Midwest Business Trends
Midwest Business Trends West Coast Business Trends By Paul Miller Jr. Vice President Throughout the Midwest region lumber suppliers noted that their sales were doing well and that their markets were active, at the time of this writing. In South Dakota, a lumber spokesman said, “Our markets are active right now. I think that this is due to the warming temperatures after it being so cold for a few weeks.” He also said that they are doing better than they were six months ago. His company offers Ponderosa Pine boards. “All of our boards are 3/4 and 1 inch thick and we carry those in grades Nos. 2, 3 and 4 Common,” he added. He sells to distribution yards and mentioned that they have said their sales are starting to pick up and it has reflected in their orders. “Right now I think that everyone is optimistic,” he stated. “As we get further into the year people are getting used to the interest rates being at six to seven percentage points instead of two to three, and so we will continue to see better business and more activity the more that this sinks in.” Bert and Bud Vaagen founded Vaagen Brothers lumber in the early 1950’s. Today, the company continues as a closely held corporation owned by members of the Vaagen family. This continuity of management, vision, and leadership has helped guide the company for more than half a century. Creating a culture of innovation, integrity, and cooperation that’s fueled Vaagen’s advancement, evolution and growth over the years. Vaagen Bros. Lumber 565 W. 5TH Ave Colville, Wa 99114 Sales - 509-684-5072 www.vaagenbros.com Continued on page 56 By Zach Miller At the time of this writing, the North American Lumber market, relative to this time of year, can best be described as idle. That said, there appears to be some optimism that buying will begin to accelerate as spring nears and inventories will need to be built. Even with the current mild demand of most products, West Coast producers are dealing with obstacles such as log supply and weatherrelated disruptions. On top of that the U.S. just announced its intention to raise the Softwood lumber duties from 8.05 percent to 13.86 percent creating uncertainty and confusion on how this will affect market conditions. The following is what a few West Coast manufactures had to say on the current climate: Dean Garofano of Delta Forestry Group, Delta, BC said, “What a start to 2024! The extreme cold and snow that hit us in January had a significant impact on Delta Forestry Group and most of the coastal industry. The unusually frigid temperatures and frozen logs severely impacted production in the sawmills and reman process, consequently delaying the runs and shipments. With weather returning to normal, Coastal log supply is currently Delta Forestry Groups biggest concern.” Garofano continued, “Economics and policies continue to restrict the harvest and Cedar volumes continue to decline. That same supply concern does not appear to resonate with buyers who are reluctant to take on inventory during these winter months. I suspect that once the spring weather arrives and buyers look to ramp up purchases, they will have a hard time sourcing enough volume on certain Cedar items. These factors have led to Cedar gang and chipn-saw log prices climbing and merchandise staying stubbornly firm. These log price increases, along with stagnant Cedar lumber prices, have resulted in manufacturing margins being squeezed or diminished. BCTS Timber sales, year to date, have averaged only 9 percent Cedar content. Any sales with a healthy Cedar content are being bid and won with unbelievably high evaluations, which suggests that future Cedar log appreciation is being built into the bids. All the factors above, as well as the recent news of the duty rate increase coming later this year, point to the likelihood that Cedar lumber prices will be increasing.” Garofano finished with this, “On Do you know how your lumber is made? Scan the QR Code below to see our fascinating step by step process a positive note, there does appear to be some optimism for demand once the winter weather breaks, interest rates have likely peaked, inflation is near target levels and an election year in the U.S.A. Should this North American optimism become reality through 2024, and the export markets perk up, it will be welcome news for Cedar manufacturers.” Leslie Southwick of C&D Lumber, Riddle, OR said, “Supply is currently outpacing demand Continued on page 56 Page 24 Softwood Forest Products Buyer • March/April 2024 Softwood Forest Products Buyer • March/April 2024 Page 25
