Editorial: We’re looking on the bright side in 2019
December was a tough month for our industry. Things were looking grim on many fronts. In a matter of weeks, several large western producers announced mill curtailments in B.C., blaming high log costs and diminishing supply; lumber prices in North America were at yearly lows; and the results of CFI’s Contractor Survey were released, showing mounting concern for the sustainability of Canada’s logging contractors.
Add to that concerns about the so-called “weirding” climate change trend and its negative affects on Canada’s forests (more unpredictable weather, insects, and wildfires) as pointed out by Natural Resources Canada forestry researcher Barry Cooke in a Canadian Press article published in late December, and things were looking downright bleak heading into the end-of-year holidays.
But, as the world turned the page on 2018, the outlook for Canada’s forest industry improved.
In his contributed 2019 lumber market outlook, FEA Canada’s Russ Taylor shares a bit of good news: “… both the Canadian and U.S. divisions of FEA are forecasting a pleasant surprise in lumber pricing in 2019; in fact, the second-highest average annual levels could be seen.” Taylor projects all major markets, including the U.S. and China, to record lumber consumption gains in 2019 and global demand to increase 2.8 per cent from 2018 numbers.
There are, however, some cautionary notes in there. Overall production in Canada could slow owing to U.S. import duties and lower harvest levels, and in B.C. “… it is still expected that three to five sawmills (or equivalent volume) could close by 2025,” Taylor writes.
But other good news surfaced in early January. In Saskatchewan, 13 First Nations formed an alliance to grow the province’s forest industry, which took a hit in 2006 when Weyerhaeuser closed the Prince Albert Pulp Mill. Partnering with First Nations is more important than ever for the industry to thrive in Canada, and this is a great example of them taking the lead. No doubt the alliance’s projects will snowball to create more jobs for First Nations and non-First Nations companies alike.
On the federal level, the Canadian Transportation Agency (CTA) opened an investigation into rail service delays and congestion in B.C.’s lower mainland. A public hearing was set for late January. Better late than never given the impacts of rail service disruptions to lumber producers last year. According to the CTA news release, they will investigate “…whether there is evidence of discriminatory treatment of certain commodities, how freight rail permits and/or embargoes are being used, and whether railway companies operating in the Vancouver area are fulfilling their service obligations.” I expect the investigation will reveal what we already know: there were significant, at times insurmountable, challenges for B.C.’s lumber producers to get their products to market last spring. Hopefully we can expect some changes this year.
One more good news item to share. Over the past month I’ve received a surge of interest from forestry companies, some previously media shy, looking to share their stories with CFI. To me, this reflects a turning point for our industry. The world has changed significantly from just 10 years ago; the news cycle never ends and audiences are constantly hungry. If we don’t tell our stories, someone else will tell them for us, and we can’t control whether or not they tell it right. It seems our industry is starting to emerge from its shell, and embrace its storytelling powers.
Speaking for the whole CFI team, we’re excited to share those stories this year.