The changing tace o

1f,n estimated I billion 4lboard feet of redwood was produced in 1992. Experts pedict,that this year production will fall to 800 million board feet, 140 MM kiln dried uppers and 660 MM commons. With the anemic demand of 1992 keeping pace with the lower production levels, prices remained fairly stable through most of the year. But increasing demand could combine with further mill closures and curtailments to drive the production figures even lower and prices higher by 30Vo or more.

On these pages, the major redwood producers give the supply outlook for their companies in tenns of changing products and quantities.

I l. How do you expect 1993 shipments to compare to 1992 shipments?

/.t

Z. What will be vour product line for 1993?

J. What factors have played the greatest role in changing your redwood shipments and your product line?

Story at a Glance

Major redwood manufacturers size up their companies'and the industry's evolving product lines and shipments factors causing changes in

Essentially no change in ship ments this year from 1992. Redwood 60Vo and whitewoods 4O7o.

Product line fm 1993 is 1007o garden grades. Product line has changed dramatically from 1988 with the elimination of architectuml grades. Simpson is processing new growth timber exclusively.

The change in the resource base has predicated that more non-redwood species be processed to fill mill capacity. Our mill has been and continues to be upgraded to process lower-value rcsource at lower costs.

Difficulty in Harvest Plan approval has drastically added to the cost of resource conversion ard therefore to the lumber. The Northern Spotted Owl Habitat Conservation Plan, the first of its kind fomred with the U.S. Fish & Wildlife Service, has facilitated the Harvest Plan approval process.

If we do not suffer a "political lock-up" of our timberland, current timhrlard management pnrctices will double and triple the sustained yield harvest levels in the next 20 to 30 yean. The redwood region is the most productive forestland in the United States. Simpson's long-term, intensive forest management of that land will deliver an increasing amount of wood products for families in perpetuity.

Expectations for the 1993 season are that an adequate number of barvest plans will be approved leading us to believe that redwood production for the year will compare volume-wise to 1992. Near ternt there is potential for a disruption to log supply due to the impact that current weather patterns are having on logging operations. The impact on supply o tbe marketplace will not be felt from this until later in the spring.

Tne proOuct mix that we ar€ experiencing has seen considerable change over the course of the last several years as log sizes have diminished. Old growth logs are virtmlly nonexistent. Architectural grades represent less rhen 7% of redwmd p'roduction, fence grades represent nnglly 25%, with the balance going primrily into dry decking or dry comrnons.

Beginning three tro forn yean agq as Oe log sizes diminished, decking and common grades of siding products became the mainstay in our product line. With the seasonality and the restricted market that green products forces you into, the need to carry an inventory of a stable product and to reduce the weight of the product in mder to expand our matets, we were forced to consider drying as much of our productiur as physi<ally ad nnancially possible. Supportod by a srong marlceting and ad canpaign ftom the California Redwood Association and by a loyal and concerned customer base, our ability to transcend this change has been possible.