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Comment by PragmaticPulp | Hacker News Reader

There are multiple contributing factors, but the supply-side limitations are very real.

Sawmills slowed down in anticipation of a housing slump that never came, and now they're stuck playing catch-up.

Wildfires destroyed huge swaths of trees and even equipment last year, especially in Oregon. Oregon officials estimate that they lost 4X more harvestable trees last year than the state produces in an average year: https://www.ofic.com/after-the-fires-timber-industry-faces-g...

Even various policy changes from timber harvesting quotas to required sawmill safety retrofits have contributed. If you were a sawmill looking to upgrade, what better time than to do it during a pandemic? Turns out this wasn't such a great time.

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WSJ youtube had a segment the other day on the price increases and shortages but pointed out that this isn't necessarily translating into increased prices paid for trees, and interviewed a couple who own a wood lot in Georgia (for 40 years) who sounded like they were barely getting by:

https://www.youtube.com/watch?v=m_5MkGbXXKc

So yeah, problem is at the mills.

Ah yes, the proverbial "trouble at mill."

Additionally, the wildfires in the Northwest also contributed to glut of timber. The wildfires kill the trees, but usually don’t destroy the timber, which is still good for harvest — however, it must be harvested quickly before it rots or gets infested by insects. Thus the owners of burned timberlands are scrambling to harvest the timber ASAP. This results in plenty of cheap logs, but since sawmills aren’t keeping up, its a double whammy to owners of burned timberlands: not only they have to harvest at less than optimal time, they also have to pay top dollar for logging crews as everybody else is also scrambling to harvest their burned timber, and selling the logs for cheap, as there are so many sellers and too little milling capacity.

As a plot owner, at least in Europe, you cannot make a living with just the trees. At the moment, and this is expected to worsen with the time, we go through series of very harsh weather conditions over long periods of time. We have a lot of wood getting lost or sold at the cost of harvesting (if not less).

You basically lose 20 to 30 years of taking care of the trees and you need to "restart" the forest naturally afterwards, because anyway, you have no ideas what could be the right kind of trees to support the climate change.

You lose money on the forest, the land is getting more value, but it means just more taxes nothing more.

At the moment, it does not make sense to own only the land, the value is extracted one level above. But here in Europe (at least in France), forest is owned by a lot of people. Many, many people have 1ha or less, here and there, because of the agricultural tradition of the country (forest has been growing again on not taken care of fields).

Source: We have about 300ha, taken care of in a "sustainable" way (all the stuff you read about the "best/ecological" way to take care of a forest) for the past 30 years, we just break even. That is, the forest is bringing no money at all to the owners, everything is going back to pay the workers and taxes.

I think it's been the case for a long time, that cutting trees and selling them is not financially interesting. My own goal is to get a couple of ha, plant "a few" trees and let them grow without planning on cutting anything for the next century. Nobody is doing that anymore, so it might be interesting to see what happens!

Do it! A forest is wonderful and buying a small lot does not cost that much.

But if in France, stay below the 40ha limit to not have to deal with massive costs of having your forest to be managed with validated planning every X years etc. which makes it very hard to keep "wild" areas in it (even more paperwork!).

> But if in France, stay below the 40ha limit to not have to deal with massive costs of having your forest to be managed

I read about that a while ago! To me it seems like good-intent at first that turned out a complete bureaucratic creep! My question is: Can we decide to "manage" the forest ourselves and be registered as an official "forest manager", draft a management plan, publish any outstanding paperwork, etc ? I'm not sure about which administrative body would enforce the planning and management (municipalities, ONF, ...)

I won't go above 40ha for any foreseeable future, so it's probably not an issue!

The 40ha limit is generous. This is because at the moment we have a lot of diseases in the forests (thank you climate change...). Nearly each specie is suffering of one and sometimes, the only way not to transform your forest in a reservoir which then spread and attack the surroundings is to quickly remove the trees.

Trees are not evolving as fast as the speed we destroy our environment, we have no choices left and we need to help them by not letting the forest completely wild. You need a bit of control. This is the reasoning being this 40ha limit. Starting this limit, you need to do the control seriously.

Very good point! Thanks for sharing!

> Trees are not evolving as fast as the speed we destroy our environment, we have no choices left and we need to help them by not letting the forest completely wild.

Mostly, the problem isn't actually one of too-slow evolution, but even more basic: Forests often can't migrate fast enough to keep up with current rates of climactic zone movement.

Human intervention is pretty simple and effective, though: keep planting trees on the leading edge of the forest (usually poleward or upslope where the limit is temperature, away from the coast where the limit is precipitation)

Of course, there are ecosystems that don't have anywhere convenient to move to (arctic and alpine, for example), but most forests don't fall into that category.

What do you mean by nobody is doing that anymore? Isn't this exactly what a nature reserve is, they're all over the place. My family owned one of the larger forests in The Netherlands originally developed to sell timber but it was infeasible so the family sold most of it to the national forestry service, which is paid by the government to take care of the forests. Mostly by not cutting them down.

My grandmother has about 10 acres with lots of >100 yo trees on it. It's fairly common around where I live.

Here in Ontario having a managed forest entitles you to the same better property tax rate that farmers get. Basically 1/3rd of the annual taxes. Unfortunately my 7 acres (2.8 ha) isn't big enough, you need at least 4 hectares of woods (I have about 1).

But I think the point of the program they offer is more for conservation than for incentivizing wood production.

(Softwood exports have ceased to be a healthy industry in Canada a couple decades ago, especially since a long and ugly trade war with the United States which they seemingly won.)

You can get more tax breaks for planting > 6 fruit trees, and an additional break if you get a forester to survey your woodlot and they find species on a protected list! There are also incentives for putting in wetlands/ponds and grassland.

Could that couple buy portable milling machinery and start selling finished lumber? My relative had someone come out to his land and turn his trees into finished lumber for his house.

They're not operating at cottage industry scale, they're talking hundreds of acres I believe. Those portable mills are more of a cottage/craft industry (I had one come and mill some of my trees a few years ago)

I suspect owning a mill exposes you to additional risks as well. I know here in Canada a bunch of the softwood mills in B.C. closed a decade ago, I suspect it's big time boom and bust and now you've got expensive equipment you're in debt for...

Good luck buying a sawmill.

Every yuppie that fancies themselves a handyman and every landscaper looking for more side gigs had that same idea and sawmills are back-orded as bad or worse than outdoor recreation items.

Furthermore, milling lumber is one of those things that only pencils out to be economically in the black at very large scale or at very small scale where you focus on a high margin niche.

Then there's regulatory compliance...

This. Good luck getting your hands on a Miser right now.

Homes in North America are not built with wood from Southeastern US. Wood from PNW and Canada is used. I believe this is why a lot of furniture, cardboard boxes and cabinetry is made in Southeast US.

Mills / lumber yards consolidated during 2008-2009 financial crisis.

In the years leading up to covid, Canada unintentionally lowered lumber prices by cutting down trees that were infested with a certain type of beatle. At the same time, Canada was reducing the number of (healthy) trees allowed to be harvested for wood every year.

Some have argued that wood prices have been too low, for to long. The industry has never recovered from 2008-2009, and has a conservative mindset.

There are definitely a lot of perspectives to hear in this equation.

I like a quote from this podcast; higher prices cure high prices.

Transcript: Stinson Dean On The Soaring Price Of Lumber ["https://www.bloomberg.com/news/articles/2021-04-29/transcrip..."]

Another issue is rail capacity for transporting lumber from sawmills. Even if the sawmills were able to ramp up and massively increase their supply, we could run into a bottleneck with transport. The mills typically sign contracts with rail companies ahead of time (based on projected demand) and it's not likely they could all of the sudden get double the number of trains if supply went up.

Prices were spiking before the pandemic. Immediately after Trump’s tariffs Canada (and, also China), $/sqft increased over 20% for new construction in the SF Bay Area. I imagine the percentage increase was higher in places where labor and bureaucracy are a lower percentage of construction costs.

Prices in Canada are just as high.

They're very high in Canada compared to two years ago, but then the US government adds a 9% tariff.

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