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Zac Ziegler: I'm Zac Ziegler, and you're listening to Oregon Rainmakers from KLCC. On this edition, I talk with Sean Smith, the CEO of Starfire Lumber in Cottage Grove.
Oregon has been a top state for lumber production for most of its history, and while it isn't the end-all be-all of the state's economy anymore, state reports show that it still employs about the same number of Oregonians as the federal government. Those jobs come in a variety of shapes and sizes, from those who actually cut down the trees to people who make products using the lumber that comes after the process. One place that adds to the totals is Cottage Grove's Starfire Lumber, the sawmill specializes in specialty size cuts of lumber making the most of large trees that stood in our forest for sometimes hundreds of years. When I arrived at Starfire, I was greeted by CEO Sean Smith and his one year old black lab Rhino. We started with a tour of the company's new offices, which are made largely of wood cut by the company.
Sean Smith: This is all our product, including the tongue and groove stuff on the ceiling and obviously all the timbers.
Ziegler: Yeah, it's gonna say you don't trust an industry necessarily, that that doesn't use its own product.
Smith: Right. Well, we really wanted to showcase it with this building, and so we went a little bit bananas and a little bit over budget, but, you know, very thrilled with the outcome.
Smith: This is a table, slab, that we made.
Ziegler: Oh, that's beautiful. Yeah, that's beautiful.
Smith: Just love it the details of how they framed it up underneath. The same outfit built this for us that designed the building. It's New Energy Works. They're up in McMinnville, and they are timber, timber rights, you know, like these are, that's, those are white oak dowels holding those together. And it's a legit mortise and tenon. Those guys were like a drill team watching them put this thing together. I mean, they knew, you know, they knew what they were about. You just stayed the hell out of their way.
Ziegler: Yeah, no, no, that, that, you know, no screw, no bolt construction is always so impressive with carpentry work.
Smith: Yeah, it's a genuine article. You just don't see very often
Ziegler: We sit down in Sean's office, where the large TV on his wall is showing a scene from inside the mill. A complex piece of equipment is guiding large logs past a massive saw blade, giving the first glimpse of what's to come.
Smith: Behind the behind that cab you can see with the door on it, that's where the head rig operator sits. But what happens is the log goes up there, and these hammer dogs come down and grab hold of it. They got a basically a chisel end on them, and they come down and hold the log fast to the carriage. And he's taking it back and forth. So the the sawyer, who sits inside the cab there, he's adjusting the saw tension, the depth of cut and the feed rate into the saw, depending on the log he's cutting up. And so he's making all kinds of decisions to try to extract the maximum value out of each log segment that he processes here. But yeah, so this guy is the most highly paid production guy in the mill, he's making close to 40 bucks an hour, and maybe a little over. I don't know what our latest pay scale is in that position, but we only have three sawyers. And then the logs going up this incline here. They're going to the next station, which is called the edger, and that's what cuts them to widths. And you'll see that when you when you get out in the mill.
Ziegler: It's impressive to watch. You know, it's when you're watching someone who's good at their craft. Regardless of what it is, it's entertaining to watch.
Smith: The industry term for this is a cutting mill, and there are not as many of us as there once were, but we're more old school. What you would contrast this with is like a modern, you know, high production sawmill that's making a lot narrower range of products, more dimension, linear dimension, lumber like you find at Home Depot. They're cutting a log that is, you know, 35 to 50 years old. So it's a much more homogeneous log, whereas we have a much broader range of grades and sizes of log that we're cutting. So you got to break down each log individually. You know, with human intelligence behind the decision, I guess until AI gets to a point where it can duplicate this function. But that's questionable whether that'll ever be. But a high speed, modern, linear dimension mill. They're cutting logs with very little internal defect. They're just gonna we call it jokingly call those spaghetti factories, because they're just running the log through and it's like we're scanning the outer dimensions of this log, and we're going to give you a solution based on the software that says you can get X number of two by fours, four by fours, two by sixes. And then you're going to optimize how you break down that log based on current market conditions. If two by sixes or the hot seller this week. We're going to maximize the number of two by six we get out of that. Now here's a nice big, yeah, that thing's big. It's a higher grade a log. You can see it's got a lot of clear fiber on the outside, not a lot of knots. So you can see he really slowed down, because he's really he's going to turn this log more and he's going to be a lot more analytical how he breaks it down, whereas with, with the 16 to 19 inch diameter logs, they're just what we call two siding them. So they're taking an open face, taking a second cut, flipping the log, doing the same thing on the opposite side. It's a real straightforward thing, and they get the log off the carriage a lot quicker. This one, it pays to be more judicious how you break it down because there's more value to be gotten out of this log, and you don't want to just be in a hurry and butcher up the log
Ziegler: A tree that size. I mean, you know, you were talking earlier, the ones that that, you know, get cut down, you know, through the the spaghetti factories, as you call it, they're 30-50, I mean, a tree like this. Just so I've got an idea of of how rare and how precious of a resource this is, any idea how old a tree like that is?
Smith: That'd be a 200 or 300 year old tree, probably. It's, it looks pretty dense green from here. Obviously the camera resolution isn't that great, but just having looked at a billion of these, I can tell you that's a that's an older log. The diameter doesn't always tell you much about the age, because the you know, if you if you've got a log that's growing like on a west facing slope of, say, the coast range over here, where it's getting rain and sun all the time, and the soil is 10 feet deep. And you know that log the growth rings on that are going to be a quarter to a half inch wide and and you can have a, you know, 40 inch diameter log from there that's sitting in the yard next to a 30 inch diameter, or 24 inch diameter log from the high Cascades, let's say. That log that came out of the Coast Range might be, you know, 80 to 100 years old, and the log out of the Cascades that's much smaller, might be 300 years old. So it huge variability in Douglas fir based on where it grew.
Ziegler: I'm Zac Ziegler, and you're listening to Oregon Rainmakers. Our tour of Starfire lumber with CEO Sean Smith begins as we walk around a yard surrounded by heavy equipment, something he says is a major expense for the company. And you'll hear another voice along our tour, Andy Geissler, a forester who works for timber industry group American Forest Resource Council.
Smith: You can make a small fortune and lumber by starting out with a large fortune.
Ziegler: [laughs]
Smith: The it's a very capital intensive business. A lot of expensive things break and wear out in any given month. And you know, we're buying new forklifts once or twice a year. You know, some of these machines are on their third and fourth engines and transmissions. We run them hard, like that's a 19,000 pound machine. Those are almost $200,000 now. And the smaller machines we use are 11,000 pound machines, and they're 150 or something. I mean. Just everything goes up, up, up.
Andy Geissler: So when you're getting special orders, what kind of stuff like, what are these going into? Because they're not becoming most
Smith: Kind of like what you see in the office, yeah, you know, it's a larger timber frame type product. Perfect illustration. This is a low elevation Coast Range log right here. See the growth rings, yeah. And then you got a log over here, you know, similar diameter, tighter grain, you know, eight or 10 Rings per inch on the outer rind of that. You know, obviously younger part of its growth cycle. It's growing a lot faster, and then the growth flows as it gets larger diameter, more mature.
Ziegler: Well, it's like a vinyl record. They talk about how it's, you know, you have more distance on the outside, you know. So it spins, technically, it's spinning quicker on the outside than the inside.
Smith: Right. Yeah.
Ziegler: So you're growing, growing at a different rate.
Smith: Putting on fiber, but it's on a lot bigger spread over a lot bigger tree. So yeah, he's feeding those into the end of the barker. We'll head up there and take a look.
Andy Geissler: So does any of this go towards, like, decorative stuff? Sean, like flooring or, I mean, like all that fine grain stuff is, I mean, that's the value.
Smith: Yep. paneling, molding, window trim, you know, that tends to be, like, vertical grain, clear. But, yeah, a lot of lot of that interior application. That used to be a lot bigger component of our business, before we became more focused on larger timbers, but we'll always make a certain portion of that
Ziegler: Cool. So what are we looking at right here?
Smith: This is a ring barker. So it's basically got these knives that are pneumatically actuated, so they just a certain air pressure brings them down on the log, and they kind of float over the surface contours of the log and peel the bark off, and then this log doesn't have a hell of a lot of bark on it, so he's just going to kind of skin off the discoloration on the outside. But then we'll watch the next log, kind of see how and basically that's so that when you run the mill, run the log in through the mill, you're not getting bark into the chips and sawdust and other byproduct where they don't want bark in it, so you're just making a separate product out of the bark. The bark falls down into this conveyor, and you can see it every different size and shape and consistency. Well, it's falling down into this machine, which is called a hog, which is just a spinning drum with some hammers on it that chews it up into a more uniform consistency. Then it goes up this conveyor into this bin where it can be dropped into trucks. And this mainly gets sold as either landscape bark or soil amendment or hog fuel, meaning it goes to a biomass, electrical cogeneration plant gets burned for electricity.
Ziegler: I mean, on on a good day, where the metaphorically speaking, the sun's shining and the birds are chirping. How much timber can get processed through here in a day?
Smith: We normally produce about 23,000 board feet an hour of lumber. And so if you divide that number by about 1.5 that's the volume and board feet of logs that we're cutting in a day, we consume 36 to 40 million board feet of logs a year, which is not a huge amount compared to a lot of mills in the area. You know, we're we're solidly medium sized producer for for lumber.
Ziegler: This is where we head indoors for the first time since we left Sean's office. And you'll have to bear with some description here, because the inside of this part was loud, too loud to hear what anyone was saying. One of the first stops where things became audible again, was the cab of that massive saw we were watching on the TV in Shawn's office.
Smith: Grant is our senior most sawyer. He's about 95 years old. He's trying to keep a straight face.
Ziegler: It's great when the boss is standing over. Yeah, and making jokes as you're going and you're trying to work here, huh?
Smith: That's a real rough log there. We call it a three mill. We try not to get too many of those, but you're gonna end up with some.
So basically, the data he's got in front of him gives you the outside contours and dimensions of the logs. But he's making every decision here about when to turn the log, how deep of a cut to make. You know, the feed rate into the saw, all that stuff. He's pretty fast, at it, because he's been doing this for, like, I said, longer than I've been alive, not really, but yeah. We'll have saws blow up every once in a while, like if they hit metal or they'll hit like a ceramic insulator from an old telegraph line or something, and that massive band saw being driven by a 300 horse motor will disintegrate. And that's why we have basically bullet proof glass around the operator, because that throws some pretty nasty shrapnel that you don't want to be anywhere near.
Ziegler: Yeah, I can imagine.
Smith: Yeah. Well, we'll get out of your hair, Grant, yeah, we don't want to ruin your concentration.
Ziegler: Thank you much. Been a pleasure watching your work. We walk back out into the sawmill, where workers are sorting pieces that have come from the first giant saw, cutting it down farther to those specialty sizes, or sending it outside to a massive wooden chipper.
Smith: The two sawmill waste conveyors and the one waste conveyor from the planer converge up here. They get dropped into that vibrating conveyor. You can see the pieces coming off there. And then they get fed into the chipper. And we'll go look at the chipper in a second. But the chips drop down onto the shaker screen. They get sorted by size, and if they're too big, they fall out the right side there, go up and get re chipped if they're the correct consistency for the pulp mill to use. Then they fall in and go to this bin here where they can be dumped into chip trucks.
Ziegler: We walk up to the conveyor belt that leads out of the chipper and see small pieces of chipped wood that are much more uniform than what was going into it.
Smith: This is what we're sending to Japan. So these goes are the big pulp mills in Japan. They get exported at North Bend, Jordan Cove, Coos Bay, Roseburg Forest Products. So we shipped about five truckloads of these out a day.
Ziegler: What's that, You said pulp? Is it getting turned into paper?
Smith: Yeah, yeah, that's all going to paper mills. It goes into their big digesters and gets turned into paper. So it's just got to be the right consistency. Have the right percentage of fines and very little bark allowed. You know, they're pretty strict on quality control. Anyway. Well, we can just wander about
Smith: These six by sixes and eight by eights right here are hemlock. So you can see there's a different color and grain structure compared to the units of fur sitting right next to it. And this stuff smells terrible. The fur smells really good. Yeah, get a hearty whiff. Yeah. It's a whole different smell.
Ziegler: Oh, yeah, yeah. And then walk over to this guy. Ah, yeah. I'm from Flagstaff, Arizona, up in the north in the pines, this smells like home.
Smith: Yeah, well, Douglas fir actually is a pine. It's falsely named fir. It's a and Hemlock is actually a true fir, if you remember the story of Socrates, it's toxic,
Ziegler: Yeah.
Smith: Other than the obvious reasons they want to handle it with gloves, you get too much of the sap. That's a real skin irritant. A lot of guys are sensitive to breathing the sawdust, and so we have masts and respirators available for guys that you know find it disagreeable. This is a packing packaging plant here, so this is kind of a choke point where they do inventory control, so they're tallying each unit. Putting a barcode on it, so they can scan it into the inventory system. We know exactly what we have, and then scan it again when it goes on a truck, so we know what's leaving.
Ziegler: So you know, as I'm walking around here, I'm seeing a lot of guys making making judgment calls about things. I'm guessing that means you probably you need some good, seasoned workers for this kind of work.
Smith: I'm guessing, yeah, it's not just strong backs. They got to know what they're doing and why they're doing it. And you know, we really like to promote from within. I always make it a point rather than run out and poach somebody. I always want to give my guys opportunities stuff to strive for.
Ziegler: What's been going on with prices on this stuff? Because you hear that all the input products are going up. That's one of the issues with housing is, is, Has this been, has wood been an issue for for home builders?
Smith: I was just having a discussion with a senior executive from a sister company of ours the other day, and right now, the demand for wood products is not great. Markets aren't great, and it's a little bit enigmatic, because we're not really sure why. Interest rates aren't that high by historic standards. The stock market's on a tear, and generally, when the stock market's been doing well, you get the wealth effect, right? People feel, feel like they have more money, so they spend more money, and usually discretionary things like building projects or what the money gets spent on. Because oftentimes, you know, if you're tightening your belt, you you moth ball your building projects until. And I think, frankly, the thing that's kind of just got people sitting things out right now is just uncertainty. I mean, it just seems like, you know the current administration, you don't know from one day to the next, or one minute to the next what he's going to do with tariffs and international relations and . . . So it's like, you know, people with money to spend are like, gosh, is this the environment where I really want to commit a ton of capital to a huge building project, you know? But, I mean, I agree we have an affordability crisis in this country, and if we don't build more homes, we're not going to do anything to address that. It's ultimately supply driven, right?
Ziegler: Yeah, your guys need a house to live in, and if houses are more expensive, they're going to ask you for a better salary. We were just talking about. These guys are more than strong backs. You want to keep them around. So you got to pay them more, so you got to charge a little more, and it's just a self perpetuating cycle.
Smith: Well, I've got lumber graders that make over $30 an hour who can't get into a home, they just can't afford it. And that's a problem. When you bust your ass and give it everything you have every day and you can't afford something as basic as housing, that's the kind of thing that causes a lot of understandable anger and could ultimately lead to social upheaval and who knows what. I mean it's not even a partisan or ideological issue people need to be able to afford housing. I think we can all agree on that. There are only a few things you can tweak policy wise that makes that more likely than not. And you know, you can't get to affordability if supply is not meeting demand.
Ziegler: So seeing a fair amount of people around here, how many guys do you have working for you here?
Smith: Typically, we run about 82 employees. Sometimes a little more, sometimes a little less, but settles on that average.
Ziegler: And how is it? Are you having any issues keeping that that number, where you want it these days, or?
Smith: It really runs in cycles. We'll have six months to a year of relative stability in our workforce, and all of a sudden, for whatever reason, there's just a lot of turnover, almost always at the entry level. You know, as you would expect. I mean, most of our middle and upper guys and seasoned guys have been with us decades. So it's like, once they kind of reach a certain rung of the ladder, they tend to stick around. But the turnover is always going to be your green chain pullers and your, you know, guys that are looking for greener pastures and seeing this as a stepping stone to something else. And, you know, but we, I mean, our starting way. Just over $22 an hour with very good health insurance, dental, 401K matching. You know, we have to stay in the hunt. You can't recruit and retain anyone good if you don't. If you're trying to get people on the cheap, that's what you're going to get, but not what you want.
Ziegler: We head back into Sean's office, where we're warmly greeted by Sean's young lap Rhino. Oh, there we go. That's the sign that he's happy to see ya.
Smith: Yeah.
Ziegler: Got the toy. You'll occasionally hear my microphone being bumped during the rest of our interview, accompanied by maybe some chuckles or other noises. You see, I have a big fuzzy windscreen on my mic, and I have learned on a few occasions that it looks a lot like a dog toy.
Ziegler: You know, the last kind of thing that I have, I think, to ask you about is this kind of my favorite question to ask people at the very end, you know, what do people need to know about this industry?
Smith: I want people to know he's a big help. I want people to know that we're the good guys. You know, that we not only make a product people want and need, but we we think environmental stewardship is very important. I mean, we want to do this sustainably, and hand it down to our kids and grandkids, and if you're not growing trees and taking good care of the resource, that isn't going to happen, meaning preventing it from burning up, but also practicing good forestry, and, you know, making the standing inventory of forests more fire and resist and bug resistant, you know. So there's a lot to that, but you know. And the other takeaway, I would say, is this is a green building product. It's renewable. It takes a lot less energy to produce these things that you got to see made today than it does to produce the alternatives, like steel and concrete.
Ziegler: Not to mention you're not digging a big hole in the ground, and you're not extracting something that gets that that use, and that's it.
Smith: And you know, the science of forestry is one of those things where it's not static, right? You know, we know what we know, but as we learn new things, we put them into practice. Healthy forests are in everybody's interests. We all want to breathe clean air. We none of us like breathe and smoke every August and September from these massive fires. You know, everybody in this industry lives here. We all have deep roots in the community. We don't, you know, destructive wildfires break our hearts. Collectively, we're heavily invested in doing things right, and we are not the slash and burn, rape and pillage industry. We're sometimes portrayed as. I think, less now. People's understanding of what we do has been deepening over the last couple decades. I don't think we're viewed near as negatively as maybe we once were. I hope that's true.
Ziegler: Thanks for taking some time out of your day. You know, you're a busy guy with quite an operation here. I appreciate you taking this kind of time for me.
Smith: Thank you for being curious and not coming at us with an agenda. You know, being an actual journalist, that you guys still exist, that's good to know.
Ziegler: Yeah, there's a few of us out there.
That was Sean Smith, CEO of Starfire Lumber. This has been Oregon Rainmakers from KLCC. I'm Zac Ziegler. Thanks for listening.
