Changed forest and market factors share blame for sawmill troubles, forest supervisor says

Changed forest conditions and market forces likely contributed to layoffs at a Spearfish sawmill, according to the U.S. Forest Service’s top official in the Black Hills.

Last week, the owner of the sawmill blamed logging reductions in the Black Hills National Forest for the layoffs.

The forest’s supervisor is Shawn Cochran. He said this week that the Forest Service was saddened to hear about the laid-off employees, and the agency is concerned about the economic health of sawmills.

“The mills here in South Dakota and across the West are facing what appear to be some tough times,” Cochran said. “It’s not necessarily tied to just the timber supply chain, because we’re seeing the same things happen all throughout the West with mill closures.”

South Dakota Searchlight confirmed about 1,700 job losses at sawmills across the country since September, based on news reports about mill closures or layoffs in Florida, Montana, West Virginia, Oregon and Arkansas.

Companies cited outdated facilities, labor and housing shortages, rising costs, and plummeting lumber prices. One measure of those prices, the U.S. Bureau of Labor Statistics’ producer price index for softwood lumber, has fallen by 56% since a peak in 2021. The “softwood” description includes the Black Hills’ predominant tree species, ponderosa pine.

Wyoming-based Neiman Enterprises announced 50 layoffs Thursday at Spearfish Forest Products, the company’s mill in South Dakota’s northern Black Hills.

Neiman said the layoffs were “the direct result of reductions to the Black Hills National Forest timber sale program.” The company made similar comments in 2021 when it closed its other South Dakota mill in Hill City.

A year prior to that closure, Forest Service researchers said severe wildfires and a pine beetle epidemic had drastically reduced the number of trees big enough for logging in the Black Hills. Those trees, called sawtimber, measure at least 9 inches in diameter at a point 4.5 feet above the ground. The forest had only half the sawtimber-size trees needed to sustain the level of timber sales allowed in the forest plan, the researchers said.

Some members of the timber industry disputed the research. Neiman’s Thursday news release included a statement from Ben Wudtke, executive director of a timber industry trade group called the Black Hills Forest Resource Association. Wudtke said “we have more timber now than in the ’70s and ’80s when the Black Hills National Forest was selling twice the amount of timber.”

The Forest Service initially declined to respond; then, on Monday, the Forest Service offered interviews with Cochran to several media outlets.

In his interview with Searchlight, Cochran defended the Forest Service research.

“The forest is very much in a changed condition,” he said.

There are many young trees in the forest, he added, which have sprouted in the wake of the pine beetle epidemic and severe wildfires. But those are not sawtimber size.

“More volume than ever?” he said, responding to a question about Wudtke’s statement. “I’d say, yes, we have a tremendous amount of volume that’s 9 inches and below. However, 9 and above, that has dramatically declined.”

Cochran said the Forest Service has spent $70 million during the last 10 years to help the Black Hills timber industry weather changing forest conditions. He did not provide a full breakdown of costs but said the amount includes stewardship sales. In those sales, the Forest Service covers some of the high costs that timber companies encounter in difficult logging areas, such as steep slopes.

There are more steep-slope areas to harvest, Cochran said, but logging those areas would come at great cost to the Forest Service, since companies need help to make steep-slope logging profitable. Cochran said the Forest Service’s cost to continue a full program of steep-slope logging on the forest could be up to $20 million.

“There is a need to do that, but there are also other needs on the forest,” Cochran said.

The Forest Service also spent $3 million on a pilot project to transport timber by train from other parts of the country to Neiman’s mill in Hulett, Wyoming.

“The last thing we want to do is see additional mill closures, and that’s why the Forest Service is investing heavily in the timber industry,” Cochran said.

Yet the changed conditions in the forest and the high costs of steep-slope logging remain “driving factors” for timber sales, Cochran added.

The Forest Service measures timber volume in a unit called “CCF,” with 1 CCF equaling 100 cubic feet. The agency plans to sell 63,000 CCF of timber in the Black Hills National Forest this fiscal year. That continues several years of reductions and is about a third of the allowable sale quantity of 181,000 CCF in the forest plan.