1980 Sawmill Production: The Who, What, When, Where and Why

By Dwight Curran Contributing Editor The Merchant Magazine

THE Year of 1980 will long be I remembered as a year of contrast and confusion. Following rising interest rates and a housing slowdown in 1979, many expected 1980 to be the year of turn-around. But early in the year, the Federal Reserve slapped the brakes to the economy. It was sharp; it was unexpected. Then, just as unexpectedly, the Federal Reserve reversed itself. Interest rates fell and homebuilding began to revive. Late in the year, however, things were reversed once again.

Difficult to operate in? It certainly was. But put yourself in the shoes of a sawmill operator for a few moments.

Large log inventories. Timber contracts which require the purchaser to commit himself for several years in advance. A declining timber base caused, in part, by the mismanagement of the federal government of its timber supply. Declining prices for the product of the mill.

The end result of this was a series of curtailments and closures, (both temporary or permanent) and, in some cases, outright sale of the sawmill to another company. Some, if not all, of these factors influenced those producers we call the top ten. Accordingly, production dropPed markedly for some of the top ten and for the year as a whole.

Here then, is a study of the information provided in the 198l Annual Lumber Review & Buyers' Guide of the May 30, l98l issue of Forest Industries. The information compiled in that issue serves as the basis for this article and we are deeply indebted to them for the use of this material.

When this series of articles began in 1970, Weyerhaeuser Co. of

Tacoma, Wa., was in the number one position. At no time has this changed, and, to no one's surprise, Weyerhaeuser captured that position again. Production dropped 7.790 from 1979 to 1980 and the firm reported a cut of 2 billion, 689 million feet in 1980. Although some producers experienced a greater decline in production, Weyerhaeuser's marketing emphasis permitted it to maintain a high level of activity.

With distribution centers crisscrossing the United States, and with its strong emphasis on lumber sales in a declining market coupled to its reputation for quality, it stood fast during this period of distress.

In second place is LouisianaPacific Corp. of Portland, Or. Production dropped to I billion, 504 million in 1980 from the 2 billion, I 93 million feet of 1979. This was a decrease of 31 .4v/o from 1979, the largest among the top ten. Although L-P's sawmills are spread across the country, the bulk are in the West: California, Oregon, Washington, Idaho, Montana, and Alaska. Other mills are located in Texas, Florida, Louisiana, Michigan, and Wisconsin.

In a related move, this firm is making a strong committment to the manufacture of waferboard in the Midwest. Waferboard is a panel-type board that can be used as a substitute for plywood and is usually more economical. L-P mills producing waferboard have experienced strong sales growth and the company is building more plants to meet the demand. It is this product that should help L-P weather the difficult years ahead; moreover, such production should make L-P very competitive in the plywood marketplace.

In the lumber marketplace, however, it is faced with more severe problems. These problems include the loss of old-growth redwood timberlands through the seizure of these lands by the federal government for the redwood parks; the

Story at a Glance

The numbers on a tough year for lumber. who moved up, who moved down . . . factors behind the declines.

regulatory environment where much of its timber production is located; the difficulty in purchasing private lands: the nature of its timberlands which are heavily oriented towards second growth (such timber is especially suited to new home construction when made into lumber, but is not as accePtable to the remodeling market); and, the declining timber base in the Northwest, some of it caused by mis-guided government policies.

However, Harry Merlo, chairman of the board of Louisiana-Pacific, has proven himself to be a superb, capable lumberman and quick to adapt. The problems facing his organization, although severe, should only temporarily deter him as

L-P continues to meet the challenges and opportunities of this decade.

Third place Georgia-Pacific sawed I billion, 319 million feet of lumber in 1980, down8.99o fromits l979cut of I billion, 448 million. Most of G-P's production is located in the South with very limited production in the Northwest. Its Fort Bragg, Ca., plant continues to increase production each year of both redwood and Douglas fir. The sawmill sits on a site that has cut redwood continuously since 1885. But it is only in recent years that it has begun to saw Douglas fir. Loggers there are falling fir trees that were left in place when the first loggers went through decades ago. It is anticipated that production will soon reach a million feet a day.

G-P has two other mills on the coast. Located at Toledo and Coquille, Or., these plants are both stud mills. Accordingly, less than 25v/o of G-P's production are West Coast woods; the other 7590 is Southern pine and mixed hardwoods.

In fourth place is Boise-Cascade Corp. of Boise, Id. Its 1980 production fell l8.2Vo to 642 million feet from 1979's 784 million feet. Sawmills are located mostly in Oregon, Washington and Idaho. Most of its production is sold kilndried, and includes Ponderosa pine, hem-fir, fir & larch and other whitewoods. Its green production is quite limited.

Production at its large Yakima, Wa., plant declined from I l3 million feet to 95 million feet in 1980. Elgin, Or., produced 74 million, off I I million from 1979. Also down was Emmett, Idaho, which dropped to 34 million from 1979's 55 million feet; Aberdeen, Wa., showed a similar drop of 20 million down to 27 million in 1980.

However, Boise's Southern Oregon mills showed an increase of nearly 3 million feet to 90 million feet in 1980; these included plants at both Medford and White City. Other plants with increases included LaGrande, Or., up 8 million to 7l million feet; Goldendale, Wa., up 3 million to 32 million feet and Kettle Falls, Wa., up 6 million to 69 million feet. Areas showing a decline were Horseshoe Bend, Idaho, down from 70 million feet to 30 million feet, and

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