Ads seeking forklift operators and mill laborers at the Missoula Job Service signal improving times for the Montana wood products industry, reflecting the findings of a recent report that showed a bump in wages and hiring at regional mills. But industry insiders say the state’s surviving mills are operating well below capacity and that rising stumpage prices could jeopardize the recovery.

The Montana Wood Products Association is calling on the state’s congressional delegation to bring an end to the litigation they say is stalling timber production on federal lands and driving up prices. A meeting is planned with congressional leaders later this month and could include U.S. Forest Service Chief Tom Tidwell.

“We’ve wound our way through all the foreclosures and we’ve seen an increase in housing starts and building, and that’s good,” said Julia Altemus, executive vice president of the Montana Wood Products Association. “Lumber prices are actually quite good. The problem now is supply.”

While state lands are hitting their quota, Altemus said, production off federal lands remains poor. Lawsuits continue to tie up timber production, she said, leaving the industry 60 million board feet short of capacity. “That’s at a minimum,” Altemus said. “We’re not running at full capacity and we haven’t been for years. With so few sales off federal lands, the rates are going astronomically high, and that drives up the prices of what the mills will pay for stumpage.”

The rising prices are cutting into profit margins, which could slow or reverse the industry’s recovery. It may also nullify any gains made by the recovering housing market, she said. Altemus said the industry currently employs 7,000 workers in Montana, including loggers, contractors, haulers and mill workers. That’s down from 19,000 employees in the 1980s, and the state’s 26 mills have been reduced to seven.

From The Missoulian: