Tough year for local loggers

Foust Inc. currently employs a record-high 45 workers.

It’s too soon, however, to say how many will remain on the job due to the economy after this spring’s breakup.

Although Tom Foust, president of the Bonners Ferry company, says “things are okay,” he has tremendous concerns.

“Markets are soft,” Foust said. “When we come out of breakup — in such a down market . . . I will do everything possible to keep (going), but I can’t control the markets.”

His concerns go beyond his own company.

A low demand for timber means less work for lumber mills, which could ultimately lead to their demise.

“Once we lose the infrastructure (it will be almost impossible to get it back) . . .” Foust said.

Idaho Forest Products

Bob Blanford, resource manager for Idaho Forest Group mill in Moyie Springs and the former Riley Creek, says the market is at its worst since he got into the business in the late 1970s.

“The last downturn in the market was off by about 25 percent,” Blanford said. “Currently, they’re off 45 to 50 percent.”

For example, large studs that went for an average of $333 per thousand on the wholesale market over the last 12 years are now selling for $168.

“With sub-prime mortgage, things have really slowed the demand,” Blanford said.

Ninety percent of the timber Foust harvests goes to housing construction, which is expected to fall by 47 percent nationwide in 2009, according to Metrostudy, a leading provider of primary and secondary market information to the housing industry.

“What we hear from our economy, 2009 doesn’t look very promising,” Foust said. “There’s an abundance of homes that have been foreclosed on and newer homes are selling.”

Blanford noted that instead of the historical 1.8 million housing starts, 700,000 are expected.

“So as a company, this is going to be a tough year,” he said. “Everyone is in a cash preservation mode. Basically, we’re trying to be around here to be in position when the market recovers.”

Some say 2009 will be the toughest year. Some improvement could occur in 2010.

Blanford is optimistic about the future of the mill, which employs 93, down from 105 workers as of late last year.

“Riley Creek bought the mill and put $12 million in improvements,” he said. “It’s an efficient mill and we’ll be in a good position once we come out of this. We have a good customer base. We plan on being here.”

Idaho Forest Group has reduced the price it pays for logs. Employee benefits also were cut.

Bennett Forest Industries and Riley Creek Lumber last summer merged to form Idaho Forest Group and strengthen ties to large customers including Home Depot and Lowe’s as the market for lumber slumps.

Foust Inc.

Foust’s father, the late Mike Foust, and Ray Plumlee founded the company in 1967-68. Tom Foust joined his father after graduating from Bonners Ferry High School in 1969. Mike Foust bought out his partner in the mid-1970s. Mike Foust passed in 1990.

Foust Inc. saw its greatest growth from the early 1980s and into the 1990s. Today, the company does work for the U.S. Forest Service, West Slopes and Idaho Forest Group.

The 45 men who work for Foust Inc., of which 15 to 16 are log truck drivers, are almost all from Boundary County. They are paid $22 an hour with benefits, including 401K retirement plans.

“We’ve got a lot of homegrown boys,” Foust said. “I worked with their dads and with their kids. They’re the backbone. Sixty to 70 percent are second generation loggers.”

Foust has more than 40 pieces of heavy equipment, including yarders, back hoes, loaders, skidders and processors.

“Every bit of equipment is in use,” he said.

As for Foust Inc., the company has five jobs under way. They are in Boundary County, Priest Lake, Hayden Lake, and Libby and Yaak, Mont.

“We try to utilize everything out of tree,” Foust said. “We grind up bone piles to generate electricity.”

Diversifying the key

Diversifying has helped Foust Inc.

“We work for different people,” he said. “That helps us stay busy.”

Foust counts on companies like Forest Capital, which owns 100,000 acres in Boundary, Bonner and Kootenai counties; 40,000 of those acres are in Boundary County, said Ed Moe, who works from Forest Capital’s Bonners Ferry office.

Forest Capital purchased the property from Crown Pacific in 2002. In Boundary County, the property is mixed among public land, including in the areas of Trail, Snow, Smith and Myrtle creek areas and Pack River, Trout Creek and Clark Fork in Bonner County. Some of the species growing includes Douglas fir, western larch, western hemlock and western red cedar.

Four foresters work from the Bonners Ferry office, managing the local timberlands.

That involves setting up harvest units, marking trees, identifying property lines and administering timber harvests, Moe said.

Companies like Foust Inc. work for Forest Capital.

“We use three to six local logging contractors, replanting after a harvest is completed,” he said.

Since 2002, Forest Capital has planted an average of 800,000 trees a year on the 100,000 in Boundary, Bonner and Kootenai counties.

Forest Capital will continue to log, sending wood to Idaho Forest Group and Welco.

“We don’t know what’s going to happen this year,” Moe said. “We are anticipating prices to drop later this year. We’re planning to continue harvesting after breakup, but we’re unsure of market conditions that will exist when demands come up.”

He can say, however, that during his 20 years in Boundary County, he’s never seen the timber markets this low.