OAKFIELD, Maine — On the heels of a banner sales year in 2022, Katahdin Forest Products has closed one mill and laid off 20 employees because its cedar stock is nearly depleted.
The combination of warmer weather and a 30 percent reduction in the number of Maine firms harvesting timber means the company cannot keep pace with the demands of cedar log home and fencing sales, owner David Gordon said.
“While there have been shortened seasons in the past, there has never been a year where supply was this limited,” Gordon said.
Founded in 1973, Katahdin Forest Products, parent company of Katahdin Cedar Log Homes, owns three mills in Ashland, Oakfield and Chester. The most recent layoffs occurred in Oakfield last week. The Ashland mill closed in January when cedar stocks ran out, and while the other two remain open with a skeleton staff to fulfill existing orders, they face closure by June, Gordon said.
He does not know if the mills will reopen next cedar season, he said.
Northern white cedar thrives in Maine’s northern swamps. The lumber can only be harvested when the ground is frozen, so harvest season typically occurs from January to mid-March, Gordon said. Without cedar, they have no product to sell.
“It is very sad to lose the market. They have been very important for a long time,” said Dana Doran, executive director of Professional Logging Contractors of Maine. “Several factors, including a loss of market and the inability to afford overall costs, threaten current and future production.”
The Maine logging industry contributed an estimated $582 million to the state economy in 2021, but certain factors — operational costs that nearly doubled, mills that closed, fewer logging contractors, weather and access to repair parts — threaten the industry’s ability to maintain maximum production, according to a University of Maine economic impact report issued last month.
H.C. Haynes Inc., Katahdin Forest Products’ cedar supplier, works with subcontractors to harvest wood mostly in north central Maine and northern Aroostook County, company President Jay Haynes said Friday.
“Fuel costs have gone through the roof and that’s discouraging for loggers,” Haynes said, adding that most of the state’s logging companies are small, private contractors with six or fewer employees.
Some are selling out or retiring, and most of the logging contractors the company works with are in their 50s, 70s and 80s, he said.
Unless the business has been passed down within a family, it’s tough financially for young people to get into logging, Haynes said.
Katahdin Forest Products has been the nation’s largest producer of custom log homes, and supplies more than 50 cedar fence installation companies across New England, Gordon said.
The company uses the entire tree for their products. The largest logs are used for log homes, smaller parts and top are used to produce fencing, and the remainder is used for sawdust, scraps and shavings, as well as to fuel the company’s 5-million-BTU biomass boiler that heats the manufacturing facility, Gordon said.
“We already have far more sales in the pipeline than we have the ability to fulfill with the wood we have,” Gordon said.
Nonetheless, Ward Cedar Log Homes, based in Houlton, has not had a problem getting cedar this year, Director of Sales and Marketing Ron Silliboy said.
“We source through multiple suppliers and the vendors we work with are not seeing a shortage at this time,” he said. “We don’t see that as an issue for us right now.”
Katahdin’s 20 laid-off employees will receive unemployment compensation, Gordon said.
The Maine Department of Labor’s Rapid Response team program, in partnership with Aroostook County Action Program, is working with those employees, Maine Department of Labor spokesperson Jess Picard said.
“They held a session for Katahdin Forest Products and Katahdin Cedar Log Homes employees Wednesday, March 8, in Houlton,” she said. “Workers were connected with CareerCenter staff as well.”
At this time Gordon said he does not know what will happen to the remaining 58 employees when the other two mills close or whether the company will reopen.
“The future is unknown at this point, but we are pursuing every avenue to resume operations in the future,” Gordon said.
