Douglas Timber Operators Breakfast Meeting Announcement Please join us for our January 26 Roseburg Breakfast Meeting when we welcome our guest speaker Mike Newton Professor Emeritus, Oregon State University Program: Can Management of Douglas-fir Forests Provide What Everyone Wants? Elmer’s Thursday, January 26, 2012 7:00 a.m. No-Host Breakfast For more information, please contact Audrey at (541) 672-0757.

By: Rick Sohn

Timber Industry Report                                         December 22, 2011

Weaker log and stud prices are seasonally expected, while homebuilding statistics increased, unsold inventory dropped, and mortgage rates continued near record lows.  See below for details and a six-year span of prices and analysis of lumber, logs, housing, and mortgage statistics.

__Prices in Dollars per Thousand Board Feet___

____ Thousands of  Housing Units__

 __ Months of  Inventory of Unsold Homes_

____    Percentage interest rate         _   

Information and interpretation.

As reported in the News Review, Roseburg Oregon, Swanson Group has gone from operating 6 mills with 1200 employees in 2007, to 4 mills with 700 employees in 2011.  CEO Steve Swanson provided the information while explaining competition from Canadians who under-grade logs so that products produced from them escape an export duty when sold into the US.  Swanson Group’s layoffs are taking place as normally competitive operations look for ways to balance supply and demand, in an environment exacerbated by both the weak domestic market and over-supply from Canada.  One of Swanson’s 2 mills is shuttered (former Glide Lumber) and the other. Located at Noti,  was sold to Seneca Sawmill Co.  of Eugene, and operates at a reduced rate.

This month, Lumber and Logs are following a typical end-of-year pattern, and are down slightly, due to the decreased demand of the season.

Fundamentals continue to slowly improve.  Housing starts are up.  Builder’s prices, combined with the low mortgage interest rates, are finally pushing housing starts and building permits up about 10% over last month’s seasonally adjusted rate.  Some people simply have more urge to build than to buy the attractively prices homes on the market.

There are other good signs for our domestic economy, such as a stronger shopping season, and slightly improved employment picture.   There is optimism, despite serious  challenges beyond our control, particularly in Europe.

Merry Christmas and Happy New Year to All.  Lets hope for more improvement in 2012.

Data reports used with permission of:

¹Random Lengths.  2”x4”x8’ precision end trimmed hem-fir studs from southern Oregon mills.  Price reported is Dollars per Thousand Board Feet  for the most recent week.  One “board foot” of product measures 12 inches by 12 inches by one inch thick.

²RISI, Log Lines.   Douglas-fir #2 Sawmill Log Average Region 5 price.  Current report is for the prior month.  Dollars per Thousand Board Feet of logs are reported using standardized  log measurements from the “Scribner log table.”

³ Dept. of Commerce, US Census Bureau.   New Residential Housing Starts and New Residential Construction Permits, seasonally adjusted, annual rate.  Current report is for the prior month.   Recent reports are often revised in bold.  Also, major revision made each May, reaching 21/2  yrs back.

⁴Regional Multiple Listing Service RMLS^TM  data, courtesy of Janet Johnston, Prudential Real Estate Professionals  Broker, Roseburg, OR.  Inventory of Unsold Homes (Ratio of Active Listings to Closed Sales) in Portland Oregon, for most recent month available.

⁵Freddie Mac.  Primary Mortgage Market Survey.  30-year Fixed Rate Mortgages Since 1971, national averages.  Updated weekly, current report is for the prior full month.

Issue  #4-12. © Copyright Rick Sohn, Umpqua Coquille LLC.   For permission to reprint for nominal fee, Email  rsohn@umpquacoquille.com

Douglas Timber Operators

Please join us for our October 27 Roseburg Breakfast Meeting featuring our guest speaker: Dave Stroble Merrill & Ring Program: China Log Market: An outlook for export log markets from Coos Bay. Elmer’s, Thursday, October 27, 2011, 7:00 a.m. No-Host Breakfast

For more information, please contact Audrey at (541) 672-0757.

Roseburg Area Chamber of Commerce and Communities for Healthy Forests

INVITE YOU TO THE  FALL FOREST TOUR

 THURSDAY OCTOBER 13, 2011

 Meet at the Dixon Steel (Dutch Bros ) parking lot

Diamond Lake Boulevard

8:00 AM until 4:00 PM

Touring Vans  depart at 8:30

Kick off Speaker:  Board of Commissioner Chairman, Joe Laurance

Doughnuts and coffee before tour

and box lunches at noon

RSVP  by  Oct 7   to

                               Javier Goirigolzarri  rms@rosenet.net   541-957-9001                 or

Gail Trimble   Gailt@roseburgareachamber.org 541-672-2648  X 22

Tour includes forest sites that have experienced catastrophic fires.  This is an opportunity to see on the ground, the condition of the sites and learn about the future of these valuable resources.

Douglas Timber Operators

Roseburg Breakfast Meeting Announcement

Please join us for our September 22 Roseburg Breakfast Meeting featuring our guest speaker:

Jim James

Oregon Small Woodlands Association

Program: 

What is the role of Oregon Small Woodlands Association?

What is the role of small woodland owners?

 Elmer’s

Thursday, September 22, 2011

7:00 a.m. No-Host Breakfast

From Rick Sohn

Timber Industry Report                                             July 31, 2011

Fundamental improvement is steady, led by increased housing starts, and lower unsold inventory and interest rates.  Five years ago, interest rates tipped us into an inevitable downturn.  See below for details and a six-year span of prices and analysis of lumber, logs, housing, and mortgage stats.

__Prices in Dollars per Thousand Board Feet___

____ Thousands of  Housing Units__

 __ Months of  Inventory of Unsold Homes_

____    Percentage interest rate         _   

Information and interpretation.

July is another decent-news month, in our snail’s pace crawl out of this depression in the wood products sector.  Decreased stud and log prices are expected during the summer.  There is a healthy and not unexpected increase in housing starts.

Building permits were way ahead of starts when the last 4 months of each are added up, and still cumulatively outnumber starts by 50,000 in that period.  That said, not all permits get built in a down market, but we are in a rising (slowly) market.  The unsold home inventory of 6 months is the best since mid 2007.

We finally have two consecutive months of less than 7 months unsold inventory, a move in the right direction.  And, mortgage interest rates are down, since the stock market is volatile. Lower credit ratings could eventually cause interest rates to rise, as will inflation, when it comes.

Looking at June of 2006 statistics causes us to reflect on the economic cycle we are so slowly climbing out of.  June 2006 could be viewed as one of the down-turning points in the cycle.  The 2.6 months of unsold inventory, was the last time inventory would be below 3.0.  With only one exception housing starts and building permits had been dropping steadily from January to June of  2006, but were still respectable.

Mortgage interest rates often can put a damper on purchases, and the 6.68% rate in June of ’06 was the highest since 2002.  It was these higher rates of interest that created an inevitable tipping point for people who could not afford the higher mortgage payments of their adjustable rate mortgages.  Not only were they poorly qualified borrowers, but building homes on speculation had reached feverish levels, banks were more than happy to lend without down payments or without checking credit, so it was inevitable that the loan holders would not have the financial capacity to adjust to the interest rate increases, which led to the unprecedented defaults and foreclosures.  In turn, the foreclosures caused unsold home inventory to surge and prices to drop, in a vicious cycle that repeated itself several times thereafter.  The oversupply of homes decimated the new construction market, and will be years before we see a full recovery.

July, 2011 was also a memorable month in the development of the Roseburg, Oregon timber industry.  Roseburg Forest Products reached its 75^th anniversary milestone.  http://www.nrtoday.com/article/20110724/NEWS/110729920.

And, the founder of Sun Studs, Inc. and Lone Rock Timber, Fred Sohn, passed away.    http://www.nrtoday.com/article/20110726/OBITS/110729859.

Both companies are among many private, family firms that thrive in Douglas County, Oregon today, with multi-generational family leadership histories.  These companies, and 9 others are featured in an exhibit at the Douglas County Fair, August 9-13.  Douglas County Museum designed  exhibits which lay out the history and survival of these 11 companies through good times and bad, with 600 combined years of  business operation and community support.

Meanwhile, news reports of protests in the Elliott State Forest, and efforts to harvest and produce revenues on public lands, are familiar stories in the media.  Rural counties are struggling to tell the story of forest land management for the good of all, but progress is slow.   One particular victim, is the Douglas County library, with multiple branches, all under threat of closure, due to a shortage of County funds for its $2.5 million annual budget.    Federal land (more…)

Business After Hours – Hope to see you there!

• Roseburg Forest Products, Western Wings airport hangar on Aviation Drive
• Thursday, July 28, from 5 to 7 p.m.
• Catering and local wines provided by Brix 527
• Celebrating 75 years in the timber industry!
• Don’t forget to enter your business card to win one of several door prizes

Douglas Timber Operators

Breakfast Meeting Announcement

July 28 Roseburg Breakfast Meeting featuring our guest speaker: Chris Claflin  Oregon Business and Development Department.

 Program: 

Green Building and Mill Power

 Elmer’s

Thursday, July 28, 2011

7:00 a.m. No-Host Breakfast

 For more information, please contact Audrey at (541) 672-0757