“Top 20” Lumber Producers Report Indicates Renewed Industry Optimism

The latest Wood Markets annual survey of the “top 20” Canadian and U.S. softwood lumber producers shows an uneven trend across North America for 2012: U.S. softwood lumber production increased 6.3% to 28.5 billion bf, whereas Canadian production increased only 0.4% to 22.6 billion bf. Rapidly increasing demand outpaced mill output in 2012, while blockbuster corporate acquisitions and catastrophic mill fires further altered the production landscape.

These and other industry highlights were released this week in the March issue of Wood Markets Monthly International Report. The consultants at International Wood Markets Group, Vancouver B.C. have conducted this survey annually since 1997.

The top 20 Canadian companies increased their market share of total Canadian lumber production, rising from 75% in 2011 to 80% in 2012. Canfor pulled ahead of West Fraser as the top Canadian lumber producer with 3.8 billion bf of production from its purchase of two sawmills from Tembec in the first half of 2012; Tolko, Resolute Forest Products and Western Forest Products took the next three spots. Together, these five firms produced a total of 11.6 billion bf (52% of Canadian lumber output, up from 48% in 2011). Despite surging prices in U.S. and China in the second half of 2012, it was not enough to change the production response at Canada’s lumber mills from those levels achieved in 2011. A tightening of timber supplies in B.C., Ontario and Quebec were partly responsible.

The output of the top 20 U.S. companies rose strongly: from 15.1 billion bf in 2011 to 16.4 billion bf (+9.1%) in 2012. In doing so, these firms increased their market share of U.S. production from 56% to 58%. The five largest producing U.S. companies, Weyerhaeuser, Sierra Pacific, West Fraser (U.S. operations), Hampton Affiliates and Georgia-Pacific, produced 9.0 billion bf or 31% of total U.S. production. Of note, all regions in the U.S. recorded production increases in 2012, with the U.S. South showing the largest gains in lumber volume (an increase of over 800 million bf as compared to 2011).

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