Lumber Outlook For 1949

(Address delivered by Robert E. MahaFfay, Trode Extension Director, West Coast Lumbermen's Association, at the 1949 Annual Convention of the Lumber Merchants Associotion of Northern Californio, held in Yosemite National Park, California, April 11 and 12.)

The other day a retail lumber dealer from Montana, making his annual buying trip to the coast, called at our offrces in Portland. He wanted to know what the outlook was, and how much lumber, and what kind, he could expect to get. I told him things were steadily improving and asked him if he hadn't already noticed the difierence.

"Well, yes," he said. "This year I haven't been thror,r,n out of nearly as many offices as I was last year."

Possibly there was some exaggeration in this way of putting it. The fact remains, however, that the Douglas fir industry is pulling out of the squeeze that has made things so rugged for you and for us during the past few years. You may definitely count on an ample supply of construction lumber during 1949. It is probably that there will not be available all of the uppers that you would like to have, but there will be a greater quantity than there has been in the past. We are a lot closer to normalcy in the matter of supply than we have been for a long time.

It is not possible to predict at this time whether the Douglas fir industry rvill match in 1949 its production total of 8l billion board feet for 1948. The colder weather, of which I understand you had more than hearsay evidence down here, hasn't helped us any in getting off to a good start. Nevertheless, we are in a position to supply the lumber that's needed.

Perhaps a little background will help to show how we got into that position. Since the war our production facilities have expanded materially. Perhaps you recall that the OPA price structure was set up at a level which permitted 75/o of the lumber producers to at least break even. The remaining 25/o were left with the alternatives of operating at a loss, shutting down, or going into black market. Congress later altered the provision so that only l0/o would be unable to break down.

It is obvious that under these circumstances there could be little or no expansion of the industry, When the controls were removed, it was a different story. Everyone jumped into what looked like a very profitbale business. Before long, as has been the historic practice of the lumber industry, lumber was producing itself out of a market.

Consider some of these figures. Tn 1937 there were 575 active sawmills in the Douglas fir region of Western Washington and Oregon. In 1948 there were 1,625, nearly three times as many. Over-all production in the region during this period increased by approximately ll billion board feet. This clearly indicates that the increase has come predominantly from the small mills, many of a temporary nature whose continued existence depends on the state of the market.

No doubt you have observed that some recent West Coast Lumbermen's Association statistics have covered Northern California as well as Western Oregon and Western Washington. This is because California production of Douglas fir lumber has assumed substantial importance in the manufacturing picture. This production is centered chiefly in Del Norte and Humbolt counties, and a study of the figures relating to them is illuminating.

In 1941 these two counties boasted 24 Douglas fir mills with a combined annual production of 366 million board feet. In 1947 there were 127 Douglas fir mills in these two counties and production had jumped to 682 million board feet. Estimates for 1948 set the number of mills at 150 and their combined production at 1 billion board feet. It is inevitable that such a rapid expansion should bring with it certain dislocations. Some of these newer mills have not yet settled down to the stable basis of manufacture achieved by some of the older mills elsewhere in the region. Steady progress in this regard, however, is being made, and the West Coast Bureau of Lumber Grades and Inspection is playing no small part in it.

The Douglas fir industry's efforts to improve and standatdize its product is nowhere better illustrated than in the development of the West Coast Bureau in the past decade. In 1940 the Bureau had 45 to 50 supervisors and inspectors who served 196 member mills. Today the Bureau has 350 men in the field supervising 430 mills.

The West Coast Bureau has moved, quite frankly rvith reluctance, into the Northern California area and has set up d branch office in Eureka. I say with reluctance because-an expansion of this sort presented numerous problems. Standing importantly among these were the costs involved and the matter of providing adequate supervision. The reputation of the West Coast Bureau, and the reliance placed in it, are high. We did not wish to jeopardize either of these considerations by offering inadequate service or service of a lesser caliber than that provided elsewhere in the area. Moreover, the beginnings of any such undertaking are always unprofitable. The Bureau is a non-profit organization, and has no funds with which to maintain for long a branch of its service which cannot pay its way. Nevertheless, the need for proper lumber inspection among the Northern California mills u'as acute, and growing more so. This is, after all, part of the Douglas fir region and has a logical reason for calling on the services of the West Coast Bureau. The initial steps have been taken and the Bureau is now prepared to extend its services, on the usual basis, to all mills requesting them in the Northrvestern section of the state.

At this point let me mention that proper grade-marking of lurnber is available to all mills in the Douglas fir region. This grade-marking can be done by the staffs of both the West Coast Bureau of Lumber Grades and Inspection and the Pacific Lumber Inspection Bureau.

In connection with the increased production of Douglas fir in California let me remind you that California now ranks third in lumber production nationally, being led only by the states of Oregon and Washington in that order. California, of course, has long been the largest single consumer of Douglas fir lumber in the country. Some of the trends in this connec-