Sourcing Quality Wood To Remain a Challenge
by Dave Baber

		Dave Baber is a specialist in the sourcing of lumber for the log home industry. With over 12 years experience buying, shipping, and overseeing the production of all types of wood products used in the manufacture of log homes, Dave works with the Industrial Department of North Pacific Lumber Company. North Pacific is one of the oldest and largest employee-owned distributors of building products in the world, with sales for 1998 in excess of $1 billion.

Maintaining the flow of quality wood for a demanding customer like Glu-Lam-Log seems to get more challenging all the time. Every year we lose a few more mills to closures, changes in equipment, or management direction, but each setback seems to act as a catalyst for finding creative ways to not only maintain, but improve sources of supply and the quality of the wood we work with.

A case in point is what we go through to source the raw material to make laminated logs. Glu-Lam-Log’s laminated logs are all graded, stamped, and approved as structural laminated beams.

One of the primary indicators of a mill’s potential for supply is the size of its wood deck and the number of incoming logging trucks. This mill seems to be in pretty good shape.

Another factor influencing the availability of the lam stock is the smaller logs that are being harvested today. The giant ponderosa pines harvested in the past are no longer so readily available for processing. As the log sizes get smaller, the production of 2x10 and 2x12 decreases and mills convert to producing 2x4 and 2x6. And, with smaller logs and smaller log decks, mills that were historically running two shifts have cut back to just one shift per day. All of these factors combine to restrict the availability of pine lam stock.

Now that we’ve got all that bad news out of the way, let’s take a look at some of those creative steps that are being taken to turn a serious problem into an excellent opportunity.

For starters, in my job, I get to talk to hundreds of people involved in the wood products industry. I also have the benefit of sharing daily experiences with other members of the large staff of wood professionals at North Pacific Lumber (NORPAC).

There’s nothing like getting out in the bush to discuss our specs directly with the people who cut our wood. This approach has dramatically reduced downfall and improved quality.

The intelligence we collectively gather is passed on to our clients, and Glu-Lam-Log is no exception. As one of my largest accounts, no-one is more interested in their future success than I am. So, I do my best to keep them informed and, to their credit, they are terrific listeners. Together, we foresaw the decline in the number of mills that would produce lam stock and Glu-Lam-Log took action by investing the human and financial resources necessary to become basic in the milling of lam stock. With that capability in hand, I was able to widen my search to include rough sawn, kiln-dried wood that could then be processed into lam stock right at Glu-Lam’s facilities.

As a result, we were able to develop a great supply of beautiful Canadian lodgepole pine that was previously sold to Japan. In fact, this past fall Phil Alman and I spent four days wandering around “in the bush” visiting the mills ourselves. We were even able to tour a mill and follow our wood from the log deck to the finished product. The combination of Glu-Lam’s willingness to act in advance of a supply problem and NORPAC’s strength in the market secured this particular mill’s production for Glu-Lam-Log’s use. Barring an unforeseen catastrophic event, this mill alone should be able to produce all the stock we need to produce the 7-3/8" stack log for years to come.

One of the reasons we have been able to secure this wood from Canada is the “Pacific Rim Effect”. A large amount of the better grades of lumber in the past were shipped to Japan and Korea. With the financial problems those countries are now facing, the amount of wood exported to them has decreased substantially, and that wood has become available to us.

Prior to the decline in the Pacific Rim economies, Canadian mills, faced with the current U.S. quota system, would rather sell the better grades to other countries or keep it in Canada when they could. They would then be able to sell more of the construction grades of lumber to the United States and still be able to stay within their quota. Even though wholesalers and manufacturers in the United States were willing to pay the asking price for the “J” grades, some mills would not allow the export of these products into the United States. Healthy Rim economies provided a ready market for virtually all of their high grade/high value wood. So, the best way for Canadian mills to use their quota was to sell higher grade/higher margin wood to the Rim and lower grade/lower margin wood to the US.

In today’s economic climate, most mills will no longer ship their low grade stock to the United States. With the drop in exports to the Rim, it now makes more sense for Canadian mills to use their quota to ship the higher grade/higher profit wood to the United States. When the Pacific Rim economies improve, the flow could reverse itself with the higher grade wood flowing once more to the Rim and lower grades to the U.S. During the current economic downturn in the Rim we’re making an all out effort to prove that we are valuable, reliable, and consistent customers, and we’re focusing on building relationships that will help us to maintain our programs with the mills even after there is a turn around in Asia.

One of the bright spots in sourcing the wood for Glu-Lam-Log has been the material for traditional milled logs.

Experienced in-house personnel grade lumber based on visual characteristics and, where necessary, the graders mark lumber for trim with a grading crayon.

The past two years we have been getting standing dead western white wood from a Canadian mill that is now putting out an exceptional product. I have spent a lot of time working with the mill and the owner of the operation even spent time at Glu-Lam’s planing operation to gain a better understanding of our rigid quality standards. The results have been rewarding. Downfall, when we pattern logs, has dropped from over 10% to around 3-4%. Last year, this increased yield offset a price increase on the rough stock, allowing us to hold prices.

As some of you are aware, we are now grade stamping traditional milled logs with a TPI (Timber Products Inspection) “Wall Log 40” grade stamp. There are six grades of logs in the T.P.I. grading system. From lowest to highest they are: Wall Log 27, Wall Log 30, Wall Log 40, Rustic, Select and Premium. The reason we chose Wall Log 40 is that many of our competitors grade Wall Log 30, and TPI inspections of the milled stock in our yard did not yield a single log that graded out less than Wall Log 40. When you buy a traditional milled log that was processed at Glu-Lam-Log you can rest assured that the lowest grade you will receive is Wall Log 40. Since enrolling in the TPI inspection program our records show that only 5-15% of the logs in each run actually grade out as Wall Log 40 logs. The rest exceed this grade. In fact, records of actual third party inspections show that 70%, or more, of the western white wood logs produced could be stamped Premium if we chose to do so. Traditional milled cedar logs do even better with the percentage of Premium logs coming closer to 90% to 95%. The reason our logs always grade out so high is that along with the structural grading required for the TPI stamp, we have always graded the logs for appearance as well.

Recently, I was asked, “If lumber has gotten so cheap, why hasn’t the price of the laminated logs gone down?” My reply was, “Even though construction grades of lumber have become cheaper, industrial lumber prices have remained firm, and prices have drifted in a very narrow range.” That’s because demand has remained strong and the number of mills producing industrial stock has declined. While “Random Lengths” (a private reporting service of lumber prices similar to the stock market) doesn’t publish prices for the specific wood we use as lam stock, other industrial items they do track show just how stable this market is and has been. 6/4 ponderosa pine #2 shop, a grade of lumber used to cut clear parts for windows and doors, is dried down to the same tolerances as our lam stock. The base price, as reported in “Random Lengths” last year, has ranged from $850.00-895.00/1000 board feet. 6/4 paragraph 99, a grade that is used by millwork plants to cut clear blocks for finger jointed mouldings, jambs and other wood parts has had a range of $425.00-455.00/1000 board feet this past year. Our raw material for the lam stock has been even more stable than these items during the last year. During the past two years the industrial grades of lumber just haven’t had the wild price variations that have been evident in the construction grades. We anticipate that this pattern will continue well into 1999.