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HARDWOOD RECORD 



June 25, 1U19 



Analysis of Southern Production 



"The entire Imrchvood market continues exceptionally strong." 



This is the initial sentence in an open market letter which has just 

 been issued to members of the American Hardwood Manufacturers' 

 Association by F. R. Gadd, manager of statistics. Continuing it says : 



We have never before witnessed a time when the industry was so closely 

 sulci up as at present. Heavy buyini; continues and reserve stocks at the 

 mills are exhausted. Former top prices are really nominal now. Advances 

 are made almost daily. With cost of manufacture mounting as wages and 

 supplies go still higher, expectations of price declines are steadily diminish- 

 ing and there is a rush to secure suppUes in anticipation of additional 

 advances. 



After calling attention to the reversal of purchasing policy on the 

 part of the consuming and distributing public and after pointing 

 out the unusual optimism which is based on the magnificent crop 

 outlook and high prices for all agricultural products, Mr. Gadd says : 

 that an optimistic view of the future of the railways seems justified. 

 Discussion of the many phases of the problems is helping to crystalize 

 thought as to the evils to be eliminated and the aims to be sought. 

 It is estimated that there is a building deficit of 1,000,000 homes 

 and construction activities are now gaining headway rapidly. Activity 

 in furniture is said to be the greatest in several years. The output 

 is reported to be fifty per cent higher than last year, most of the 

 factories having sold their output up to October and many to 

 January 1. 'I he automobile and kindred industries are very active. 

 Pleasure cars are in particularly good demand. 



He said further: 



Decided progress was made during the past month In the removal of many 

 war-time restrictions on foreign trade. The stringency which kept so great 

 a tonnage in the European food service is passing. The expectation is that 

 during July and August the bulk of this work will be completed and that 

 ships can be released for commercial routes. High rates are not the obstacle 

 that they were a few months ago. The signing of the peace treaty by 

 Germany will favorably affect business through several channels. The mere 

 event will operate to release a great deal of business that has been held 

 back. The lifting of all or nearly all of the blockades will allow trade that 

 has been in abeyance to be carried out. 



Prospect of an early and stringent shortage of cars is giving the mills 

 some concern. The handling of the enormous wheat crop will tax transpor- 

 tation facilities, and lumbermen expect serious shortage of equipment. 



Labor continues well employed, with an actual scarcity of farm labor. 

 General labor conditions are good. But there is a marked shortage of 

 common labor at the mills. 



Mr. Gadd's letter is silent on the question of hardwood production. 

 It is noteworthy, however, that tlie quantity of hardwood lumber now 

 being produced is still sharply below sales and shipments which fur- 

 nishes ample confirmation of the fact that stocks are being reduced 

 every day. Much better weather has prevailed during the past fort- 

 night and hardwood production is admittedly increasing considerably. 

 The real key to the situation, however, lies in the fact that DEMAND 

 IS EXPANDING MORE RAPIDLY THAN PRODUCTION, WITH 

 THE RESULT THAT THERE CAN BE NO ACCUMULATION OF 

 HARDWOOD LUMBER FOR AN INDEFINITE PERIOD. 



This is the time of year when production ought to be at the maximum 

 but it is estimate at but little more than 50 per cent of normal in the 

 southern field. Meantime, the United States is being called upon to 

 supply not only a very heavy domestic demand but is likewise asked 

 to furnish lumber for reconstruction and rehabilitation purposes in 

 war-devastated countries overseas. Both domestic interests and ex- 

 porters are active buyers and all complain of the difficulty of securing 

 their requirements because of the known shortage of hardwood 

 lumber. There is nothing to indicate that demand will grow lighter. 

 On the contrary, there are enough inquiries in the market right now 

 to suggest further expansion in Iniying, provided stocks are to be had. 

 There is not enough lumber to take care of present requirements. 

 Meantime stocks are decreasing still further and nothing whatever is 

 being laid up in the way of reserve. The mills are cutting up all the 

 logs available and are not able to operate on anything like full time. 

 They have no accumulation of logs. 



The production outlook, therefore, is regarded as quite unfavorable 

 and the big question in the minds of the trade is this: When will 

 production Ije large enough to offset the heavy off-take of hardwood 

 lumber, or, in other words, when will the pouit be reached where pro- 

 duction is equal to the present requirements of the trade and an event 

 balance is restored as between production and sales? Members of 

 the hardwood trade here refuse to attempt an answer to this question 

 ill either form. They say that there are too many unknown quantities 

 in the equation. The general opinion, however, appears to be that 

 there will be practically an indefinite period before there will be re- 

 storation of this even balance for the reason that every tangible 

 indication points to such expansion in demand that production cannot 

 overtake it. 



It is recognized that the jiosition of the market itself will stimulate 

 production to a greater degree than ever before if possible. There 

 has been no lack of effort toward production during the past six 

 months. There has been no lack of incentive to maximum output 

 during this period. But, so far as the southern field is concerned, 

 there have been such handicaps as to greatly reduce the results which 

 were attempted. Heavy rains, lack of log supplies, shortage of labor 

 and other factors have rendered full production entirely out of the 

 question, and even now, with a somewhat improved outlook for log 

 supplies, it is questionable whether or not anything approximately 

 normal production can be reached under sixty days. 



The majority of the mills in Memphis are working short time. The 

 same is true of many of those in the Mississippi valley. The Valley 

 Log Loading Company loaded only 1,000 cars of logs for mills at 

 Memphis and at point on the Yazoo & Mississippi Valley and Missouri 

 Pacific roads during the month of Jime, or a quantity heavily below 

 the average for this time of the year. Firms doing their own log 

 loading are falling considerably below normal accomplishments. 



"We have quit trying to bring out logs for our mills in Quitman 

 county, ' ' said a prominent manufacturer recently. ' ' We have found 

 it impossible to get anything like average results out of either men 

 or teams because of the wet condition of the woods. And what is 

 even more important, we have found it utterly impossible to keep 

 up our logging road so as to be able to keep cars on the track. De- 

 murrage charges pile up under such conditions and we have stopped 

 all operations until we can get results. That time will come when 

 there is a cessation of rainfall and when the woods are normally dry. ' ' 



The Valley Log Loading Company anticipates some expansion in log 

 movement. J. W. Dickson, president, put on another loader this 

 week, making three for the Yazoo & Mississippi Valley line and 

 one for the Missouri Pacific. If this additional machine is kept busy 

 and all present equipment is fully engaged, this firm will be operat- • 

 ing at only SO per cent capacity. In the meantime, the mills cannot 

 operate on greater than 80 per cent capacity if the logs do not move at 

 a more rapid rate than indicated. Thus the best that can be antici- 

 pated for the next thirty days is 80 per cent production as against 

 a demand that averages quite up to the 100 per cent mark. 



All hardwoods are in demand. The higher grades, including No. 1 

 common, are moving with unusual freedom. The lower grades are 

 moving better than a short time ago and are advancing in price. 

 There are fewer favorites in the hardwood list than ever known before 

 for the reason that all are moving about as rapidly as they can be 

 found and prepared for shipment. Price levels are maintained with- 

 out ditficulty and every week sees a new high level estabished. This 

 is the situation as it exists today. What it will be a month hence 

 nobody knows. But the average hardwood lumber manufacturer is 

 proceeding on the theory that everything that can be produced will 

 be wanted and every possible effort to get out hardwood lumber in 

 the southern field during the next thirty to sixty days is regarded 

 as a foregone conclusion. 



