Creativity needed to navigate latest market conditions

On April 15, 2020 the wood markets in Maine changed significantly. One of the digester’s in the pulpmill in Jay exploded, sending a plume of wood chips, steam, machinery, and chemicals sky-high. Shortly after that all splattered to the ground, with no loss of life fortunately, the mill stopped buying pulpwood, and the other Maine mills dropped their prices. Supply suddenly far exceeded demand. The summer and fall’s low pricing and reduced demand has squeezed all logging contractors, with similar expectations for the winter. Pulpwood, normally destined for that mill, has been rerouted to ND Paper’s facility in Rumford, Sappi’s mill in Skowhegan, sold as firewood, or chipped as biomass. Delivery quotas, for contractors, have been lowered, and as a result the pace of logging has slowed. It is a scary time for loggers. Without word from the Jay mill about possible rebuilding plans, many wonder if they will survive. Selling pine pulpwood has become the most dire, with as much as possible sold as biomass fuel, at prices generally below operating expenses. And more recently, the Rumford mill announced a reorientation away from printing paper and toward packaging paper, which will shutter its mechanical pulping process, and its need for aspen groundwood, often the highest paying pulpwood. It’s been exhausting and, have you heard this word before, as it relates to 2020 … unprecedented, for us?

Though sawlog prices and demand remain stable, most of our sales average only 25% to 30% sawtimber, as we prefer to cut mostly pulpwood-grade material and thus direct new growth onto the bigger and better trees, so our ability to conduct timber sales is constrained. With a mostly non-existent pine pulpwood market, we have steered loggers toward hardwood and hemlock woodlots, though with pine so plentiful in Maine’s coastal plain and western foothills, finding more of those will become harder, as we move into winter. For the most part, landowners asking for their lands to be harvested have been willing to accept the current conditions, and generally prefer to see their forest conditions improved rather than waiting to see what happens to the wood market.

The pine log market remains hugely frustrating, as anyone who can relate the contrast between the price of boards at the local lumber yard, which have been steadily rising as COVID-stay-at-homers remodel and improve their homes, to the still flat prices paid for pine logs. Presumably the sawmills figure that they don’t have to pay more, if enough log trucks keep arriving at their gate, but at a time when loggers are barely holding on, or not, I’d like to think that the mills see their suppliers’ and landowners’ survivals as existential threats to their own businesses, and pass along some of the added revenue that must undoubtedly be filling their coffers.

Yet in these trying times there always seems to be a little brightness. One creative logger sold two cords of pine pulpwood to a landowner as firewood – exactly as the landowner wanted. Any other takers? Creativity and ingenuity might just get us by.