Timber industry runs into buzz saw

BY KIM McGUIRE

07/18/2009

Weeks after a south-central Missouri storm destroyed about one-third of the state's annual timber harvest, loggers are struggling not only to clear out thousands of downed trees, but to fetch a price for timber that makes the task worthwhile.

The May 8 storm, which merely grazed the St. Louis area, delivered a brutal blow to the state's already struggling timber industry. More than 204 million board feet of timber with a commercial value of more than $12 million was damaged, according to the Missouri Department of Conservation. Combine that loss with a 30 percent decrease in demand for forest products as a result of the recession, and the pain the industry is feeling right now becomes all too apparent.

"This storm couldn't have come at a worse time for us," said Brian Brookshire, director of the Missouri Forest Products Association. "It's a double whammy." While storms damage timber in the state every year, the May storm was a doozy. Thunderstorms, tornadoes and straight-line winds damaged trees on 113,000 acres — about 68,000 acres on private land, 28,000 in the Mark Twain National Forest and 7,000 acres in state-owned conservation areas. Reynolds, Dent, Madison, Shannon, Iron and Bollinger counties suffered the worst damage, according to the Conservation Department.

"I've had landowners call me and say that they lost trees on 80 acres and that was all of their retirement," said Kyle Cunningham, a Madison County-based forestry and small business development specialist with the University of Missouri Extension. "They're just devastated." Many landowners are still cleaning up after the storm, which carried with it 90 mph winds and knocked out electricity to homes and businesses for weeks. Meteorologists characterized the storm as a "derecho," a violent straight-line windstorm.

Terry Cunningham, forest manager for Pioneer Forest, estimated it would take a year to clean up the storm damage on about 22,000 acres. And they've had to triple the number of loggers they typically hire to get the job done in that amount of time. "I've been here for 37 years working in the Current River/Jacks Fork watershed, and this is the first time I've seen a storm affect such a wide area," Cunningham said. "We have trees down from Texas County to Wayne County."

About $1 million in federal funds were made available to assist landowners with salvage operations, but the sign-up period already has passed, leaving many in the lurch. Now, it's a race against time to remove the downed trees, about half of which foresters expect to be salvageable. Hardwood trees such as oaks and maples must be removed in about a year before rot sets in. Pine trees, which are much less hardy, have only a few weeks before they succumb to fungus or beetle infestations in warm weather.

While thousands of downed trees might sound like a lucrative proposition for Missouri's loggers, Brookshire said removing the trees is time-consuming and dangerous. There are widespread anecdotal reports of people suffering broken bones while performing storm cleanup work in recent weeks.

Even if the trees are ultimately salvaged, landowners likely will be paid paltry prices, if they get anything at all. Several sawmills are reporting a glut of downed timber. "I've had to turn a lot of it down," said Steve Spencer, who owns a Salem sawmill. Most of Missouri's sawmills already were feeling the pinch of the current economic downturn before the storm hit. To cope with the downturn, many have reduced their hours and cut their production schedules in half. Most report that they are either breaking even or losing money. "Really, had I not downsized a few years ago, and had a full crew, I would have had to shut down six months ago," Spencer said.

The Missouri Forest Products Association estimates that in the last 18 months, timber industry revenue has fallen 25 percent. The forest product industry and supporting industries pump about $4.3 billion into the state economy and support about 67,000 jobs, according to the Missouri Department of Economic Development. The combined industries constitute about 2 percent of the Missouri's gross state product.

Nationally, more than 346,000 jobs in the forest products industry have been lost since 2006, according to the American Forest Products Association. Many of those losses have occurred in the paper sector, in which revenue fell 18 percent for the most recent quarter compared with 2008. That drop was attributed to a decrease in demand for paper used in consumer product packaging. Earlier this year, the cardboard box maker Smurfit-Stone Container Corp., which has dual headquarters in Creve Coeur and Chicago, filed for Chapter 11 bankruptcy.

Like a lot of other timber-producing states, Missouri's woes largely can be attributed to a slump in sales of high-grade lumber used in the housing industry, which has been in a tailspin in recent months. Missouri has sales from the production of wood pallets — which is down, but not as bad as grade lumber — and railroad ties to fall back on, Brookshire said. "We've got a very diverse industry here in Missouri, and we can be thankful for that," he said.