Soft Wood, Soft Market

Feds want to sell tons of Bitterroot timber. But who will buy it?

March 29, 2001

Bitterrooters have long viewed timber harvesting on the Bitterroot National Forest as a local affair: local loggers cutting local trees destined for local mills. But in the 1990s, timber prices were high, global timber trade increased, the mills disappeared and timber harvesters were thrust onto the world’s economic stage.

If the lumber mills in Ravalli County could have held on a few more years, they could have reaped a bonanza in timber following the devastating fires of 2000, if only for a short time. Now, however, the huge amount of standing dead timber on the Bitterroot National Forest may well go to regional lumber mills in neighboring states, if time doesn’t erode the quality of the wood.

Recently, Bitterroot National Forest officials announced a proposal to repair the fire damage to 356,000 acres of land. Among their ideas to bring the forest back to a “desired condition,” as they put it, is to reduce the fuel, or remove dead trees, from 65,000 acres of affected land. The commercial sale that is part of the overall fuel-reduction strategy translates into a yield between 120 and 180 million board feet of timber—roughly twice the amount sold in all of the 1990s.

Can the market absorb that much timber, especially with American markets open to foreign timber exports? Given the recent mill closures in western Montana, will that much wood have many bidders? And will it have any value?

Chuck Keegan, an economist with the University of Montana, says 180 million board feet of timber could keep four to five “good-sized” mills operating for a year. None of those mills are in Ravalli County, of course, since the last operating mill, Darby Lumber, closed in the fall of 1998.

“In Ravalli County there aren’t any mills left, that’s true,” Keegan says. “But there are others within a reasonable hauling distance.”

One of those mills is Vaagun Brothers, of Colville, Wash., which successfully bid on salvage timber sales in the fire-ravaged Sula State Forest.

Butch Sager is vice president of Vaagun Brothers. Though he’s skeptical that standing dead pine and fir will have much value more than a year after the fires, his company will at least take a look at the trees when the bidding contracts are advertised this fall. Despite the sagging timber market, Sager says, an agreeable transportation deal with Montana Rail Link will allow the company to bid on the pending sales. He worries, though, that the quality of the timber won’t measure up to the quantity.

“The market is soft, and the concern with timber more than a year old is that the quality is going to be poor,” Sager says.

Standing dead pine develops a blue stain and becomes too dry to peel after a year or so, Sager explains. Fir can stand dead for about two years before the insects devalue their marketability. “Then you don’t have timber you can sell,” he says. “All the pine will be blue and loses its grade yield because people want bright stuff for windows and doors.”

Harvesting won’t begin until next winter, but by then it will have been a year and a half since the fires blazed, leaving the timber in questionable condition, Sager notes. And with operating mills some distance away, “I can’t imagine it will pay off.” Nevertheless, he adds, “It’s going to sell.”

Quality isn’t the only unanswered question; the supply issue also looms over the proposal. With timber entering the American market from Scandinavia, Canada and Europe, Sager says over-supply could be a determining factor in the bidding process. “It’s a matter of supply,” he says. “Can we buy it and get it over here and still do all right?”

Keegan says interest in Bitterroot salvage timber from a Washington-based mill is a good indication that regional mills are still healthy. “Just the fact that you’re talking to a mill in Colville, Wash. shows a substantial milling capacity,” he says.

Other factors come into play, however. Economic “forecaster gurus” have ratcheted up their predictions for a recession, Keegan says. If a recession does occur this year, housing starts will probably slack off and harm the industry. But if Japan gets its economy back on track, he says, the lumber industry could profit.

Regardless of the immediate problems of disease and insects, and factors beyond the industry’s control like a possible recession and the Japanese economy, the timber will likely sell. And though it may appear to be a real boon to an ailing timber industry, the pending sales offer only short-term solutions, Keegan says. What the industry needs, he says, is a long-term strategy to reduce fire hazards and restore the ecosystem. Only then will the timber industry be able to survive in a tough global market.

“It would be a great opportunity if our entire timber efforts were on ecosystem restoration and fire hazard reduction,” he says. Without that long-term strategy, Keegan adds, investors will not put $20 to $50 million into new mill construction: “People aren’t going to invest that without some sort of commitment.”

With a new administration and a new Forest Service chief yet to be named, long-term fire treatment programs aren’t likely to emerge any time soon, he says, despite the enormity of last year’s fire season.

In the meantime, timber harvesters remain at the whim of nature and global economics.

If not enough bidders come forward to remove the number of trees the Forest Service wants removed, the agency will consider other ways of reaching its goal, says Bitterroot Forest resource staff officer Jeff Amoss. “If, for whatever combination of reasons, the projects advertised don’t sell, then we’ll have to look at some other means to get to the desired condition,” he says. “If they don’t sell, we can still get the treatment done, but it will cost money and we’ll have to find the funding.”

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