With Environmentalists and the Lumber Industry at Loggerheads, Companies Shift Focus Overseas as the . . . : Timber War Branches Out

Even as President Clinton enters the Pacific Northwest timber battle today, U.S. wood-products companies are hunting overseas for their next two-by-fours.

Clinton will open a one-day conference on the dispute between environmentalists and loggers in Portland, Ore., at a time when California, Oregon and Washington--long prime sources of high-grade construction lumber--are becoming only regional players in an increasingly global lumber market.

“The whole game’s changed,” says Jeff Romm, professor of resource policy at the UC Berkeley School of Forestry. And the new world market may cast a pitiless eye on the problems of the Pacific Northwest. “It’s almost like we’re arguing about the past,” Romm says.

U.S. wood producers are now in competition with Chile, New Zealand and the Russian Far East, says Tom Waggener, a professor of forest economics and international trade at the University of Washington.

“These are all major producers of softwood timber,” Waggener says, “and wood is literally floating all around the globe now, seeking the best markets.”

Preservation efforts by environmentalists and a dwindling supply of uncut U.S. forest are slowing domestic production. Yet demand in the United States--and worldwide--is projected to greatly expand.

Current estimates predict a 40% to 60% increase in worldwide wood demand by the year 2010. “It’s just mind- boggling,” says Con Schallau, chief economist at the American Forest and Paper Assn.

U.S. officials are already gearing up for the new imports.

The Agriculture Department’s Animal and Plant Health Inspection Service just issued standards for New Zealand logs and in the next month expects to release proposed regulations covering imports of wood from all foreign nations.

Historically, the mostly self-reliant U.S. industry has imported only Canadian lumber, which has met about 30% of U.S. construction demand. But Canadian companies, faced with their own country’s environmental constraints, are not expected to fill the growing gap in U.S. production.

Besides, say industry experts, any surplus Canadian lumber (the Canadian government bans the export of whole logs) will most likely go to the better-paying Europeans and Japanese.

Meanwhile, the larger U.S. lumber companies have been shifting their investments in new mills to the U.S. South, where the latest generation of softwood forests is ready to cut. But these Southern pines are expected to keep up with demand for only three to five years.

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And so most big U.S. timber companies are looking elsewhere for wood, with a special interest in the former Soviet Union.

The Siberian forests still amount to the planet’s largest and least-touched stands of trees, making up 58% of the world’s softwood timber--compared to the 27% held in all of North America.

Snavely Forest Products Inc., a big lumber wholesaler headquartered in Pittsburgh, already has joint ventures established in Latvia and Russia, and in the last year has begun marketing lumber from a Siberian mill to U.S. and European manufacturers of windows, doors and interior wood trim.

So far, the most marketable exports have been Russian red pine, considered comparable to U.S. ponderosa pine, and the Russian larch, similar to the Northwest’s Douglas fir.

Chairman Chris Snavely says he is very optimistic about the company’s Russian operations, “although it’s not easy; nothing over there is.”

That has also been the experience of Ted Fullmer, president of Fullmer Lumber Co., Inc., a smaller wholesale distributor 20 miles south of Portland, Ore. Fullmer imported the equivalent of two big truckloads from Siberia more than a year ago, some of which still rests in his warehouse.

“It’s beautiful wood,” Fullmer says. He sent samples to the manufacturers he supplies, with good results.

“They tested it and they liked it and said they’d take more,” Fullmer says. “But it’s hard to get a consistent supply and quality out of the Russians--although they have sold a lot of lumber, for over 100 years.”

In the next two decades, other countries, such as Indonesia and Malaysia, which are replacing their old-growth hardwoods with softwood plantations, will be exporting their own lumber worldwide.

And Nicholas Kent, executive vice president of the Illinois-based North American Wholesale Lumber Assn., has lately heard from loggers in Norway and Sweden, curious about how they might set up distribution in the U.S. market.

So far, most non-Canadian imports have been radiata pines, genetically identical to the twisty Monterey pine.

Imports from nations other than Canada have already inched up from 106 million board feet in 1988 to 122 million last year--still a mere sliver compared with total U.S. construction-lumber production in 1990 of 36 billion board feet. But many industry experts believe that imports are poised to increase dramatically.

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In Chile, New Zealand and other areas, radiata plantations are now coming of age. Forest-products innovator Louisiana Pacific recently signed a deal for a million acres of Venezuelan timber, planning to make wood-chip construction board there for export to the United States and other parts of South American.

Snavely of Snavely Forest Products has been successfully importing the radiata pine for the last eight years. He expects one day to see radiata pine arriving from South Africa, Spain and Portugal as well.

Importing wood while U.S. trees are set aside for environmental preservation “just makes me sick,” says Tom Mullin, president of Terry Lumber, the largest lumber retailer in Southern California.

“All over the world people want our Douglas fir. . . . We are a consuming nation and we have to learn how to deal with it.”