SEELEY LAKE – Since economies around the world have ground to halt in the last month, there are very few industries that haven’t seen an impact. While the lumber prices have dropped an average of 20% in the last month for the products Pyramid Mountain Lumber, Inc. produces, Pyramid has remained operational through the coronavirus pandemic thanks to their employees. They are continuing to invest another $1.3 million in their phased upgrades to the mill.
Chief Operations Officer Loren Rose said this year was lined up to be a really good year. Prices were really strong, supply and demand were well balanced, the economies were moving forward and people were investing in projects. They were starting to see more mass timber construction using cross-laminated timbers.
“Our economy as a whole was really moving in the right direction,” said Rose. “When the supply demand equation is so balanced, it doesn’t take much extra consumption to really move prices. Prices were in a really good place.”
When the coronavirus pandemic hit the United States that changed almost immediately. The Department of Homeland Security deemed forest products as part of the essential, critical infrastructure. This allowed Pyramid to keep operating as normal, loggers to keep logging and all the peripheral businesses to do the same.
Rose said a few local contractors were told to go home in areas hardest hit by COVID-19 in Montana. While there are isolated incidents of interruptions in construction in Montana, for the most part everything has been continuing. Washington and California didn’t follow the DHS guidelines and shut down construction.
“All of the sudden you have this large consumer of forest products not consuming anything. The mills are still producing and there is a lot of Canadian production that was being exported [that now fills their mill yards],” said Rose. “But things are far worse in other countries.”
All of Pyramid’s timber sales continued and they continued to receive logs. Hauling was tempered only by the annual spring break up. There continues to be a lot of active sales, both state and federal, however Rose said he is uncertain if this will continue in years to come.
The biggest impact for Pyramid has been the steady drop in the lumber market prices. The prices in the last three weeks have dropped almost $100 per 1,000 board feet.
“I think it is the fear and uncertainty of what is going to happen,” said Controller Wendy Dalrymple. “People don’t want to stock up on inventory so they are not buying up inventory for future months. We remain optimistic that things will improve in the market.”
Fortunately for Pyramid, a lot of their two-inch lumber is used locally in Montana or Utah and their shipping has not diminished. They shipped more than four million board feet of lumber in April.
“The prices aren’t good but the consumption is still there in the intermountain west,” said Rose.
Pyramid continues to promote safety and social distancing for their employees. All the break rooms were shut down and they provided extra cleaning supplies and hand sanitizer. They are also not currently hiring and will reassess once the economy starts to reopen.
Dalrymple said they also changed the policy for lumber truck drivers. Instead of coming into the office several times, the process is streamlined to the point where they don’t have to leave the cab of their truck except to count their bundles.
“We’ve really limited the interaction with the truck drivers,” said Dalrymple. “That has actually sped things up for the drivers and for us. It encourages cleanliness in all of those areas so that will probably continue [after COVID-19 restrictions are lifted].”
Rose is thankful Pyramid was able to keep their employees working through the pandemic. He thinks this will help Pyramid rebound quicker compared to other businesses that had to close or lay employees off.
“There are people making way more money unemployed than they were employed. So to kick start the economy, there will be a component of the workforce that will not come back until their benefits run out which the earliest is July,” said Rose.
Rose continued, “The solution is time and some people have more time than others. There will be small businesses that won’t survive this.”
Rose added that Pyramid is very thankful for their employees. Even with many having children at home due to school closures, they have only had one employee miss considerable time due to COVID-19.
“It is really remarkable the resolve of Americans in general and the local people to do what they need to do,” said Rose. “We need to be very thankful we live in Montana and in the United States because we are so much better off than so many other states and countries.”
Pyramid continues to invest in mill upgrades and looks forward to the future.
Rose said, “We are not backing down and we are doing everything we can do to be more competitive and do a better job with the resources - both the human capital and the raw material - to make sure we have a good future.”
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