Forest Products: Montana Wood Products in the Time of COVID-19.

• Author: Hayes, Steven
• Position: ASSESSING MONTANA'S KEY INDUSTRIES

Montana's wood products industry started 2020 on a business as usual basis, but COVID-19 reached the industry in early March. All of the industry's components, from forests to mills to markets were affected somehow. The wood products industry was considered an essential industry. Loggers, truckers and mills could generally keep operating while complying with health restrictions, facing ongoing log supply challenges and finding new market opportunities.

With COVID-related shutdowns and stay-at-home orders in effect across the U.S., many people found time for do-it yourself and home improvement projects. Nationwide, this created additional demand for wood products. Meanwhile, the U.S. timber producing regions (i.e., the South and Pacific Coast) that provide most of the wood products encountered production slowdowns and curtailments. Lumber shipments from Canada declined due to limited timber supply and reduced milling capacity, which contributed to U.S. wood product shortages. Lumber and panel markets responded with historic price spikes. The Random Lengths framing lumber composite price index increased nearly 150% from the beginning of2020 to its record high in September, when it started to slowly decline (Figure 1). In Montana, delivered log prices to mills were up 6% to 10% from 2019, just a small increase compared to national lumber prices.

Montana mills were generally able to continue operating. Even when they had sufficient logs to fill lumber orders, some mills were hard-pressed to match sales and shipping demands. This frenzy was short lived as mills worked through their log inventories while waiting for logging crews to get back into the forest after spring breakup. Lumber production in Montana through the first nine months of 2020 was 318 million board feet (MMBF), down 12.5% compared to the same period in 2019 (Figure 2). Employment at Montana mills over the same period was down almost 5%, and wages paid to production workers slipped by about 10.6% compared to 2019.

Comparing 2020 to the prior five-year average for the first through third quarters showed employment was down 8.5%, wages were down 6.7%...