US Lumber Market Drying up Till 2011

By Ben Meisner

We in the region had better braced for the waves of problems that are about to hit this central interior. 

The latest economic reports in the US say that the housing market will likely stay flat until 2011. Take that bit of information and marry it to the fact that the beetles are continuing to chew through our forests, and we are very likely to be facing a major problem just about the time that the US market opens up again.

In the meantime, the high value of our dollar and the Yanks wanting us to pay an increased duty on the wood we are shipping does not bode well.

The Canadian banks are not rushing out handing out major loans to the forest companies, to the contrary; the word that you are hearing more and more is that they are out there trying to collect money, and they are getting tougher on their clients.

Canfor’s new boss is the hatchet man, he is there temporarily, meaning he will clean house, shut down the inefficient mills and then leave the job to a new body.

The rumble on the street has been that Isle Piere would get the can but insiders say that it is a very efficient mill and it likely is a long way down the list.  Plateau, (well if Canfor hadn’t dumped 100 million into the place) would be on shaky ground. They are almost certain to leave it alone and see if they can get the bottom line changed.

So where does that leave us?

Stewart Lake logging has been down, the family operation and a good one, Lytton Lumber another family outfit has been shut down permanently.  So unless someone can make up a silver bullet right away the prediction in the industry is very quickly coming true.

Mackenzie has been our biggest hit so far, but hang on there is more to come.

The only bright spot is the coast ,where the second growth of trees is expected to be coming on stream just about the time the Central Interior will hit the wall . 

But then trees being cut in the lower mainland will have  no impact on our fortunes.

I’m Meisner and that’s one man’s opinion

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