Forest products market: Loggers knock on wood

Logger Jeremy Stecker is watching demand for timber as some Northeastern Minnesota lumber and paper mills are idle.

 

Loggers by nature know how to social distance.

In the forest by daybreak. Harvesting wood in remote locations. Operating one-man controlled feller-bunchers. Spending long days transporting logs in tractor-trailers to distant wood products plants. 

However, uneasiness in the forest products industry has northeastern Minnesota loggers knocking on wood.

With several area timber products facilities idled due to an uncertain market and this winter’s wood still on the ground in some mill yards, loggers and industry officials say it’s an unsettled time for the state’s roughly 1,500 employees who work in the woods.

“The (mill) shutdowns have been kind of quiet compared to the mines,” said Scott Dane, executive director of Associated Contract Loggers & Truckers of Minnesota in rural Gilbert. “But the timber industry has been impacted as much as the mines.”

As the public knows all too well, there’s been a run on toilet paper during the coronavirus-triggered economic downturn. But demand for other forest industry products such as paper for books, brochures, magazines and oriented strand board for new home construction hasn’t been as strong.

“At first, we thought we’d be kind of immune from the impacts,” said Dane. “But our mills and the products they produce are being impacted by schools (K-12) and colleges being closed.” The result has been temporary shutdowns at a number of northeastern Minnesota wood products plants.

Northeastern Minnesota lumber and paper mills stretch from Bemidji to Two Harbors and from International Falls and Grand Marais to Duluth.

“We can go out and harvest wood,” said Dane, “but if there’s no place to take it, it impacts us.”

Some mills are in extended outages, said Mike Birkeland, executive vice president of Duluth-based Minnesota Forest Industries. Others are implementing rolling outages to keep employees working, he said.

“So far, it depends on the markets and sectors,” said Birkeland. “The building market has been doing pretty good with do-it-yourself projects, but housing starts are down. The biggest thing is that Minnesota doesn’t have a tissue mill.”

  

Big business

Forest products are big business in Minnesota.

Nearly 32,000 people are directly and indirectly employed by the industry, paying total wages of $1.8 billion annually, according to Minnesota Forest Industries. Each year, the value of forest products produced in the state is approximately $9.1 billion. Almost 300 communities in Minnesota are home to businesses that provide goods and services to the industry. Gov. Tim Walz has deemed Minnesota’s forest products industry as critical.

However, some area loggers say the economic crash is raising questions about the future.

“The market filled up pretty well this winter,” said Jeremy Stecker, owner of JATCO, Inc., a Duluth-based logging company. “The mills bought all the wood they needed and then with the COVID, they had to shut down.”

Loggers are currently in their down season. Many spend the spring repairing and maintaining equipment in preparation for summer logging or preparing logging roads for next winter.

Stecker says with mill wood yards full from last winter’s harvest and some mills closed, there’s concern about future demand.

“With the mills being shut down, they’re not utilizing the wood they bought in the winter, so they’re backed up,” said Stecker. “The big question is how long the hangover will be on the back end?  Now, we’re dealing with the effects of having full yards.”

The market has become so uncertain that some loggers have been forced to lay off employees, said Dane. But state unemployment benefits, coupled with $600 per week payments from the federal government, may make it tough for some loggers to get employees back to work when the market rebounds, said Dane.

“One logger told me, ‘I will have to give my guys a raise to get them to come back’,” said Dane.

Some loggers though, are doing fine.

“It’s been fairly good for us,” said Cliff Shermer of Shermer Logging in Gheen. “We provide biomasss to the city of Virginia, but it’s going to be down (not operational) in the next few weeks. I think that in the short term we are going to be in pretty good shape, but I don’t know how long it’s going to last.”

Louisiana-Pacific’s plant in Two Harbors was not taking wood in mid-May, said Shermer. But he has other plants willing to buy his wood

“Summer is a lower percentage of what we do as opposed to winter,” said Shermer. “Some of the mills want winter wood as opposed to summer wood because it’s better. It’s cleaner as opposed to summer wood.”  

As this winter’s wood inventory lies in mill yards and demand continues to be slow, another concern is the possibility of losing additional loggers, said Stecker.

“We’ve had several older loggers retire,” said Stecker. “If we lose any more logging companies in the region, the mills could have a hard time getting enough wood this winter.”

Meanwhile, northeastern Minnesota loggers continue to be resilient.

“We’re taking kind of an approach to watch what lies ahead in the next few weeks and what the next few months bring,” said Birkeland. “But you’re talking about business folks who persevere. You’re talking about people who live off the land and make adjustments.”