Orofino Chamber of Commerce
Chamber speaker predicts a gloomy picture of forest economics in Idaho
Timber industry recovery to begin sometime between 2010 and 2012
By Charlie Pottenger
Orofino Chamber of Commerce guest speaker, Serena Carlson, Communications
Program Manager representing The Idaho Intermountain Forest Association
presented a realistic fact-filled and at the same time gloomy picture of forest
industry economics in Idaho, the Pacific Northwest and the nation. If recovery
begins as early as the optimistic forecast in 2010, the resulting long term
damage to Idaho’s forest economy and, in fact, the State’s general economy may
be substantial but survivable.
However, if the gloomier projections of recovery as late as 2012 proves correct, then more mills will permanently be closed and dismantled, more skilled loggers and mill workers will emigrate to other careers to support their families and the investment, infrastructure and ability to revive the industry will be severely delayed.
Attendees at last week’s Chamber meeting were informed of the deep dependency of Idaho’s forest economy on the number of housing starts in North America. With the near total collapse of the new housing industry associated with the current severe recession and the mortgage foreclosure crises sweeping the nation, the demand for lumber, plywood and other forest products has declined to levels which are unsustainable for all factors of the building products sector.
Housing starts in 2009 appear headed for about half the level seen in 2008 which was a terrible year. The result has been a 50% drop in lumber prices from levels seen in 2005 according to Carlson.
Due to the severe market conditions 63 – 70% of all Idaho mills have fully or partially curtailed production. Many have elected to permanently shut down and dismantle the facility while others have reduced shifts or taken extended shutdowns to try and preserve their suppliers and retain skilled personnel as they weather the storm. Those trying to survive are limiting capital investment and hunkering down while the economy unravels and takes steps toward a renewed interest in home construction.
The real tragedy as the wait for recovery drags on is the simultaneous loss of dedicated trained workers and the erosion and loss of mills and infrastructure needed to support a vibrant forest resource based economy, such as previously enjoyed in Clearwater County.
Loss of forest industry jobs is hard on Idaho as seen in the following comparisons:
Average annual wage
The average annual wage of a forest products logger is $40,196, and the average annual wage of a forest products mill worker is $39,149 as compared to an annual wage of $37,428 for manufacturing workers and $13,045 for those employed in service/tourism industry.
If recovery does not start soon the real risk is that future demand on Idaho’s abundant, sustainable forest resources will not be promptly met. Workforces will have to be retrained, mills will have to be founded and constructed, timberland owners may have subdivided and sold off prime real estate as timber values decline and holding timberland as an investment has become unattractive (currently timberland is often worth six times more for recreational property).
If the less optimistic recovery forecast is closer to reality, future timber activity may depend more on National Forest resources which are being poorly managed. Due mostly to the new directions taken to manage national forests, the annual harvest from the regions predominately Forest Service lands has dropped while in-forest management on federal land has languished. Although standing inventory has grown from 30 billion board feet (BBF) in 1953 to 42BBF now, the total Inventory of dead standing timber has tripled from 4% to 12%. The national forest holds 94% of the dead standing timber. (For understanding a stack of logs covering a football field and four miles high represents a 1 BBF.)
The result of Forest Service and wilderness-type management policy is to drastically increase the risk to the resource from insect and fire damage resulting in ever increasing larger losses. To see the future more dependent on national forests to support a resurgent forest products industry seems a dream that can’t come true.
The industry’s future depends on timing of the recovery. Early recovery will limit timberland loss to recreational property, reduce further losses of mills available to be ramped back to full productivity, and reduce total loss of skilled loggers and mill workers.
State and private timberlands will need to be managed as they have been for the past generation to assure sustainable supplies of logs, and taxes to counties. Most importantly, for long range forest health U.S. Forest Service managed lands should refocus on forest health to secure usable values, revenues to communities and varied recreational values from lands in their care.
Chamber announcements
Chamber Director Phil Schriver made a report on his recent trip to Sun Valley which is tentatively set for June 18, 2009 at the Prison Training Center.
Shriver also announced information on an upcoming State Campaign on Recreation and Travel reality show in which a Seattle area couple will be selected to be introduced to the State of Idaho.
Hwy. 12 in top 10 for scenery
There is a website, www.drivetop10.com, showing some of the sights along Highway 12 which were included in the Top 10 Scenic Highways in the country.
Fourth of July
A call for volunteers was made to help the Chamber make this year’s 4th of July celebration a success, call 476-4335.
The guest speaker, Serena Carlson was introduced by chamber president, John Goffinet.