Hard times hit the nation's hardwood lumber industry

CHARLESTON, W.Va.

Global economics and the housing bust are throwing a relentless string of problems at the mom-and-pop sawmills and logging companies that make up much of the nation's hardwood lumber industry.

Large furniture makers have abandoned the U.S., a growing number of raw logs are being shipped overseas for processing, and changing consumer tastes and construction downturns have slashed demand for hardwood flooring and red oak, long the dominant species.

The result has been rising unemployment for forestry workers and a sharp decline in hardwood production. Government statistics show production has dropped from 12.6 billion board feet in 1999 to about 10.7 billion last year.

U.S. Forest Service economist Bill Luppold expects production to dip further, to perhaps 10.5 billion board feet or less this year.

"I don't even think the numbers demonstrate how bad it is," Luppold said. "We haven't seen this amount of decline year in and year out since the early part of the [20th] century."

The industry's problems started more than a decade ago when U.S. furniture makers started leaving the Carolinas in favor of foreign destinations with cheaper labor and lower operating costs.

Randy Snyder ~ Associated Press Tony Woodyard, co-owner of Twin River Hardwoods Inc., walked by a stack of logs March 10 at the sawmill in Southside, W.Va. Woodyard said he keeps about a 30 to 45 day supply of logs in the yard. The company primarily deals in red and white oak and ships 80 percent of its lumber to Pennsylvania, North Carolina, Virginia, eastern Kentucky and northeast Ohio.

"Manufacturing is moving away, it's going to China or whatever, Vietnam, today," said Virginia Tech professor Urs Buehlmann. "You're looking at a depressed industry."

Shutting down isn't an option for Tony Woodyard of Twin River Hardwoods Inc. in Southside in Mason County. Woodyard said he has to keep running his mills to pay the debt he took on to buy them in 2006.

"The prices are ... where they were 20 years ago," said Woodyard, who has worked more than two decades in the business. "To be profitable you've got to watch all your P's and Q's and eliminate all the fat in the payroll."

Prices vary by factors such as species and grade, as well as negotiations with buyers, but Woodyard said the price of cabinet-grade lumber has slumped in some cases to $900 for 1,000 board feet. For years that price was $1,200 and at times as much as $1,400.

Tony Woodyard, co-owner of Twin River Hardwoods Inc., measures logs on Monday, March 10, 2008, at the sawmill in Southside, W.Va. Woodyard says he keeps about a 30-45 day supply of logs in the yard. The company primarily deals in red and white oak and ships 80 percent of its lumber to Pennsylvania, North Carolina, Virginia, Eastern Kentucky and Northeast Ohio. He says imports from China have hurt his business. (AP Photo/Randy Snyder)

People in the industry say the formerly booming housing market masked problems by creating demand for hardwood cabinets, trim and flooring. That bubble burst with the housing market's free fall.

"Even though furniture was going down dramatically, we had kind of a buffer there with these other industries going up," Luppold said. "As soon as the housing market cooled, these industries started having problems."

Problems such as a series of temporary shutdowns for Facemyer Lumber's Ripley mill and others across Appalachia.

"We've been on a downturn for about four years now," owner Les Facemyer said as he ticks off a list of operations in the same situation, including a veneer plant in Spencer, W.Va., and two Roane County mills.

Marvin Hershberger flips boards boards to grade the wood on Monday, March 10, 2008, at the Twin River Hardwoods Inc. sawmill in Southside, W.Va. The 22 employees at this Mason county mill work nine hour shifts five days a week on hardwoods cut in Lincoln, Boone, Putnam Cabell and Kanawha counties in W.Va. (AP photo/Randy Snyder)

"It's starting to snowball," he said.

The problems extend beyond West Virginia's borders, said Tom Inman, president of High Point, N.C.-based Appalachian Hardwood Manufacturers Inc.

"The industry is shrinking," Inman said. "I could cite probably a dozen that I know of sawmill closings of mills of prominence ... the value of the timber versus the price that they're able to get for the lumber is too tight or it's a loss."

Bureau of Labor Statistics data reflects how the industry is shrinking.

A machine is used to debark hardwood logs on Monday, March 10, 2008, at the Twin River Hardwoods Inc. sawmill in Southside, W.Va. Tony Woodyard, co-owner of Twin River Hardwoods Inc., says every other by-product of the log is sold. The bark is sold for landscaping. The sawdust is sold for paper. The chips are sold for boiler fuel. (AP Photo/Randy Snyder)

The number of timber jobs nationwide fell almost 13 percent to 8,790 in 2006 from 9,910 in 2000. Likewise, the number of logging equipment operators has declined more than 17 percent to 28,300 in 2006 from 34,180 in 2000.

Another problem is a shift in consumer tastes.

Homeowners once wanted red oak, the most common hardwood in much of Appalachia. Now, lighter-grained species, especially maple and poplar, are in vogue.

"My wife's 35, she doesn't want red oak because her mother had it," said mill operator Scott England. "The biggest item that we make here, that we used to make money on has dropped by 35 percent."

Tony Woodyard, co-owner of Twin River Hardwoods Inc., measures logs on Monday, March 10, 2008, at the sawmill in Southside, W.Va. Woodyard says he keeps about a 30-45 day supply of logs in the yard. The company primarily deals in red and white oak and ships 80 percent of its lumber to Pennsylvania, North Carolina, Virginia, Eastern Kentucky and Northeast Ohio. (AP Photo/Randy Snyder)

That drop extends beyond England's home base of West Virginia to Arkansas, Louisiana, Mississippi and Virginia, all of which have lots of red oak.

Luppold looks around the industry and sees mill owners and loggers just trying to hang on. People who used to boast about profits brag about how they're able to stop the bleeding, he said.

"I don't know of anybody that's turning any respectable profit."