Tough times in the forest products industry

Got an auction flyer in the mail yesterday. The well know Pelletier Brothers of Maine are downsizing operations and auctioning off equipment . I’ve been out completely for about 2 years . I saw the writing on the wall around 2003, limited my exposure to the industry and diversified my operations . Many close associates of mine in the industry are also feeling the pain of the global slow down. Most are saying it’s worse than the recession of 07-08. Sad day for many multi generation business’ .

 

I hear you, things aren't much better up here either. I used to enjoy watching their TV show when it was on several years ago.

 

I hate to hear that for them. They have a lot of family tied up in that business!

Is their restaurant still open..I'd want to say no.

It's hard down here in the south as well. Prices never recovered after the 98 recession. They had a few dollars a ton uptick in the last decade but this year we are down between $1-2/ton on various products from this time last year.

I personally sense more hard times just on the horizon. I hope I am wrong. Locally new construction is going as fast as ever. If this continues hopefully it will keep us where we are right now.

 

restaurant closed several years ago

 

My FIL contracted to Gerald, the one who started the whole business and really a great man. The boys are running it now. The company has diversified into building log trailers and they started a machine fire extinguisher company, that seems to be doing very well. Problem here is 90% of the wood needs to go to Canada to be milled. There are some smaller mills left here, a couple plywood or waferboard mills but not huge volume. Biomass is weak at best. I think 3 papermills left in the state. They are still prominent in the area but mostly keeping roads going and hiring out the forestry work. The restaurant closed because all the workers were hanging out there drinking all day, that on top of being in a very desolate location. Used to be 2 big paper mills in town now nothing. Wife is from 20 miles north of there, that whole area is dead.

 

Interesting comments. In our province, the big mills are closing and moving to China. Our main complaint is raw logs export to the USA and China with no manufacturing left here. Presently we have a workers strike in the local industry that has been going for five months. Because the markets are low right now, it looks like it will continue for awhile longer.

 

The export market here collapsed this last year with the talk of tariffs . Any of my sales that were within two hours trucking of the coast, all the good quality and larger logs went straight to export yards and to be crammed into containers to go over seas. Sure I'd them rather stay here and be sawn. But it's another outlet for the wood in a troubled market and they paid the highest price so honestly I welcomed it. Our Mills just ate not run my at capacity and loggers are suffering with the quotas.

 

Most all of the wood here has always been used in state or in neighboring states, don't recall ever having a large overseas export market. Some very large lumber mills not far over the border in Canada have always been the exports. Seems odd we truck logs there and buy 2×4s from that same mill. That said most of the large woodlands are in the Canadian vicinity of the state. Ashland still has a decent sized saw mill, Pleasant River Lumber and Lumbra in the Dover/Milo area and one in Guilford (don't recall the name) are still players. Hancock Lumber in southern Maine runs full but does not have a big capacity. I think GP still operates a plywood mill around Masardis but not sure. Biomass is bad, most of the plants that used it closed. I can think of 6 paper mills shuttered within 75 miles and more around the state. I think 4 fairly strong mills still exist but rumors are always floating. With all the wood we have there is just not enough places to take it in Maine anymore hence we need to send it to Canada to get rid of it. No explanation other than the cost of doing business here is too high and some of the state politics are against it with the tax rates.

 

I should add that while I have only been in this 15 years or so. The export market was a new thing, it basically popped up overnight and basically everyone and their Brother set up an export yard. Now I bet half those are gone and the ones left do a fraction of the business they once did

 

I had the opportunity to go the Pelletiers restaurant. Interesting place. Middle of nowhere. We went when the TV show was popular. I picked up a hat there, and I wear it when "logging".

 

Middle of nowhere? That's downtown Millinockett. You want to see middle of nowhere I can show you some interesting places in the NMW. Wife is from the next exit north on 95, I've been places I've never heard tell of and I'm originally from a lot further north like looking at Canada from the living room window north.

 

Kinda funny, not long before my FIL passed we were talking about all the mills he hauled to and how many were left. Most of the woodland owners have gone out of business or been bought out by international companies. All the names that used to be well known for woodlands is gone. Irving from Canada has bought a large portion of the north woodlands, cuts and hauls directly to their mills in Quebec and New Brunswick.

 

Prior to the late 80s logging was big business in our area. Our logging industry in MN defiantly took a downturn during the last slowdown in the economy. It started picking back up after that. As far as I know the few guys doing it are still pretty busy with pulpwood, and some saw logs that go the local mill in Grand Marais. Pulpwood is going to Thunder Bay, Ontario about 50 miles from our old homestead where there are two mills, or to Duluth about 150 miles south. There are about 250 full-times jobs at Verso in Duluth, so I hope they are still doing okay. I read that they were going to change out some equipment last year to make a higher margin paper product to help their financials.

 

That's the whole industry. I barely try to keep up with who owns what mill this year anymore. In the industry we just call the mill by the name that it had been for years anyway so it doesn't matter. Haha. Like one of the paper Mills near my farm and some of my timber sale wood goes there from one of my locations I deal with. We still call it Bowater which was the name forever all my younger life growing up and when I first started working it was Bowater paper. Well it hasn't been Bowater in like 10 years! It has been through several ownerships. It now is owned by Resolute Paper out of Canada. NO ONE calls it that, like no one. One of the foresters I deal with that works in management, who I sell his timber said something about Bowater one day a few weeks back. I said, Jon you realize that's not really it's name anymore, it sold. He said really!! When, I said like 19 years ago and this is like the second or third company since it sold! Haha

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I have heard of a few crews down here that are contracting in this area from up there. I wonder how many crews y'all lost to the south? Those are just crews I know about in a somewhat small area.

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As far as I know none of the guys here went south. These are all small operations, many single man operations as well. This gentleman is a typical NE Minnesota logger:

"No push-button machines..." 85-Year-Old Logger Just Keeps Cutting | Northern Wilds Magazine

The color pictures in the article were taken on our land when he was logging it a few years ago. His grandchildren (3 boys) are carrying on the logging tradition in our area. When I talked to Duane about their operation he said "they are high powered." The boys have equipment that cuts down, limbs and cuts logs to 8' lengths without leaving the machine. Duane lugs his saw, cuts, limbs and skids everything by himself. It was great to have him around and watch his methodical and consistent work.

He recently retired at age 87. He told me he "lost his power." When I inquired further, he said he could not consistently pull start his saws any longer. He is still active stacking his firewood and fishing regularly with his wife on nice days.

 

Doesn't sound so great... to me.

Before I left the printing industry, the shop I worked bought paper manufactured overseas. Very strange to think the paper would be cheaper after such a long ride on a boat burning all that fuel.

 

And many times were sending them the raw material. My cousin works at Bowater, he told me a few years back that they pulp out the wood and then strain the pulp out and then dry it and chop it into 4x8 sheets and stack the raw dried pulp up on pallets to export to China. So they. An rehydrate it and turn it into paper to sell to us.