Past Twelve Months in the Wholesale Market

By Walter C. Ball, J. R. Hanify Company, San Francisco

WaEa C. Ball

A review of the Douglas Fir market in California during the last twelve months, as far as net results to the trade in general is concerned, does not vary much from the previous year.

All branches of the industry have maintained volume at the expense of profit. Production at the mills for a period was cut below normal, but during the same time consumption decreased even to a greater degree, thus simply keeping the market from further declines, but did not advance prices.

Competition has forced the supply closer to all consuming domestic markets, thus giving the buyers less need for placing futures and causing every slight firmness shown during the year to hold for short periods only during the Fall and Spring. Coastwise and intercoastal tonnage being greater than required, freights have been soft. Anxiety to keep vessels in operation probably has been the greatest contributing cause of a gradually declining market in California, as well as on the East Coast, with delivered prices generally lower than mill prices plus the going freight.

Mill prices have held to a surprising degree considering the weakness shown at the main consuming California markets taking water delivery. The volume required to load the fleet in operation during the greater part of the year has kept the mill docks fairly well cleaned up. This condition enabled the mills to follow, not lesd the decline in delivered prices. Possibly at no time have the mills been able to hold prices so well, otherwise no telling where the market would be at present.

California probably has used slightly more lumber during the last six months than during the same period of last year. The demand about San Francisco Bay was exceptionally good until the carpenters' strike, called about three months ago, cut the demand about 5O/o. Just holv long the strike conditions will continue to interfere with a largi b_uilding program, which would insure a good demand for F'ir, remains to be seen.

We are delivering to Southern California more than can be readily absorbed, or we would not have a surplus of unsold stock on the docks and prices r,veaker today than for about two years.

Within the last trvo weeks many vessels have been tied' u.p w.hi9!. may take fp the slack of the summer buying, thus holding the market at its present level, and proliabi-y lnaxy more vessels will be forced out of operation account lack of business. Competition forces these vessels back in the trade however when same can be loaded with a hope of selling- their cargoes at a profit, hence can expect thei? lay up to be temporary only.

It would_appear that the only hope for a profitable price for the mills is an increased demand from- off shori and. domesti-c markets, as there is no immediate signs of a lessening of supply through production or transpoitation. Our most experienced operators seem to feel that the above is true, so have started extensive advertising campaigns, hop- i1S to increase per capita consumption. -The ir.n'd of the trmes points to quantity production and intensive sales pressure, so presume our industrlr must follow and we can not look forless production.

Regardless of the facts set forth lumber will be used as long as people exist, and the future will take care of the industry through improvements $'ithin itself, the nature of which time alone will tell. With the gradual evolution we u'ill have-our-good_and bad times, and with the long period. of unprofitable business behind us we can rest assuied that prosperous times are closer every day.

The above is written simply to give an account of the Fir trade_ as viewed by many manufacturers and wholesalers, and does not pretend to take into consideration many other angles of the trade or to fortell what the immediate future will bring forth.