2007 Forestry Prediction Bleak

By 250 News

   
A forestry expert says 2007 is shaping up as a poor year in the woods industry across Canada. "I can speak openly only if I am not identified" said our expert, as people in this industry tend to be quite about their business.  Our expert's prediction is  far from bright "You can look for more down time not only in this region but across the country" because the "markets are all off and there is too much wood plain and simple."

Accordinig to our expert,  a lot of owners  are "Shaking their heads wondering why they are still running."  The  operators  are caught in an odd situation "How do you walk away from the mills for a few weeks  because politically its suicide to shut down the mills right now.  You are standing their telling the guys and gals who pound it out every day that you’re going to shut it down when they know you are standing there with a cheque for $20 million dollars in your back pocket that you just got from the countervailing duties."

Expect changes over the holidays "I think you will see the industry wait around till maybe Christmas and then shut down for a couple of weeks, you can't do it right now even though you’re losing money."  Things are even tougher for some mills than others "There are those who decided not to ship to the US markets when the trade duties were in place, and sold only into Canada. Those mills are really behind the 8-ball."

The condition doesn’t just exist here in BC  but it is occurring all across Canada as the US market stays flat and is expected to do so for the next year. "We know that this business can turn around on a dime if suddenly the demand picks up, but unless we have a market that gets $30 dollars more a thousand, or the Canadian dollar drops 10 points to about 80 cents  things don’t look good for the foreseeable future."

2007 in the forest industry does not look good says our expert "It really doesn’t matter  that you are cutting Pine Beetle Wood, the fact is, if you don’t have the demand, and you can’t cut the stuff at profitability it really doesn’t matter what the price of the stumpage is. We may have millions of board feet of Beetle wood sitting out there but  no demand translates into no reason to cut it and a couple of things need to happen before that changes. " 

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