Posted: Thursday, August 18, 2011 9:00 AM
The immediate focus of the new softwood lumber checkoff will be stimulating demand among domestic builders, but a longer-term goal may be expanding overseas markets.
In China, for example, most new residential projects are large steel and concrete buildings, said Dale Riddle, vice president of legal affairs for the Seneca Sawmill Co.
If even a small percentage of the enormous Chinese building market shifted to lumber, that would likely result in a large increase in demand for wood products, he said.
Currently, the Chinese import a lot of raw logs, which they cut and use for concrete formwork.
That market dynamic has hurt sawmills, which must contend with low domestic demand for lumber but high log prices due to exports, said Steve Zika, president and CEO of the Hampton Affiliates lumber company.
"The U.S. market is still in the doldrums," he said.
However, foreign demand for U.S. lumber does exist and has been a boon to the industry, particularly due to exports to China, India, Japan and Vietnam, Zika said.
"If we didn't have the overseas market, we'd have quite a few mills close down," he said.
Zika said the checkoff program will probably expand overseas marketing over the long term.
Sorting out the details of export ventures will be tough, though.
Different regions of the U.S. rely on numerous shipping lanes and foreign markets, so it will be hard to decide which foreign countries to concentrate on, Zika said.
"You have limited dollars, so you can't go everywhere," he said.