Heavy machinery carries hardwood logs to be debarked and cut into boards of varying lengths at AJD Forest Products. (Photo: Todd VanSickle)
Timberrrrr! You’ve probably seen the high demand for lumber and its skyrocketing prices of late. Or maybe, like folks driving along M-72 between Williamsburg and Kalkaska in the last year, you noticed a large swath of forest has vanished. With mega South American company Arauco’s opening of a giant plant in Grayling in 2018, and Michigan Lumber and Wood Fiber Inc. of Comins, Michigan constructing a state-of-the-art sawmill on Georgia Pacific’s old campus near Gaylord this year, and local lumber retailers pricing their supply higher and higher we had to wonder: Is there a timber boom on? And if so, can Northern Michigan handle it? Northern Express looks into the state of the state’s forest industry — home to more than 1/3 of manufacturing jobs in the U.P. and, at last count, driving $891 million into to the state’s economy from U.P. and northern Lower Michigan alone. By Todd VanSickle AJD Forest Products, located just south of Grayling, vibrates with activity from 6am to 3:30pm five days a week. Outside the mill, the buzzing saws and the rumbling of heavy machinery carrying large logs to be debarked resonate throughout the body while the smell of freshly cut wood hangs in the air. Inside the facility, a host of workers sort through rough-cut hardwood boards of varying lengths zipping along conveyor belts high and low. At the end of the line, the boards are bundled, stacked, and loaded onto tractor-trailers and shipped out to customers or kilns to be dried. The facility is busy, but in one corner of the building, a machine that was installed during the height of the pandemic sits idle. “We don’t have enough workers,” AJD General Manager Tim Neff said. “If we had the workers here, this machine would be running.” As pandemic restrictions ease and businesses re-open, lumber orders are returning to normal, but prices are skyrocketing, especially for soft lumber like pine. In 2019, a 2-by-4 stud commonly used in building was priced around $5 a board. Now, the price is twice as much — and it continues to increase. Lumber prices are up 67 percent since January and up 340 percent from a year ago, according to Random Lengths, a
wood-products-industry tracking firm. It is estimated that the price increase has added more than $35,000 to the price of an average new single-family home and almost $13,000 to the market value of an average new multifamily home, according to the National Association of Home Builders. Perhaps not surprisingly, the rising lumber prices have made such an impact, cut wood has achieved a near Kardashianlevel fame as Internet-meme fodder. Images of small bags of sawdust selling for $1.2 million aside, the actual but still exorbitant prices for lumber are no laughing matter for homebuilders. John Packard, who was shopping at Home Depot in Traverse City in April, told Northern Express he’d had plans to build a small home on a piece of property in Kalkaska, but lumber prices impelled him to postpone. “It is going to cost me more, like $20,000 more, just in lumber,” he said. “I think I’ll wait until things return to normal.” MANY TREES, TOO FEW LABORERS Will prices return to normal, however? That depends on who you’re asking, and where they place the blame. Some experts point to low interest rates and a booming housing market for the rising prices. Neff says the lumber industry sees a different culprit: a broken supply chain and sheer lack of workers.
10 • may 24, 2021 • Northern Express Weekly
“That supply chain, if it’s empty, takes a long time to fill it up, and that’s where we’re at now,” Neff said. “It was pretty depleted.” During the start of the pandemic, some sawmills and logging operations, especially in the southern United States, were not deemed essential. Meanwhile, more and more people were unemployed or working from home and taking on homeimprovement projects like building decks and other renovations. The demand for lumber went up, but the supply wasn’t being replenished at the same rate. The uncertainty forced retailers to cut back on orders. Orders at AJD — which mainly focuses on hardwood species like red oak — fell by more than 80 percent. “April of last year we were staring at a pretty bleak situation,” Neff said. Before April, however, AJD’s production had been on track for a record-breaking year. “We’d had a great production year in 2019,” Neff said. “And we were running ahead of that production rate for the first three months of 2020. And then, the pandemic hit, and we ended the year, like, 75 percent of what we would expect.” Neff described the situation as something they had to navigate week to week, but said the company forged on and continued to fill orders with whatever inventory they had in the yard. The production manager said the company didn’t have any layoffs but did trim the schedule to 32-hour weeks, with
employees taking one day of unemployment, instead of their normal 45-hour workweeks. “It was better than nothing,” Neff said. The company began rebounding around November and is now almost at full capacity. In fact, employees are now working overtime, and AJD is looking for a handful of new employees. “The additional people would allow us to put more production through the mill by running saws that are idle today,” Neff said. If the facility were able to run at full production, even some of the positions currently filled — such as truck driver — could expand to add more employees in those roles. That’s a big “if,” however. Although ADJ offers competitive wages and benefits, the production manager said he’s finding it hard to find employees. Mainly, because so many other companies are trying to hire, too — not only other sawmills but various businesses, like restaurants and stores. He added that extended unemployment benefits have also hampered their hiring process. AJD employs 50 full-time workers and contracts about six private logging operations that have numerous employees. One of Neff ’s main concerns is having enough people to run the mill. “If we didn’t have orders, the worry would be orders — well, we’ve got orders to be running at full capacity,” Neff said. “But we can’t run at full capacity, because we don’t have enough people.”
