US dock workers and port operators have reached a tentative deal to end the East Coast port strike. In other Business news: an Ontario mayor pushes back on First Nation call for Dryden mill shutdown; Wisconsin’s Besse Forest Products puts six hardwood mills up for sale; Hancock Lumber curtails its Madison lumber mill; and one of Australia’s largest sawmills switches back to biomass power generation.
In Forestry news: the European Union claims to be on-track with its biodiversity pledge despite deforestation u-turn—and it defends regulation delay despite pushback; BC ENGOs call for a new BC Forest Act; BC court denies bid to halt tree felling in Vancouver’s Stanley Park; USDA Chief Randy Moore celebrates his partnership with America’s loggers; Wisconsin groups urge Biden to protect more old-growth; and Brazil secures support for a forest fund to protect trees.
Finally, wildfires, drought and heatwaves are now the second-most-costly US insured loss.
Kelly McCloskey, Tree Frog Editor
BC’s forest industry stands at an important juncture and crossroads of its future prosperity and the high standard of living it imparts to individuals, communities, and society. Much has been written, documented and analyzed about its massive contribution to the gross domestic product, taxes and revenues to all levels of government, the 100,000 jobs dependent on its success, and the absolute reliance for so many of BC’s resource communities. In fact, BC’s forest sector is one of a few “profitable” job segments that drive our economy and government services through above average wages and consequential higher tax revenues. …Today we find a forest sector under significant (or severe) stress with uncertainty being the predominant constant from initiatives at the federal and provincial levels. This uncertainty arises from the flood of programs, policies, and initiatives each arising without any apparent consistency, coordination, or weighing of economic impacts among them.
NEW YORK/WASHINGTON — U.S. dock workers and port operators reached a tentative deal that will immediately end a crippling three-day strike that has shut down shipping on the U.S. East Coast and Gulf Coast, the two sides said Thursday. The tentative agreement is for a wage hike of around 62% over six years. …That would raise average wages to about $63 an hour from $39 an hour over the life of the contract. The union had been seeking a 77% raise while the employer group had previously raised its offer to nearly 50%. …The union and the port operators said in a statement that they would extend their master contract until Jan. 15, 2025 to return to the bargaining table to negotiate all outstanding issues. …Among key issues that remain unresolved is automation that workers say will lead to job losses. The port strike hit just as southeastern states were struggling for supplies following a deadly hurricane.
The longstanding trade dispute between the U.S. and Canada over softwood lumber has hinged on a critical factor: the substitutability of lumber products. A recent study by…
A looming unknown is the potential impact from the European Union’s deforestation regulation (EUDR). If this policy requirement is implemented as currently planned on December 30, 2024, it will cause total trade chaos in world markets. Simply put, many countries will not be ready to meet the stringent requirements of the policy. While the markets may be lacklustre for the rest of 2024, the EUDR could quickly change it all with the potential of huge dislocations in global trade flows. …A quick pro-forma analysis on the lumber revenue versus the costs of lumber production of four major producing regions in North America plus Central Europe yields a very clear story. …The results are essentially negative in all regions of North America given their higher costs. …Permanent mill closures at high-cost mills have also been occurring in BC, the US Pacific Northwest regions and the US South. 
With lower mortgage rates expected, will we see a hotter housing market increasing demand for lumber and lumber prices? …Although many mills continued to run during previous tough times to drive high-cost producers out of the market, mills are taking downtime more quickly now to support prices. …After a slowdown in homebuilding activity over the previous months, 
The softwood lumber market’s reaction to last week’s encouraging economic news remained moderate at best. Demand was steady in most species, but news of reduced interest rates fell far short of jump-starting sales. As a whole, prices wavered and the Random Lengths Framing Lumber Composite Price dropped $1 for the second consecutive week. Western S-P-F sales were unspectacular. …Lumber futures surged early in the week, but the board gave back on Wednesday. The front month continued to carry a premium to the physical market, affording some traders basis opportunities. Hurricane Helene’s approach through the Gulf of Mexico interrupted an otherwise steady Southern Pine market. Buyers covered mostly immediate needs in early trading and scaled back new orders as the week progressed. …A perception that recent curtailments across the South had aligned supplies more closely with demand infused a firmer tone into the market.
In September, mortgage rates maintained their downward trajectory, returning to levels last seen two years ago. According to Freddie Mac, the average rate for a 30-year fixed-rate mortgage fell to 6.18%, a decline of 32 basis points (bps) from August. The 15-year fixed-rate mortgage saw an even steeper decline, decreasing by 42 bps from August to 5.26%. Additionally, the 10-year Treasury rate declined by 23 bps, falling from 3.98% in August to 3.75%. According to the NAHB forecast, the 30-year mortgage rate is expected to near 6% on a sustained basis by the end of 2024, with a further decline to just below 6% during 2025. NAHB also predicts furthering easing by the Federal Reserve before the end of 2024.
Southern Pine dimension mills have attempted to keep supplies more in line with sluggish lumber demand in recent months, but perceptions remain mixed whether it has ultimately been effective in tempering downward price pressure. Several mills reportedly curtailed production through the summer months without making public announcements to indicate cutbacks. Most of the measures were modest, often limited in scope to simply reducing shifts, according to sources. …Production curtailments by Western S-P-F mills have also contributed to rebalancing supplies and demand, as buyers in northern-tier markets who purchase both species have encountered dwindling availability. However, some SYP traders are unsure whether the quiet production cutbacks have had any true effect on the overall market. New mills in some producing zones came online in early summer and ramped up output.
After last year’s off-the-charts, record-breaking wildfire season in 2023, this year may have felt like a reprieve — at least in some parts of the country. But this past summer was still far above normal by several measures — and experts say what transpired holds clues for what’s to come as the climate changes, primarily due to the burning of fossil fuels. …By the numbers, the 2024 wildfire season is on track to be the second-worst wildfire season in terms of area burned since 1995, with more than 5.3 million hectares burned so far. That trails far behind last year, when more than 15 million hectares burned. …In contrast with 2023, where much of the country had major wildfires, this year the bulk of them broke out in Western Canada. …About 70% of the total area burned was in British Columbia, Alberta, Northwest Territories and Saskatchewan, officials said in a briefing last week.
The European Union’s chief negotiator on a United Nations compact to reverse biodiversity loss denies postponement of anti-deforestation law undermines credibility just weeks ahead of crunch summit in Colombia. The European Commission’s proposal to delay implementation of the Deforestation Regulation will not undermine the EU’s position in upcoming UN biodiversity talks, its lead negotiator has claimed, saying the postponement was a recognition that further preparatory work with trading partners was needed. The 16th conference of parties to the UN Convention on Biological Diversity later this month will be the first since the landmark COP15 in Montreal two years ago that yielded an agreement to place 30% of land and sea under conservation status by 2030. Environmental groups were outraged when the EU yielded to pressure for a delay to the law, which requires proof that no forests were cleared in the production of a range of goods from coffee to beef and timber.
While many of the daily activities we all deal with in this business can take years to accomplish, it doesn’t mean things move slowly when it comes to industry reaction to forest policy change. …Were they aware that losses of literally billions of dollars in GDP contributions to the Province is a direct result of the forest industry revenues falling by an harvest decline? And what about the loss of 34,000 rural, community-based forest industry jobs and all the taxes they will no longer pay? …It is hard to believe government did not understand the consequences of their actions given the plethora of analysis and forecasting that has been made available to them. …Can the path we are on change? Perhaps, but it will require that political leaders realize the problems and demonstrate a willingness to tackle them decisively with all interests, including the forest sector.
Wildfires are burning through the carbon budget that humans have allocated themselves to limit global heating, a study shows. The authors said this accelerating trend was approaching – and may have already breached – a “critical temperature threshold” after which fires cause significant shifts in tree cover and carbon storage. …Forests are going up in smoke in Brazil, the US, Greece, Portugal and even the Arctic Circle amid the Earth’s two hottest years in recorded history. Each fire has a double impact on the global climate: first, by emitting carbon from the burned trees, and second, by reducing the capacity of forests to absorb carbon dioxide. …Other research showed the Amazon is undergoing a “critical slowing down”, with more than a third of the rainforest struggling to recover from drought after four supposedly “one-in-a-century” dry spells in less than 20 years. These compounding impacts are turning forests from carbon sinks into carbon sources.