Turning Point for Timber as Demand Rises, Workforce Numbers Fall

by Jan Cottingham  on Monday, Nov. 25, 2013 12:00 am  

The hurdles facing loggers and the companies that need loggers’ products concern those in the industry.

Those obstacles:

• Logging is capital-intensive, requiring investments of $1 million to $1.5 million for what is now a largely mechanized endeavor, for heavy equipment like fellers, which cut the trees; skidders, which move the felled trees; processors, which de-limb the trees, and loaders, which lift the logs from piles to log trucks.

And now, if the timber industry really is poised to recover, companies may find product hard to come by.

• Lenders remain wary about providing money to young logging enterprises that are not well established.

• Logging, like almost any agricultural effort, is hard work subject to the whims of weather. Wet weather in Arkansas typically shortens logging time to 42 weeks of the year or fewer.

With the disappearance of so many logging companies, Pelkki said, those that survived are working as hard as they can. “Five years ago, Arkansas loggers had a capacity to bring in somewhere around 35 million tons a year of wood,” he said. “That’s dropped to somewhere around 22 million, 23 million tons now. And we’re harvesting somewhere around 20 million tons, so the loggers are working pretty much at full capacity. So if a mill wanted to bring in another million tons of wood, they’d have a hard time finding loggers who could do it.”

“If you haven’t been in this business, the heartaches and the headaches are such that most folks, No. 1, don’t want to go in it and, No. 2, they can’t because the lending institutions” have grown so careful, said Richardson, who has been in the business since 1981.

Some timber companies are considering forming their own logging crews, a practice that largely disappeared during the 1980s when workers’ compensation insurance rates soared.

The loggers, as Richardson said, “cleaned up our act,” providing increased training to their workers. At the same time, logging grew mechanized, moving away from men with power saws to workers handling big, expensive pieces of equipment. Safety improved and workers’ comp insurance rates dropped.

Forest products companies, Pelkki said, “used to all be a very vertically integrated process, and they got out of that, the land for tax reasons and the logging sector for a lot of cost reasons. And now they may end up having to go back to that.”

But Richardson is skeptical. “That’s fine. They can take their own crews. But they don’t have any idea of how to work this labor. These folks that work for me are fiercely independent. They’re not college graduates. They want to make a living, they want to go hunting and fishing on the weekend, and then some of them want to start getting drunk on Friday afternoon.”

And that mindset doesn’t fit with most business plans.

 

 

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