Extent of Lumber Market Decline Now Known

By Richard G. Reid Weslern Timber Association

THE NUMBERS coming in conI firm what everyone in rhe lumber business knew was happening in 1980. It was a terrible year.

The statistics compiled and reported by industry trade journals and associations show just how bad it is.

Some of the earliest reports came lrom the annual lumber review conducted by Forest Industries magazine. The volume of lumber produced as reported by the survey was the lowest since 1976, with the biggest drop coming in the West.

The Western Wood Products

Association more recently reported that 1980 production in the West was the lowest in recent history. Homebuilding is the largest market for western lumber, and the recordhigh interest rates that drastically curtailed building slowed lumber production.

Data for California show the same pattern.The State Board of Equalization reported a harvest of slightly more than 3 billion board feet for 1980. For the past several years, California timber harvests have been in the 4.5 to 5 billion board foot range.

Interestingly, timber harvests from the National Forests in California amounted to 49qo of the total state harvest for 1980. Traditionally the National Forest share runs at about 4090.

"This year the proportion is higher because of reduced harvests on private lands," said William Dennison, executive v.p. of Western Timber Association.

"Federal timber purchasers do not have as much flexibility in their harvest plans as those operating on private land, especially industrial owners," Dennison explained. "The

Forest Service timber sale contract covers a relatively short term, and extension of the contract is onlv granted under special conditions'. The timber must generally be cut within the contract term," he said.

This circumstance has put mills primarily dependent on federal timber in a double bind. Much of the timber being harvested now was contracted for three to five years ago at a high price. Now, in many cases, the price being offered for lumber will not cover the cost of the standing timber, yet it must be harvested to comply with the contract.

When you're unemployed, it's a recession; when I'm unemployed, it's a depression goes the old line. Today, in the timber counties of northern California where double-digit unemployment is the norm, everyone agrees we are in a depression.

The dry statistics of the trade journals cannot provide the true feeling for what is happening in human terms. More than 500 loggers and mill workers in Humboldt and Shasta Counties alone have lost their jobs this summer according to a report in the Socramento Bee, Many more have been affected by temporary shutdowns of one week to a month as companies attempt to match production with orders received.

Loggers are especially hurt because it is seasonal work, and summer is the season of l6 hour days and healthy paychecks. "It's not a holiday. I'd rather be working," a laidoff logger in the Sierra Nevada recently told the San Francisco Examiner.

The interest rate lid on homebuilding will be lifted eventually, although it appears that there will be no help in time to salvage l98l for the lumber industry and its workers.

New concerns are beginning to emerge over the availability of sawmill and plywood mill capacityto meet the increased demand expected when interest rates come down. Many mills which are dependent on federal timber that now are closed because of market conditions may never reopen because of uncertainties over the supply and cost of raw material.

Whether or not the remaining mills can meet the demand and cushion