The University of Idaho Argonaut

The University of Idaho’s College of Natural Resources published its annual report on the conditions of Idaho’s forest products industry last month. Photo Illustration by Jake Barber/Argonaut

University of Idaho’s College of Natural Resources published its annual report last month summarizing the conditions of Idaho’s struggling forest products industry. Among the authors are Francis G. Wagner, professor of forest products and Steven R. Shook, associate professor of marketing.

The report, “Idaho’s Forest Products Industry: Current Conditions and Forecast 2010,” is a compilation of surveys from 65 of Idaho’s largest wood processing facilities.

The report said lumber prices fell 13 percent in 2009 and approximately 43 percent from 2005, when U.S. housing peaked at more than two million starts. Last year was just above a quarter of that, at 550,000 starts.

Eighty-two percent of the surveyed facilities reported a decrease in sales and more than 80 percent reduced employment.
Wagner said the economic downturn does affect employment opportunities, but the market looks better for 2010.
“It’s the same as any other commodities-based market,” Shook said.

He said it follows a typical “down and back up” cycle of the economy and things look slightly better for 2010.
The report is sent to state legislators and studied by Wagner’s students. Graduating seniors in the CNR’s Forest Products Department have had more than 90 percent employment success for the last decade. That rate remains high, even though the state’s employment in the industry has declined for the last 15 years.

It is important for forestry students to keep enrolling and entering the field, Wagner said, because UI may face another program prioritization this year.

“Our graduates are in high demand by the forest products industry and serve that industry well,” Wagner said.

Idaho wood products manufacturers experienced a substantial drop in profits in 2009 from an already bleak 2008. Less than 800 million board feet was harvested in 2009 — the lowest amount since World War II.
The surveyed manufacturers were right two years ago when they predicted the sharp decline to continue in Idaho timber harvest and lumber production.

Now the report predicts a small increase in U.S. housing starts and wood and paper consumption for 2010. Only 12 percent of the surveyed manufacturers predict their conditions will decline in 2010, while 36 percent expect their conditions to get better.

Nearly all of the producers said the timber market and the overall economic condition are the major factors affecting their conditions in 2010. Increases in transportation and energy costs are also major variables that will affect their operations.

Lumber production continues to be higher than timber harvesting through the economic slump. That is because when scaling logs at the mills using the Scribner Log Rule, an old method, logs are under scaled. That means more boards are produced than estimated. Saw mills have become more efficient since Scribner’s Rule was adapted.

Shook said the production numbers stayed relatively constant considering the slump the industry is in. In Idaho, the industry moved to fewer, but larger, lumber mills.