This year, “we had a really good summer, even with the high gas prices,” said his wife, Faye. “But now they've told him he only has work till the end of the month. After that, what we do, I don't know.”
Uskoski - whose trucking outfit used to run four rigs but now has just one - is among the contractors feeling the pinch as mills cut back on production.
And the layoffs at area wood-product plants have meant contract loggers and log haulers are out of work, too.
At one end of this chain of events is a nation full of bad mortgage debt, which led to a reduction in available bank credit, which led to fewer home sales, which led to fewer houses being built, which led to sinking demand for building materials, which led to mill closures, which led, finally, to Uskoski's pending unemployment.
“We kind of hit the wall about a month ago,” said Greg Dennison, a private logging contractor from Kalispell. He sells to Plum Creek and to F.H. Stoltze Land and Lumber, “and both of those mills have pretty much shut down their purchasing,” Dennison said.
“They shut me off on Dec. 1, and it looks like it's going to be six months, at least.”
Logyards at both mills are stacked high with supply, but demand for finished lumber has tanked.
“They're telling us they already have enough (logs) to run until September,” Dennison said, “and that just postpones everything for us.”
The Western Wood Products Association reported last week that the region's mills “are experiencing the largest downturn in lumber demand ever recorded.”
Homebuilding consumes nearly half of all lumber sold, and housing starts have fallen by more than 50 percent since 2005. Western mills produced about 13.5 billion board feet in 2008, down a full 17 percent from just one year before.
And 2009, the association predicts, will be even worse - the weakest demand in nearly 30 years.
Of course, as the logs and finished lumber stack up at the mills, prices have plunged.
“They're the lowest that we've seen since the early 1980s,” said Shawn Church, editor of the trade magazine Random Lengths. “And if you adjust for inflation, well, you have to go way, way, way back to see prices like this.”
“It's not supply that's the concern,” he said. “They have lots of logs. The concern going forward is consumer demand for the product.”
Green Douglas fir two-by-fours are selling at about $150 per thousand board feet, he said, less than half of the January 2006 price of $362.
And fir and larch - the mainstay in northwest Montana mills - is priced at $200 per 1,000 board feet, down from $425 at this time in 2006.
All are predicting a rough 2009, with some hope of turnaround in 2010. The WWPA goes so far as to project a near doubling of housing starts during 2011, back into the neighborhood of 1.5 million annually, but Church and others remain unconvinced.
“I think we'll be fortunate if we do see a bounce in 2010,” he said. “Any recovery is going to be slow to take hold, and it's not going to be a robust climb.”
Either way, it's not good news for Dennison; even assuming a best-case scenario and complete recovery in 2011, “there's no way we could survive that long,” the logger said.
At Plum Creek, management said Monday that more than half of its contractors - loggers and log haulers alike - have been directly affected by recent mill curtailments.
“We are slowing down our log deliveries,” said Tom Ray, vice president of Montana operations. “I realize this is a tremendous hardship on our contractors and their families, but we simply have less need than we have had in the past.”
At Plum Creek's plywood plant, he said, six months of log supply is stacked up out front.
And at Stoltze, where company contractors still are working, the mill is no longer buying logs from private haulers.
“I can't tell you for sure what the future will bring if things don't get better,” said Stoltze general manager Chuck Roady. “We've been getting lots of calls from contractors who have been turned away at other mills.”
Stoltze will meet its current obligations - timber sales to which the company already has committed - but Roady would not speculate as to whether his mill will take on any new obligations.
“It's all about moving product out the back door of the plant,” he said, which is no easy matter with lumber orders down somewhere between
30 percent and 50 percent, depending on the product. Plum Creek has reported a similar slump in orders.
“We're anxiously hoping for a springtime uptick in demand from the lumber yards,” said Keith Olson, executive director of the Montana Logging Association. “Otherwise, it's going to be a very sad year.”
Missoula loggers and log haulers have been hit especially hard, Olson said, with the closure of the Stimson Lumber Co. plants. Many of those contractors “came north to find work,” Olson said, “but now with Plum Creek cutting back, they're all headed back home. What we have is too many contractors chasing too few contracts.”
And many of those contractors, Dennison said, “have a half million dollars worth of equipment tied up.” He's lucky, he said, because his capital investment is smaller than most, “and I can ride it for a while.”
Question is, can he ride it long enough? And how long is long enough?
“We saw a tremendous amount of curtailment in 2008,” Church said, “and we're expecting more of the same in 2009. It's just a function of markets, and falling demand for the product.”
The price of a tree on the stump is falling, he said, “which has helped somewhat, but they're still losing money at these lumber prices. Everyone's hoping that the supply and demand lines are going to cross soon, as they work through all this inventory.”
Only then, Church said, will lumber prices begin to push back up.
“It's just going to take time,” he said, which is something many small, private contractors simply do not have. For them, he said, “it looks like the darkest period is right now.”
|
 |
 |
Add your comment now! Write your comment in the form below.
(Email address is for verification only. If you'd like to email a story, look for the link above)