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Expiration of Soft Wood Lumber Agreement Causes More Concerns For Local Sawmills

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The Softwood Lumber Agreement between the United States and Canada expired on October 12, after being extended for one year in 2015, but the agreement has not been renewed by the Obama administration.

Montana Senator Steve Daines said the failure to extend the agreement means more economic woes for local sawmills.

“This is about subsidized lumber imports and it’s about unfairly traded lumber imports, which continue to severely harm Montana mills, Montana workers and Montana communities,” Daines said. “President Obama needs to remain committed to reaching a new trade agreement that prioritizes the American worker, and fights for good-paying jobs.”

One of the mills directly affected by the expired agreement is Tri-Con Timber in St. Regis, where Controller Andy Elhert detailed the continuing drama over the SLA.

“We had a pretty significant layoff last year when the agreement first lapsed,” Elhert said. “We laid off close to 50 percent of our work force at the end of September last year. Since then, we’ve added a few more people, so we’re up to about 75 percent capacity, and we’re omnly at about 50 percent capacity as far as production goes. The biggest impact we have been seeing is increased competition from Canadian sawmills. It’s keeping lumber prices down pretty low, to a point where it’s really difficukt for us to compete in the market.”

Loren Rose, Chief Operating Officer at Pyramid Mountain Lumber Company in Seeley Lake, said one of his company’s biggest difficulties is the strength of the U.S. dollar., and the flagging Chinese demand for lumber.

“The Chinese appetite for North American softwoods has been whetted, and they’re not taking near as much as they had before,” Rose said. “That Canadian wood and some domestic wood needs to find a new home. Now, the strength of the dollar gives the Canadian manufacturers a huge advantage in our country. Today, I think it was $1.32 with the exchange. The agreement expiring was one thing, but the Canadian’s ability to export to China, and the Canadian’s huge advantage because of the exchange rate, has ben more problematic for Montana mills than the expiration of the agreement.”

A seven year agreement was signed by the two countries on April 27, 2006, then extended for a year in 2015. It officially ended on October 12, 2016.

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