A Montana timber company on Jan. 13 announced indefinitely closing one of its two sawmills, citing chronic timber supply problems due to litigation. Economists say lawsuits are only partly to blame.
R Y Timber General Manager Dan Richards says the mill in Townsend will suspend operations once it runs out of logs in the yard. He says that won’t happen before Apr. 1. Layoffs are not expected before then either.
Richards says the closure will affect 70 employees. Some will have the option of getting transferred to R Y Timber’s second mill in Livingston. Others will receive separation pay and the option of job training.
Townsend Area Chamber of Commerce Co-President Bobbi Meehan says the news is extremely disappointing. She says the only other businesses in town that employ as many people as R Y Timber are the hospital and courthouse.
“We’re rural Montana so any business closures here in Townsend, it does place more economic challenges on a county that is already struggling," Meehan says.
In the past two years, Meehan says Townsend has lost four major businesses, which affects the town’s tax base and employment opportunities.
“Every single one of those businesses, definitely, their closures affected our growth, our families. And finding employment in Townsend is not easy," she says.
She says many of the people living in Townsend have to commute 40 minutes to Helena or an hour to Bozeman for work.
R Y Timber’s Dan Richards says the company’s decision was due to chronic timber shortages.
“Let me just put it this way: If there was an abundance of logs that we could manufacture, we’d have two shifts running in both plants," Richards says.
Richards says the uncertainty and delays from litigation around Forest Service timber sales are to blame.
Todd Morgan, director of Forest Industry Research at the University of Montana’s Bureau of Business and Economic Research, says litigation can cause significant delays for some mills, depending on which timber sales the companies purchased.
“Getting enough logs, enough timber supply or availability, is a challenge in Montana and has been for decades,” Morgan says.
He says the National Forest Service reduced its harvest levels in the 90s. Demand for lumber dropped during the recession when fewer people were building homes.
But Morgan says some of change has come from a shift in timberland ownership. Southern Pine Plantations confirmed in December it bought 630,000 acres of Montana timberlands from the company Weyerhaeuser.
“Some of that land may be sold for development," he says. "Some of it may be sold for housing. Some of it sold and kept in timber production. But when it changes hands and it goes from one private owner to another private owner, those owners have wants and needs that they want to use the land for, and it may not be timber production.”
Some Montana companies have laid off workers or cut back due to other factors, including wildfires, bark-beetle kill-offs and competition.
F.H. Stoltze Land and Lumber Company announced in June it would cut back on its shifts at its mill in Columbia Falls, according to Hungry Horse News. Stoltze said the decision was “purely market driven.” The price for fir and larch had dropped 50 percent.