The Ochoco Lumber Co. has sold 32,000 acres in Central Oregon for $18.5 million, some of which will pay for upgrades to its sawmill in John Day, Ore.
The company recently completed a complex, two-part sale that was initiated last year with Stafford Ranches of Fields, Ore..
“Strategically, it didn’t make sense to hold onto property so far away from our existing facility,” said Bruce Daucsavage, Ochoco Lumber’s president.
The 32,000-acre continguous “Foley Butte Block” was amassed by Ochoco Lumber over a period of 35 years and once provided logs for its sawmill in Prineville, Ore., which shut down more than a decade ago.
Ochoco Lumber is retaining about 15,000 acres in the John Day Valley and has entered into a 10-year contract with the U.S. Forest Service to cut timber on the Malheur National Forest.
As part of the deal, Ochoco will pay the agency $69 million over the course of the contract to obtain logs from a 300,000-acre project area in the national forest, with a collaborative group deciding on logging sites.
The Forest Service, in turn, will use those funds to pay local contractors for forest health and restoration work. Between the sawmill, the federal agency and local contractors, the agreement creates about 100 new jobs in the area.
“It’s a great opportunity for the future of the company,” said Daucsavage. “It’s going to be used as a model nationally.”
Just two years ago, the company was planning to shut down its sawmill in John Day due to the lack of available timber from surrounding national forests, he said. Now, the anticipated volume of timber is expected to exceed the capacity of its facilities, which means Ochoco Lumber needs additional equipment.
Strategically, it made sense to sell off the land in Central Oregon and invest in the John Day facilities, which include a sawmill and biomass plant that manufactures wood pellets, heat bricks and animal bedding, Daucsavage said.
Ochoco Lumber also has plans for its former sawmill site in Prineville, where the company still has its headquarters.
The firm has sold 30 acres to a hospital at a discount in exchange for the installation of water and sewer lines and other infrastructure on the remaining 40 acres, opening the property up for development, he said.
Stafford Ranches, which bought the 32,000 acres, already owns farm and ranch properties in Central Oregon and plans to use the new addition for cattle grazing as well as logging, said Jerry Hicks, a broker with Fay Ranches who was involved in the deal.
Capital Press was unable to reach a representative of Stafford Ranches for comment.