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Tough Times for Timber
Posted Thursday, March 22, 2007 ; 06:00 AM | View Comments | Post Comment
Updated Tuesday, March 27, 2007 ; 09:48 AM

Wood production boom in West Virginia ends as mills and loggers attempt to find new markets.

Story by Paul Darst
Email | Bio | Other Stories by Paul Darst

Sawmills around West Virginia are a lot quieter today than they used to be.

It was only a little more than a year ago that the state's timber industry was setting new production records. The 1990s saw a slew of wood products manufacturers come to the state, helping the industry reach those new heights.

Now some mills have laid off workers, reduced the number of shifts and even closed up shop one day each week.

"It had been pretty strong," said Dick Waybright, executive director of the West Virginia Forestry Association. "But the last couple of years ... red oak through the whole area, the whole region, lost its value. ... It's been a tough couple of years."

The Mighty Red Oak

The most popular hardwood tree in West Virginia is the red oak, said Randy Dye, director and state forester with the West Virginia Division of Forestry. It was that species of tree that caused the recent timbering boom.

"In 2004, it topped out," Dye said. "It was excellent during that period though. Our mainstay, the red oak, was in fashion then. ... We're blessed with red oaks. That's about 50 percent of the hardwoods in the state."

According to information from the West Virginia Hardwood Alliance Zone, its members produced 69,193 million board feet (mbf) of red oak lumber during the recent boom. Not far behind was poplar with 57,398 mbf. Hard maple was the third at 31,478 mbf.

Today's numbers are an estimated 20 percent below those, said Ed Murriner of the Hardwood Alliance Zone.

"Red oak is what's causing (the production downturn)," he said. "That's 50 percent of what mills were sawing. They've now shifted production to other species."

During the past couple of years, red oak fell victim to the fashion whims of the wood products industry, Waybright said.

"The industry shifted, and now furniture is made more from maples and poplar -- the kind of woods where you can't see the grain. If you painted red oak, you could still see the grain."

When It Rains, It Pours

But the shift from oak to other kinds of wood is just one factor affecting the state's timbering industry today, Dye said. Increased fuel costs, the high price of logging equipment and a shortage of labor have combined recently to hit the industry hard.

Adding to the problem is the shortage of timber lands, Dye said. Fewer landowners are selling the rights to their timber because of the lower prices. West Virginia has about 260,000 landowners who control 63 percent of the timber land, Dye said.

"They don't have to sell," he said. "They can just wait for the market to come back."

A final factor is that one of the state industry's primary market has shifted in recent years, Dye said.

"North Carolina was the world supplier of furniture," Dye said. "But they've lost a tremendous share of that market."

Today, much West Virginia wood is shipped to places like China, where it is made into furniture, and then shipped back to the United States, Murriner said. But today, Chinese furniture makers are looking for cheaper raw materials, which is affecting this unusual industry downturn.

"This is not the same type of downturn that we used to get," he said. "For 10 or 12 years, we went without a downturn. We used to get them every four or five years. This one is caused by the export market."

Although the international market is hurting the state's timber industry, it is a necessary aspect of the business, said Gregory Cook, assistant state forester.

"There is a huge market (overseas) for mills in the state who chose to play," he said.

And it's a market that most mills in the state are trying to tap, Cook said.

"They all are doing it to some extent," he said. "Most of the large ones employ salesmen overseas -- in Europe or China -- people who come from those places."

Although competing on the international stage can be difficult and even intimidating, it's a necessary aspect of doing business today, Cook said.

"It's about accepting change," he said. "They are being forced to do things differently."

But recognizing the markets have changed is only one area in which the industry has embraced change, Dye said. In the past, when profits fell mills would react by sawing more lumber. As a result, the market was flooded with excess lumber, which caused the price to drop even more.

Today, when the market takes a downward turn, mills react by slowing production, he said. They might have to lay off workers because of the decrease, but profits generally will increase because of the scarcity of lumber in the market.

The Spice of Life

West Virginia is generally in a better position than most other timber-producing states, Dye said. For example, the deep south mostly has pine trees, which are used mostly in one market: the housing industry. If that industry takes a downturn, those areas are in dire straits until the market improves.

The West Virginia timber industry, however, is more diverse, Dye said.

"We are blessed in Appalachia with lots of hardwood," he said.

Although red oak has been the dominant species in recent years, the state has a plethora of hardwoods, including maple, poplar, hickory and ash. That means the state has more than one possible market, Dye said.

"Our diversity allows for adjustments," he said. "Appalachian hardwoods are desired around the world, and we're right in the heart of Appalachia."

Although the market is down, mills don't appear to be permanently closing their doors. Waybright, Dye, Cook and Murriner said they know of no mills that have gone out of business.

But some are temporarily ceasing operations, Waybright said.

"Even though the markets have dropped, most mills are trying to keep their employees on," he said. "Most of them are family-owned operations, and they feel an obligation to their employees. A lot of other businesses would have closed."

About 95 percent of the mills in the state are owned by West Virginians, Waybright said.

"Hopefully the tough times will end soon, or a lot more are going to hurt," he said.

Copyright 2009 West Virginia Media. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.
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