The latest Wood Markets annual survey of the “Top 20” Canadian and U.S. softwood lumber producers shows modest gains in both countries in 2013 as lumber demand continues to rise in the U.S. and in key export markets. U.S. softwood lumber shipments increased 5.1 percent to 30.0 billion board feet (bf), whereas Canadian production rebounded from minimal gains in 2012 to record an increase of 4.0 percent to 23.5 billion bf. Corporate acquisitions were again a big part of the story as the Canadian buying frenzy continued in the U.S. South—more than 25 mills have been purchased by Canadian firms in the South that all started in the mid-2000s.

According to the report, the output of the top 20 U.S. companies rose strongly: from 16.6 billion bf in 2012 to 17.9 billion bf (+8.2 percent) in 2013. In doing so, these firms increased their market share of U.S. production from 58 percent to 60 percent. The five largest producing U.S. companies, Weyerhaeuser, Sierra Pacific, Georgia-Pacific, West Fraser (U.S. operations), and Hampton Affiliates, produced almost 10.0 billion bf or 33 percent of total U.S. production. Of note, all regions in the U.S. recorded production increases in 2013, with the U.S. West leading the surge in output with a gain of 6.1 percent; the U.S. South increased 5.1 percent.

The top 20 Canadian companies increased their market share of total Canadian lumber shipments, rising from 79.8 percent in 2012 to 80.5 percent in 2013. Canfor retained its leading position as the top Canadian lumber producer with 4.2 billion bf of production—a 9-percent gain over 2012. West Fraser held onto the number two spot with 3.6 billion bf of output (+3 percent). Tolko and Resolute Forest Products remained in the number three and four spots, while Interfor leaped into the number five spot from production gains at its B.C. Interior SPF mills. Together, these five firms produced a total of 12.1 billion bf (51 percent of Canadian lumber shipments—similar to in 2012). B.C. Interior sawmills continued to struggle with processing dead logs from mountain pine beetle-killed timber (West Fraser and Canfor both announced mill closures for the first half of 2014).

Sawmill acquisitions were active in 2013 with two smaller ones announced in 2014 by Interfor (Tolleson Lumber) and West Fraser (Travis Lumber). Two B.C. Interior sawmills that were destroyed by catastrophic explosions in 2012 (Hampton’s Babine and Sinclar’s Lakeland mill) have been rebuilt and will be operating in 2014.

The report further states that with prospects of steady to stronger lumber demand and prices through most of 2014, there is persuasive evidence companies are increasing efforts to expand output by adding shifts, re-opening closed mills or buying sawmills (and expanding these). More of this is expected for 2014, as sawmill companies continue to gear up for the potential of a lumber “super-cycle” that is expected as early as 2015 but more likely 2016.