Mill Shut Downs Not Over: One Man's Opinion
By Ben Meisner
Carrier Lumber Chief Bill Kordyban is absolutely right, we are cutting too much wood, hence the reason for the dropping prices and the need to shut down mills. Some for a week, some for two, some indefinitely.
Add that to the 15% duty and the wood industry is looking at some tough times.
Well perhaps not the industry, given the fact that many of them are about to receive checks back from the Feds in the money collected under the old system. But would you throw good after bad? Would you continue to subsidize an industry that has too much product on the shelf?
Who’s going to be the first to curtail production and who will be last? Major companies are monitoring the balance between production costs and the price of lumber . It is all about supply and demand, and export tax. Too much wood sitting south of the border, reduced demand, a 15 % export tax. Production costs are now higher than what a mill can get for the product.
So if you’re looking for an omen of what can be expected in the woods industry in the coming months, look no further than cutbacks by Canfor, Tolko, and Carrier to see the trend.
But have you forgotten yet one further dimension?
Alberta is now being hit by the Mountain Pine beetle, they also will want to log as much of the beetle infested wood as possible, throwing yet more onto the market.
Can you condemn them for a problem that we sent across the rocks to them? But wait, when we get finished with Alberta, we will need to tackle the problems of Saskatchewan and on and on.
Idaho, Washington State, and Montana are also in the process of trying to cut their beetle kill to mitigate the losses in their forests.
Quite apart from the future in which we have only a skeleton of Lodgepole Pine remaining in this province and we must look for some new way to curb the loss of employment, we will also have to address the problem the Beetle will be making in the balance of Canada.
It makes our future in the forest industry appear bleak indeed.
I’m Meisner and that is one man’s opinion.
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