When the forces of nature speak, it’s often with dire consequences. The Nepal earthquake is a stark reminder. Lingering impact of the Northeast winter that was is contributing to skewed seasonal lumber market activity. While the Pacific Northwest basks in the charm of April showers, news of severe drought dominates news out of California. Media reports in these parts suggest that long-range plans to divert some of B.C.’s moisture to drought-stricken parts of the U.S. may resurface. Even so, scientists are cautioning that, while B.C. residents are known to keep an umbrella handy, we could be subject to drought crisis ourselves. In a recent CBC interview, watershed management professor Hans Schreier at UBC discussed these concerns, touching on the economic impact, including significance of water in delivering power.
“If B.C. were to experience a drought, one of the biggest issues Schreier foresees is power. He says California’s drop in water supply cost the state $1.4 billion in reduced hydro power, which they had to replace with greenhouse-gas emitting LNG.
About 18 to 19 per cent of California’s power comes from hydro; in B.C., it’s more like 90 per cent, according to Schreier.
It’s difficult for scientists like Schreier to foresee whether or not B.C. will have a water crisis similar to California’s. He says it’s easier to predict rising temperatures than precipitation.
‘If you look at our reservoirs, we have reasonable capacity if we have snow cover and if we get lots of rain,’ he says. ‘But that’s very hard to predict.’
Scientists are already predicting B.C.’s low snow pack could affect the salmon run this summer. And many local ski hills have been closed most of the winter because of lack of snow.”
And all this, even though some suggest it’s a tad early to begin talking summer wildfire threats in the woods.
It’s no secret. Celebrating care of the planet makes good economic sense. More than that, we’ve come to appreciate that it’s a matter of survival. The messaging beyond one-liners and slogans is finding roots with a new generation:
- “A Good Planet is hard to find”
- “Pollution is not a solution”
- “Plant a Tree for me”
- “There’s no Planet B”
- “May the Forest be with you”
Even in down markets industry recognizes there is more that can and needs to be done. Could it be that in super-saturated lumber markets presently experienced the forest is begging to be left alone for a day or two? Happy Earth Day.
Photo credit: ejh
The Art of Marketing Conference promised to “provide a clearer understanding of how marketing has changed, what role marketing now plays in the buying decision, its impact on your business, and ultimately how the consumer views and interacts with your brand in a crowded marketplace.” Billed as Canada’s #1 Marketing and Innovation Conference, five internationally renowned bestselling authors – serious thought leaders – shared their cutting edge research and practical thinking yesterday at the Vancouver Convention Centre.
What a treat! I experienced a day of intense, new marketing insights, lending new perspective to even grinding lumber markets. While the day provided enough mental gymnastics for a thousand blog posts, here’s a handful of takeaways:
- Dr. Robert Cialdini is an expert on the psychology of influence. He cited numerous case studies based on behavioural science to expand upon each of his Six Universal Principles of Social Influence: reciprocation, liking (identifying commonalities), commitment/consistency, scarcity (loss averse), authority (pointing to genuine expertise), and consensus (reducing uncertainty). The notion that “in the old world we compete to win – in the new world we collaborate to win” struck a chord.
- Author Nir Eyal shared his Hook model to explain the (scary?) psychology behind what drives user/human behaviour and how apps are built to cater to those needs. Behaviour = motivation + ability + trigger. “What do you want the user to do?” asked Eyal. “The more difficult it is to understand the more difficult it is to do. Where’s the trigger? What’s in your user’s way?” And hey, “Just because it doesn’t cost anything doesn’t mean it’s free. There’s a reason they call it “paying attention’,” notes Eyal.
- Time Magazine considers Martin Lindstrom one of the World’s 100 Most Influential People. “We have tons of data but no information,” lamented Lindstrom, while confirming 90% of all the information in the world today was created in the last two years. A self-described “observer”, his presentation included a rapid fire assortment of mostly probability studies in revealing his CLUE to building a brand (Culture, Local, Understand, Engage). Who knew having a lot of fridge magnets at home is a reflection of a strong imbalance in your life?! And thanks to all our electronic devices, “we’re rarely truly present” anymore.
- Jackie Huba shared her customer loyalty lessons gleaned from Lady Gaga. She suggested companies put too much emphasis on finding new customers. Evidently it’s five times cheaper to keep a customer than to get a new one. And existing customers often find new customers. “Don’t underestimate the power of the one per cent,” advised Huba. The ‘one percenters’ are the advocates aka “highly-engaged superfans who drive word of mouth”. Do you know who your ‘one percenters’ are?” asked Huba. Companies should lead with values, build community, and generate something to talk about. “What is your company selling (beside products)?”
- Chip Heath is a professor at the Stanford Graduate School of Business. He explained how better process leads to better and bolder decisions. Widen your options, reality-test your assumptions, attain some distance, and prepare to be wrong, advised Heath. “Adding distance” with added benefit of clarification through the 10/10/10 rule registered the most. Concluded Heath: “We’ll never be perfect (in our decision making) because the world is full of uncertainty – but we can do better.”
Chip Heath, New York Times Bestselling Author of “Made to Stick”, “Switch”, and “Decisive” (Apr 15)
In 2010 and 2011, attendance at the NAWLA Vancouver Regional Meeting averaged 150. In 2012, there were 170 registered attendees. April 2nd marked the third consecutive year that attendance has blown past 200 in a packed Grand Ballroom at The Vancouver Club. During the evening networking session, many attendees remarked how much they enjoyed the diverse themes offered up by our professional presenters at the afternoon meeting: Bob Lenarduzzi (Vancouver Whitecaps FC), Peter Woodbridge and Kim Marshall (Woodbridge Associates), and Gavin Dew (Trans Mountain Expansion Project).
Of note, forest industry and wood product consultants Peter Woodbridge and Kim Marshall left attendees buzzing about their “Super-Saturated” chemistry analogy to describe present market conditions. According to Woodbridge Associates, there are seven factors fueling today’s over-supply of softwood lumber:
- China Lumber Supply, diverted to the U.S. market
- China/Asia Log Supply, diverted (in part) to the U.S. market
- Currency-Fueled SPF lumber (C$), muting the intended impacts of Softwood Lumber Agreement (SLA) supply management
- Currency-Fueled Euro Lumber (Eu) diverted from the MENA market
- Currency-Fueled Russian Logs/Lumber (RUB), selling into Asia/Europe
- Low Tax-Rated Canadian public timber, partially offsetting rapidly rising structural wood costs in many parts of Canada
- ‘Coming of Age’ of U.S. South Southern Yellow Pine industry, as dominant supply region and price setter. 87% of 2014 production growth = U.S. Mills.
Woodbridge suggested “Super-Saturated Supply” will continue to dominate lumber markets and ‘hold-down’ lumber prices this year. And while too early to declare a trend in critical Texas, they cited Q1 warning signals in lumber demand, ripple effects from the oil price collapse. Their in-depth analysis charting multi-family vs single family home building, particularly in the South, was eye-catching.
At the same time, Woodbridge cautioned that Super-Saturated Supply is temporary, confirming predicted lumber super cycle fundamentals are “alive and well”; super cycle timing has simply been “pushed forward”. Also of note, in Woodbridge’s view, the SLA will be renewed (October 2015), but with a ‘kicker’ in the form of a ‘re-calibration’ which will be priced into Canadian SPF from 2016 onwards.