Timber event has international feel

COEUR d'ALENE - Asian buyers are hungry to make a deal with Northwest timber firms.

Buyers representing 18 foreign companies are attending the Small Log Conference at The Coeur d'Alene Resort - far more than during the event's previous years and another sign of an upbeat timber market after the downturn, said Craig Rawlings, president of the Missoula-based Forest Business Network, which is presenting the conference.

"This is one of the largest (wood products) trade missions we've ever had," Rawlings said.

The buyers, representing firms from China, South Korea, Australia and Canada, are visiting local mills during their visit as part of a reverse trade mission in which they come to suppliers rather than vice-versa.

"There's a lot more optimism than we've seen since the recession," Rawlings said. "Typically there's just presenters here, not buyers. They're looking for products to buy."

Wu Zhi Xi, a buyer from China, said forest resources are limited in China due to efforts to protect the environment, so he's looking to make deals with Idaho and Montana firms, even if it costs more to transport the product to coastal ports.

"There's limited harvest (in China)," Xi said through a translator.

Northwest lumber, including Douglas fir, hemlock and Ponderosa pine, is used for construction, packaging, furniture and other uses in China.

Michael Liu, another buyer from China, called the demand for wood products "huge" because of economic growth.

Liu said lumber mills here are larger and more technologically advanced than in China and the quality of the product is better. He said that, while the price of lumber here is still reasonable, it's not as favorable to foreign buyers as a few years ago.

Translation: The market has rebounded here and prices have gone up.

At the height of the housing boom, the average price for lumber pushed $500 per 1,000 board feet. The number dropped to around $188 during the recession due to glut. The price has gradually gone up with demand the past three years and now hovers around $425.

"Historically speaking, we're at a very good number," Russ Vaagen of Vaagen Brothers Lumber in Colville, Wash., said at the conference. "When the price is more than $400, everybody is feeling good."

Adding to that optimism: Asian buyers are now more interested in finished wood products here, not just raw material.

Vaagen said mill closures and downsizing only paints part of the Northwest timber industry picture. The survivors, he said, have invested in infrastructure to be more competitive.

There are other shifts in the industry, he said.

"There's less jobs, but they're higher-paying jobs," he said. "It used to be brute-force jobs that paid $12 to $15 an hour, but now it's computer jobs that pay $20 or more."

Vaagen said there's also a demand for logging contractors to perform jobs such as thinning and logging.

"That's where the real growth will be," he said. "We're down 15 to 20 percent of where we need to be."

Vaagen said that, as long as the housing market continues to rebound, the timber sector should continue to show positive signs.

"I think we're on solid footing," he said.