Fewer Mills, More Production

There is an odd occurrence taking place within the Idaho forest products industry. We are losing sawmills and increasing lumber production! Since 1995, we have lost a substantial number of sawmills. In northern Idaho alone, five mills have shut down within the last six years. However, lumber production has increased by over 15% during the same time period (see accompanying graph). What’s going on here?

Well, as you might guess, it all comes down to mill efficiency. In general, sawmills are becoming more efficient and have the ability to cut more lumber while processing a higher log flow. For this same reason, we have seen demand for logs remain steady, even though fewer mills exist. This fact has helped keep our log prices up with fewer competitors.

Long term impacts

Unfortunately, if this trend of losing mills continues, there will be a point at which our log prices suffer. Extreme cases of this situation are vividly illustrated in southern Idaho and central Oregon. We recently met a central Oregon landowner that owns 4,000 acres of timberland. Two sawmills near his property have shut down within the last year. In the past he has supported his family by completing the forest management and logging operations on his property. But because of the long log hauling distance to the nearest operating mill, he is very concerned about being able to economically harvest timber and maintain his livelihood.
Thankfully, we are still blessed with a variety of sawmills in the eastern Washington/northern Idaho region. Hopefully, this situation will continue and our log prices will remain competitive.