Can Montana Participate in the Lumber Export Market to China?
2014
Scudder, Micah | Venn, Tyron | Morgan, Todd A.
The severe recession and the housing and lumber market collapse in the 2007 to 2011 period has led to increased interest in market diversification in an attempt to cushion the impact of market swings in the United States. An international market diversification strategy has been implemented by several lumber manufacturers in Oregon and Washington that allowed them to be well positioned to shift sales to the Asian market during this domestic lumber market collapse. By diversifying a portion of sales into new international markets, Montana sawmills may be able to stabilize demand for their products instead of being subject to domestic market demand swings. To determine if Montana sawmills can participate in the Chinese export market and to identify the best export opportunities, a strategic assessment was conducted through the use of a SWOT (strengths, weaknesses, opportunities, threats) analysis. For this process, Montana's lumber industry core competencies were identified and aligned with Chinese wood product demand to highlight potential export opportunities for the Montana sawmill industry. It was found that the optimal export opportunity consisted of dimension lumber from Douglas-fir (Pseudotsuga menziesii), lodgepole pine (Pinus contorta), and ponderosa pine (Pinus ponderosa) species with nominal 2 by 4 dimensions and with No. 3 utility and No. 4 economy product grades. This product mix provided the best fit with Montana's timber supply, manufacturing capabilities, and Chinese product demand. By incorporating this strategy with the help of international lumber brokers and experienced exporters, Montana sawmills will be well positioned to respond to domestic market fluctuations and future Chinese product demand opportunities.
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