Grant County's last lumber mill tries to hang on despite obstacles

JOHN DAY — On the canyon floor near a treeline, amid sawdust and scrap, the last lumber mill in Grant County is barely holding on.

While the housing boom has fizzled and the economy is in the tank, the real problem is a lack of timber available from federal lands.

"We were having a tough time before getting enough logs," says Mike Billman, the Malheur Lumber's timber manager. "Now it's tougher."

Eastern Oregon's abundance of trees that don't go to the mills shapes the natural and economic landscape.

Lumber mills have been the backbone of Grant County for generations, but now even private landowners have quit selling because of low prices.

At Malheur Lumber, a near-empty log yard spells trouble for 75 workers.

"We've had multiyear losses," says John Shelk, managing director of the Ochoco Lumber Co. in Prineville, Malheur's parent company. "We have a real strong feeling for the John Day community. We feel an obligation to keep the mill open if possible."

Rural leaders wonder about keeping communities alive. Residents mourn the passing of a way of life. Environmentalists, who once opposed logging in public lands, now fear overgrown, insect-infested forests may become tinderboxes.

Without mills and skilled loggers, public forests suffer, says Diane Vosick, restoration program director for the Nature Conservancy.

Now Malheur Lumber is filling orders it wouldn't have sniffed at a year ago. Leftovers from a fire salvage sale may keep it going through July, but the mill is running out of logs and choices.

"The only other option is to close down and walk away," Billman says. "We hope we've hit the floor and we're headed up."

Each year, the U.S. Forest Service calls for timber bids but competition is stiff, and mills tend to rely on logs from private landowners.

But ponderosa average prices fell from $500 for 1,000 board feet last year to less than $240 this year.

"It's so bad right now, we don't even look at cutting," says Chris Heffernan, who owns 1,100 acres of pine near Baker City. "You're almost giving the logs away if you cut."

In 1992, four mills within 40 miles would bid for his logs. Today, the nearest mill is too far away to turn a profit since landowners pay for freight.

While the restrictions, started in the early 1990s, have helped conservation, they have slammed Eastern Oregon's resource-based economy.

"In Eastern Oregon, more than in Western Oregon, forests are publicly owned with no reliable sources of logs," says David Kvamme, spokesman for the Oregon Forest Resources Institute, a semi-independent state agency. "Without logs, those mills can no longer exist."