The recent announcement of the Townsend RY Lumber Mill closure in Townsend, Montana continues a trend seen throughout the country. Although RY Lumber suggests this is due to environmental regulations or lawsuits, a broader context demonstrates this is a flawed argument.
The timber industry has been going through a transition for decades. The bulk of all wood production has been moving to the Southeastern states for a variety of economic reasons.
Consider that in some parts of Montana, it might take up to60-100 years to grow a tree to 12 inches diameter, but you can produce a similar-sized tree in Georgia or Mississippi in ten years. All the time you are waiting for trees to grow to merchantable size in Montana, they are exposed to insects, drought, fires, and other sources of mortality. Meanwhile, in the Southeast, you get to cut 3-4 rotations or more of trees in the same time period.
In the Southeast, you can run logging operations year-round due to the lack of snow. And since the landscape is relatively flat, road construction costs are far lower than building logging roads in Montana.
Lastly, the bulk of wood consumers in the country living in the eastern part of the country, so once you have produced a wood product, it is closer to the markets.
For all these and other reasons, the trend has been for the wood products industry to relocate to the southeastern United States.
Maine provides an excellent analogy to decipher the falsehood in the claims of Montana’s timber industry that supply is the problem. At one time, Maine had over 100 operating wood product mills. Indeed, timber companies owned more than half of the state’s land area. Despite this advantage in timberland access, in the past 25 years, two-thirds of Maine’s remaining mills have closed.
Why? It’s not due to a lack of wood, as is suggested for RY Lumber. Private timber companies owned half of Maine at one time, so they had access to their own lands for timber.
There are almost no listed endangered species in Maine (except lynx), and so far, this has not slowed logging operations.
And even compared to Montana, trees grow faster in Maine, but producers there still can’t compete with timber operations in the Southeast where tree growth is much quicker.
What has been happening in Maine is that as mills became obsolete and need modernization and upgrades, the industry moved their operations to the Southeast. If you are going to invest in new and better equipment, it makes sense to do so in a place where you can get a more rapid and a better return on your investment.
Logging operations on federal lands in Montana are subsidized by taxpayers both in economic ways as well as the environmental damage from logging activities. Despite these subsidies, Montana timber companies cannot effectively compete with more efficient operations in other parts of the country where the geographic, climatic, and economic conditions are more favorable to timber production.
And like Maine, we can expect to see a continuous decline in Montana’s wood products industry, not because of wood supply but due to larger economic issues.