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article imageContinuing wildfires in B.C. impacting Canadian timber harvests

By Karen Graham     Jul 30, 2017 in Business
Vancouver - Three weeks ago, when lumber companies began scaling back or halting operations due to the wildfires burning in British Columbia's interior, no one really knew just how bad it would become.
According to CBC News, new wildfires are continuing to spring up, forcing new evacuations in some areas, even while people are beginning to return to homes they were forced from several weeks ago.
The B.C. Wildfire Service reported that as of July 28, the Cariboo region accounted for 75 per cent of the total 426,719 hectares (1,054,446 acres) that have burned province-wide in 2017. The number includes five new fires reported over the weekend.
Over 240 wildfires are raging through central British Columbia.
Over 240 wildfires are raging through central British Columbia.
British Columbia Government
Interestingly, on July 16, Ketan Mamtora, an analyst with BMO Capital Markets, said he expected lumber prices to continue to rise by 6.0 to 8.0 percent over the next few weeks, partly because of the fires and partly because of the limited supply. At that time, no one had really anticipated the impact from the wildfires over the long-term on the timber and finished lumber industry.
Wildfire's economic impacts starting to be felt in U.S.
In Metro Vancouver, the price of plywood has nearly doubled in some cases because mill and supply routes have been shut down for an extended period of time, not only because of the wildfires but due to the longer-than-usual winter. The impact on the lumber industry has also reached into the U.S.
U.S. wholesalers have been left with bare cupboards after running their inventories down this year as a trade dispute between Trump and Canada over tariffs created a wide swing in prices. And adding the worst wildfire season B.C. has seen in over a decade to the mix has resulted in making lumber a hard product to find.
Many homes in the U.S. are built using Canadian softwood lumber  like this home under construction i...
Many homes in the U.S. are built using Canadian softwood lumber, like this home under construction in Katy, Texas.
Jaksmata
Home builders in the U.S. get about a third of their lumber from Canada, while B.C. produces over half of all Canadian lumber. There are fears that lumber prices will jump even higher. “People need wood now,” said Paul Harder, a timber trader at wholesaler Dakeryn Industries in North Vancouver, which sells to US lumber yards. “Little lumber is being offered out there.”
Production and harvesting halted in B.C.
Tolko's Quest Wood mill in Quesnel halted operations July 20, putting 200 employees out of work because of a shortage of raw materials, according to a company statement.
"With the curtailment of Quest Wood, and the closures of our Lakeview and Soda Creek mills due to the evacuation order in Williams Lake, approximately 3 million board feet of lumber per day has been removed from the market," said the statement.
Tim Menning, the owner of Hytest Timber Co. in Williams Lake, employees 65 people. "You've still got payments to make and facilities to maintain and essential crews to keep going," he said, adding that about 10 of his staff are using company equipment to combat nearby fires.
Canadian softwood lumber producers in 2015 show solid increases by the industry. — Photo: Fresh ch...
Canadian softwood lumber producers in 2015 show solid increases by the industry. — Photo: Fresh chunks of wood collected where they were growing, after 3-4 days of being cut along the new forest road north of Chehalis Lake, BC, Canada.
Harvesting operations, like Hytest Timber Co., supply the raw materials to the mills. However, it is doubtful that any harvesting will be done until the end of the summer, given the risk of logging equipment starting a new fire, and that is going to make it tough on the mills.
"I don't think government, or even industry for that matter, has got too much of an appetite to entertain more risk at this point," Menning said. "We've got more than we can handle now."
Phil Burton, a professor of forest ecology and management at the University of Northern British Columbia points out that it is not known how much of the province's valuable timber has actually gone up in smoke. There are fears the wildfires will impact negatively on B.C.'s shrinking timber supply.
"Part of the tragedy we are dealing with is that fires are also burning through trees spared by the pine beetle outbreak, including young planted stands that were being counted on as timber supply over the next several decades," said Burton.
The Ministry of Forests Lands and Natural Resources says it won't be able to determine the full impact on the timber industry until after the flames are extinguished, but Cariboo has been one of the hardest hit areas.
More about British columbia, Wildfires, timber companies, lumber prices, US home builders