Business Columns & Blogs

Log export saga is still a sad song

On radio, it’s as though the 1980s never packed up and left. Instead the music that was once contemporary has been repackaged as “oldies” or “classics.”

It’s the ’80s all over again on another chart, that of contentious Northwest issues. An old favorite is getting a lot of airplay lately.

Log exports.

Many of the players in the band may have changed, but the underlying rhythm and melody are remarkably similar to what we heard more than two decades ago – not to mention how difficult it is to make sense of the lyrics.

That this golden oldie is experiencing a revival might have been a surprise to listeners six or seven years ago, when the West Coast log-export market had dwindled to the point that stories were being written about the last timber- bearing ship leaving Coos Bay, Ore.

Back then, the refrain was, Asian buyers had other sources of raw logs, and what was being cut in the Northwest found a ready market in U.S. new-home construction.

But the song’s current popularity might not be so stunning to those who heard it the first time round, when it was paired with another familiar ditty – “The Saga of the Spotted Owl,” one which is still a regional favorite.

In the late 1980s, the argument was that restrictions on cutting federal timber forced domestic independent mills to buy logs from other sources. Many of those logs, however, were going to foreign markets, prompting some to advocate restrictions or outright bans on exports.

At the time Japan was the favored destination for those logs. Today it’s China, and to some it’s a blessing that anyone wants to buy American logs. U.S. housing construction once ran as high as 2 million starts (in 2005, counting both single and multi-family). Last year they were less than 588,000, and that was an improvement from the year before.

The Chinese want U.S. logs for their own housing construction, to turn into export goods such as furniture and because Russia, which has been a supply source, threatens to hike its log export tariff.

That’s good news for loggers and truckers who might otherwise be unemployed due to the slump in domestic demand, and it’s good news for ports such as Tacoma that are seeing a business they once figured was gone for good make up for revenues lost in the container-traffic slump.

But the resurgence of log export volumes is also prompting a resurgence of complaints about a shortage of logs for domestic mills.

Portland-based Hampton Affiliates recently announced plans to lay off 80 workers at its Randle mill and curtail operating hours in October. “With so many logs from private lands being exported and with the Gifford Pinchot National Forest effectively locked up, there are very few options for additional log volumes in the Cowlitz area,” said Chief Executive Steve Zika. “The combination of surging Chinese log exports and a continued depression in the U.S. housing market (has) made operating a sawmill in the Pacific Northwest a difficult proposition.”

Right away you see the kinds of questions that make exports such a contentious issue. A sampler: How can there be a log shortage when housing construction is less than a third of its peak? Should log exports be restricted to assure supply for domestic mills even if it penalizes timber owners? Should the Chinese be forced to buy more lumber and processed goods instead of raw materials? Would they? And is that the responsibility of government or the industry?

The ’80s version of the log- export issue didn’t have a neat ending; the latest rendition could also fade out. But if there’s a sudden rebound in housing construction causing more demand for lumber prompting mills to go looking for more logs, the volume could get cranked up to eardrum-straining levels.

Bill Virgin is editor and publisher of Washington Manufacturing Alert and Pacific Northwest Rail News. He can be reached at