Hard times strike hardwood industry

CHARLESTON, W.Va. – Global economics and the housing bust are throwing a relentless string of problems at the mom-and-pop sawmills and logging companies that make up much of the nation’s hardwood lumber industry.

Large furniture makers have abandoned the U.S., a growing number of raw logs are being shipped overseas for processing, and changing consumer tastes and construction downturns have slashed demand for hardwood flooring, trim and red oak, long the dominant species.

The result has been rising unemployment for forestry workers and a sharp decline in hardwood production. Government statistics show production has dropped from 12.6 billion board feet in 1999 to about 10.7 billion last year.

U.S. Forest Service economist Bill Luppold expects production to dip further to perhaps 10.5 billion board feet or less this year.

“I don’t even think the numbers demonstrate how bad it is,” Luppold said. “We haven’t seen this amount of decline year in and year out since the early part of the [20th] century.”

The industry’s problems started more than a decade ago when U.S. furniture makers started leaving the Carolinas in favor of foreign destinations with cheaper labor and lower operating costs.

“Manufacturing is moving away, it’s going to China or whatever, Vietnam, today,” says Virginia Tech professor Urs Buehlmann. “You’re looking at a depressed industry.”

Shutting down isn’t an option for Tony Woodyard of Twin River Hardwoods Inc. Woodyard says he has to keep running his mills to pay the debt he took on to buy them in 2006.

“The prices are, they’re where they were 20 years ago,” says Woodyard, who has more than two decades in the business. “To be profitable you’ve got to watch all your P’s and Q’s and eliminate all the fat in the payroll.”

Prices vary by factors such as species and grade, as well as negotiations with buyers, but Woodyard says the price of cabinet-grade lumber has slumped in some cases to $900 for 1,000 board feet. For years that price was $1,200 and at times as much as $1,400.

People in the industry say the formerly booming housing market masked problems for a while by creating demand for hardwood cabinets, trim and flooring. That bubble burst with the housing market’s free fall.

“Even though furniture was going down dramatically, we had kind of a buffer there with these other industries going up,” Luppold says. “As soon as the housing market cooled, these industries started having problems.”