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Mill Shut Downs Not Over: One Man's Opinion

By Ben Meisner

Tuesday, October 24, 2006 03:45 AM

    

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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Comments

Could this mean tightening of belts and cutting back is on the horizon?
Could it mean foreclosures on homes when residents cannot afford to pay.
Increased interest rates-starting today? What will be the cost facing those with mortgage renewals?
Soup kitchens and other hand out establishments-will we require more?
Will other businesses face closure for a lack of customers?
Should we wonder if there will be a marked increase in bankruptcies? Both business and personal?
Can we afford to heat our homes and keep the lights on?
Right at this time-just 2 months before Christmas-where do we stand?
Am I being stricken with fear for all without just cause?
Just what are the predictions?
"It makes our future in the forest industry appear bleak indeed."

That is only the relative short term scenario - five to ten years, depending on the other areas infested. As for our own area, when everything settles out, there will be less AAC, fewer mills, longer hauls (or newer and smaller mills with improved technology) and not enough supply to meet the demand (although the rate of population increase is projectd to slow down unless the immigration policies change).

So, the cost of lumber ought to increase, with the likelyhood of more wood from overseas. Russia may yet come to supply North America, unless they have an infestation assisted with climate change.
its simple, instead of shipping raw logs accross the border we mill all of them. Then we reduce the sale of lumber and make windows, doors, wood flooring, furniture, ect. Then and only then we sell the finished product. Why ship valuable jobs accross the border. Canada has almost every resours that is avaible to man kind, why not make more seconday, along with the primary jobs, our country then can be one of the strongest. Just imagen to be almost completly autarky. To have a unimaginable trade surples.
rightwing
May I answere your question rightwing? Free trade is the problem. We are allowing forgien investment to buy up our profitable industries with the profits not remaining in our country to develop secondary industry. I know this is socialist ideology but until we see the light we will be hughers of wood and carriers of water. I'll bet you have herd that one before

Cheers
I agree with rightwing as to what the end goal should be. When it comes to finished wood products, there is stiff competition out there that has been around for some time. We had Canadian Woodworks here who tried for the longest time to make a go of it but failed. That does not mean that others cannot succeed in the future.

Of the list you cited, when people build fewer houses, they need fewer windows, doors and less wood flooring. There may be an expanding market for home improvements and I will let the marketers decided that. On the face of it, however, it appears not to be an expanded demand, just a redistribution.
Leftys got it right. We ship our Lumber 2x4's to the USA for house building. It would be way to expensive to ship Windows and Doors from here to market. Much cheaper to send the lumber and build the product their. The same thing applies to Pulp. All pulp produced in British Columbia (Millions of Tons) are shipped to the USA, Europe, China, Japan, etc; and made into paper. Very little if any is actually used in Canada. It is cheaper to ship the raw product to the highly populated area and produce the finished product, that it is to ship the finished product. Mainly because of weight and dimensions. This is one very simple rule of cost, for finished goods, especially, in regards to wood products.

The proof of this is the fact that the raw materials Lumber, Woodpulp, Ore Concentrates, etc; have been shipped out of BC all over the World for the past 70/80 years and will continue to be so until we run out.
"Our only advantage in the forest industry is our ability to mass produce dimensional lumber from a huge supply of trees"

That huge supply is about to diminish. Russia still has it, and then some a few times over. The only question is how long it will take to gear up their production or allow others to do it for them. The incubators are there.

Here is a Canadian company importing Russian dimensional lumber into the North American Market.
http://www.welcolumber.com/mill-sales-sophia.html

Here is a "small" operator:
http://www.russianlumber.com/softwood.htm
Well we could actually do something more realistic such as lean on our strenghts

(1) We could easily grow thousands of acres of root vegtables such as, Potatoes, Carrots, Cabbage, Onions, Turnips, etc; We do this now on a small scale, but we used to do it on a larger scale years ago, when the town and surrounding area was self supporting.

(2) We could continue to grow our beef cattle industry, and establish a slaugherhouse in the area, and hopefully supply most of North Central British Columbia. We used to have a Slaugher House here back in the late 40's early 50's but it was closed down. There are still a couple of small ones in the area.

(3) We could expand our chicken industry in conjunction with the Slaughter House and supply eggs to our local stores etc;

(4) We certainly could get some money from the Provincial, Federal, and Local Governments to establish some real tourists attractions in this area, instead of having tourist go to a stinky pulp mill, or the so-called museum in the Island Cache. We need a major tourist attraction, which should include a Paddle Wheeler on the River, a replica of the Old Hudson Bay post at Fort George Park, and numerous other things (to many to mention in this post) There would be considerable money spent on building this (Town History) tourist attraction, which should reflect our history for the Yukon Gold Rush and the Gold Rush to Bakerville. Once built it would supply numerous jobs during the summer months. The list goes on.

(5) We should get the message out that Prince George is much more than a **Hockey Town** which it isnt., and maybe get some river tours going so that tourists can see real wildlife which is just up/down river from town.

(6) Last but not least we should get rid of the mentality that everthing that has to be done to get this town going needs Government money. Some things can be done by local entrepreneaurs, and should be bankrolled by local banks, and if they wont loan the money, then we shouldnt do business with them. Right now banks make millions of dollars profit and if you want to borrow money they want your first born, and your house. Years ago you could get a $10,000.00 loan on the basis of your signature and promise to pay.

(7) Pipe dreams about riches in the Nechako Basin, spin offs from the Prince Rupert Container Port, the highly unlikely Airport runway expansion with attendent business, will get you nowhere.

(8) We must stop taking all the available tax dollars and spending them on stupid projects such as a new bridge that we dont need. We need to spend this money on infrastructure and to fix our roads. We dont need a co-generation plant that will futher pollute the City. The Cameron Street Bridge should be kept and tied in with Cotton Wood Island for future tourist attraction and growth. It is the last piece of Prince George History still standing with the exception of the Steel Railway Bridge over the Fraser. Our bafflegab Mayor and City Councillors are Hell Bent to destroy this bridge and put up a chunk of Steel.

(9) We need to get this City out of debt, or at least start and quit boasting about our taxes being on a par with other Citys of our size. If we want people to stay here, and come here we need to have lower taxes than other Citys. We can easily do this with our huge tax base, but we allow the City to tax the hell out of us, and then squander the money. A good example is the $850,000.00 for a replay board at the CN Multiplex. No one complains about this, even though it is an obvious waste of taxpayers money. This kind of crap has to stop.

I could go on, but you get the point. If this City wants at least to maintain the status quo, and maybe even grow then it must start to do some basic things., and the people of Prince George and surrounding area must support these business's and ventures, instead of buying goods made in China at Wal-Mart, and other similiar outlets, and supporting 8-10.00 per hour jobs. Practically everthing we buy comes from out of our area.

I for one buy as much local produce as I can and intend to buy as much as I can to get me through the winter (Cold room in basement) I really dont give a S--- if it costs me a little more money, because it tastes much better, and it supports the local growers. The same thing applies to meat products.

I would much sooner support local industry than spend my money at a stupid casino, that is draining money out of the economy with no apparent benefits.

If people are not willing to get off their collective asses and start to do something positive, then they will get what they deserve.

right on Palopu!
we need more people like you. And to jump start all of these plans, I popose that we start a fashist party. Nothing is done better or faster than with a dictatorship. Besides we could have long term planing, instead of 4-5 year terms. What do you think?