Posts Tagged → production
Red oak and rain: Taking a strong economy for now while America fights for an even better future
Our present tariff battle with communist China has some personal pain associated with it, but I and everyone in business I deal with say we are ready and willing to put up with it for the long term betterment of America.
“I am just sitting here watching the rain come down,” says ‘D’, a young forester I have worked with for almost twenty years.
A super hard worker, risk taker, and fourth generation forester\logger (he is the first in his family to have a college degree, and in fact he has a Masters in Forestry), ‘D’ has a young family to feed and a great deal of investment in time, equipment, and standing timber that he cannot do anything with, or earn money with, so long as it rains.
With incessant rain like we had throughout 2018 and now well into 2019, most forestry operations stop. Marking timber on steep mountain sides, building roads into timber, cutting, skidding, and hauling timber just is not safe or environmentally possible in rain. Then, as a result, the sawmills slow down. They cannot get the trees they need to make the hardwood lumber products so much of America and the world require for flooring, cabinetry, moulding, doors, tables, furniture, etc.
But the rain is only part of the pressure on the timber industry.
Almost half of Pennsylvania’s hardwood timber economy is comprised of the red oak tree, which grows a beautiful wood used around the world. Until the tariff spat began last year, China was the primary destination for almost all of Pennsylvania’s red oak. China took our exported red oak logs and manufactured all kinds of wood products that they then sold back to American companies. When the tariffs started to bite in 2018, demand for red oak logs began to slow, because Chinese companies could not afford to compete on that new level playing field. Their own tariffs on manufactured American goods had protected them from competition, and so with tariffs on their products, their own manufacturing slowed down, and their decreased need for raw materials followed. A year later, the demand for red oak lumber has nearly died. Spectacular high quality red oak trees, that six months ago were highly sought after in a fiercely competitive free market, are now being turned into railroad ties and pallet wood (some wood workers specialize in making beautiful furniture from homely oak pallets; well, guys, get ready for a whole lot of very nice red oak pallets to become available).
Standing red oak trees have lost over half their value since this time last year, and as a result, roughly a third of Pennsylvania’s powerful hardwood lumber industry is at a stand-still, with landowners, foresters, loggers, and sawmills trying to figure out how to make up that lost productive time, and lost revenue, and to find another tree species to take the place of the red oak.
Back to the rain… the forest products industry can weather this storm, as well as the tariff tiff with China.
“It’s for the best, for a better America, a better economic future for all of us” says Mike, a heavy equipment operator from Renovo, Pennsylvania, to me this morning, as he finally found time to discuss a timber project we have together, and the China tariff effects on it.
Mike, too, is stalled out temporarily by the non-stop rains, and he is also bitten by the temporarily slow red oak market.
“It hurts, but we needed to do these tariffs,” says Mike.
“It’s sacrifice and pain now, so that America will have an even better economy in the future,” says ‘D’.
I feel the same way. Pain and sacrifice, risk taking and hard work, all for a better future for us and our children. We will all be creative and find ways to make a living; after all, overall the economy is very strong.
Carry on, Mister President. We understand what you are doing and why you are doing it. The tariffs hurt, but we support you. It is about damned time that someone in Washington, DC, gave a crap about our country and we people who labor out of sight in flyover country.
Logger “Pete” takes a breakfast break on his log landing. A tough, super hard working little Irishman from central Pennsylvania, it’s Americans like Pete who keep our economy going from the ground up