Higher and Higher wood prices

[deaner]

For you guys that work in the wood industry, would you mind giving a quick breakdown of how it works? Seems like a bit of a different structure than anything I have seen. So logging is done mostly on crown land? And rights to that wood are sold in an auction like process, with stumpage paid to the province? Do mills buy the rights to the wood then hire their own contractors? Any detail all along the chain would be awesome. I've always been super curious about the industry

 

[Bury Me With My Toys]

Sounds like 90% of the employee's at the mills shut down in Mackenzie.

Its not a wood supply problem there, Canfor sold over 500,000 M3 of cut and processed wood to Dunkleys after the closure

I know too much about the Isle Pierre mill, wish I knew less actually.
You're correct, no wood shortage, they had logs in abundance. Poor management, and that poor management wouldn't fire their terrible employees and hire someone good to fill those vacancies. Twenty, thirty years ago Canfor was the dominant player in BC logging and mills, they are a nobody now. Those old guys knew how to run in, they are retired or deceased now, and they slid morons into management positions. Canfor mills now are full of employees who believe they should not be expected to do anything correctly, or work more than 10 minutes per day. Listening to my relatives speaking about it, they would frequently not do more than an hour of real work in a week.

 

[Bnorth]

For you guys that work in the wood industry, would you mind giving a quick breakdown of how it works? Seems like a bit of a different structure than anything I have seen. So logging is done mostly on crown land? And rights to that wood are sold in an auction like process, with stumpage paid to the province? Do mills buy the rights to the wood then hire their own contractors? Any detail all along the chain would be awesome. I've always been super curious about the industry

To start there is a coastal industry and an interior industry and they are treated differently by government and run much differently. I'll focus on the interior to start since that's more relevant here and it's larger.
Basically all major mills have what is called Quota and they are licensees of that quota cut. That is their exclusive access to specific areas of crown land for logging and many have multiple licenses. They pay an annual rent to the gov't for that quota and have to harvest their annual allowable cut measured over a 5 year period called cut control or the gov't can take a portion of their cut and award it to another licensee that is already using all of their cut. The licensee pays stumpage to the provincial govt on all the wood they harvest from their quota licenses. Before logging the licensee puts together a permit to log that involves all kinds of work to see what is there for wood and where to build roads and how to manage the environment. They also seek feedback from First Nations bands to see if there is any cultural significance on that portion of land and they pay the FN to evaluate it independently. They also consult with specialists in water management and other environmental concerns. Once that is done they apply to govt for the permit to log. The licensee must abide by the provincial legislation laid out in the Forest and Ranges Practices Act (FRPA) and nearly all licensees also follow international independent forest certifications for environmental and cultural values.
The logs harvested off the licenses were commonly enough to sustain a mills need for logs but the cut amounts dictated by govt have been getting reduced due to the impact of the mountain pine beetle and more recently fires. This has put more pressure on other sources of logs called purchase logs. You can buy logs from: people that control woodlots, private landowners, and BCTS a government run program that took back area from the licensees 20 years ago that now auctions it back to the highest bidder. It is also becoming common for licensees to sell wood between themselves to get the right logs for their own mills. This helps optimize for species and size of different programs depending on mill equipment and product mix.
The interior harvesting is almost exclusively done by contractors that have their own equipment and employees. The road building is done the same way. In order to keep control of their quota the licensee must have legal agreements with independent contractors to harvest X% of the quota logs this is mandated by a provincial bill.

 

[deaner]

Is there any way to acquire quota? Or is it grandfathered to the mills that possess it? Can anyone bid on the BCTS stuff? Are there any restrictions on buying private wood? As long as quota wood is harvested within the allotted time frame, are there any other restrictions? How long do you have to process logs, or is there an ideal time frame? Same with milled wood, can you sit on it for a while or do you have to sell it soon after milling? Is there any legitimate opposition to logging old growth, or is it just an emotional thing? Are any companies harvesting biofuels from slash piles or is it still not economical?

 

[Bnorth]

Is there any way to acquire quota?
You can buy it or trade for it from a holder. This is rare unless that company has closed a mill in that area and doesn't have another one close by to haul the logs to for processing.
Or is it grandfathered to the mills that possess it? It is extremely rare that the govt takes back quota. The NDP did pass new legislation that any transfers of ownership need to be approved by govt and standard practice has become to siphon off some of the cut and give it to local First nations or Community Forests for management.
Can anyone bid on the BCTS stuff?
Yes, you just need to register and need a bit of cash handy to pay the deposit if you win. Newer bidders without a track record pay a higher deposit.
Are there any restrictions on buying private wood?
No anyone can buy it from landowners or woodlot owners. Most licensees will sell small volumes of logs to independent mills but to get large volumes you generally need to trade some logs back so they can maintain their needs.
As long as quota wood is harvested within the allotted time frame, are there any other restrictions? The licensee can basically do whatever they want with it as far as selling or processing. The exception is exporting. It cannot be exported unless it has been put up for bid with domestic producers first.
How long do you have to process logs, or is there an ideal time frame? Depends on species, climate they are stored in, season and the end product.
Same with milled wood, can you sit on it for a while or do you have to sell it soon after milling? No requirement to sell it and is generally stable for long time as long as it is stacked properly and not exposed to UV
Is there any legitimate opposition to logging old growth, or is it just an emotional thing? My personal take is that when the average person thinks old growth they think Cathedral Grove but the majority of old growth forests especially in the interior are far from looking like that and many contain balsam and hemlock that don't age nearly as gracefully as cedar or fir.
Are any companies harvesting biofuels from slash piles or is it still not economical? Yes it is starting to be more common as the pellet industry grows and as Pulp Mills are hungrier for raw materials due to sawmill closures. The companies are working with licensees to truck more pulp and biomass logs for use and also grinding on site. This reduces the amount of waste being burned after the blocks are logged

Answers above.

 

[Stompin Tom]

What do you think is going to happen there? It's one of the only regions with good log supply left and I am a bit surprised they didn't fire the mill up at these record prices. Obviously it is no problem to sell the wood, Dunkley is always hungry as is PG Saw and I imagine Hampton's new mill in James will be too. That said they just made killer money last quarter and could easily float the cash to announce it as a permanent closure and pay everyone out. I am thinking they will rebuild it to run on a bit less volume. ~200-220 Mmfbm on 2 shifts. That leaves enough to keep some sales wood rolling. Canfor doesn't like selling logs or hauling them long distances.

Well, that mill has had many owners, 4 if I am correct, and everyone has ended up losing money and selling out despite probably the best and most available wood supply historically in the province. The common denominator? The employee's and the union. The town is now into its 2nd and 3rd generation of mill employees and the inbred lack of production is legandary. Canfor has given up, they are on their 2rd long term shut down at that facility since buying it and the only way they will reopen is with new staff and that means a new union and that means union busting and that means allot of problems at other mills. Pretty much every major employer has given up on that town.

What has to be remembered is Mackenzie is a "young" town basically built in the 1960's. A transient workforce was brought in, no real connections to the area. They were there for one reason. Money. No community pride, no company pride, just the all mighty buck and this mentality has been passed down.

I can tell one simple story which most will call BS but I know its the goods honest truth, have spoken to people myself. At the old Abitibi Pulp Mill there was a running competition for a group of employees who could go the longest without actually doing any work. The gentleman leading the pack measured his time in YEARS, not hours or days, but years. Behind the millrights room built a lounge, complete with TV's, computers, fridge, couch's, lazyboys and beds. I have seen this room. No $hit. They would clock in, head to the millrights room, hang a right, up a set of stairs and around a back corner. Gone for the day.

 

[Bnorth]

Well, that mill has had many owners, 4 if I am correct, and everyone has ended up losing money and selling out despite probably the best and most available wood supply historically in the province. The common denominator? The employee's and the union. The town is now into its 2nd and 3rd generation of mill employees and the inbred lack of production is legandary. Canfor has given up, they are on their 2rd long term shut down at that facility since buying it and the only way they will reopen is with new staff and that means a new union and that means union busting and that means allot of problems at other mills. Pretty much every major employer has given up on that town.

What has to be remembered is Mackenzie is a "young" town basically built in the 1960's. A transient workforce was brought in, no real connections to the area. They were there for one reason. Money. No community pride, no company pride, just the all mighty buck and this mentality has been passed down.

I can tell one simple story which most will call BS but I know its the goods honest truth, have spoken to people myself. At the old Abitibi Pulp Mill there was a running competition for a group of employees who could go the longest without actually doing any work. The gentleman leading the pack measured his time in YEARS, not hours or days, but years. Behind the millrights room built a lounge, complete with TV's, computers, fridge, couch's, lazyboys and beds. I have seen this room. No $hit. They would clock in, head to the millrights room, hang a right, up a set of stairs and around a back corner. Gone for the day.

I might not believe your story if I hadn't worked in a pulp mill for a couple summers in university. There was a TV hidden in a cabinet in the control room and rumour had it one of our cross shifts had hidden a satellite dish on the building and kept the receiver in their locker.

From what I have seen of Mackenzie it has largely turned over and not been a very generational town so it should still be attracting new blood hungry for money but I also haven't been there for many years.

 

[S.W.A.T.]

Well, that mill has had many owners, 4 if I am correct, and everyone has ended up losing money and selling out despite probably the best and most available wood supply historically in the province. The common denominator? The employee's and the union. The town is now into its 2nd and 3rd generation of mill employees and the inbred lack of production is legandary. Canfor has given up, they are on their 2rd long term shut down at that facility since buying it and the only way they will reopen is with new staff and that means a new union and that means union busting and that means allot of problems at other mills. Pretty much every major employer has given up on that town.

What has to be remembered is Mackenzie is a "young" town basically built in the 1960's. A transient workforce was brought in, no real connections to the area. They were there for one reason. Money. No community pride, no company pride, just the all mighty buck and this mentality has been passed down.

I can tell one simple story which most will call BS but I know its the goods honest truth, have spoken to people myself. At the old Abitibi Pulp Mill there was a running competition for a group of employees who could go the longest without actually doing any work. The gentleman leading the pack measured his time in YEARS, not hours or days, but years. Behind the millrights room built a lounge, complete with TV's, computers, fridge, couch's, lazyboys and beds. I have seen this room. No $hit. They would clock in, head to the millrights room, hang a right, up a set of stairs and around a back corner. Gone for the day.

When i graduated a mill job was sought after now they can't find anyone to work. Personally its not for me but in order to sway good workers they need to pay more. I also agree that if the unions got pushed out you would see higher wages and more competitive employees. No one moves to Makenzie because there is nothing there, work, shopping, etc. Houses are cheap yes but its a long drive to anywhere and no serviceable airport. Has big potential but that town has always seemed to lack something

 

[Cableguy]

ya it needed a peeler joint
but now those establishments are mia in bigger towns too

 

[Bury Me With My Toys]

Well, that mill has had many owners, 4 if I am correct, and everyone has ended up losing money and selling out despite probably the best and most available wood supply historically in the province. The common denominator? The employee's and the union. The town is now into its 2nd and 3rd generation of mill employees and the inbred lack of production is legandary. Canfor has given up, they are on their 2rd long term shut down at that facility since buying it and the only way they will reopen is with new staff and that means a new union and that means union busting and that means allot of problems at other mills. Pretty much every major employer has given up on that town.

What has to be remembered is Mackenzie is a "young" town basically built in the 1960's. A transient workforce was brought in, no real connections to the area. They were there for one reason. Money. No community pride, no company pride, just the all mighty buck and this mentality has been passed down.

I can tell one simple story which most will call BS but I know its the goods honest truth, have spoken to people myself. At the old Abitibi Pulp Mill there was a running competition for a group of employees who could go the longest without actually doing any work. The gentleman leading the pack measured his time in YEARS, not hours or days, but years. Behind the millrights room built a lounge, complete with TV's, computers, fridge, couch's, lazyboys and beds. I have seen this room. No $hit. They would clock in, head to the millrights room, hang a right, up a set of stairs and around a back corner. Gone for the day.

I don't doubt your story at all. Most employees at Isle Pierre, and other mills, do little, or nothing at all. Roy, a former Isle Pierre employee, was on maintenance at the mill, all he did was drink coffee, and tell lies. That guy has no clue how to tell the truth, or do any work. They kept him on there for 20 years, till it closed. In those 20 years, I would guess that he hasn't done a combined total of 2 days actual work. But if you ever need something screwed up, or incorrect information on something, he is the best guy to call. Claims to be an expert on everything, knows absolutely nothing! In a real work place, he would have been fired before lunch on day one.

 

[Bnorth]

When i graduated a mill job was sought after now they can't find anyone to work. Personally its not for me but in order to sway good workers they need to pay more. I also agree that if the unions got pushed out you would see higher wages and more competitive employees. No one moves to Makenzie because there is nothing there, work, shopping, etc. Houses are cheap yes but its a long drive to anywhere and no serviceable airport. Has big potential but that town has always seemed to lack something

I know a number of people that have lived in Mackenzie and it is more of a starting point. They get their foot in the door in the industry and then use that experience to get a job somewhere more desirable. There is no denying that it is an outdoor paradise though, nearly unrivaled access to nature for hunting, fishing, sledding, skiing etc. Other than that I hope you like subway and 7/11 take out. And the weather is terrible, crazy long winters and very short summers.
I'm not sure there is much more room to up the pay in the Industry, the margins are razor sharp other than in the brief times that the prices go on a boom. In the past 15 yrs the forest industry lost a lot of workers to the O&G industry in AB but the corner on that has turned with the prolonged downturn and increased automation. It used to be you got a mill job and held on to it but now we are seeing lots of young people come work for a couple years and then take off to travel to or go to post secondary education.

 

[Stompin Tom]

I know a number of people that have lived in Mackenzie and it is more of a starting point. They get their foot in the door in the industry and then use that experience to get a job somewhere more desirable. There is no denying that it is an outdoor paradise though, nearly unrivaled access to nature for hunting, fishing, sledding, skiing etc. Other than that I hope you like subway and 7/11 take out. And the weather is terrible, crazy long winters and very short summers.
I'm not sure there is much more room to up the pay in the Industry, the margins are razor sharp other than in the brief times that the prices go on a boom. In the past 15 yrs the forest industry lost a lot of workers to the O&G industry in AB but the corner on that has turned with the prolonged downturn and increased automation. It used to be you got a mill job and held on to it but now we are seeing lots of young people come work for a couple years and then take off to travel to or go to post secondary education.

Most of the "generational" workers in the Mackenzie region are of the ethic variety. Im trying to be politically correct.

 

[Stompin Tom]

When i graduated a mill job was sought after now they can't find anyone to work. Personally its not for me but in order to sway good workers they need to pay more. I also agree that if the unions got pushed out you would see higher wages and more competitive employees. No one moves to Makenzie because there is nothing there, work, shopping, etc. Houses are cheap yes but its a long drive to anywhere and no serviceable airport. Has big potential but that town has always seemed to lack something

Mackenzie has allot to offer, if you dont want much. Vast outdoor recreation, then long drives to anything else. Outdoor recreation sounds great, until its the only thing you have to keep yourself occupied. After that its pretty much drinking and getting stoned.

 

[S.W.A.T.]

Mackenzie has allot to offer, if you dont want much. Vast outdoor recreation, then long drives to anything else. Outdoor recreation sounds great, until its the only thing you have to keep yourself occupied. After that its pretty much drinking and getting stoned.

Mackenzie is pretty much the new Granisle.

 

[gunner3006]

You may see a comeback of the small ma and pa mills. If your running low overhead there is still money in that industry. Can you get rich? Mmm those days may be gone. Nothing like the smell of fresh cut lumber tho. I grew up slinging lumber. Unfortunately times have changed. Northern Ontario is full of towns like granisle. The government keeps them going now tho.

 

[S.W.A.T.]

Hampton is building new mills that only take 4 to 6 people to run per shift, automation is where mills are going to make money. 20 people aren't needed to cut a 2x4 anymore so even if mills start up again the work force isn't needed. Mackenzie is a dead dog, no steady employment not major draw of attraction and no services. Its sad to see once vibrant communities end up like that because there is potential there but it has more factors against it then for it.

 

[gunner3006]

Remember when you used to be able to roll into the small mill yards and buy a lift of lumber. Quality lumber. They also had lower grade lumber for building sheds and out buildings.

 

[tejay]

No wonder lumber and ply are overpriced , it’s all being used up in the states for boarding up businesses in advance of the free and democratic US election. This will be followed immediately by “ mostly peaceful protests “ What a screwed up world we are in these days .https://www.ctvnews.ca/world/americ...RMFhruKd4ojm9SrU4ljBHl_7yqrz-mdOTSUYTOtXoAG6M

 

[S.W.A.T.]

Guessing with current mill shortages prices will continue to rise again