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Business Q&A -- David Hill Wood products industry should see stronger prices next year David Hill is executive vice president of Southern Oregon Timber Industries Association. Previously, he worked for Georgia-Pacific Corp. as a forester in the mid-Willamette Valley. Hill is a 1969 graduate of the University of Washington with a bachelor's degree in forest management. He has worked for the Oregon Department of Forestry, the International Trade Department of Oregon Economic Development and ran an import/export business while living in Hong Kong. Hill is married to Karen Shelton, payroll tax analyst for Bear Creek Corp., and has a daughter, Allison, who works for Safeco Corp. in Seattle. Q: How are wood products companies doing compared to a year ago? The financial health of most wood products companies in Southern Oregon at the end of 2001 is similar to that of one year ago. Pacific Northwest lumber prices, as tracked by the Western Wood Products Association, show Douglas fir selling at the mill for $312 per thousand board feet, compared to $335 per thousand board feet in November of 2000. These figures can be compared with an average annual index price for Douglas-fir lumber of $356 per thousand board feet and a price of $411 per thousand board feet in January of 2000. Industrial lumber, that which is used by secondary manufacturers such as window and door manufacturers, is forecast to show some good gains early next year. Should industrial lumber prices strengthen in early 2002, prices to the primary lumber manufacturers in Southern Oregon should strengthen as well. Q: Given the restricted access to federal and state timberlands, have wood products companies become more active in acquiring land? Forest products companies involved in manufacturing are always looking to acquire commercial timberlands. Most of the Southern Oregon manufacturers in operation today have a timberland base from which to harvest when federal timber sales are not available. Even the largest timberland owners in Southern Oregon, however, cannot supply more than 50 percent of the raw log material they need to operate an efficient manufacturing operation. That is why the federal timberlands in Southern Oregon, the U.S. Forest Service and Bureau of Land Management, with 70 percent of the commercial forest land base, play such a significant role in the health of our local forest products economy. In 1989 the federal timberlands in Oregon supplied 51 percent of the overall harvest. In 2001, the federal timber contribution had dropped to 8 percent. One White City remanufacturing company must import 60 percent of their raw material from overseas (Chile, New Zealand and Brazil) because the industrial wood product they need is no longer available locally. Q: How would you summarize the wood products work force in terms of age and education compared to 20 years ago? The wood products work force in Southern Oregon today is probably more educated, but older than 20 years ago. Mills today are much more efficient and highly computerized compared to even 10 years ago. Computers run everything from veneer manufacturing used in plywood to engineered wood products. Wood products employees today are highly trained and they receive family-wage pay. The public probably does not realize that 45 or 50 percent of manufacturing employment in Jackson County is still wood-products related. Attitude, aptitude and work ethic are still very important and competition for good workers is tight. Drug testing has improved the quality of workers employed. Jackson County has a wide range of wood-products manufacturing operations: lumber, veneer, plywood, particleboard, medium density fiberboard, engineered wood products, laminated wood products, molding and mlllwork and specialty products from fruit bins to landscape timbers and bark dust. Q: What's your take on Weyerhaeuser's effort to take over Willamette Industries and what kind of impact could it have on Southern Oregon? SOTIA does not have an official position on the Weyerhaeuser/Willamette Industries potential consolidation. If Weyerhaeuser is successful in acquiring Willamette Industries, it should not have a great effect on Southern Oregon wood products manufacturing operations. Q: Has any progress been made in the softwood import tug-of-war between the United States and Canada? Yes. Former Montana Gov. Marc Racicot, special envoy appointed by President Bush, reported earlier this month that a trade agreement was possible. Problems to be overcome involve long-term cutting agreements between Canadian producers and the various Canadian provinces and also the fact that agreements will have to be made individually between each Canadian province and the United States government. Twice this year the United States imposed punitive duties on Canadian lumber imports: a 12.6 percent tariff on softwood lumber placed in the fall, and a 19.3 percent duty imposed in August. Some 35-40 percent of the softwood lumber consumed in the United States annually is imported, most all of it from Canada. To suggest a subject for this column, please contact business reporter Greg Stiles at 776-4463 or e-mail [email protected] Mail Tribune Home | Ottaway Newspapers, Inc. | Dow Jones & Co., Inc. | Privacy | Contact Us Copyright � 2001 Mail Tribune, Inc.