Mill operators look forward to rebound in housing starts

By STEVE BROWN
Capital Press

WINLOCK, Wash. -- The lumber market has been tough the past few years, but Lance Pennington has managed to keep the saws spinning at Clary Lumber Products.

"The only reason we're still standing is we're too stubborn to quit," he said.

Pennington has been operating the planer mill for the past five years with partner Pat Clary. "It's been three years since we've drawn any money out of this company."

Still, he said, he has managed to keep six employees working full-time, processing six loads of Douglas fir logs a day.

"Our original goal was to employ 12 to 15 guys, supporting that many families. If we can ever do that, we'll be able to get a three-day weekend once in a while."

Small mill operations like his have been closing since the downturn in demand three years ago, Pennington said.

According to the Western Wood Products Association, 97 small mills have been squeezed out during that period.

The trend was echoed by Joe Heitz, associate editor of Random Lengths, a wood products reporting service in Eugene, Ore. "It's been a tough go for the past several years. ... There has been a lot of attrition. Housing starts, which drive the industry, fell from 2 million starts in 2005 to 500,000 in 2009."

However, Heitz said, the lumber market is better than at the start of 2010. "Prices of lumber are up a fair amount, which is good for small independents and for larger firms. Production got reined in by the economic downturn. Now supply and demand are much closer together."

According to Marple's Northwest Business Letter, a publication of Random Lengths, lumber prices in January and February increased 27 percent. "This marked an increase of 36 percent from a trough last October and 58 percent from the depths of a year ago."

The long-term outlook is for more housing starts through 2010 and 2011, with estimates ranging from 618,000 to 700,000, Heitz said, "but there's a long way to go."

Pennington said small mills like his struggle to keep the mill running every day. "We're like pilot fish. We swim around and try not to bite the big guys on the lips."

His mill gets about half its timber from the slopes of Mount St. Helens as Weyerhaeuser harvests areas it replanted 26 years ago.

"I've been up there," he said. "It's absolutely beautiful. Everything is replanted and nurtured. I'm proud to be part of this operation."

In addition to primarily producing 4-inch lumber, Clary Lumber Products also turns out firewood, landscape bark, and sawdust and shavings for animal bedding, selling primarily to fairgrounds, horse owners and dairies.

"We've got our heart and soul and everything invested in this," Pennington said. "We're excited about keeping working. We're hoping by this time next year, we can have some new equipment."

Marple's acknowledged the continuing importance of timber industry to the Pacific Northwest:

"Unlike some of the region's younger industries, unless someone figures out a way to move a forest, the timber and wood products jobs aren't easily transferred across the country or overseas," he said. "Once this industry rebounds, it will help lift the region and signal that the nation's economic health is on its way to recovery."

Online

Clary Lumber Products: clarylumber@live.com

Random Lengths: www.randomlengths.com