Idaho’s wood-products industry employs about 15,000 people, down from nearly 23,000 in 1979. But anyone who thinks the industry is yesterday’s news should see what’s happening in Grangeville.

More than 20 legislators, legislative candidates, state employees and others did that Friday as part of a two-day tour to learn about Idaho’s forests and forestry businesses. The tour was led by the Idaho Forest Products Commission, a state agency funded by taxes on the industry.

The final stop was a 2-year-old, $40 million lumber mill built and owned by Bennett Forest Industries, a family business that also owns mills in Princeton (north of Moscow) and Clarkston, Wash., across the Snake River from Lewiston.

The Grangeville mill replaced one in Elk City, 60 miles east, that Bennett closed to save on transportation costs. John Bennett, the chief financial officer and a son of primary owner Richard Bennett of Hayden Lake, said the Elk City mill employed 110 people. “Virtually all took jobs in the Grangeville mill,” he said. He said they average more than $15 an hour plus benefits.

At the new mill, computerized equipment scans incoming Douglas fir, grand fir and other logs and determines within seconds how to get the most lumber from each one. Many logs are not straight, so the mill cuts them following their curvature. The lumber is then flattened by pressure during kiln drying. The production line has almost no people performing inspections or other repetitive tasks typical of traditional manufacturing plants. Even the grading of lumber based on knots and other defects is largely automated.

Nothing from a log is wasted. Wood chips are sold to Potlatch Corp. for making paper in Lewiston, pine shavings are sold as Rosebud brand horse bedding, and unusable wood is burned for steam that heats the kilns and the mill.

Bennett said the mill is still making a profit even though lumber prices have fallen about 40 percent from their peak in 2004 and 2005. Employment has climbed to 165. Output recently has remained flat despite the slowdown in home construction.

Bennett attributes this success to two things:

Æ Efficiency. The Grangeville mill gets up to 38 percent more lumber from each log than the Elk City mill, which was still a modern plant when it closed. The new mill tripled production while employee costs rose 50 percent.

Æ Specialty products. The company makes high margins on noncommodity lumber products like laminate and stress-rated lumber, used where design specifications require tested properties.

Bennett expects lumber prices to fall an additional 10 percent to 20 percent. But he hopes to add a third shift — and more employees — when prices rebound. “There’s always demand for product,” he said.

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A hopeful report for Micron

Micron got some good press this past week when the Wall Street Journal Online reported that the Boise company “is setting up for a big run — once chip prices recover, that is.”

The story quoted Caris & Co. analyst Betsy Van Hees as saying Micron has done “an excellent job” of lowering its cost of making memory chips. Before the end of 2008, Micron will begin using a technology that will get more chips from each wafer, lowering the cost per chip, the story said.

Micron also was part of a story on PBS’ NewsHour about Virginia’s growth changing the state’s political landscape. Micron has a 300-mm chip plant in Manassas.

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Idaho's sad fall from job-growth leadership

Lest you get too bullish too fast about our still-weak local economy, consider these U.S. Bureau of Labor Statistics data shared with me by Statesman business reporter Joe Estrella:

In second quarter of this year, Idaho job growth ranked 44th lowest among the 50 states and Washington D.C. Ohio, Wisconsin, Nevada, Arizona, Florida, Michigan and Rhode Island each reported weaker job growth than Idaho. Idaho was among the top five in the nation every quarter between the second quarter of 2004 and the second quarter of 2007.