Oregon juniper loan program off to slow start, but backers remain hopeful

Eric Mortenson/Capital PressKendall Derby of Fossil, Ore., takes a break beside a load of juniper posts destined for shipment to Portland in this photo from November 2014. Demand for juniper wood is strong, but the logging and milling infrastructure is hobbling.

A state loan program intended to jump start the Western juniper market has had only one applicant so far, and people in the industry say it remains stalled in a situation where good intentions and strong demand for juniper lumber aren’t matched by log supply and mill infrastructure.

Business Oregon, the state agency in charge of an $800,000 juniper fund approved by the 2015 state Legislature, recently tweaked the details of its loan program in an effort to provide better terms and spur more interest. Meanwhile, small rural juniper mills sputter along and hope for better times.

“I feel like a zombie, caught between the living and the dead,” said Kendall Derby, owner and operator of In the Sticks sawmill in Fossil, Ore. Derby entered the spring with little supply — “Demand is through the roof and I’m out of logs,” he complained. At the end of June he received three truckloads of logs, only to have some of his equipment break down.

The predicament is another in the series of starts and stops that has long marked the juniper market.

Western juniper is an intrusive tree in much of Eastern Oregon and other dry parts of the West. It covers an estimated 9 million acres in Oregon alone and is a prodigious water “thief,” as some landowners call it. Mature trees can use up to 30 gallons a day, and crowd out native sage and grasses.

An Oregon State University study showed that cutting juniper quickly restores watersheds and improves streamflows, which in turn improves grazing conditions for cattle and habitat for species such as Greater sage grouse. Politicians, agency experts and environmentalists believe a vibrant juniper logging and milling industry could revitalize the economy in parts of rural Oregon, as well.

For that purpose, the state Legislature approved the $800,000 Western Juniper Industry Fund in 2015. Of that, $500,000 was intended as loans to increase harvesting and manufacturing; $200,000 was for technical assistance; and $100,000 was for workforce training.

But six months into 2016, only one loan application has been completed and the other two parts of the program haven’t started. Business Oregon spokesman Nathan Buehler said the department revised the loan program details. Now, producers can get loans for up to 90 percent of the project cost, instead of 75 percent. Also, companies the handle other types of wood are now eligible to apply.

Mill owner Derby said part of the supply problem is because loggers pursued pine and fir logs available through wildfire salvage sales. Pine and fir are easier to get to, cut and haul, Derby said.

“They don’t want to mess with juniper,” he said.

Derby and other mill operators sell their wood to Sustainable Northwest Wood in Portland, a for-profit offshoot of Sustainable Northwest. Ryan Temple, president of Sustainable Northwest Wood, agreed with Derby’s assessment that loggers turned their attention to salvage logs rather than juniper.

He said loggers and mill operators need to communicate better with ranchers whose rangeland is covered with juniper trees. He said some ranchers simply cut it and shove it into a jumbled pile.

“If ranchers de-limb it and put it into something that looks like a log deck, somebody will buy it,” Temple said.

He said demand for juniper products is strong and varied. Oregon vineyards moving to organic production want juniper trellis posts because they are naturally rot-resistant and don’t have to be chemically treated, while a new brew pub adjacent to Oregon Health & Science University opted for a bar top made from a long, polished juniper slab.

He said Sustainable Northwest Woods can sell all the juniper posts, boards and landscape timbers it receives.

“It’s probably gone from a tenth of our business to a third of our business,” he said. “It could easily be half of what we do.”

Temple said he paid $20,000 each to Derby and to another mill operator this year to keep them going. The “pre-purchase” money will be used to buy lumber as the mills produce it, but the operators were free to use it in advance.

Meanwhile, a new mill operator is jumping into juniper.

Bob White, who has a background in a nursery business and a fence building company, plans to open a mill in Lakeview, Ore. White said he bought two portable saws, the type that can be towed to job sites, and will have a large saw in a building he’s buying in Lakeview.

White said he already is cutting boards from a large juniper pile assembled by a farmer in the area. “The state paid him money to cut it, and he gave it to us instead of burning it,” White said.

He said small mills want logs, but lack the ability to cut and haul it themselves. “We’re going to do all that,” he said.

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