Cutting for China


The Coos Bay World just published a great look at what the increased demand from China for timber means in a local timber community. Loggers in the Oregon coastal town are coming out of retirement and scores of longshoremen are arriving to help load the ships.

Coos County has a pretty good customer in China at the moment. The country’s seemingly insatiable appetite for timber is stirring a bit of a frenzy here as log trucks roar down roads and ships cruise overseas with Oregon Coast payloads.

“We gathered our stuff up and got out of hibernation,” says Dennis Cole, of Coos Bay’s Cole & Hongell Logging.

“There’s a lot of people who haven’t worked in two years,” Mahaffy adds.

China’s growing demand for timber has become a major  — and welcome — trend for the Pacific Northwest timber industry. Dan Fulton, the chief executive of Weyerhaeuser, told the Wall Street Journal in February: “Everybody in the Northwest is talking about China.”

While demand and prices are going up across the U.S., “the benefits are greatest for U.S. timber companies with operations in the Pacific Northwest, where the access to China is easiest,” according to the Journal.

The West, including Washington, Oregon, Idaho and California, accounted for 44% of all U.S. timber production in 2009, compared with 50% for the South, according to estimates by the Western Wood Products Association and the Southern Forest Products Association.

There are major caveats though. The logging activity may not be long-term. Dave Lewis, the head of the Truck Loggers Association in British Columbia, noted this week that there are limits to the recent success.

A lot has been written about China’s hunger for raw materials and building products. While China’s appetite seems insatiable, the reality is that without a thriving United States housing market, there is more global lumber supply than demand.

In Coos Bay, the solution to the uncertainty is to act fast.

Bob Mahaffy surveys his 300-acre property, dense with Douglas and grand fir, as a saw’s buzz peals through the forest. He plans to clear about 2 million board feet – about 400 truckloads of felled timber – within two to three months to cash in on a hot log-export market.

He’s got to get while the getting’s good.

“I don’t expect it to last as long as most people do,” the Coos Bay resident says of China’s top-dollar offerings for U.S. logs.

There are no doubt benefits to the recent trend, no matter what happens in the next five to 10 years.

While exports to China aren’t a long-term solution for the U.S. timber industry—the trend hasn’t spurred many mills to hire new workers or expand capacity—they are a bright spot that is helping to stave off further declines and cuts.

“It’s a step in the right direction,” said Steve Chercover, an analyst at D.A. Davidson & Co. in Portland, Ore.