Hardwood Outlook

By Larry R. Frye Executive Director Fine Hardwoods/American Walnut Association

IIHE veneer

I business is fair at best. The high prime rate, and increasing labor, produc- tion, and raw materials costs make it difficult to "make a buck. " However, as our European counterparts will be quick to say, the situation could be much worse.

The veneer business is slow in Europe. Demand for United States species has almost stopped. The strength of the United States dollar in light of a general recession in Europe has caused United States manufacturers to look entirely to the domestic market for shipments. Supply and demand figures are following with the textbook concepts.

$55.7 billion. Almost two-thirds of that will be spent by homeowners on their own single family residences. Clearly, homebuilding on the national level is in for a slow rebound from the current depression. It's no secret that lower interest rates are the key to an improvement in homebuilding. When you realize that only I l9o of the population can af-

Story at aGlance

More home building in the West than any other region. even stronger market f or repair and remodeling . . ever an. creasing government borrowing in money markels a big factor in housing.

As much as we are hurting, we feel that President Ronald Reagan's economic program is the best longterm solution for our industry and the country as a whole. Additional federal budget reductions are essential to lowering the deficit, the need for government borrowing and a reduction in interest rates.

Federal Reserve Board data shows very clearly why we're in the mess we're in. Of all credit used annually by non-financial institutions over the last 30 years, about 2890 went into housing during the first 15 years and about22t/o annually during the latest l5-year period. But look at the federal government. It's share of total credit rose from an average of 790 annually in the five years ending in 1969, to I I 9o annually the next five years to 23o/o in the five years ending 1979. Of all borrowers only the

(Please turn to page I6)

Walnut lumber is soft to fair depending on whom you ask. The consumer popularity of walnut seems to have a way of sustaining its demand even during troubled times.

While business is slow now and is expected to remain slow through portions of 1982, the real concern is for the future. Raw material is expected to be the real problem, because it is a low priority item to landowners.

As we look into the future, we feel that hardwoods will continue to be readily available, but the quality problems will continue. The challenge to foresters and landowners is almost frightening. Somehow, we have to motivate the people who own the land growing hardwood timber to do a much better job of managing the trees.

Whether the industry can keep up with the money market and the high prime rate is questionable. Whether or not anyone can keep up with the prime rate is questionable. This is one of the most serious problems facing the industry. With the high prime rate and the business slow, demand for timber is likely to soften slightly. Hopefully, the prime will comedown in 1982, and at the same time, let's hope inflation will be lowered, so this country can return to a somewhat stable and normal econornic situation again.

I am optimistic that the future for hardwood lumber and veneer is excellent. We all know that the children of the population explosion that occurred in the late 1940s have now moved into the prime buying age bracket. They will be buying homes and they will be filling those homes with furniture. With all other factors being normal, we expect excellent business throughout the 1980s. By the timethe war babies move onto an older age bracket, where they may not buy so much, we will be more into a worldwide market, which again should brighten the prospects and opportunities for timber growers and the hardwood lumber and veneer industry.

Story at a Glance

Veneer sales slack . .. walnut still popular raw material supply a serious Problem for the future excellent business throughout the'80s.

Canadian Forest Products ttd,.l:cr::rr,lttg;,,,,.''subsidiary,C-anf or Corp., plans to buy Chandler Corp., Boise, Id.; acquisition is set for this mo., no price rcvealed . . Senate Appropriations Commit tee v oted to terminate the U.S. Metric Board, causing spculation that metric conversion has hadit...

Weyerhaanser plqs to appeal an apdlate court refusal to overturn the guilty verdict in a "phan- tom" freight rate conspiracy case that also includd Georgia-Pacific and Willamette Industries

Andersonia Forest Products moved its Medford, Or., offices to nearby Phoenix, Or. .- . . Diamond International Corp, is mO n A t n ref&Arrc ilA I LAfpi:,:,';18 probing the -possibility of,,r:,':Sh James Goldsmith, a British financier who controls Cavenham Holdings Inc., taking over . Pella Products ofArizona, Inc. is ..-

,tg$ :,mlo s largsr t$on:", UntmPrcit trto S $S nillign_c{

Tlne Importd Hardw@d hr,ducts Association will become International Hordwood Prodttcts Asociation if the manbership approves Victor Posner, Miami, Fl., financier, has plrrchased 150,000 shares of Evons Products Co., Portland, Or., for 43q6'".',";1..11,1:.'1:

$3,288,750 in open market to raise his holding from 41.990 to t't'''' p,&;,fu'ttifuourco., Redding, Ca., is rapidly expanding its confmercial wood products div., accorditrg','16 Rick Cua &am, sales mgr. . . . Crgm,,',:,,'::Fbigst L:umber Co,, a wholesale opera,,, i',b-as been opened in Auburn, ',5 :$Y;,},H. Bruce .Sutherland Lumber, City of Industry, Ca., ha$ri feorganizgd,,':and: added a gardencenter...

Home Lumber Yord, Inc., Turlock, Ca., pres. Tom Reeser, has announced plans to close . . Bassett Lumber Co., Douglas, Az., filed a petition for bankruptcy Ernst Home Center, Eugene, Or., is converting to a BiMart membership discount store, :,, &ccording,,to Pay'N Save Cog., parent co. for both . .

L ouisiana- Pacific is planning to build a Waferwood plant in the Interyxryntain region of the:U;$,r''