Wood, the environment, and Man

A wide-ranging overview of the state of the primary processing industry, and where it may be going from here. August 10, 2000

I'm amazed that raw material procurement and environmentally based debate on timber harvesting and related issues are not discussed at this forum or anywhere on WOODWEB.

We're a commercial operation (not a "woodmiser") and do both primary and secondary manufacturing. Like everyone else, we like what we do (making things out of wood).

At the same time, we are just as concerned about were the next log is going to come from and how its quality will be as we are about how we're going to saw it. Given the latest mandates from the paper industry, to whom we sell our byproducts, we're more than a little interested in the procurement and environmental aspects of the industry. Are any of you guys aware of what's going on?

Forum Responses
It seems to me that over the past few months, many posts have been added that address the issues of both log acquisition and environmental awareness. A lot of small mills derive the majority of their raw material from "urban" trees, with many others drawing from alternative sources. These include standing dead, blowdowns, forest floor recovered, and underwater salvage, to name just a few.

As both a primary and secondary specialty product manufacturer, I can tell you firsthand that in this day and age, the opportunity for any mill other than the "majors" to acquire a reliable fiber supply is the most difficult task a small mill has to face. We have been very lucky in sourcing the necessary raw materials for our facility, but this has not come without a great deal of effort, connections, and, of course, money.

All too frequently, small operators are lulled into the "dream" of owning their own mill; "Be your own boss, work when you want, have your independence," etc. Unfortunately, the hard reality is that there is an enormous amount of education that one needs to undertake to become merely self-sustaining, let alone successful.

Having spent the last 15 years of my life working in the lumber industry, I can tell you that hard work is a uniform truth. I have been (and still am) involved in setting up sawmill operations in North America, South America, Africa and Russia. Regardless of the location; whether you are cutting hardwoods, softwoods, exotics or commodity product; you need to meet the same challenges and overcome the same obstacles.

The "trick" is to become good at something, and continue to improve.
The markets are there, and, for the most part, demand exceeds supply.

There seems to be a paradigm shift happening in the lumber industry. The pendulum has started to swing back to the way things were 100 years ago. On the decline are the "mega mills" that cut hundreds of thousands of board feet of lumber per day, regardless of the inbound log spectrum. On the increase are small specialty mills, better able to cater to their market's needs and desires. I hear this every day: "I called the big boys, but they aren't interested in a small volume," or, "I can't get the size/grade/quality I'm looking for," etc.

The Internet has been a godsend to anyone who has taken the time to learn how to use it to its full potential. It affords one the opportunity to identify and directly market to end users, thereby eliminating all of the "middlemen" who have historically operated between producer and consumer. This, of course, results in a double benefit: The end user obtains a lower price for the product, and the mill receives a higher price. (I guess the only "losers" are the brokers, traders, and wholesalers.)

Even in an area that has been dominated by multinational companies for the past 100 years (British Columbia), we are seeing more and more attention paid to mills that will derive the best quality products from any given log spectrum, as opposed to those that have the highest production rates. The general trend is towards "Value over Volume and Quality over Quantity."

Take heart; the system is changing, and this forum represents many, many people who are part of the solution.

What part of the country are you in? Around here (Miss.) most of the timber is privately held and many of the big boys -- Georgia-Pacific, International Paper, et. al., are divesting themselves of lots of their acreage. IP is even shutting down a pulpwood yard here and is reported to be seriously considering shutting down their paper mill at Natchez, MS (it's been there since the 40s), due to inefficiency and difficulties in upgrading.

The economies of scale that these companies enjoy also work to their disadvantage in many areas. The bigger companies become, the more like the government they turn out to be. I've worked in and out of big company mills for mechanical contractors before, and the inefficiency, inflexibility, waste, fraud, corruption, and laziness really has to be seen to be believed.

I think in the long term the big boys have more to worry about than us little guys do. Everyone on this board may disagree with me, but I've seen everything from 2,000 BF/day portables to GP's number-one producing linerboard mill at Monticello, MS from the inside out and back again, and that is my informed opinion.

There have been some good articles over the years in the FOREST PRODUCTS JOURNAL about wood, environment, and man. It certainly is a key issue for all people in the wood industry.

Much of the work is being done by associations. I have THE GROWTH RING POWER BOX from the Natural Hardwood Lumber Association, and others offer coloring books, videos, and other material for getting the message to the public.
Gene Wengert, forum moderator

Living in northern Alberta, which still has one of the largest timber reserves in North America, I see government continuing to grant more timber permits to megamills than there are trees available -- to the point where the megamills are starting to fight each other. Sad.

And the forest is referred to as "fibre"!!!

Some of the reforestation practices are a joke and there's total denial of pulp mill effluent being dumped in our rivers.

BUT, it is changing -- just very slowly.

We don't give up trying to induce some common sense, and in our area we have two large mills that are genuinely trying to minimize damage and balance that with the demands of the bean-counters in the Head Office.

Perhaps one reason we don't see more discussion on this may be that it's an issue that is quite localized; i.e., I fight for our area and let someone else look after their's.

Certainly would be great to see more discussion on this.

I have been reading this WOODWEB forum for over a year and I would now like to comment. I got started from this forum, by finding a cutter and then reading and learning from all the input from different people and Gene on how to dry wood. What an experience!!!

What really got me going was the fact that every time I wanted to build a wooden project for my family, I was faced with paying those high prices per board foot for the finished material. When I needed to cut down some trees in my yard, and because of this forum, I stood back and thought for a minute. This is where the wood for my projects really should come from. I now pay just pennies for my wood.

I think the whole issue comes down to economics. I was sick of paying the high prices and because of the small, portable lumber mills, more people now can and should enjoy the same benefits.

I have some neighbors doing the same, even though there are some large lumber mills right in our area. The only way for the small guys to stay in business is to spread the word about cutting down trees and letting the small portable mills cut the wood up. Even if the trees are in the city, why not harvest them as well? Why let them go to waste? Even they are so valuable. I know that I am spreading the word.

There is nothing more satisfying than building your own furniture with wood that was harvested off your property. Especially if you have had a hand in the entire process.

But be careful, this is a very addictive hobby. The quest for a few good boards will result in the need for your own sawmill and all the associated toys (uh... equipment) that goes along with it. Sounds like you've been bitten by the bug.

One thing that I am careful about is telling other sawmill operators that "so and so" has a good deal on logs or that I have found a good constant supply of material.

On the West Coast of British Columbia, getting a long-term supply of GOOD logs is very hard to do. We deal with two or three log brokers, and also have joint ventures with loggers and a few select small sawmill guys. We always go in with sawmill people who do something different or have different customers than us.

Any of you who have done this for any amount of time know that screwing someone on a deal will come back to haunt you at least fivefold. Everybody has to hold their cards close to the vest in this business when it comes to a good log supply, because your competitor will offer that source more money.

From the original questioner:
I have to admit, I was afraid of what kind of responses would be posted. I am pleased and encouraged by all.

Our operation is located in central Virginia. We are seeing a storm of changes in timber procurement. One such change is that "gatewood" (logs sold delivered) is less avialable. There used to be many small and large independent loggers who purchased timber. Now many of them have either left logging or have grown and gone to contract logging. There are still some left, but the recent mandates by G-P may keep us from dealing with those who don't obtain their SHARP logger certification.

Another factor: Competition for timber has increased, whether real or inflated, by the ever-increasing consultant foresters selling the resource. One lumberman called them "roadside auctions."

Third: Large companies aren't divesting. They never really had a large presence here, except in paper. G-P has a hardwood mill at Buenavista, IP an SYP mill at Franklin. Solid wood is manufactured by many small, medium and large privately owned operations.

Four: State silvercultural regulation. Voluntary best management practices for logging, commonsense laws and practical Department of Forestry regs are under attack as they are everywhere else in the U.S. Presently it's in the form of the Virginia Chip Mill Study.

The storm of changes in timber procurement won't be over for a while. So you guys talking about getting the sawdust bug, be advised: this second-generation addict is worried. Still, I thank God that I'm doing something I love.

It all depends on one's individual position in the markets that we deal in, but I still maintain that the big boys are "in for it" worse than we are.

1) The mass production mills already operate on generally lower margins than the specialty and niche-market producers.

2) It is getting harder and harder for the big companies to keep their mills logged. Even with larger forestry and procurement staffs, it is still disproportionately harder to find 120 to 150 loads of logs per day than it is to find 12 to 15.

3) From what I have experienced, big company mills are more inefficient in many ways and FAR more inflexible and resistant to change than are small, private operations.

For perspective:
Before about 1998, the record for annual production of SYP lumber was set not in the 60s, 70s, 80s, or early 90s, but WAY back in about 1913. During that time in this area (southwest Mississippi) many companies from up north had moved in and set up big band sawmills to exploit the vast, virgin longleaf pine resources in the area. This began in the late 1880s and early to mid-1890s.

Even before the Great Depression hit, all these big mills were on the decline or already had folded, with only one, Central Lumber Co. at Quentin (between Brookhaven and Natchez), lasting until the 1950s. These big companies were the GP's and IP's of their day but now are only distant memories.

My best advice for preparing for possible lean times:
1) Avoid large capital outlays that will take a long time to pay off if at all possible.

2) Do something that not everyone else does. Almost anyone with good sense who can raise lots of capital can build a mill to cut 250,000 BF/day of dimension lumber, but making money sawing grade hardwood with a headrig and edger REALLY takes some doing. The profitability of big operations relies too much on the know-how of people outside the company, chiefly equipment designers and engineers, who keep the company going with upgrades and new equipment.

3) Try to produce high-value product from a small raw material pool, rather than commodity product from a huge RM pool.

In any event, pull up your socks and cinch up your belt another notch, because the determination and hard work of the little guy is what has made this country succeed, in my humble opinion.

I have been in this business for 28 years now, doing everything from starting as a pulpwood procurement forester, to area wood and chip procurement manager, to starting and building a small pine and hardwood sawmill operation, then a totally hardwood mill operation consuming 130 MBF/week, and then became consumed by the industry itself and had to sell. So I've been there, done that, but I've always made my living from trees.

I like the lumber business, but it's not for the faint of heart. We are in another time of change and I must say very serious change. The resource is getting more fragmented and scarce, and J.Q. Public is getting much better educated as to the real value of trees.

I firmly believe in all my past and present experience that a small operation with the ability to adjust will have the ultimate edge. Also any operation that is not married to their bank will also succeed.

There are profits to be made in the business no matter what your operation's scale. To all the woodworkers out there, be sure when you compare what you do that you add in all of your costs. When you make comparisons concerning prices, you may be surprised at what it is really costing you to cut your yard tree down and saw it into lumber.

I'm a big supporter of this industry and those not willing to make changes and "catch the big guys sleeping" will never succeed.

Another thing we all need to realize is that many of our decisions in business both in the woods and at the mill will have to include the environmental part of the equation for success. Twenty-five years ago, that wasn't even a factor.