Tight supply sq tleere$ tddai producers

nF LATE, demand for cedar prod\-fucts has been strong. The problem has been supply.

Western Red Cedar Lumber Association member mills are virtually sold out of most product lines and inquiries continue to come in. Cedar products have reached record prices, some more than 50Vo above levels a year earlier.

The key difference this year, according to Ken McClelland, executive director of the WRCLA, is the lack of additional fiber to meet the rising demand for cedar. In fact, the shrinking log supply will likely reduce 1997 mill production from 5Vo to l0Vo below its traditional 1.6 billion bd. ft. level.

Several factors have contributed to this reduction in fiber supply. Explains McClelland: "These include the increased harvesting regulations in the British Columbia forest industry as well as the weak market for other forest products that utilize the dominant species in the forest. In addition, a heavy winter snowpack has delayed winter logging operations for some mills. As a result, Canadian mills are using a variety of strategies to meet customer needs and comply with the export permit fees now in effect for most mills."

Last year, cedar shipments reached their highest level in four years as demand rose and customers sought more refined products and higher grades. "This growth in demand for WRCLA member products is gratifying as it reflects a renewed confidence in their quality and consistency,"

McClelland says. "The association has made great strides in branding and labeling its products. This has further increased consumers' confidence in consistently getting the products they want.

"Today there is much wider range of member products being manufactured-from traditional siding patterns to decking, fencing, timbers and trim boards. Mills are using new technologies to produce fingerjointed and edge glued products that make the most efficient use of fiber. This quest to deliver quality products has also led WRCLA mills to establish standard patterns as well as higher manufacturing standards," he adds.

So while WRCLA's 18 member mills continue manufacturing large volumes of cedar, it's currently not enough to satisfy the strong demand.

Story at a Glance

Despite strong demand, tight supply keeps production down ... causes of shortfall.

For the cedar shake and shingle industry, timber supply issues focus on British Columbia where mills are battling cutbacks in allowable harvests and escalating costs from burdensome regulations. Sawtimber volumes have decreased because of the provincial government's ongoing timber supply review, a new Forest Practices Code and new extensive set- asides for parks. One in every eight acres of British Columbia is now designated park land, according to Linda Herrington, Cedar Shake & Shingle Bureau, Bellewe, Wa.

"A hike in stumpage rates (the fee charged by the government for the harvested timber) three years ago drastically reduced manufacturers' margins and now higher lumber prices are triggering additional increases," she says. "The Canadian/U.S. lumber agreement is also triggering reduced activity and higher log prices as lumber mills choose to shut down rather than pay the $100 per thousand board feet excess-to-quota fees. The reduced activity has meant fewer opportunities for the shake and shingle industry to harvest the salvageable wood. In Washington State, timber sales under salvage logging laws were brought to a premature halt by the USDA because of increased pressure from environmentalists."

Herrington points to the shake and shingle industry's use of salvage and low grade cedar as a particularly good example of total resource utilization. "The industry constitutes the only market other than pulp chips for red cedar salvage wood and logs below lumber grade quality," she notes.

"We take the wood that lumber mills cannot use. In fact, much of the material utilized by the shake and shingle industry consists of short cedar logs, blocks, stumps and bolts salvaged from old logged areas. Few, if any, trees are felled with the shake and shinsle market as a destination."