Hot lumber markets contrast with continued pulpwood slide
Markets suffer as soft pulp demand has affected businesses and landowners
MADISON, Wis. -- As the home construction boom continues across the U.S., the dichotomy in Wisconsin’s timber industry splits further, raising concerns for the future.
Wisconsin lumber mills are running at full capacity, but the market for wood pulp continues to slide.
At Pukall Lumber, a retail lumberyard and sawmill in Arbor Vitae, production is “the busiest we’ve been,” said president Rick Wilson. Demand remains high for lumber used for home construction and for smaller, lower-grade lumber used for pallets or window frames. Pukall’s 110 employees are on mandatory overtime on Fridays for the first time at the 84-year-old, family-owned business, Wilson said.
“I get calls from brokers (in other regions) on a daily basis, asking if we have excess capacity. My answer is: ‘No.’” Wilson said Pukall plans to expand its sawmill capacity by about 40% next year. He expects retail demand will stay strong – “unless the economy is somehow disrupted.”
Louisiana-Pacific Corp.’s three Wisconsin mills – in Hayward, Green Bay and Tomahawk – have been “running at full capacity since last summer,” said Breeanna Straessle, corporate communications director, at LP headquarters in Nashville. The three facilities, with a total of 440 workers, make products for LP® SmartSide® Trim & Siding, whose sales grew 15% in 2020.
Family-owned Krueger Lumber Co., in Valders, is grappling with both sides of the industry’s trends. Demand for its hardwood lumber, which is used for furniture, cabinets and flooring, has improved in the past year and prices have jumped “like I’ve never seen them go up before,” treasurer Larry Krueger said. It’s been a return to more normal levels, though, after the market plummeted and prices fell to “unsustainable levels” over the previous two-and-a-half years because of a 25% tariff imposed by China, Krueger said. Sawmill shifts had been cut to four days a week; now, Krueger’s 36 employees are back to five-day work weeks and the mill has more orders than it can fill.
But pulp wood prices continue to drop, Krueger said, largely because of the 2020 closing of the Verso mill in Wisconsin Rapids, which used about 1.5 million tons of wood each year.
Logger Dennis Schoeneck, owner of Enterprise Forest Products, said with orders way down, he has heard as much as 15,000 cords of pulp wood – about 30,000 tons – is stuck on site or in piles “with nowhere to go.” If the problem continues, the rest of the lumber industry will suffer. “We can’t cut our hardwood stands if we can’t cut the pulp out of there,” Schoeneck.
Schoeneck is president of the Timber Professionals Cooperative, formed in 2020 to represent loggers and truckers in Wisconsin and Michigan with plans to create a bigger, multi-stakeholder cooperative that would try to buy the Verso mill. The multi-stakeholder cooperative, Consolidated Co-op, is now in place and includes other businesses related to forest products, as well as landowners.
Consolidated Co-op has filed articles of incorporation with the state and a letter of intent to buy the shuttered mill. Schoeneck said there are still many hurdles to cross, but he hopes the cooperative will make its pitch to purchase the huge mill later this year.
Judy Newman was a full-time business reporter for the Wisconsin State Journal for 22 years and before that, a radio news reporter, anchor and news director, primarily in Madison. Newman is a graduate of Northwestern University's Medill School of Journalism.