Sawmills restart as profitability jumps

flnoseecrs FoR sAwMlLL profitability have increased sigI nificantly in 2O 10, leading curtailed and closed sawmills to reopen, according to Forest2Market, which provides pricing and benchmarking services for the South and Pacific Northwest.

For example, according to its lumber price database, Mill2Market, southern yellow pine prices have risen 257o from an average of $247 per thousand bd. ft. (MBF) in 4th quarter 2009 to $308/MBF in lst quarter 2010. The price that mills receive for their residuals-the sawdust and shavings created as a by-product of the lumber milling process-also increased, by 3Vo quarter over quarter.

"While we've seen a 287o increase in revenue at the mill, input prices have been rising much more slowly," said Forest2Market's Daniel Stuber.

Sawtimber prices, which make up approximately 75Vo of a mill's operating costs, have increased nearly $2 per ton from 4th quarter 2009 to lst quarter 2010. Though this is an increase of just 57o,the total impact on a mill is higherrepresenting an increase of roughly 7.57o-becatse sawtimber costs are such a high percentage of overall costs.

"When you compare a total increase in revenue of 28Vo next to an increase of 7 .5Vo in raw material costs, the posi- tion of sawmills in the market looks significantly better than it did last quarter," said Stuber. "Assuming manufacturing costs remain the same (and increased production generally leads to a decrease in per unit costs), profitability has improved by more than 20Vo this quarter' And while this increase sounds considerable, we have to remember that mills were pretty much running at breakeven levels (or at slight losses) in the 4th quarter of 2009."

MAGICAL EVENING: Los Angeles Hardwood Lumberman's Club celebrated Ladies lighJ ryla.y 13 at the world famous Magic Castle in Hollywood, Ca. Attendees includid (/-rJ Randy Porter, Loralee Swaner, Gary Swaner, Marty Porter, Candice Penderqasi. Cassia Korn, Paul Pendergast, Diane Johnston, Mike Bohnhoff, Steve Ondich. Nathan Osborne, Christa Bohnhoff. Brooke Bohnhoff, Heidi Ondich, Dennis Johnston, Lisa Trager, Doug Trager, Kathy Fitzgerald, Sergio Korn, Bill Fitzgerald, Charles Bohnhoff.

Gorrections -

Piedmont Lumber's yard in Oakland, Ca., was purchased bv Economv Lumber, Oaktand, Ca., not Econom!' Lumber, Campbell, Ca. (June, p.2B).

Pacific Cedar Supply, auena Park, Ca., is only testing BluWood and is currently not producing or distributing products with the treatment (May, p. 30).

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GolorGuard" coating system f Tess LUMBER & Home Center, Malad City,Id., has lots .llto celebrate: 75 years of business and the grand opening of a new, larger location.

"The biggest thing is seeing lots of new faces," said Doug Crowther, who owns the store with his parents, Jared and Ronda Crowther, and his wife, Stephanie. "After we opened April 5, business went up lTVo in jtst one month."

Although Malad City has just 5000 residents, the store draws from the surrounding area-and the nearest competitor is 45 miles away.

"We have looked forward to this for a long time"' said Jared, who has managed the store since 1980. "Grandpa Jody Hess started out in 1935 with approximately 700 sq. ft. of retail space. Floor space more than doubled when they moved the store downtown to its present location. Our new building has 9,000 sq. ft., with 7,000 sq. ft. for the retail end of the business."

The latest chapter in the family business began in 1992, when Jared and Ronda bought out other family members and brought Doug into the business. They joined Do it Best the next year, and in 1999, Jared requested that a DIB architect/designer draw plans for a larger building.

And that's where it stopped-for about seven years. The Crowthers had mixed emotions about movins ahead with the project. In the meantime. the old yard needed remodeling, so they decided to invest what they could, on their own. They built two new covered lumber storage areas and a new perimeter fence, removed an old storage barn, and purchased nearby land for the expansion.

The Crowthers poured the foundation for the new building in the fall of 2007, but actual construction didn't besin

Mowners

for another two years. By the spring of 2009, however, financing had been arranged through U.S. Bank and the Eastern Idaho Development Corp.-and the family's dream was finally becoming reality.

Doug said that customers are pleased with the many improvements and additions: wider aisles, more than 10,000 SKUs, an expanded paint department, and 800 sq. ft. of kitchen and bath products. Outside, customers can park in a new lot, instead ofon the street.

"The new store was designed to appeal to women," said Doug. "They just put the kids in the new shopping carts and browse the wide aisles."

Inside, Ronda has decorated one wall of the store with family photos. "It's one way we can remember our past and honor their good name," she said. "I'm very excited that we are a four-generation-owned store."