Ever shoot a tracer round
into a pond at night and watch it skip off the water into a grove of
trees where it ricochets several times before burning out.
It is amazing how fast the direction of that speeding bullet
changes. The lumber
market and the news that surrounds it seems a lot like that fired
round.
Perhaps this is the ‘new norm’ some have been
anticipating or warning about.
A norm, where many more ebbs and flows and persisting
uncertainty and inconsistency become regular.
Perhaps this is a continuation of the resizing and
restructuring of our industry.
It is much more pleasant to consider the worst is behind us
and nothing but growth, albeit slow, ahead.
However, the low inventories that fueled the spring and
summer surge in lumber prices and activity are akin to the
government stimuli, helpful but unsustainable.
Eventually every cycle must reach an uninfluenced
bottom before it can begin true recovery.
The determination of where our industry and
economy is in that process is not the intent of this article.
The point is to illustrate that manufacturing capacity
adjustments in the hardwood industry are not complete.
This goes well beyond the favorite sawmill claim of a hard
winter for logging. This
time that is the least of the concern to supply.
Ahead of seasonal influences are reemerging liquidity
concerns, log affordability in a falling green market, and an
unwillingness to produce with price and sales uncertainty.
All these influences, and the decisions that
follow, point to a limited supply of lumber long term.
Admittedly, long term may not be at the forefront because the
immediate is more than enough to handle for us all.
However, every sound business looks as far in the future as
they can and plans accordingly.
If your business depends on hardwood lumber to manufacture or
resell, make sure you are confident in the companies that comprise
your supply base.
In that vein, Coastal Lumber has suffered along with everyone during
this downturn in the economy.
Coastal Lumber took steps to restructure.
These steps were painful but turned out to be proactive and
successful necessities to strengthen Coastal Lumber to be a long
term supply partner for our customers.