What’s Going Down in the Timber Industry?

Southwestern Oregon has a rich history of harvesting, processing, and exporting timber products.  Oregon’s land area covers approximately 62 million acres, of which nearly 30 million is forested.  Our region is part of an area referred to as the Timber Belt, which includes rural areas stretching from Northern California up through much of Oregon and Washington. Communities within the Timber Belt have historically relied heavily upon natural resources (timber) and manufacturing (wood products and paper mills, e.g.) to drive their economies. Timber is a valuable renewable resource which must be stewarded well while at the same time contributing to regional and global economic needs.

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The timber industry is an integral piece of the culture of our community, region, and state.  The Oregon International Port of Coos Bay (Port) plays an active role in supporting the industry and encouraging future economic growth.  Last year, approximately 1.8 million short tons of logs and wood pulp was exported to foreign markets from our harbor.  The Waterborne Commerce Statistics Center reports in 2017, 2.6 million short tons of waterborne lumber, logs, chips, and pulp originated in Oregon.  That means our harbor handled over half of the state’s waterborne timber products! In addition, approximately $220 million in wood products travel along the Port owned Coos Bay Rail Line, destined for markets throughout the United States and Canada.  The products moving along the rail line help to directly support employment of close to 1,000 people throughout Coos, Douglas, and Lane Counties.  The timber industry continues to drive our local economy and support a substantial segment of our workforce, employing 2,212 in Coos County alone. Other major regional industries and employers include healthcare, agriculture, and tourism. For more information about other employment clusters, go to https://www.qualityinfo.org/southwestern-oregon.

The Port keeps a close eye on the trends and indicators in the volatile timber industry. As of the past month, housing starts dropped 5.3% in September nationwide due to Hurricanes Florence and Michael. However, seasonally-adjusted total housing starts in the west rose by 6.6% while home sale prices continue to increase. The housing market is softening, reaching a neutral point. This decline in house building indicates a need for the timber industry to look for new growth opportunities such as bioenergy.

Looking towards the future, opportunity in bioenergy such as biofuel woodchips is projected to continue to grow over the next five years. Currently China is poised to be the largest consumer of renewable energy by 2023 which will drive exports of bioenergy products. Timber is a renewable energy and can be used to fill this demand through energy woodchips. There are a couple terminals within the Coos Bay harbor who are already exporting biofuel to support this increasing demand.

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Although we remain confident the timber market will prosper for the foreseeable future and continue to be a major export from Coos Bay, the escalating trade war between US and China adds uncertainty into an already volatile marketplace. This uncertainty with decreased home building has driven regional log prices lower and many sawmills are reducing production this quarter. Oregon relies on the ability to invest and trade in global markets without burdensome tariffs. The Port will continue to urge policymakers with the American Association of Port Authorities (AAPA) to consider the negative impacts of imposed tariffs and to restore market certainty.

For more information about the timber market, visit https://www.forest2market.com/. This has been the source of this article and is also a valuable resource for timber market trends and updates.