2010 began with most economic forecasters optimistically predicting a 35 % improvement in housing starts. Unfortunately new home construction results were disappointing and dominated by foreclosures and challenging credit markets.
Several world events significantly impacted our timber industry. First was the massive earthquake in February crippling Chile's plywood exports to the United States. As a result panel prices in the US skyrocketed from an average price of $260/Msf to a high of $460/Msf in early May. The beneficiaries were our plywood mills, principally Roseburg Forest Products and the Swanson Group. The run-up in prices was a temporary shot in the arm, but unfortunately the market retreated quickly when Chile resumed exporting plywood in late May.
The second major world event affecting our industry was the entry of China into our forest products market this summer. Russia imposed a 25% tariff on logs exported from Siberia to Chinese sawmills and now lumber and logs from the northwest are in high demand to satisfy China's expanding economy. This is a two edged sword for our industry by improving the overall lumber market but also driving up log costs to our local mills.
Finally Douglas County is now on the Secretary of Interior's radar screen for relief from the gridlock that has brought timber sales from the BLM in southwest Oregon to a virtual standstill. Secretary Salazar convened a one day roundtable discussion in Roseburg in October with a followup meeting in Washington DC in December. Several of our industry leaders including Allyn Ford and Steve Swanson participated as well as County Commissioner Doug Robertson. The lack of federal timber availability remains a key impediment to jobs and county revenues in Douglas County and all of rural Oregon.
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