Weathering Climate Change

How long before we can expect to see palm trees lining Vancouver boulevards?

It’s expected that shifts in climate will see trees normally associated with warmer climes finding comfort levels farther north. The Vancouver Sun reports here that according to a new study called Climate Projections for Metro Vancouver, “changes in temperature and precipitation will affect everything from sewage pipes to ski hills.” Local trees will be poorly adapted to the rising temperatures and elevated disease pressures.

According to Genome British Columbia, foresters have three options for dealing with climate change: reforest with the same species but with trees that are better adapted to warmer climates; move species further north or to higher elevations; or select and breed trees that can better withstand climatic stresses or disease. This news release from Genone British Columbia is an interesting read. We’re told the CoAdapTree project, which involves revolutionary testing by a genomics research team at UBC led by Dr. Sally Aitken, Forest & Conservation Sciences, will ultimately lead to better reforestation strategies for western Canada’s changing climates.

Climate change isn’t just bad for trees. It’s also bad for the economic and environmental benefits they provide to Canada – benefits like wood, jobs, habitat protection, and carbon sequestration. CoAdapTree: Healthy trees for future climates, will provide recommendations for climate-based seed transfer policy to guide foresters in planting trees that will be healthy in new climates in western Canada. Climate-based seed transfer can result in up to 30% greater timber yields, with a proportional impact on the economy and employment, and will also sustain ecological and environmental benefits of forests.

Sawmill Shutdowns etc.

“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.

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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!

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Forest Bathing

The focus in 2017 is going to be how to achieve a deeper sense of “wellness” in everyday life, reports The Vancouver Sun here. Defined as “making contact with and taking in the atmosphere of the forest,” forest bathing involves immersing “in the calming, leafy greenery of a woodland/forest environment – to relieve tension and stress and to experience a more heightened sense of well-being.”

The term forest bathing comes from the Japanese shinrin-yoku, which means taking in the forest atmosphere. “Knowing the pleasure of being outdoors is nothing new to people here on the West Coast, but the terminology ‘forest bathing’ is something new to our ears. As a result, more people are predicted to go for a walk in the woods if they think of it as ‘bathing’ in nature rather than just taking a rustic ramble.”

Psychology Today explains “what sets forest bathing apart from simply taking a walk in the forest is that we consciously take in the sights, sounds, smells, and the whole experience, rather than allowing our minds to do the things they habitually do, like putting together a mental grocery list.”

This theme of forest bathing certainly fits into progressive thinking for stewardship of the forest. It recognizes value in the holistic approach that plugs into Mike Apsey’s thinking on forest management that appreciated value in the woods beyond “the price of a 2×4”.

runnning-nov-2016-photo-by-ejh

Mega-fires..

Lumber traders are used to following with interest the impact of seasonal wildfires on lumber markets. The devastation and widespread impact of the Fort McMurray mega-fire is causing all of us to expand focus to broader concerns beyond seasonal gauging of forest fire effect on lumber prices.

This article today by Mark Hume in The Globe and Mail draws attention to the growing threat that mega-fires pose for their “deep and long-lasting social, economic, and environmental impacts”.  It’s pointed out that the increasing frequency of those very large fires is of real concern. A climate change wildfire action draft plan by the B.C. Ministry of Forests predicts that in the near future, the average size of fires will more than double in size. We’re told fire severity is projected to increase by 40 per cent in the spring and 95 per cent in the summer, and the length of the fire season is expected to increase by 30 per cent. It’s suggested that the solution, according to fire experts, is to reduce fuel loads in the forest before they explode. “That means more controlled burns and the creation of ‘fuel breaks’ by widening roads or logging strategically around communities.”

In the face of projections for increased number of mega-fires, we’re also told this report last year by B.C.’s Forest Practices Board (FPB) found the program has fallen short in preventative measures. “Unfortunately, over the past ten years, only 10% or less of hazardous forest fuels have been treated. Funding to protect at-risk communities in B.C. by removing interface fuel sources is inadequate” stated the report.

2016 COFI Convention – 23 Takeaways

  1. Convention buzzwords: competitiveness, rationalize/rationalization, utilize/utilization
  2. “Rationalize” is a euphemism for fewer mills.
  3. In familiar staccato style, Minister of Forests, Lands and Natural Resource Operations, Honourable Steve Thomson’s talked about viewing the forest sector through various lenses. “We’re focused to make sure we have a competitive framework in British Columbia..”
  4. Speaking of competitiveness, the province is well-positioned owing to success in Asian markets. Fibre supply has historically been an advantage but is now under pressure. Delivered wood costs, tax environment, energy costs, and regulatory processes are disadvantages. – Jock Finlayson, Executive VP & Chief Policy Officer, BC Business Council
  5. Highly regarded, impressive newcomer to COFI leadership is CEO and President, Susan Yurkovich
  6. We are in the midst of a long period of strengthening lumber markets, however growth in 2016 will be disappointing. – Paul Jannke, Principal, Lumber, Forest Economic Advisors
  7. “One thing every investor wants is liquidity.” And no matter how manageable, “investors are not interested in material stocks with debt.” Among forest analysts, Daryl Swetlishoff, Senior Managing Director, Raymond James Ltd., Equity Research is a rock star. While noting the forest sector accounts for barely 1% of the TSX Index, Swetlishoff said “opportunities exist because the market is not very efficient.” Uncertainty surrounding the SLA is keeping forestry stocks on the tarmac.
  8. “Investors always ask about two things: the SLA and demand for lumber in China.” – Ted Seraphim, President & CEO, West Fraser
  9. At the 2014 COFI Convention, Ted Seraphim simply told us it was “all about capacity”. And last year, I was critical of the CEO Panel here. This year, the CEO Panel, which also included Duncan Davies, President & CEO Interfor Corporation, and Ron Gorman, President & CEO, Gorman Bros. was a convention highlight. Seraphim was candid throughout, opening up about safety worries, the challenges in accessing high quality cost-effective fibre, and the strive to achieve our potential.
  10. Person at the convention I would most like to have lunch with: Duncan Davies, CEO Interfor. In a refreshingly relaxed manner, he expertly explained all things SLA during the CEO Panel.
  11. I asked the CEO panel “How does the “Canadian Invasion” re. sawmill acquisitions in the U.S. South impact SLA negotiations?” The panel viewed the learning experience as a real positive. With an eye to negotiations, they all agreed it has brought better understanding. Historically, Canadian producers have not seen how the system functions in the U.S.
  12. The first tariff was placed on Canadian softwood lumber exports to the United States in 1872.
  13. U.S. mills are at a competitive advantage because fibre costs are lower in the U.S. than B.C.
  14. U.S. trade laws are designed to protect U.S. producers. Consumers have nothing to do with it.
  15. The U.S. views trade deals as bad deals; blame present economic pessimism on the U.S. election. If a problem seems very complicated, a significant segment of the population doesn’t want a complicated answer. – Bruce Anderson, Chairman, Abacus Data
  16. Changing context – viewing the world as a market – global, inter-connected market – relationships/polarization. Change is not a choice. “If you don’t like change, you better acquire a taste for it.” –  Bruce Anderson
  17. Wood is good. In 1997, public opinion in Canada of the forest sector was 1/3 negative, 1/3 positive, and 1/3 neutral (costs start to rise at 25% negative opinion). Today, only 20% negative, which is low for the sector. Positive perception explains why politicians are embracing the industry. – Bruce Anderson
  18. “Sustainability has gone mainstream” – Ken Shields, President & CEO, Conifex Timber Inc.
  19. Re: the industry rationalization period, “it’s hard to be seeking collaboration at the same time you’re all fighting for a piece of a smaller pie” – Ken Shields
  20. Interesting to learn from Diane Nicholls, Chief Forester that overall, actual cuts are falling short of the Annual Allowable Cut (AAC). In view of midterm timber supply constraints, it was curious to hear that finding ways to maximize cuts to the full extent allowed was a priority. (see Nbr. 21)
  21. “Most of the economically harvestable beetle-killed timber has been harvested.” – Tim Sheldan, Deputy Minister, Ministry of Forests, Lands and Resource Operations
  22. Premier Christy Clark was in full electioneering mode at the Community Leaders Luncheon. It was a friendly crowd, and her excitable keynote address drew a standing ovation.
  23. This was my fourth consecutive outstanding COFI Convention, the location having alternated annually between Kelowna and Prince George. A surprise announcement at the Friday luncheon confirmed the convention will be in Vancouver next year. While convenient for me, how this change influences attendees will be interesting to see. On my travels, and after listening to the mayors of Prince George, Williams Lake, and Cranbrook at the Community Leaders Breakfast session, the Interior and northern communities of this province don’t share the same love affair with Vancouver that Vancouver does these days. In the words of Walt Cobb, Mayor of Williams Lake, talking about Vancouver/Victoria on Friday morning, “They just don’t get it!”

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Wood Basics

Earlier this month, Lauren Chimko, lumber trader at Dakeryn Industries, completed the NAWLA Spring Wood Basics Course at Mississippi State University (MSU), in Starkville, Mississippi. In the following guest post, Lauren shares a little bit about her trip and the four-day immersion course which included both classroom training and instructive tours of a number of field operations:

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Visting McShan Lumber Company – McShan, AL

Starkville, Mississippi – home to the MSU Bulldogs.. and not a heck of a lot more. The week of Feb 29th though, I joined over 30 newcomers to the wood products industry who flocked to Starkville to learn about – you guessed it – wood! The curriculum covered a variety of topics surrounding the life of a piece of lumber; from a wee little seedling in a forest to a structural component in a home. Key subjects: forest operations, sawmill production, transportation, and sales/negotiations. As one of those people who loves to learn, I was excited to be back in the classroom. Lectures started at 8am, and frequently included presentations from a number of expert guest speakers. Field trips were a highlight, not to mention the opportunities for networking.

The experts:
Dr. David Jones (MSU) talked everything forest, while Chris Knowles (Oregon State University) discussed the ins and outs of lumber manufacturing and global markets. Rubin Shmulsky (MSU) popped in to review engineered wood products, and took us to the lab to observe some tests. On day two, the class visited Alabama to tour two sawmills – an eye-opening first for many. On day three, resident Transportation & Logistics expert Phil Lower visited. Lectures concluded on the fourth and final day with Scott Olsen (The Olsen Group) on negotiation. Scott – I still want that book!

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The attendees:
Our diverse group arrived with backgrounds in sales, purchasing, law, engineering, logistics, and more. We had interns, employees with 20+ years in the wood products industry – and everyone inbetween.
With attendees from all corners of North America, our class had experience with all kinds of different wood species/products. The majority of the group was represented by the Southern States. There were three Canadians in our class, and I was pleased to see a decent representation of women (about 25%).

In a nutshell, Wood Basics is exactly that. A group of people coming together to develop a basic understanding of the products they deal with on a daily basis. If you want to take it up a notch, NAWLA also offers Wood Masters 2016 in Las Vegas (worlds away from Starkville, MS). Thank you to MSU for hosting us, the team at NAWLA (especially Jim, Chris, Erin and Matt), and all the presenters. Thanks also to all of the attendees, for a great week in Starkville.

Lauren will be attending the Montreal Wood Convention (March 21-23) and the COFI Convention in Kelowna (April 6-8).
View Paul Harder's LinkedIn profile View Lauren Chimko’s profile

Memorable Hikes

Within our spheres of interest, any reference to hikes has usually involved talk of interest rates, not a walk in the woods. Although rumours of interest rate hikes have been with us for some time, realities of such are mostly distant memory. A real hike in the woods, not so much. Especially for me, last week.

In a favorite book Get Your Shift Together, Steve Rizzo contends that happiness is a state of mind that can be fostered, brought about, with conscious decision in whatever circumstance we find ourselves. That may be true, but a hike in the magnificent, natural surroundings of New York’s Mohonk Preserve with a valued customer last Wednesday certainly brought focus to my camera and vistas of well-being. It’s not surprising that a lumber trader would coincidentally stumble on Scottish-American naturalist and author, John Muir’s quote that “the clearest way into the universe is through a forest wilderness.”