There were a number of trade publications that excitedly announced the following yesterday:
U.S. Hardwood Exports Hit 72-Month High:
May’s hardwood lumber export data totaled 121.4 million board feet, the highest level in 72 months and the fifth highest monthly total ever. China shipments set a record.
This is good news for hardwood sellers, I guess. And it might indicate that the global economy is improving. Hardwood is used to make stuff, after all. And if factories are making stuff, then it’s likely that people are buying stuff. But I’ve got to admit, this headline makes me sad. Here are a few of the reasons:
1) Hardwood is a renewable resource. You plant a tree, it grows, you cut it down, you plant another. BUT it is a very slow process, taking 30 years or more to have a nice, mature tree with some real size to it. Interestingly, a farm’s value prior to the industrial revolution had very little to do with the crops it grew or its overall acreage. It was all about its trees. Crops, back then, were principally for feeding the family. Wood was what gave your land its value, since it was the principle medium in which goods were manufactured.
2) 120 MILLION board feet of wood was exported from the U.S. to foreign countries (mostly China) in a single month. For perspective, you could put one-inch-thick flooring over 4 SQUARE MILES with that amount of wood. And that’s just one month’s worth of exports. I’m ballparking here, but I suspect 4 square miles would be a footprint about the size of the commercial center of either Houston or Dallas’s true downtowns. Bottom line: it’s a lot of freaking wood.
3) I placed a ‘huge’ order of wood two weeks ago, buying 400 board feet of walnut from my favorite hardwood supplier. When I got that wood, I treated it like the precious stuff it is. I went over each board, trying to maximize the yield and beauty of what I’ve received. I work very hard not to waste material, not only out of a sense of environmental stewardship, but also because it makes financial sense for a small woodworking business to be careful with their materials. I wonder, though, how I’d feel if I received 40,000 board feet of wood. Would I care so much? Would I take the time to go through the wood? Or would I say, “time is money,” and burn through the pile.
4) In celebrating how much wood we are exporting, we are also celebrating how many jobs we are outsourcing. It only costs about $600 (yep, six hundred bucks) to ship a 40-foot Conex shipping container full of American hardwood from the U.S. to China. This is because China exports such a vast quantity of finished goods via container to the U.S. that there are a heck of a lot of empty containers sitting idle on our shores. Rather than shipping those empty containers back to China, shipping companies are happy to get something (anything) loaded up in them so they can make a little money on the return trip.
In essence, then, shipping costs are negligible. So these containers full of precious hardwood get dumped on foreign shores, where a bajillion semi-skilled laborers create the furniture that will subsequently be shipped back to the U.S. for sale at pretty much every furniture store in the country. Generally, this furniture looks good and is poorly constructed. But U.S. consumers are ok with that because it is comparatively inexpensive. And that, dear readers, is how the furniture game is played. If you want to verify this, go to a large furniture store near you. Ask to see a dresser that was made in America. If they have one, ask to see a second one. I’ll bet you a nickel they won’t be able to do it.
By now you are saying, ‘Gee thanks for the encouraging post, John.’ And if I were a preacher or an infomercial writer, I’d quickly turn a corner and provide you with the solution, which is to buy what I’m selling. I’m not going to do that, mostly because that’s just not my style. But I am legitimately encouraged by a couple of trends that I believe are just starting to emerge:
1) There is a growing segment of Americans who are regaining an interest in well-made goods. Typically, these people are starting to reject fast-food consumerism (cheap, plentiful, and immediate gratification) and are instead becoming more intentional about what they buy. This requires some degree of work. You sometimes have to wait, or research, or save your money before making a purchase. But I think there’s a growing trend here, and I’m pleased to see it. Selfishly, my livelihood depends on it. 🙂
2) Manufacturing parity is coming, I think. There will come a point (5 years, I believe), where manufacturing will return to the U.S. It will have to be leaner (smaller, non-unionized) and make use of technology (automation) in order to be competitive in the global space. But I believe that we will once again see American (furniture) manufacturers have a spot in the marketplace. The pendulum is just starting to swing in this direction, with operational efficiency and skilled labor supply being key drivers. I look forward to seeing this happen, because a balanced economy is one that has a full-range of commercial enterprises. When an economy is skewed heavily towards ‘white collar’ commerce, the imbalance creates instability.