Re: First Paid Fire for the New Tender tonight!


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Posted by David Sherman on Friday, June 30, 2006 at 1:31PM :

In Reply to: Re: First Paid Fire for the New Tender tonight! posted by Willy-N on Friday, June 30, 2006 at 11:34AM :

It'll be interesting to see what they do with it. I don't mean this as anything bad about Indians in general, but I've sure seen a lot of new Indian-owned businesses, usually started with some kind of government economic development money, fail due to mismanagement, lack of a real market for their product or other causes. You can see the remains of one of these failed "economic development" projects on almost every reservation. It probably seemed like a good idea back in the '70s and '80s when many of them were started, but most of them were manufacturing plants of some kind, and manufacturing is tough for even big established US companies with skilled workers and good sales networks. A startup, even a federally-subsidized Indian one, didn't have much of a chance even to start with. When all the US manufacturing moved to Mexico and then to China, it was a lost cause. Lumber's a little different because it's a commodity for which there's always a market and because its value is low relative to its weight, local markets can give local mills an advantage over distant ones. The problem, of course, is anybody can buy logs and saw them into boards. Traditionally, in the lumber business, the lower the lumber prices go, the more boards the mills produce in order to make up for declining profit margins. The result is nobody in the sawmill business is making much money. The dealers and speculators might make a quick buck when a hurricane or earthquake spikes the demand, but little of that profit trickles back to the mills.

I'm assuming this is the mill that used to be Omak Lumber. If that's the case, they own timber rights to much of the Okanogan Highlands. It's kind of an unusual arrangement, but years ago when most of that land was cattle ranches, Omak Lumber approached the ranchers and rather than buying the land outright or buying the timber for one-time logging, they bought the right to cut anything above 10" dbh that ever grew on the land. Basically, they'd come back in every 40 years or so and re-log it. This was find for the ranchers -- they got money up front, and trees just got in the way of cows anyway. But now most of those ranches have been chopped up into 20-40 acre ranchettes and not everybody who bought them really understood what it means when somebody else owns the timber rights on their land. Some real estate agents were entirely eager to educate them either. The result is quite a few people have been horrified when the loggers show up to turn their new cabin in the woods into a cabin in the stumps, and not only is there nothing the land owners can do about it, but there don't even get any money for the timber.

I suspect that at this point it would make more economic sense for the Indians to just shut Omak Lumber (or whatever they call it these days) down, sell the land for an industrial park or shopping mall, and sell their timber rights back to the owners of the underlying land. I bet somebody who just built his dream log mansion in the piney woods of the Okanogan Highlands would pay far more than stumpage value to preserve the trees on his land.



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