It’s been said that economics is an imperfect science. So it is that sometimes even lumber market forecasts have been known to be less than perfect. In some aspects related to the woods business, accuracy can be critical – as in when you’re aiming to fall a towering Douglas Fir that’s been growing in your backyard for a century. Unfortunately due to root rot, this giant had to be removed in Langley on Thursday. We can appreciate there was little margin for error. Some days are like that. Thanks to Duke and Tracey for the video!
These days much of what constitutes Vancouver’s crazed real estate scenario is taking shape around the urban False Creek shoreline. Glassed-in condo towers in various stages of completion compete with new, nearby downtown towers, including one named Trump. This week I chanced upon what’s at the bottom of much of what’s going up around False Creek; buried treasure from years gone by. Logs. Huge logs.
In what was the industrial heart of Vancouver, over a dozen sawmills, planing mills, shingle mills and wood preserving plants once operated on this 66 hectare strip of waterfront land called Pacific Place. According to the BC Ministry of Environment, most of this land was created by filling in False Creek with construction debris, industrial waste, and fill from other downtown Vancouver building sites. According to the Pacific Place Remediation Project, studies conducted at Pacific Place show that the volume of fill material is enormous – more than two million cubic metres (enough to fill two BC Place-sized stadiums to the rim). The fill is up to 13 metres deep in some areas along the existing shoreline.
Construction workers and even one pedestrian lumber trader were amazed to note the size of some of the buried logs uncovered during present excavations for The Arc Vancouver condo tower on Expo Boulevard at the foot of the Cambie Street bridge. Interesting stories abound on the history of coastal sawmills and the forest industry that was the early economic engine in these parts.
Market Minute: Amidst the Canada-U.S. softwood lumber dispute, underlying strong demand on both sides of the border seems to be catching buyers unawares on many fronts. There are reports this week that some mills in B.C. are extending order files to unprecedented levels. In their February 8, 2017 Industry Update, CIBC Capital Markets describes dramatic lumber price increases since February 1 as “an encouraging sign for producers’ ability to pass on duties to U.S. consumers when tariffs are actually imposed.. considering we are only in partial retroactive territory, and we still have no idea how high Commerce will set initial duties..”
There are many joys in blogging. We appreciate that cyberspace offers bloggers virtually unlimited latitude in expression and range of viewpoints. The medium can be a useful tool in support of business and development of customer relationships. In these days of heightened political sensitivities and polarized opinions, it’s evident that messaging via any medium creates perception of opportunity as well as risk. Measuring effectiveness may call for nuance. It’s interesting to read of the early feedback on the Super Bowl ad of our friends at 84 Lumber.
Of course daily now we’re exposed to direct messaging of folks marching in the streets, advertising a particular point of view or belief on, what is often a hastily-scratched message on cardboard. Through six years, I have found Harderblog to be a positive experience and useful medium for periodic messaging in support of lumber marketing here at Dakeryn Industries. Some might suggest that the messaging here is no more effective than if I decided to march in the streets with a placard advertising personal beliefs in support of the value-added services we provide. But then I took heart in affirmation of my beliefs on that score when I saw the image below. My only suggestion is that if I were a sign-carrying marcher in that parade I’d suggest a small revision to make it read: If you believe in lumber, think Harder…
“More sawmills will be shut down in BC,” says Hakan Ekstrom of the Seattle forestry consulting firm Wood Resources International, in the Victoria Times Colonist. “The question is, will it be three, four, five, or six sawmills?”
The report, from the January 19 Western Forest Industry Conference in Vancouver, Washington, cites details on the fallout from the pine beetle infestation, a major factor behind the shrinking sustainable harvest rate/annual allowable cut (AAC) in this province. The most significant impact will be felt in the BC Interior, where it’s estimated 80-90 per cent of merchantable pine was killed. Salvage logging in the region is winding down as the availability of economic, beetle-killed timber peters out. While AAC reductions were anticipated, “it was always somewhere in the future,” said Ekstrom. “Now it is actually going to happen.” BC’s chief forester is expected to announce cutbacks in Quesnel in March, Prince George in June, and Lakes, west of Prince George, in late 2017.
Meanwhile, economic forecasts suggest US housing starts will continue to climb in 2017. In China, softwood lumber imports reached an all-time high in 2016, “fueled by growing demand for use of lumber in the furniture, door, window and finishing segments” (International Wood Markets 1/23/17). At the same time, questions related to how optimism for overall demand will play out in the face of the Canada-United States softwood lumber dispute, as curtailments and shutdowns loom, remain unanswered.
Anyone know where this tree is located? We can probably rule out Quesnel. Its certainly got a mind of its own, with a natural defence against sawmills bent on producing dimension lumber free of crook. Update: Solved! The tree is located in Kona, Hawaii, at the Kona Country Club. Thanks to Ian White of Dakeryn Industries, who even shared his own picture of this tree!
“Tune in!” shouted Mike Foley, Certified Speaking Professional and founder of Clarity Central, keynote speaker yesterday at the Northwestern Building Products EXPO in Bloomington, Minnesota. That’s how Mike suggests we differentiate ourselves in a world where everyone is distracted, overwhelmed, overworked – and no one is present. “Tune in to your kid, your boss, your partner, your customer,” said Mike, while noting the attention span of a millennial (8 seconds) is shorter than the attention span of a goldfish (9 seconds).
In his breakfast presentation, Mike expanded on his four keys to “letting go” and “losing the junk in our trunk”: grow your comfort zone, find your balance, manage your mind, lighten your load. It was a fast-paced workshop. One memorable round table exercise quickly revealed how growth can only occur outside the comfort zone, in “the stress zone”. How to manage your mind? “Become a fine connoisseur of the present moment! Where do you live? In the past, present, or future? How does this affect your life? How would it change if you lived moment to moment?” His segment on the importance of credibility and balance – “responding skillfully” – was perhaps most relevant to many attendees engaged in lumber trading.
While Dakeryn has been an associate member of the Northwestern Lumber Association for a number of years, this was our first time attending and exhibiting at the Northwestern Building Products EXPO. Held at the DoubleTree by Hilton Hotel in Bloomington, MN, the show was tight and upbeat. Virtually every key US distributor in the region was represented. Most retail dealers in attendance acknowledged that business was ticking along – unseasonably steady for January. While the show’s slogan was A World of Opportunities, the majority of Midwest lumber dealers we spoke with openly expressed apprehension over looming cross-border trade constraints. Most-asked question: “What’s going to happen?”
This year, Dakeryn has decided against buying TV ad time for the Super Bowl. The decision is based on analysis of how to most effectively nurture the relationships with our valued customers and supplying mills. It could be that the $5 million-plus cost for a 30-second ad played into the decision as well. But that hasn’t deterred 84 Lumber. According to this report at Adweek, 84 Lumber will make its Super Bowl advertising debut just before halftime of this year’s event – the only brand to purchase more than a minute of airtime for a single spot.
We’re told the purpose of the ad is to launch a year-long campaign focused on recruitment, targeting men aged 20 to 29. According to the report, 84 Lumber includes some 250 locations across 30 states and made Forbes’ 2016 list of “Largest Private Companies in America.” It is also one of the biggest such businesses run by a woman; Hardy Magerko was chosen by her father at the age of 27 to lead the company he founded in 1956.
Our industry is going through a period of extreme disruption. And I’ve always preferred to be the one doing the disrupting, rather than the one being disrupted. But to do that, we need to hire and train people differently. We need to cast a wider net, and to let the world know that 84 Lumber is a place for people who don’t always fit nicely into a box.
– Maggie Magerko
According to weekend reports, the US International Trade Commission determined Friday there is indication of injury from imports of softwood lumber products from Canada. Perhaps the market is sensing that a resolution will ultimately be found in a negotiated, managed trade agreement, but probably not before duties are in place. By May? In the face of the looming threat of retroactive duties, cross-border shipments continue largely unabated as mills and distributors weigh decisions impacting trading activity into February.
Meanwhile, Random Lengths reports word of “sizable inventories in US reloads”. No doubt we’ll soon find out if this is the case. If history is any guide, building mountains of inventory in advance of duties/export taxes/quota is anything but a speculative “no-brainer”. We’ve all seen the movie. Still, dealer demand for lumber in the United States, albeit hand-to-mouth – has been surprisingly buoyant so far this winter. Certainly some items are in abundant supply – on both sides of the border. But in this uncertain environment, over time, it seems any items in tight supply today would become even scarcer when Canadian shipments are eventually constrained.
Meanwhile, the US Department of Commerce investigations continue; the countervailing duty determination is expected February 20, while the preliminary antidumping duty determination is expected May 4.