An Analysis Of Plywood Demand

Excerpts from a talk delivered Association dnnudl me€ting at

6elore the Southern California Retail Lumber

Los Angeles, April 22,6y Charles E. Devlin, mdndging director, Douglos Flr Plywood Association, Tacoma, \Uosh.

The Douglas fir plyrvood industry and the trade association for it have been distressed about the continuing shortages of plywood because we know that you in the retail lumber business-the key outlets in our distribution-have had so little plywood for so many years. And, I fear, that as long as the present level of demand continues, you-who have historically done the. selling job for our industrywill be short of the amount of fir plyrvood that you ought to hive.

Thus rt"'ith these few markets alone, 40 per cent of thc industry's production is spoken for already. Roughly 40 per cent more lvould be required to take care of the minimum requirements of industrial buyers if the nation's economy continues at the present rate.

Then to get the nation's jobbers and lumber dealers in a position where they can handle plyrvood sales efificientl1' again about 400,000,000 square feet ought to be produced just for stock purposes. That should be set up as a reserve in the bank over and above what may be sold tl-ris vear bv these merchants..

There's no use adding it up. It just won't come out and it's easy to see there will be lots of boat builders, contractors, farmers, and dozens of other long-overdue customers that are going to be disappointed again this year.

All of this reasoning may be, of course, a lot of economic rvooi-gathering. For everyone knows that demand is always related to price.

Charles E. Devlin

something, but it seems to be

Why can't we do something about it right norv? Actuallv, we are doing too little and perhaps too late.

Production is currently running at the rate of 30 million square feet of Douglas fir plyrvood a rveek. Total output of the fir plywood factories should top 1,600,0@,000 feet this year. This amour-rt r.vill be greater than any other vear except 1942 *'hen the industry turned out 1,800,000,000 square feet to meet war needs an<l nearlv knocked itself out doing so.

Squeezing out all the water which may be in the order files of the plyrvood manufacturers, the industrial buyers, the jobbers and the dealers, we still find more buyers for the plywood than there is plywood to sell.

For instance, here are a few demands that we can measure fairly accurately:

Rough boxes to bring back the caskets of our overseas dead-24,000,000 square feet.

Railroad car building program and other essential railroad uses, important to the entire economy-l00,000,000 square feet.

Panels for stock door production, a critical housing item fl6qr, 1'ou ask, does all this happen ? Where do these opportunists find the plywood that they offer? Well, it's not too difficult to answer. In doing so rve find, fortunately, that while the problem is serious, it is not as importaht in volume as rumor would have us suspect.

-80,000,000 square feet.

Panels for the emergency housing program, including not only prefabricated houses, trailer coaches and milllvork manufacturers directly involved, but other types of largescale housing as well-about 400,000,000 square feet.

Current export shipments, running at a level far below last year and below the historic 5 per cent of prewar days-50,000,000 square feet.

Plywood prices at the mill level are probably not too high, particularly in relation to cost increases. I don't anticipate that the prices that the manufacturers charge will move much lorver than they no1'v are, certainly. they lvill never go back to prewar levels no matter lvhat happens. The tvuo preponderant items in the plyrvood manufacturers' costs are labor and logs, and the inflexibility of both precludes any substantial reduction of priced at the mill level.

But I'm here to say now that the prices being charged by the opportunists and the curbstone brokers are definitely out of line. The spread between the manufacturers' prices and the prices the ultimate consumers have had to pay, in many cases, has been nothing short of scandalous.

By the term opportunistic middlemen I am, of course, not referring to the established wholesale distributors and jobbers nor to established lumber dealers who typically maintain their historic prewar percentage mark-ups and have resisted taking advantage of the situation with commendable restraint. I am referring to the hundreds of curbstone brokers that have suddenly turned up with plywood for sale to the highest bidder. I guess you'd call that free enterprise operating in its most virulent form.

The manufacturers to a man greatly deplore the fact that somehou' these leeches have attached themselves to the industry and are sucking every last drop of profit frorn the product. For the producers know that in so doing the industry itself is not only being given a very black name, but the very future of the product is jeopardized by the sharp practices and the high prices being asked for the product at the consumer level.

The number one source of irritation has been the excessive amount of plywood allocated by CPA under the housing program. Many builders to whom the industry was directed by government to sell about 25 per cent of the production during the past year often were not able to use all the plywood in their houses, and sold it instead in their local markets. This particular situation we hope now is rapidly being cleaned up.

That does not mean that plywood will no longer be furnished to the house prefabricating industry for the producers will continue to handle the requirements oI those prefabri,cators who are actually producing houses.

The order of the federal government directing our industry to produce 5O per cent for certified orders expired on March 31. Orders which had been accepted prior to that date will be shipped in April. Once this has been cleaned up the plywood industry will be free of controls for the first time since 1941. From this we can expect that many of the irritations that have existed for years will be eliminated.

The second condition that has permitted plyv'ood to find its way to the "grey market" arose in the necessity for some of the manufacturers to trade plywood for logs needed to keep the plants running. Plywood so traded often found its way to the highest bidder by passing through several hands, each adding to the price.

None of the manufacturers like to trade and none would trade if they w€re not forced by lack of logs to 'do so. Trading is decreasing in volume, and in another 60 days I predict it will no longer be a problem. The good logging'season is now here and most of the mills will be producing their own logs. Futhermore, as the prices being paid at the consumer level drop from the fantastic heights (as they give every indication of doing) you'll find the opportunist middlemen running for ,cover and losing their interest in plywood.

The third and final cause of the "grey market" in ply. wood has been due to the sale in primary markets near the plyr,r'ood mills ih excess of the capacity of the market to absorb. (Historically, Oregon and Washington have been the top consumers of plywood.) Thus curbstone brokers com€ in, buy up the excess at retail, make up pool cars and send out lists all over the country offering the product for sale at retail prices plus brokerage, plus freight and whatnot.

In total volume, this leakage is small, and this, too, is being corrected. Sales in the primary markets are being made strictly for local consumption and manufacturers now require assurance from the buyers that such rvill be the case.

That's about the picture as I see it today.

Production is running at 30,000,000 square feet a week and should top 1,600,00O,0N f.or 1947.

Three new plants should come into production by fall adding B or 9 per cent to overall capacity.

Prices at the mill level should level off, but can't be expected to drop much with logs and labor costs as they are.

Prices at the consumer level, particularly the volume going outside established channels, will decline to a point where they are in balance with normal percentage markups followed by established jobbers and dealers.

There will be less trading of plywood for logs beginning immediately, and by June the volume should be unimportant. This will mean some more plywood for established distribution channels.

There will be less plywood going to the prefab industry than was the case last year, unless prefabricated housing booms more than it appears to be doing today. This also will mean some more plywood for established distribution channels.

The mills will exercise more care in the sale of plywood at retail in the primary markets. This also should mean a little more plywood for established distribution channels outside the primary markets, including California of course.

Adding this together I believe that an increase of about 20 per cent in the volume of fir plywood going through jobbers and dealers can be expected this year. That still won't be enough i{ demand continues strong in all markets as it gives every indication of doing even at present price levels.

But the supply situation will be better, and I'm glad that I can bring you that bit of optimism.

Overhauling West Point Mill

The plant of the Associated Lumber & Box Company, at West Point, Calaveras County, California, is undergoing a general overhauling at the present time, and when ready to start will be almost a new mill, according to report.

"A Complete Line of Forest Productstt

Lumber Company

Vholesale Distribution Yard

White Pine Sugar Pine

Douglas Fir White Fir

Ptywood Redwood Hardwood s folcphone: JEf,cnon 7201

2301 Eorr Nodrqu Avrnuo

P. O. 8ox 266 Huntington ?orlr, Cclifornio

Fern Trucking Company

Ofrers Comblned Service Of:

Trucking Ccrr Unlocding

Pool Car Distribution

Sorting

Sticking lor Air Drying

Storing ol Any Qucrntity ol Forest Products

Ten Heavy Duty Trucks qnd Trcrilers

Fourteen 3-Axle All Purpose Army Lumber Truclcs

Seven 16,000 lb. Lilt Trucks

Twenty-Seven Acres Pcved Lcnd ct Two Locctions

Served by L A. Junciion Bcilrocrd

Shed Spcce lor Two Million Bocrd Feet

Spur Trcrck to Accommodcte Thirty Rcrilroad Ccrs

Bcrcked by Twenty-two yecrs oI Experience in Htrndling Lumber crnd Forest Products

This Comprny Is Owned cnd Opercrted by FERN-cmdo I. Negri

4550 Mcrywood Ave., Los Angeles ll

JEfferson 7261

Oakland Plant Name Changed

Oakland, Calif., May l-Announcement has been made that the large lumber remanufacturing plant and wholesaleretail yard, heretofore operated as a division, and under the name of The Pacific Tank & Pipe Company, will now be operated under the name of the Eastshore Lumber & Mill Company.

The Pacific Tank & Pipe Compa^y, a pioneer California firm, founded in 1888, will continue to manufacture and distribute under their old name all wooden tanks, pipe, crossarms, and other special manufactured products, other than building materials.

The Eastshore Lumber & i\fill Company will continue the remanufacturing and distribution of construction lumber, siding, flooring, rustic, trim, and other manufactured lumber items associated with building construction. All western softwoods are handled, but they specialize in redwood rustic and sidings. Rough lumber is received princi pally from Oregon and California mills by truck and rail, and after being sorted and graded over the green chain, it is either stuck for drying or conveyed to the mill where it is manufactured into the firm's many products. A fleet of carriers and lumber stackers perform practically allof the firm's handling and delivery operations.

The change in name does not affect the ownership or management of the firm, headed by Herbert A. Tildesley, an East Bay lumberman'of many years experience. Roy T. Edwards, rvho has been associated with the sawmill and lumber industry for 35 years, is the general plant superintendent. The large plant, which has a floor area of 35,000 square feet, is located near the foot of High Street at 4821 Tidewater Avenue, Oakland 1. California.

Terrible Twenty C'oU Tournctment

Hervey Bowles and Vic Jones tied for the first prize at the 251st Terrible Twenty golf tournament at the Bel Air Country Club, West Los Angeles, Thursday afternoon, April 17. The tie will be played off at the May tournament.

Vic Jones won the tie carried over from the March tournament in the play off with Dee Essley. Eddie Klassen sponsored the tournament.

Bob Osgood will play Clarence Bohnhoff in the finals of the first flight at the May tournament, and Joe Tardy will play George Morrison in the second flight finals. The May tournament, which is the annual meeting, will be held at the Los Angeles Country Club

Direct Mill Shippers of Douglas Fir - Redwood - Incense Cedar Sugar and Ponderosa Pine

Rough or Surfaced 8611 So. Alameda St., Los.Angeles 2, Calif. LUcas 7169

T. M. Cobb Co. Increases Production Of R. O. \(/. Frame and Window Units

T. M. Cobb Company of Los Angeles and San Diego, distributors of R.O.W. "Spring Cushion" Frame and Wood Window Units, have increased their production of assembly to meet the growing demand in Southern California.

R.O.W. Units are a new principle in window construction. No weights, cords, pulleys or balances. The steel spring holds the non-corrosive metal faced sash guides in firm contact with the sash, permitting the rvindor.v to be raised or lowered easily.

Each sash can be easily removed for cleaning or painting without the removal of any part of the frame. Complete weather stripping assures minimum loss of heat and prevents outside air infiltration.

The Units when delivered to the dealer are complete with flashing and sill pans, ready to place in opening, and comply with approved building standards.

A real package item for the retail lumber dealer.

IJoyd Thorpe Appointed Field Representctive ol WFIA.

Lloyd Thorpe, who has been actively identified with the wood-using industries of the West for the past 20 years, has been appointed the first repres-entative of Western Forest fndustries Association. He began his duties in April, one of his first assignments being to handle details of the first small sawmill conference in Washington which rvas staged so successfully in Centralia on April 19. The announcement was made by R. T. Titus, secretary of WFIA. Either as a direct employee or in cooperative capacitv, Mr. Thorpe has been closely identified with the West Coast Lumbermen's Association, Western Retail Lumbermen's Association, Red Cedar Shingle Bureau, Douglas Fir Plywood Association, American Forest Products Industries Inc., and other organizations concerned with forest problems and products.

MFMA Moves Oflices

At their annual meeting, recently held in Chicago, the members of the Maple Flooring Manufacturers Association voted to move their headquarters and offices from Chicago to Oshkosh, Wisconsin.

Kiln Drying Course Scheduled

Berkeley, Californid, Mag 1-A two-week course of instuction in kiln drying of lumber will be given at San Francisco, California, starting Monday, July 21, 1947, the Forest Utilization Service of the U. S. Forest Service announced here today. The course is designed to assist industry to dry lumber better and faster, as a means of improving wood utilization practices and of alleviating the critical shortage of dry lumber.

The Forest Utilization Service, a branch of the California Forest and Range Experiment Station, 329 Giannini Hall, University of California, Berkeley 4, is promoting the course in kiln drying as a part of its program of encouraging better practices in the wood-using industries.

Introduction during the course, which will be limited to 30 enrollees, will be given by experts in wood technology and kiln drying from the Forest Service's Forest Products Laboratory. The Laboratory, maintained at Madison, Wisconsin, since 1910, for many years has included in its broad research program a thorough-going study'of the problems of wood seasoning. During the past year the Laboratory conducted seven kiln-drying courses with an enrollment of 186.

The subject matter of the course in San Francisco will include wood-moisture relationships, shrinkage of wood, drying stresses in wood, drying schedules, and other basic principles of seasoning wood. Types of dry kilns, kiln equipment, testing of kilns, and analysis of problems arising in their operation'will also be covered.

A fee of $150 per person will be charged to cover the costs of the course, and in addition to this fee, students must meet their own living and travel expenses.

Further information on the course may be obtained from the California Forest and Range Experiment Station or the Forest Products Laboratory, Madison 5, Wisconsin.

Union Lumber Co. Estqblishes Wholescle Division

Union Lumber Company, San Francisco, has established a wholesale division, and will now wholesale Douglas Fir in all their distributing centers.

Bovard Shibley has been transferred from San Francisco to the Kansas City office, where he will replace R. C. (Bob) Dixon. The latter will come to San Francisco about July 1, and with E. G. (Dave) Davis will head up the wholesale division.

Fred V. Holmes, Co., San Francisco, Southern California and 22.

Hank Aldrich, H. egon, spent a week and other Northern