonwood competitors, and the advent of the “Amazon” model of purchase and delivery have all transformed the market. Despite the turmoil, the Western Red Cedar Lumber Association has employed data-driven analytics to cut through the chaos and target their audience with resonant messaging to create the highest value for this 100 percent natural building material. The WRCLA also announced that the dates for the 2019 Cedar Summit are May 15-17 at Grand Okanagan Resort, in Kelowna, BC, and the WRCLA Cedar School is set for May 11-17 at the Hilton Vancouver Airport Hotel, Vancouver, BC and the Grand Okanagan Resort, Kelowna, BC. Learn more about WRCLA by visiting www.realcedar.com. n LMC - Continued from page 1 always something different, something you hadn’t thought of, and the continued relationships that you get to build year after year.” This year’s LMC Expo opened up with a forum on the 2019 outlook for the forest products industry. Three speakers—Phil Odom of Roseburg Forest Products, Jean-Michel Broschart of Interfor, and Dan Hutchinson of Boise Cascade Wood Products—all discussed the state of the industry. In his presentation, Jean-Michel Broschart of Interfor spoke to the price volatility in the lumber market and how the Softwood countervailing duties are impacting the Softwood Forest Products Buyer n January/February 2019 Page 39
