Missoula-area wood industry closures mean ripple effects for workers, tax base, forest management

The pending closures of Missoula County's two largest wood products employers, announced separately this month, will have effects beyond the local economy, limiting options for landowners and other mills throughout the region and making forest management projects more expensive, according to local and industry officials. 

"It's not just the facilities and jobs that are impacted at those facilities," said Todd Morgan, director of the University of Montana's Forest Industry Research Program. "It's going to have a bigger impact on the landscape, on forests, on communities in and around the forest and certainly on the economies of those communities."  

On March 14, Seeley Lake sawmill Pyramid Mountain Lumber announced its impending closure later this year, the company board of directors and shareholders wrote in a press release. The mill employs about 100 people.

"Among other problems, labor shortages, lack of housing, unprecedented rising costs, plummeting lumber prices, and the cost of living in Western Montana have crippled Pyramid's ability to operate," the release said. 

Five days later, Roseburg Forest Products announced that it will close its Missoula particleboard plant on May 22, affecting about 150 employees. The closure is part of the company's plan to exit the particleboard manufacturing business and focus on other products, according to a press release. 

The closures will not only affect the approximately 250 people employed by Pyramid and Roseburg, but potentially another 100 or so jobs indirectly associated with the facilities, like log truck drivers, Morgan said.  

"For them to keep running would provide a lot more stability, a lot more opportunity for good forest management in Montana," he said. "The other scenario, both close permanently, which has a lot more downside potential for remaining facilities, other mills that are interconnected and landowners." 

The wood products industry across the Western United States has seen log supply challenges for decades, Morgan said. National forest management changes in the 1980s and 1990s affected timber availability for mills in the region, where so much land is national forest, he said. 

In recent years, economic trends, such as higher interest rates and slower home construction, which reduces lumber demand, have hampered the wood products industry, Morgan said. Lumber prices have dropped significantly from the record high in 2021, during the COVID-19 pandemic. 

Oregon-based Roseburg Forest Products cited challenges competing with more modern plants with the 1969 building's aging manufacturing platform as the main reason for closing the Missoula facility.

"The decision to permanently close a plant is always difficult. It is especially difficult with our Missoula operation as we complete our exit from the particleboard marketplace," Stuart Gray, Roseburg's president and CEO, said in a statement. "Unfortunately, Missoula's older platform and technology is simply not competitive from a cost structure perspective in a marketplace with many new, modern particleboard facilities." 

For Pyramid Mountain Lumber, Missoula County's last remaining sawmill, sawn timber prices are back down to where they were before the COVID-19 pandemic, but not terrible, Todd Johnson, president and general manager, told Montana Free Press. The problem is keeping up with rising expenses, he said - especially as the mill hasn't been able to hire the workers that would be necessary to increase production. 

In the last 10 years, Pyramid has lost a third of its workforce, down from 150 employees to 100, Johnson said. 

"We can't replace the ones that are leaving and housing is a huge part of that," he said. 

Part of the housing challenge is Seeley Lake's limited sewer infrastructure, which makes it difficult to build homes where mill workers or other residents could live.

Seeley Lake does not have a public sewer system and much of the community is under a special management district with septic restrictions to prevent groundwater contamination, said Tom Browder, Seeley Lake Community Council chair. That increases costs and makes it difficult to build new housing, especially at a price affordable for millworkers, he said. 

Pyramid leaders have been talking about their declining workforce in the community and at public meetings, and they're not the only ones, Johnson said. 

"It's not just a Pyramid problem," Johnson said. "It's a town problem. We're just the largest employer, but everybody has got the problem, everybody is aware. There's not one business in town that isn't hiring."  

Missoula County officials have heard from teachers, law enforcement, Forest Service staff and others who work in Seeley Lake struggling to find housing, said Missoula County Commissioner Dave Strohmaier. While the challenge is region-wide, Seeley's limited infrastructure exacerbates the problem, he said. The commissioners and staff are working on creative ways to address housing shortages community-wide, but that's a long-term effort, Strohmaier said.  

"We don't have any broad, sweeping remedies for what is now becoming a reality in our communities," Strohmaier said. "But rest assured Missoula County is at the table with major players in the community, such as Missoula Economic Partnership, seeing what we can do to make a bad situation a little bit better." 

While the timber industry is no longer the "lifeblood" of Seeley Lake as it was decades ago, it still constitutes a large chunk of the area's economy, said Browder, the community council chair. He estimates that Pyramid's staff, along with loggers and truck drivers, make up a third of the economy or more in the tourism off-season. 

The mill workers and their families support Seeley's grocery and hardware stores, gas station and restaurants, Browder said.

"Those are the ones that would be impacted if all those jobs go away," he said. "The schools could see their pupil count go down, which means less money from the county and state. That's the big concern right now." 

Missoula County finance staff members are looking at how the closures will affect the tax base that supports Missoula County property tax collections, Strohmaier said. Taking major employers offline will not necessarily diminish the need for county services, he said.

"How you continue to deliver high-quality services at the same level as in the past with decreased revenue is absolutely a concern," Strohmaier said. "Especially in a state where local government is so reliant upon property taxes, that absolutely creates challenges for us." 

Along with immediate community impacts, the closures will affect downstream customers relying on products from the sawmill and plant, Strohmaier said.

Roseburg's Missoula plant is also a major user of sawdust and other residuals from facilities throughout the region, said Morgan, with the Forest Industry Research Program. The closure will reduce the revenue that other mills can get from wood residue because they will likely have to ship it further away, he said. Not having the Roseburg plant to serve will also hurt trucking and other industries that supply it with goods and services, Morgan said.

Pyramid is an important user of ponderosa pine, a species that is common in Montana forests but is less sought after by the wood products industry, Morgan said. 

"If Pyramid's closure is permanent and nobody reopens, it's definitely going to make forest management more challenging not just for Western Montana, but eastern Montana, where they're predominantly looking at ponderosa pine forest needing to be thinned, restored or needing timber harvest," Morgan said. "It will make it harder for landowners of all sizes ... when there's going to be a lot less capacity to mill that material they will have on their land." 

Johnson said Pyramid is the only sawmill in Montana with any large appetite for ponderosa pine. 

"From a forest management standpoint, it is huge," he said. "You've got one of the predominant species in Western Montana that doesn't have the home it had before." 

Many mills avoid processing ponderosa pine because it takes longer to dry, is more expensive to run through planers and doesn't make good studs, or two-inch-thick pieces, Johnson said. Pyramid has always specialized in one-inch-thick boards, while many other mills focus on studs, he said. 

"It's a resource that's always been available to us, so that's one of the reasons why it's been our niche when no one else prefers it," Johnson said.  

While the initial public reaction to the closure announcement mourned the loss of another sawmill closing in Montana and the impacts on communities and forest health, there's more "going on behind the scenes" as people realize the effects of losing the only mill that processes a large amount of ponderosa pine, Johnson said. 

"It affects the state, Forest Service, landowners, everything," he said. "If you have to ship logs to a farther location, with trucking costs, you don't have a lot of income coming in to offset the cost. The farther you're going with a log, the less valuable it becomes." 

Montana still has milling capacity, but problems in other Western states illustrate reviving lumber infrastructure is more difficult than maintaining it, Morgan said. For example, Arizona and New Mexico are struggling financially to complete fire hazard treatments with a shrunken wood products industry, he said. 

"It's unfortunate," Morgan said of Montana's declining timber industry. "We've lost this capacity to mill, produce lumber and timber in the state, and at the same time we're realizing the challenges going along with climate change: drier hotter summers, drier winters, shorter winters and issues with wildfires, mortality from other disturbances like beetles, drought." 

Pyramid closing permanently would affect residents throughout the region dealing with wildfires and related challenges, Morgan said. 

"Clean air, clean water are vital pieces of what forest management provides, as well as lumber, paper and other wood products," he said. "We can remain optimistic that somebody will recognize the importance of these facilities and see opportunity in them." 

Roseburg Forest Products' Missoula particleboard plant will close on May 22, the company announced Wednesday, March 20, 2024. Credit: Credit: Roseburg Forest Products