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Business and Economy

From Mill Explosion To Pandemic, Maine's Wood Products Industry Had A Rocky Year

Lumber industry
Robert F. Bukaty
/
AP
Massive stacks of eastern white pine dwarf Glenn Rowe, a scaler at Hancock Lumber, Tuesday, June 5, 2018, in Bethel, Maine. Rowe uses a scaling ruler to measure length and diameter to determine how many board feet the mill will get after the wood is cut.

If you've been shopping for building materials lately, you might have noticed that prices have gone up: wood panel products that would have cost you maybe $14 a year ago will now set you back $35 or $40. The pandemic has had a number of effects on the wood products industry.

To learn more about them, Morning Edition Host Jennifer Mitchel spoke with Patrick Strauch, executive director of the Maine Forest Products Council.

Jennifer Mitchell: So Patrick, what is the deal with lumber prices right now? Why are they so high even in a place like Maine that has, you know, lots of trees around?

Patrick Strauch: Yes, I can speak from firsthand experience: I'm trying to build an addition on my house. COVID caught a lot of people off guard, of course. There's no way to predict that kind of event, and I think what you found was that we didn't have the manufacturing capacity to keep up with that demand. We had the wood resource. We had the loggers available to cut the wood. But we just didn't didn't have the capacity to come online fast enough to produce the lumber in the panels that were needed.

So where did this last year leave Maine's forest products industry, then? If we didn't have a huge capacity for finished lumber that suddenly everyone wanted, but we do have a lot of trees and a lot of product out there, what happened to it all, and where did it go?

We're also part of a pulp and paper economy that affects everyone as well. It's all inter-related. The mills in Maine that were still making writing paper and printing paper, they were losing markets because of the long-term trend with electronic communications. And a lot of them were converting over to paper packaging products and cardboard type products and tissue paper: a mill in Woodland had tissue paper.

So those mills were strong, but we still had a lot of dependence on media papers. And that market started to go south very quickly. And it started to create a surplus of wood that was already cut and on the market.

And then that was compounded by the digester in Jay, the Pixelle Specialty papers digester, erupting. And that took out a major pulp and paper mill in the wood basket. So all of a sudden, we had a lot of wood on the market. So we had a surplus amount of wood, high demand for lumber, not enough capacity to really take in all that wood. So loggers were still left waiting and landowners waiting for the markets to adjust. And it's only recently that we've seen that surplus amount of wood kind of start decreasing and therefore the price of logs and pulp wood is adjusting.

So what about the future? You'd mentioned paper products like cartons, packaging, cardboard, things like that: obviously, we don't have any numbers yet, but it seems like this past year might have been a pretty bullish year for those kinds of products because of the pandemic and everybody shopping online and having takeout and things like that. But what did you learn over the pandemic year about what maybe needs to change? Or is the wood products portfolio, I suppose, diverse enough for what we know going forward?

Yeah, I think there's been a recognition that we needed to diversify our portfolio. If we think of ourselves, the state, as a business, and we want to stay in forest products, that's really what we need to do. Fortunately, there are market trends that are really supporting that kind of concept. A lot has to do with climate change.

And climate change is forcing us to take a look at what are the materials we use, can they be recycled? Is there a way to get off of petroleum-based products and move into more biodegradable products? And that opens up a lot of possibilities.