Canadian and U.S. softwood lumber producers reported modest gains in 2014 as lumber demand continues to rise slowly (but steadily) in the U.S. as well as in key export markets. Total U.S. softwood lumber shipments increased 4.1% to 31.3 billion bf (73,1 million m3) and Canadian production recorded smaller gains, or +3.1% to 24.2 billion bf (57,1 million m3). Corporate acquisitions were again a big part of the story as the Canadian buying frenzy continued in the U.S. South – since 2004 when only 2 U.S. sawmills were owned by Canadian companies (only West Fraser), there are now more than 35 mills that have been purchased by Canadian firms in the South as well as the U.S. West.
“In fact”, commented Russ Taylor, President of Wood Markets, “the combined sawmill count owned by West Fraser, Canfor and Interfor is now higher in the U.S. than it is in Canada, reflecting the tight availability of timber and limited lumber growth prospects in Western Canada!”
The latest Wood Markets (WM) annual survey of the Top 20 North American softwood lumber producers shows that although the top 20 Canadian companies increased production slightly in 2014 (+0.6%), they recorded a decrease in their market share of total Canadian lumber shipments, slipping to 78% in 2014 from 80% in 2013. The top 5 Canadian producers were Canfor, West Fraser, Tolko, Resolute and Interfor, with their order unchanged from 2013. However, output was lower for the top 3 Canadian companies due to their B.C. interior mills feeling the impact of the mountain pine beetle infestation. In 2014, these top 5 Canadian lumber companies produced a total of 11.6 billion bf (27,3 million m3)-48.0% of Canadian lumber output-, versus 12.1 billion bf (28,5 million m3)-51.4% in 2013.
According to Wood Markets, Canfor retained its lead spot despite its output dropping by 11% (to 3.74 billion bf or 8,8 million m3) due to the sale of its Daaquam mill (Quebec) and the closure of its Quesnel mill. In close second spot was West Fraser at 3.48 billion bf (8,2 million m3) (-3%, due in part to the closure of its Houston mill).
The top 20 U.S. firms produced 60.8% of all American softwood lumber shipments in 2014, versus 58.2% in 2013. This growth indicates that the largest U.S. producers (including Canadian firms) are continuing with their investment strategies aimed at increasing their capabilities and mill efficiencies in preparation for the ongoing U.S. lumber market recovery.
Unlike Canada, the order of the top 5 U.S. companies shifted in 2014. While Weyerhaeuser (+12% to 3.3 billion bf or 7,7 million m3) retained first place, Georgia-Pacific moved into second at 2.27 billion bf or 5,3 mil. m3 (+42%) following the complete addition of Temple-Inland’s five sawmills.
Slipping from second to third was Sierra Pacific (-2% to 1.95 billion bf or 4,6 mil. m3) as the company worked on the rebuild of its Quincy sawmill and commissioned work on a new sawmill in Frederickson, WA. West Fraser kept its fourth spot, with output up 15% to 1.82 billion bf (4,2 mil. m3) and Hampton remained in fifth spot.
According to Wood Markets, the top 5 U.S. firms produced 35.1% (11.0 billion bf or 25 mil. m3; +10.4% over 2013) of U.S. lumber shipments, up from 33.2% in 2013; Canada’s top 5 produced 48.0% (11.6 billion bf or 27,3 mil. m3; -3.6% vs. 2013) of Canadian lumber shipments, down from 51.4% in 2013.
|CANADA TOP SOFTWOOD LUMBER PRODUCERS IN 2014 (Million BF)
||No. of Mills
|Total Top 5||55||12,065||11,625||-3,6%|
|Total Top 20||106||18,801||18,906||0,6%|
|Top 5 as a % of Canada Shipments||51,4%||48,0%|
|Top 20 as a % of Canada Shipments||80,0%||78,0%|
Notes: Includes lumber produced only at primary sawmills and excludes U.S. production. (Source: Wood Markets)
|USA TOP SOFTWOOD LUMBER PRODUCERS IN 2014 (Million BF)
||No. of Mills
|Total Top 5||64||9,958||10.992||10,4%|
|Total Top 20||124||17,478||19,024||8,8%|
|Top 5 as a % of US Shipments||33,2%||35,1%|
|Top 20 as a % of US Shipments||58,2%||60,8%|
Notes: Includes lumber produced only at primary sawmills and excludes all Canadian and offshore production. (Source: Wood Markets)