Forest Industry Positioned to Survive Housing Downturn

EUGENE, Ore.--(Business Wire)--
Despite the slowing housing market and subsequent downturn
afflicting lumber mills, forests in the Pacific Northwest remain a
valuable resource with important products that are still in demand, an
expert in the forest industry said Monday.

The lumber industry is down 20 percent from normal production
levels as many mills reduce shifts, take downtime or permanently shut
down, said Gordon Culbertson, Pacific Northwest region manager for
price information provider Forest2Market. But, loaded log trucks are
still moving down the highway - delivering raw materials unique to the
Pacific Northwest.

"Our forests have many unique attributes that cannot be found
anywhere else," Culbertson said. "Even with the negative impacts of
the housing sector, the forest industry remains strong in many areas."

Forest2Market analyzes the prices of logs specific to species,
grade, length and diameter as they are delivered to mills. The
information allows the company to track log and wood values and
identify trends.

One emerging trend is the resurgence of exports to Asian markets
such as Japan and Korea. The dollar has weakened against foreign
currencies, encouraging sales to offshore customers.

Export grade Douglas fir and hemlock logs are specially selected
for high-quality. These logs are cut to special lengths and command a
premium of 20 percent more than domestic logs.

Another positive trend is the plywood market, which is less
reliant on the housing market. Northwest plywood products are
typically used for industrial and commercial building purposes, such
as concrete forms.

Pulp mills are driving demand for small logs and wood chips - a
byproduct of lumber production with a supply crises related to the
housing market. The lack of available chips has produced a big demand
for small, lower quality logs. Pulp mills are using twice as many logs
as they normally would to satisfy production levels.

Larger logs are also in demand for certain specialty products.
Electric utilities across the country have been grabbing up logs that
are up to 120 feet long, paying a significant premium of up to $1,100
per 1,000 board feet - a common price for Douglas fir is $500 per
1,000 board feet.

These exceptionally tall and straight trees are used to make poles
for utility transmission lines. Power companies have been improving
their decaying infrastructures and expanding services to provide for
population growth.

Also, sawmills cutting larger, higher quality Douglas fir logs for
specialty timbers and non-housing related custom items were more
resilient last year.

"These are examples of healthy segments of the Pacific Northwest's
forest industry," Culbertson said. "Lumber mills are struggling, but
the forest industry is positioned to weather the economic downturn
that the country is facing."

Charlotte, N.C.-based Forest2Market has developed sophisticated
analytical tools to accurately report timber prices in the South and
the Pacific Northwest. Its regional office is in Eugene, Ore. For more
information, visit www.forest2market.com.

For Forest2Market
Mike Reed, 704-376-3434
mreed@crown-com.com

Copyright Business Wire 2008