Timber Industry Hoodwinks Forest Service — Again

This is a graph of lumber value (click to enlarge). The recent low point for lumber was in April, 2020. Remember that date, we’ll come back to it below.

Now see what lumber has done since April of last year. Quadrupled in price by early 2021! That’s a lot of gelt for some lucky mills.

The luckiest of those mills are the ones that had Forest Service timber contracts expiring in April 2020. Why lucky? Because on April 10, 2020, the Undersecretary of Agriculture issued a two-year extension on the performance of those contracts. See what happened? Those purchasers quadrupled their earnings!

In my 40-year experience, Forest Service planners and economists have a perfect track record in predicting the future — they are always wrong.

4 thoughts on “Timber Industry Hoodwinks Forest Service — Again”

  1. You are right, lucky mills! It is always risky business buying FS timber sales. Sometimes you win, sometimes you loss. It will be good for mills and the mill workers.
    You give the timber industry more influence then they have. Accusing the industry of “hoodwinking” the FS I don’t believe is accurate.
    I am not sure why or where these extensions took place. It makes sense for the FS sales along the Oregon Cascades so the industry could harvest the timber burned in the Labor day fires of 2000.

  2. Andy, if someone could predict future prices of commodities successfully, they would probably be living on a $40 million dollar ranch in Montana and not working for USDA. Just a thought.

    In April 2020 we didn’t know a lot about how Covid would roll out including how that would affect the construction industry near and long term. As an economist you know all about the unknown unknowns that can affect prices.

  3. All that I can say is that mills in Southwestern Montana are paying contractors the same rate per mbf that they were four years ago. Some of the reasons could be a lot of available supply combined with an increase in mill production costs. Unfortunately contractors aren’t an organized force and just have to accept what they are offered due to freight costs and not being able to access more lucrative markets.


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