Specialty Products Give Mills an Edge

Amid Bust, Montana Lumber Mills a ‘Bright Spot’

By Robert Struckman, 1-11-08

Montana’s wood products industry may be suffering, but it’s a relatively bright spot in a gloomy North American market.

“It’s a market that takes a higher percentage of higher-grade lumber with higher value,” said Random Lengths editor Shawn Church. The independent, Oregon-based Random Lengths publishes data and analysis on the wood products industry.

Trucks are still rolling from Montana mills, carting finished product to places like Chicago and Arizona.

Forest products are a boom-and-bust industry, and, well, it’s bust time, Church said.

“(Wood products) prices are in a trough,” Church said. “Housing starts are down 50 percent in some markets.”

The forest products industry is one of the few pure commodities markets, he said. Plywood, framing lumber and other commodities are traded over the phone fluidly, responding immediately to market conditions, Church said.

“Lumber traders are the first to see upticks and the first to see the downturns,” he said.

No mill works in a vacuum, but many of Montana’s are a bit removed from the most punishing commodity price-drops. The most insulated mills make specialty, high-value products that appeal to niche markets.

Church’s point was not to say it’s easy sailing in the Big Sky state.

“The mills are hurting big time. The downturn has dragged the prices down,” he said.

Still, truck traffic at small Montana mills means only one thing—business is happening. And that’s good news.

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