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Profile of Forest Industry in the Interior West- Guest Post by Todd Morgan
The sun rises at Pyramid Mountain Lumber the morning of August 30, 2011, in Seeley Lake, Montana. They are one of the largest saw mills in Montana.
Another photo by Josh Birnbaum. You can find more of his photos here, on the Celebrate Forests photoblog.
Guest post by Todd Morgan.
Thank you for contacting me regarding forest industry information. I used the link and went to the blog discussion about “corporate interests.” There seems to be a lot of misconceptions or misunderstanding of the logging and wood products industries in the West. Sure, most mills & logging operations are part of corporations, but most local businesses (bike shops, ice cream stands, coffee shops) are incorporated too. Incorporating is a legal means to separate one’s personal finances from those of one’s business. But there are many different kinds of corporations—limited liability, publicly traded, privately held, etc.
Most of the logging and timber-processing firms (the businesses that use timber from private and public lands) in Montana and the other Interior West states are privately held, not publicly traded, most employ fewer than 100 people, and most have owners, officers, and managers that live in or near the community where the business is located. I don’t think the same can be said of industrial forest landowners (TIMOs & REITs). As the wood products industries have changed over the past 30 years, many companies that owned mills and timber land (vertically integrated) sold off one aspect of their business or the other, becoming either a mill/wood products business or a timberland business. There are very few left that have both, and those that do have both are generally overwhelmingly into one aspect or the other. For example is Plum Creek; they are a REIT with a great deal of timberland all over the country, but their only mills are the few in Montana; Rayonier, Weyerhaeuser, Boise, International Paper—these are similar publicly traded companies. But those are quite different than the local mills Pyramid, Tricon, R-Y, Sun Mountain, etc. that have very little or no land holdings, are not publicly traded, and must compete against the big corporations for timber, labor, and market share.
Most logging in our region is also performed by small, private contractor firms; they are not crews that work for the mills; they are not publicly traded companies; and I suspect most are in debt up to their eyeballs, considering the price of logging equipment, fuel, insurance, and skilled labor. Hopefully they are incorporated, so that if the business fails, they don’t lose their homes to pay business debts.
In terms of forest industry info, my program here produces quite a bit of information about Montana’s industry, Idaho’s, as well as the other western states. You have obviously been to our web site and seen some of the quarterly, annual and periodic information we produce. Attached are some documents that may be of interest to you, and below are some specific links to regional publications.
For quarterly conditions in Montana: http://www.bber.umt.edu/forest/wage.asp
For annual forest industry conditions in Montana and Idaho: http://www.bber.umt.edu/forest/outlook.asp
For periodic reports about the industry in various western states: http://www.bber.umt.edu/forest/regionalreports.asp
For a report we did that highlights industry capacity changes across the West as well as in Montana: http://www.bber.umt.edu/forest/timber.asp
It doesn’t take much research to see that the forest industries in the Interior West are more dependent on Federal timber than elsewhere in the country. It likewise doesn’t take much to realize the firms that comprise the forest industries in the Interior West are not the giant, highly politically influential, publicly traded companies that “occupy Missoula” and “occupy Wall Street” are rallying against and which people feel have too much power. Recognizing these facts would, however, require people to give up some of their pre-conceived notions and perhaps re-evaluate their world view.
Please let me know if you find this useful and what other types of info you could use or would like to see made available. We are constantly striving to improve the timeliness, relevance, and usefulness of the information we report. We also have several more up-to-date reports that are going to press or currently in review. These will be posted to our site ASAP.
Thank you again for contacting me. I look forward to further discussion.
Todd Morgan is the Director of Forest Industry Research at the Bureau of Business and Economic Research at the University of Montana.
Here are five documents he provided.
Baucus_request_2009_BBER
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