SPOKANE — A North Idaho lumber mill will close this summer as timber companies face strains from tight operating margins.
Despite still earning a profit at the mill, Stimson Lumber Company will permanently close its Plummer facility by August.
Mainly supplying Home Depot and Lowes, the mill specializes in making studs from smaller trees that are roughly 4 to 8 inches in diameter, according to Andrew Miller, Stimson Lumber CEO.
But recent market trends have decreased its returns tremendously.
Stimson has leased the property from the Coeur d’Alene Tribe along U.S. Highway 95 since 2007, but Miller anticipates no tenant will ever reopen the mill.
“We all know skilled labor is more and more difficult to attract and retain. So finding 80 or 90 people to start a mill is highly unlikely,” he said. “I won’t say never. But once a sawmill closes, it’s almost never going to reopen.”
At its peak, the mill once employed around 100 workers and produced about 100 million feet of lumber a year, Miller said. Today, those figures have reduced to 22 and 35 million, respectively. Its 22 workers will be offered positions at another one of Stimson’s five locations in Idaho and Oregon.
“Over time, the supply of the size of timber that that mill processes has declined, and so we reduced the production,” Miller said. “We’ve been trying to match the output of the mill to the availability of the log supply. And after the pandemic, there was a significant downshift in supply.”
The lumber industry made good profits during the COVID-19 pandemic, according to Andy Dunham, director of sales for Idaho Forest Group. Builders were busy constructing new homes and renovating old ones, so demand was high.
“It’s economics 101,” Dunham said. “Demand for lumber was high, which pushed prices up. Everyone in the industry made a lot of money.”
Because manufacturers were getting such good returns for their lumber, they produced a lot, he said.
Now that the market has cooled, manufacturers are feeling the repercussions. With an excess of inventory from overproduction, the cost of lumber has plummeted.
“There is too much lumber out there, so prices have come down to historical levels,” he said. “We don’t like it when competition goes away, but margins are shrinking. More closures are probably coming”
But Miller has more worries for Stimson and other manufacturers. Though inventory is high, he does not expect it to remain.
Rising expenses like labor, fuel costs and insurance rates particularly affect the loggers that supply a mill.
“To buy more trees, we’d have to pay to haul them great distances, but freight expense makes them prohibitively expensive,” he said.
After continuously downsizing its staff over the last few years, mirroring the decreased production, Miller held out hope.
He anticipated a rush of timber would become available from the U.S. Forest Service as part of its strategy to minimize wildfire risks to people and property.
This came from an announcement from the Forest Service in January 2022 that outlined plans for prescribed fire and thinning to reduce wildfire fuels, according to a news release from the agency.
“The strategy calls for the Forest Service to treat up to an additional 20 million acres on national forests and grasslands and support treatment of up to an additional 30 million acres of other federal, state, Tribal, private and family lands,” the release read.
But little work has been completed, Miller said.
“It looked like there was going to be a significant effort to thin out these forests, and that kind of timber is very well-suited to the Plummer Mill,” he said. “I think they’re coming around, and that’s going to be a multiyear effort, but the mill needs a more stable supply of logs to run a full-scale mill.”
Miller and Dunham worry that if closures are widespread, the regional industry could falter.
“In the Inland area in particular, there are fewer loggers, fewer truckers. And the cost of employing them goes up because we have to compete more for them,” Miller said. “It just makes the region as a whole less competitive.”
In March, Pyramid Mountain Lumber in Seeley Lake announced its closure after 75 years in operation. And already this year, three Oregon Mills closed in Philomath, Banks and Springfield.
Though the two industry insiders agree that mill closures are bad for manufacturers throughout the region, Miller argues it’s bad for everyone.
“We’ve seen it in western Montana where there used to be a lot of sawmills and pulp and paper mills, and a lot of that was based on the Forest Service being the primary supplier of timber,” Miller said. “But in the ‘90s, they changed their focus. So a lot of operations closed because the timber simply was not there to support it.”
When it becomes too expensive to operate a logging industry in an area, Miller refers to it as “economically stranded,” meaning the forest essentially grows wild, without any management from the private or public sector.
“In a few years, forest will start looking a little crowded but not too bad,” he said. “Twenty years from now, that’s when forests start dying. Then it’s just a lightning strike away from becoming a whirlwind wildfire in a matter of hours.”
