Losing Lumber Companies

Fall 2008


The sawmill world in our area has seen numerous major changes the last few months —Stimson Lumber purchased Regulus Stud Mills (St. Maries); Riley Creek Lumber acquired JD Lumber (Priest River); and Riley Creek merged with Bennett Forest Industries (Grangeville) to form Idaho Forest Group. In terms of available log markets, the biggest change is that the JD Lumber mill is shutting down and is in the process of curtailing log purchases. Thankfully, Stimson Lumber is continuing to operate the former Regulus facility.

For the family forest owner in the Inland Northwest, the bottom line is less competition between lumber companies for their logs.

Random Lengths (web site: www.rlpi.com), an industry publication that tracks lumber pricing and market trends, published a commentary in August about industry consolidation, particularly in the Inland Northwest region. With permission, the article is reprinted below:

Market, Timber Supply Behind Inland Consolidation

Another wave of consolidation in the wood products industry appears to be under way as producers adjust to current market realities and prospects for the future.

The Inland West has been particularly active with the recently announced merger of Bennett Forest Industries and Riley Creek, followed by Riley Creek’s acquisition of JD Lumber. Earlier, Stimson Lumber acquired Regulus Stud Mills, another Inland producer, and Interfor announced it will acquire Portac’s sawmill and other assets on the Olympic Peninsula.

These deals come amid one of the worst industry downturns in history, suggesting that for those being acquired a look into the future did not provide enough promise to try to outlast these hard times.

In the Inland, it has been well known that Riley and JD have been adversaries at the bidding table for the supply of North Idaho private timber. Observers note that this deal was in large part the result of a growing strain on the region’s private timber base, after 10-15 years of virtually no timber program on the national forests.

Other companies in the Inland are confronting constraints as well. In some cases, private lands have been cut over, and manufacturers may have to bridge a gap while a new generation of timber matures.

Even today, amid the unprecedented housing downturn, timber in the Inland is relatively tight. Mills have cut production, but so have timberland owners. Battling lower prices and higher fuel costs, many private landowners in the region have pulled out of the market or have substantially reduced their harvests.

As housing and wood product markets recover, it is conceivable that timber supply challenges will remain, if not grow more acute. Traders already note that problems with the bug-killed timber resource in British Columbia have pulled lumber buyers over to Inland White Fir as a substitute. This has been an additional key factor in the tightening of supplies in the current market. As housing recovers, and the Canadian industry confronts its own supply constraints, it’s not difficult to imagine an increasing strain of stateside timber supplies.

© 2022 Inland Forest Management, Inc. - Website Design by Keokee in Sandpoint, Idaho.