Gee, those Canadian forest products companies apparently grew increasingly perturbed about those taxes the U.S. has been putting on Canadian softwood lumber all of these years. They finally figured out—why ship lumber to the U.S. South, when you can go down there and buy up the sawmills and produce it yourself.
Just kidding of course. Somebody had to state the obvious.
We doubt that Canadian forest products corporations have finished purchasing southern pine sawmills yet, but at some point you have to put pen to paper (to borrow an increasingly bygone phrase).
Our intention for the main article in this issue was to focus on the SYP sawmill buyout surge. But it evolved, as will happen, into a moment-in-time look at the state of the southern pine industry, including some noise that southern yellow pine sawlog exports have been making in the past year.
What we didn’t include in the article were particulars on existing SYP sawmills with regard to their operations plans, such as machinery investment. Earlier this year we reported on the results of our nationwide sawmill capital expenditure survey. But we didn’t break it down by region. So, given the emphasis on southern pine in this issue, let’s do so. Here are some quickie numbers from that survey conducted in the spring concerning southern pine lumber operations:
—44% expect to take less downtime this year as compared to last.
—61% expect to produce at 90-100% of capacity this year.
—17% have added a shift, and 11% have been thinking about it.
—61% have already or will commit $1-4 million toward investment in machinery and systems in 2014-2015.
—56% have a project in installation stage, 28% have a project in the planning stage, and 11% are thinking about getting into a project.
—The leading areas of investment (besides maintenance) are: dry kilns and/or controls; planer mill strapping/packaging; downstream sawing (gang/edger/trimmer); boilers; automated lumber grading in the planer mill; planer mill sorting/stacking.
—50% had already invested and put into operation $1-4 million in machinery and systems during 2012-2013.
—44% say their 2012-2013 project return on investment was excellent, and 33% say it was good.
—67% forecast their lumber market situation for the remainder of this year and next year as good, and 28% say excellent (which is even more optimistic than the national percentages).
One operator commented that their downtime in 2013 was heavy due to the startup of a mill that had sat idle for four years.
Another operator said his team has aggressively pursued improved efficiency for the past several years and made excellent progress, and will continue to aggressively pursue it.
Still another pined that he doubts we will ever again see the market like it was in the early 2000s—at least in his lifetime.
Then again, he probably also never thought so many of his neighborhood sawmills would be flying the Maple Leaf during his lifetime.