Another Mill

[ELKCHSR]

Last big saw mill in Missoula/Bonner bites the dust

Reasons:

Markets are bad

Not enough logs

If any one has been thru the region of this mill, there are plenty of trees that could be marketed, including beetle kill

But with all the injunctions to stop all logging, there isn't enough available product to market

How many people are effected by such a shut down?

 

[shoots-straight]

But with all the injunctions to stop all logging, there isn't enough available product to market

When you eat 1million BD FT a day it's really tough to get enough lumber to fill it's belley.
This is BS.

The market is in the dump has been for 2 years. Every one's just now saying recession but fellas it's been here a while. The mill was loosing 1 million dollars a month, now you don't loose money if your not producing, you loose it by producing it and selling it for less than it costs. If they'd a had to shut down because of lack of logs they wouldn't have lost money just not made any of it.

 

[ELKCHSR]

That’s just how they reported it on the news this morning...

Using both reasons...

One way or another, it's still a bad thing to lose another large business, especially one that manufactures a raw product...

The loss is far more reaching than the 100 people who directly lost their jobs (which was more my point)...

I'm guessing, but there's probably a little celebration going on at the local collage in a few circles because of this loss...

Well, one thing for sure, tourism is up, so maybe that will help keep some outside dollars rolling into the community besides what's already there...

 

[BuzzH]

SS,

The truth is simply one of economics, has nothing to do with a shortage of stumpage. Theres plenty of logs available to run the mill.

You're basically 100% correct and the other poster on the thread is 100% wrong...nothing new there.

I've known about this shutdown since last Friday as my Dad works at the mill in question. My Dad wont be effected at all though, he should have retired last July, and I've been harping on him to retire since then. He knew last year the mill likely wouldnt run another year. He continued to work on the gamble that if they went out of business he may collect severance pay before he retired...smart move it seems.

I talked to him today, and he said it has ZERO to do with availability of logs. Just the tanking economy, housing boom over, etc.

Theres also a rumor running around that they may just "moth ball" the mill for 1- 1.5 years and then start up again if the economy rebounds. Dad thinks its very unlikely.

Its just big business doing what big business does...nothing wrong or bad, just the way it is.

 

[Big Fin]

Buzz:

Same thing happened to my family of loggers. They supply timber to one of the biggest particle board mills in the US. Last fall, the company could see the writing on the wall (housing market) and shut down.

Brother/cousins/friends were out of work for a short time, but they knew it was coming. Anyone with a history of the timber/logging/mill industry has seen this cycle come and go since time began.

Some wanted to blame lack of logs, but that was not it. Mill made record profits during the year following Hurricane Katrina, which drove up stumpage prices in the short-term.

Now that things are back in balance and the housing market is in the tank, stumpage is almost free, even on private ground. Even with hard costs (logs) at an all-time low, mill workers taking paycuts, the company still didn't think they could make a profit, so they shut it down.

I expect more of this to happen.

As long as Canada continues to subsidize their timber industry, US mills will have a hard time competing with softwood imports. Canada has far more softwood timber than we do, most of it is goverment owned, and the conservation standards placed on Canadian operations is below what is placed on ours. They have such a huge competitive advantage, that US producers have a hard time competing, even being closer to the end-user markets.

Myself, I would be willing to pay more for a 2x4, or plywoood, or whatever, if it meant helping protect US millworkers and loggers from cheap subsidized imports, but that ain't gonna happen with NAFTA and other trade agreements. We already heavily subsidize our public land logging, but will never be able to subsidize it to the extent our biggest competitor, Canada, does.

The Canadian timber industry is sucking air also, as they built there business models around a booming US housing market. Canada is willing to subsidize their industry with very low cost, or almost free stumpage, and lower conservation standards to get the "cut out." Something that hunters, enviros, and all other Americans would never tolerate in the US.

Bad deal for my logging family/friends, but they are finding their way doing other things and actually feel better about not being subject to the whims of a cyclical market that ebbs and flows with so many things beyond their control.

I am sure this fact doesn't sell good with the "Sky is Falling" Blue Ribbon Coalition folks, but mill closings have nothing to do with lack of logs at this time.

 

[BigHornRam]

With the falling dollar, rising fuel prices, and little bug killed Canadian timber left to cut, cheap Canadian imported lumber is a thing of the past. The U. S. timber companies that survive this latest round of hard times will do very well in the years to come. So BF, you will get the opportunity to pay more for US plywood and 2x4s next time building takes off (which could be awhile).