No. 533 August 2013 WHA Board of Directors

Mike Lipke President

Lee Jimerson Vice President

Kurt Landwehr Treasurer

Darrin Hastings Immediate Past President

Adam Brennan

Nils Dickmann

Jeff Marthaller

John Smith

Lindy Stallard David Sweitzer Secretary/Manager P.O. Box 1095 Camas, WA 98607 Ph: (360) 835-1600 Fax: (360) 835-1910 Web: www.westernhardwood.org Email: wha@westernhardwood.org

WHA

Grade School

Sherwood, OR

October 17-18, 2013

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The Economic Impact of Privately-Owned Forest

in the United States report reveals forest owners

support 2.4 million jobs, $87 billion in payroll, $223

billion in sales an 5.7 percent of all U.S. manufacturing.

“Europe’s economy starts to grow...the recession

has ended”; “Auto sales back to pre-crisis levels—

housing recovery helps”; “Corn prices fall

sharply...cheap corn means fat wallets for consumers.”

What does all this have to do with hardwood

production? Everything! It does not mean a magical

growing housing recovery. This means that people are

spending more on things they want, like a new(er) house

or upgrades to their existing home—and that means

hardwood products being produced for installation.

“Wood product pricing should be solid for the next

two years or so due to (1) improving domestic housing

market and export, (2) demand for wood products

outstrips supply as previous production cutbacks catch

up with demand, and (3) structural

products (framing lumber, OSB, plywood), and

hardwood based products like furniture, kitchen

cabinets, flooring, all benefit from residential

construction including new construction plus

remodeling. -VA Tech Monthly Housing Report, June

2013.

Hardwood production in 2013 started out slowly

and picked up in late spring. The summer production

appears to be about the same as 2012, but the positive

market components should accelerate sales and

production during the remainder of the year. YTD

hardwood production is still running at about 80% of

2007’s peak production and by year end should be

closer to 85%. -Norm Murray, U*C Coatings Corp.

Canadian hardwood lumber production

gradually increased from 780 MMBF in 2003 to 868

MMBF in 2006. With single-family detached

housing starts at record levels of around 120,000 per

year and remodeling expenditures rising about 10%

per year, manufacturers of hardwood flooring and other

secondary products steadily expanded production and

lumber purchases. Canadian hardwood exports were

* Grade School

* FYI

* Outlook

* News in the News

* Legislative Update

* Upcoming Events

* Get Motivated

In This Issue:

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also strong during much of that period.

In 2007 domestic and overseas demand remained

solid, but production slid to 788 MMBF on plummeting

exports to the U.S., where housing markets had started

to collapse. As the U.S. housing recession worsened

and spread to Canada, production plunged to 664

MMBF in 2008 and 517 MMBF in 2009. Production

rebounded in to 646 MMBF in 2010, according to

StatsCan. Much improved Canadian home building, a

24% increase in exports to the U.S.—albeit from a much

smaller base—and stronger Asian demand all

contributed to the turnaround.

Production fell 3% to 623 MMBF in 2011—as U.S.

demand turned back down and European markets

continued to contract—and another 12% to 550 MMBF

in 2012. Production was up 8% year-to-date through

April 2013, however, and will total nearly 600 MMBF

for the year if growth remains at 8%. –excerpted from

Hardwood Review Express

U.S. hardwood lumber exports in the second

quarter of 2013 shattered the

prior quarterly record by 8.6%,

continuing the steady growth in

exports we’ve seen since global

markets bottomed out in the first

quarter of 2009. June shipments

were lower than April or May

due to typical seasonal

slowdowns, but all three months

were the highest on record for those particular months—

as were January and February. Compared to the first six

months of 2012, U.S. exports in 2013 were up 7.5% to

717 MMBF. In a normal year, second-half exports

traditionally fall short of first-half volumes by 7-8%. In

growth years like the last three, however, the second-

half dip averages less than 3%. If that pattern holds

again in 2013, total exports for the year will exceed

1.41BBF.

On the West Coast, contacts have noted that

supply conditions have improved, emphasizing kiln-

dried availability. One Washington

source adds that harvesting conditions

for the loggers in that region have

improved with the drier weather.

“We’re heavy into the export market

and we’ve been selling a lot into those markets,” he

said. Regarding transportation and trucking availability,

he shared that transportation has improved greatly in the

last few weeks and they have been able to get what they

need to move what they need to move.

A source in Oregon said his markets are ‘status quo’

and they haven’t seen much change in the

last few weeks although the market has

flattened out a bit in the last couple of

weeks., Most species seem to be selling

and they were not having any availability issues.

For Quebec, sawmill production saw its regular

slowdown in July as the construction

industry took its break. Demand for kiln-

dried and green birch is keeping pace

with production, with higher prices being

noted for enhanced lengths and color

characteristics.

According to contacts in Ontario, demand for

hardwoods is favorable due to the

industrial markets being healthy, along

with export volumes to China and Asia

also picking up again following a spring

slump. The rise in residential

construction in the U.S. is also assisting

sales of Canadian hardwoods.

What’s ahead for 2013? The balance of 2013 will

be characterized by slightly improved hardwood

demand. On the supply side, we estimate that U.S.

hardwood lumber production will increase in 2013 to

9.08 BBF, about 4% higher than last year, and that

hardwood lumber imports will grow to 280 MMBF. –excerpted from Hardwood Review Express

Housing markets continue to improve, but not as

rapidly as some headlines suggest: domestic demand for

hardwood lumber will probably grow at a slower pace

during the second half of the year than during the first

half; Chinese demand should resume its climb in the

fall, exports to Europe should improve slightly in the

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fourth quarter; and production will track more loosely

with demand over the next two months before supply

tightens back up.

From the Rockies to the West Coast, improving

distribution yard markets, increasing demand from

cabinet plants, and expanding sales of rustic moulding

and millwork make the near-term outlook for alder quite

good. Distributors in the eastern U.S. could also see

more demand for alder, but they may have difficulty

procuring more volume. Following a relatively weak

January, U.S. alder exports from February through May

2013 were 16% above the same period last year. Alder

shipments to China—which now account for nearly

75% of alder exports—should keep growing through the

summer as buyers try to avoid potential shortages later

on. Relatively high prices for some alder items haven’t

significantly impacted demand yet, but could if prices

go much higher. If not, all grades of alder should move

well from Superior down to Frame for the foreseeable

future.

With industrial markets hot, most sawmills will

continue to convert beech logs into pallet cants, railroad

ties, board road and crane mats rather than grade

lumber. Production and demand for beech grade lumber

will be very limited. -excerpted from Hardwood Review Express

The U.S. trade deficit plummeted to its lowest

level since October 2009, down from $44.1 billion in

May to $34.2 billion in June. Goods exports recorded

an all-time high, providing some encouragement that

global demand might be picking up. If so, this would be

welcome news for manufacturers, with many

experiencing disappointingly slow growth in exports so

far this year. Manufactured goods exports have been up

just 1.7 percent in the first six months of 2013 relative

to the same tie period in 2012. This suggests a

deceleration from the 15.8 percent and 5.7 percent

growth rates for the past two years, respectively. -Monday

Economic Report, National Assoc. of Manufacturers.

Federal wildlife officials plan to dispatch hunter s

into forests of the Pacific Northwest, beginning with the

Hoopa Valley Indian Reservation this

fall, to shoot one species of owl to

protect another facing extinction.

The U.S. Fish and Wildlife Service

released a final environmental review

of an experiment to see if killing

barred owls will allow northern

spotted owls to reclaim territory they’ve been driven out

of over the past half-century.

Upcoming Meetings

September 5, 2013 WHA Board Meeting Portland, OR Email: wha@westernhardwood.org

September 9, 2013 Forecasting Emerging Markets & Supplying Existing Markets for Building Materials Portland, OR Email: evgreen@ep.org

September 10, 2013 Forecasting Emerging Markets & Supplying Existing Markets for Building Materials Tacoma, WA Email: evgreen@ep.org

September 18, 2013 Washington Hardwoods Commission Meeting Olympia, WA Email: w hc@wahardwoodscom m .com

September 24, 2013 2013 PNW Reforestation Council Vancouver, WA Email: richard@westernforestry.org

October 9, 2013 Forest Tech 2013 Portland, OR Email: richard@westernforestry.org

October 17-18, 2013 Grade School Class Portland, OR Email: wha@westernhardwood.org

November 20, 2013 Workshop: Energy Reductions Using Lean Thinking Princeton, WV Email: quesada@vt.edu

Have upcoming event or company news? Let us know and we’ll help you get the word out, both here and on our website. Drop us a line and let us know!

U.S. Rep. Steve Daines, (R-MT), got two

amendments attached to legislation intended to speed

up timber harvests on national forest land. One

amendment to the Restoring Healthy Forests for

Healthy Communities Act requires that the U.S. Forest

Service give priority to forests bordering Indian

reservations in need of hazardous fuels reduction, in

accordance with the Tribal Forest Protection Act of

2004.

The second would give the Forest Service more

authority to deny appeals of projects it uses under its

categorical exclusion rule. Categorical exclusions are

intended for small-scale or repetitive actions that

shouldn't need full-scale agency analysis before

approval. “Without this provision, decisions on

important, low-impact projects conducted by the Forest

Service which were once completed in 5-10 days, will

continue to be delayed by at least 30 days, and in some

cases, up to 145 days,” Daines said.

The Hardwood Federation, in a letter this month

to Gina McCarthy, administrator of the U.S.

Environmental Protection Agency, noted that the recent

ruling by the U.S. Court of

Appeals for the District of

Columbia Circuit vacating

EPA’s Deferral Rule for

biogenic carbon emissions

under the Tailoring Rule has created significant

uncertainty for biomass and forest products facilities

that have begun operations, construction, or major

modifications since the July 20, 2011, effective date of

the Deferral Rule. Companies and municipalities have

made—and are planning to make—significant capital

investments, including investments to comply with

other environmental regulations (e,g., Boiler MACT),

improve energy efficiency, produce biofuels, manage

the nation’s wastewater treatment facilities effectively,

and meet the growing global demand for pulp, paper-

based packaging, wood products and energy, which

now could be in jeopardy.

The Agency was urged to recognize the significant

and growing body of scientific findings concluding that

carbon emissions from biomass do not introduce new

carbon into the existing natural carbon cycle. For

instance, in the United States, more wood is grown than

harvested each year. So long as forest carbon stocks

nationally are stable of increasing, biogenic carbon is

not contributing to overall increases in atmospheric

greenhouse gases and, therefore, PS and Title V permit

requirements should not be triggered. EPA’s policies

should also recognize that use of agricultural residuals,

non-forest biomass residuals and byproducts, and

purposefully grown energy crops including crop-

derived bio-materials, do not increase overall

atmospheric carbon.

The letter was signed by approximately 170

industry businesses and associations.

Taxpayers Protection Alliance (TPA) President

David Williams questions the effectiveness, market

influence, and cost to taxpayers of the U.S. Green

Building Council’s new LEED v.4 standard. The new

criteria are in line to become the General Services

Administration’s choice for federal construction and

renovation projects. Since 2010, the federal

government, 35 states, and more than 170 cities have

required LEED certification for public building projects

or have given tax credits for LEED-certified buildings.

However, Williams says TPA has issued warnings that

the new standards for LEED v.4 harm taxpayers and

businesses by offering a competitive advantage to

favored industries while discouraging and targeting

other industries. TPA maintains that LEED v.4 punishes

certain products, seeking to eliminate materials that

help improve a building’s energy performance and

sustainability, such as reflective roofing and solar

technology. TPA points out that some members of

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USGBC’s board, including the Veterans

Administration, the National Institute of Standards and

Technology, and the Department of Health and Human

Services voted against using LEED as the only standard

for government buildings. TPA also has testified at

congressional hearings regarding LEED, seeking

greater transparency and accountability, and made

several Freedom of Information Act requests to better

understand the relationship between GSA and USGBC,

without results. - The Hill (08/06/13) Williams, David

I Dare You to Read This

By Robert Wilson

Recently, a reader wrote me to suggest that rather

than trying to encourage someone, a better way to

motivate them is to issue a challenge. So, I felt

challenged to write about it.

Whenever I think of laying down a challenge, I

think of a classic story about Charles Schwab the

magnate of Bethlehem Steel. One day, he was visiting

his least productive mill to discover why it was

underperforming. During his inspection, he discovered

that everything seemed to be in order: the workers all

knew their jobs, the equipment was top-notch, and the

manager highly educated. Despite all of that, it was

producing far behind all his others.

He ended his tour of the facility a few minutes

before shift change. Stopping in front of one the

furnaces, he asked a worker, “How many heats has your

shift made today?” “Six,” the man replied. Schwab then

asked for a piece of chalk. He took it, wrote a large

number “6" on the floor, then left the building.

When the second shift arrived, they saw the chalked

“6" on the floor, and inquired about it. “The big boss

was in here today,” said one of the men. “He asked us

how many heats we made, and we told him six. He

chalked it down.”

The next morning Schwab visited the same mill. He

saw that the “6” had been erased by the second shift and

a large number “7” written in its place. He returned to

the mill again at the end of first shift, where he saw that

the “7” had been replaced with a “10.” With a piece of

chalk, Schwab started a lively competition that

continued until that mill was producing more than any

other.

This particular challenge worked because it pitted

the esprit de corps of two teams against each other. I’m

not sure that particular challenge would work today

with the added burden of government regulations and

union rules.

I also believe that a challenge does not stand alone

as a motivator. There has to be something behind it. It

may be pride, prestige, or fear that drives the need to

overcome the obstacle.

Challenges are always obstacles whether it is an

athletic, academic, intellectual, work-related, health-

related, a personal goal or a personal tragedy.

Sometimes the challenge is given by a boss, a team

mate, a spouse, or simply the zeitgeist.

Many times a challenge will be issued with the

following words: “I’ll bet you can’t...” or “I dare you

to...”

A challenger draws a line in the sand and defies us

to cross it. Hmmm, isn’t that what the game of

American football is all about?

The advertising industry loves to use a challenge to

get us to try their product or service. We frequently see

words such as “Take the Taste Test,” or “Give Us 30

Days and You’ll Become a Believer.” I remember this

one from Gillette: “Take the SensorExcel Challenge:

One shave and we bet you’ll get rid of your disposable

razor for good.” Perhaps the most famous challenge ad

is this one: “Be All That You Can Be: In The Army.”

We love fun challenges such as problems that

stimulate our ingenuity: crossword

puzzles and sudoko for example. We

enjoy the challenge of improving our

skill at games and sports. OK, the love/

hate challenge of golf not withstanding.

Ultimately, all our challenges are self-given because

it is human nature to want to improve. Pablo Picasso

said it best, “I am always doing that which I cannot do,

in order that I may learn how to do it.”

The personal challenges we give ourselves create

the journey known as life. Enjoy the pitfalls and peaks

as they come because as Leo Buscaglia, author and

professor, put it most bluntly, “Death is a challenge. It

tells us not to waste time.”

I challenge you to heed his advice and get on with

the important things in your life. Robert Evans Wilson, Jr. is

an author, humorist and innovation consultant. For more information

on Robert, please visit http://www.jumpstartyourmeeting.com

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WHA GRADE SCHOOL

OCTOBER 17-18, 2013

PORTLAND, OR

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