JOHN DAY — The news that Malheur Lumber will be shutting its doors permanently has hit this community of 1,700 people like a freight train, prompting locals and lawmakers to search for solutions that could keep Grant County’s last lumber mill operating.

The company announced July 23 that it would permanently close after current log inventory has been milled and the lumber shipped to customers.

The John Day lumber mill, a subsidiary of Prineville-based Ochoco Lumber, has been in operation for 41 years and employs 76 full-time and part-time workers.

In a letter provided to the Blue Mountain Eagle, company officials said that the reasons for the mill’s closure are many, with the lack of a willing and drug-free workforce coupled with a lack of housing to recruit workers from elsewhere topping the list. Other factors, such as unfavorable market conditions for lumber, rising manufacturing costs and government regulations, were also cited as contributors to the mill’s demise.

The closure of Malheur Lumber would be a massive hit to an already struggling timber industry that was once a mainstay of the local economy.

Grant County had two functioning sawmills after Prairie Wood Products reopened in July of 2022 following a 15-year shutdown, but that situation didn’t last long. The Prairie City mill shut down again in March of this year, citing a dispute with the Forest Service over a $1 million grant intended to subsidize the cost of transporting logs to the mill.

But Malheur Lumber faced a similar crisis more than a decade ago and survived, giving rise to hope that there might be a way to keep it going this time around.

In 2012, the mill was on the verge of shutting down due to a shrinking and inconsistent timber supply, but government officials including U.S. Sen. Ron Wyden stepped in and helped broker a last-minute deal to keep the mill afloat.

Blue Mountains Forest Partners and the Harney County Restoration Collaborative, a pair of stakeholder groups that include representatives of both conservation and timber industry interests, worked with the Malheur National Forest to hammer out a deal that ensured a steady stream of logs for Malheur Lumber while thinning trees on the fire-prone forest.

Part of what made the arrangement work, according to many observers, was a long-term stewardship contract that was awarded to the John Day logging company Iron Triangle. That contract, which was criticized by some of Iron Triangle’s competitors, expired in March 2023. 

Now many are wondering what, if anything, can be done to prevent the mill’s closure this time around.

Mill employee shares concerns

Billy Ward has worked at Malheur Lumber for the past 12 years, coming on in 2012 after the mill weathered its earlier shutdown threat. Ward said there is obvious concern among Malheur Lumber employees following the news of the mill’s imminent closure.

“A few of us bought houses and vehicles and stuff,” he said, “and, you know, that’s our whole life is depending on it.”

Ward said the community could start to see people packing up to head elsewhere because there isn’t much economic opportunity for them anymore, which would create economic ripple effects. He also believes the closure of Malheur Lumber could have terrible consequences for forest management and might lead to more large wildfires like those Eastern Oregon is currently experiencing.

“It would cripple our local logging companies, if not take them completely out,” he said. “And then, you know, it’d be a trickle-down to small businesses and the grocery stores, (and) the impact it would have on our forest alone … it would be devastating.”

Now he’s hoping for a solution like the eleventh-hour deal that kept Malheur Lumber’s doors open in 2012.

“You’ve got to get everybody on board and on the same page — you know, there are congressmen and beyond,” he said. “I’d like to think there’s something that we can do to keep everybody up and running.”

The key to keeping Malheur Lumber’s doors open, Ward believes, is resolving the company’s workforce issues.

“We need good, solid employees,” he said. “We’re running at 60% of a crew or right over. Most of us are doing, you know, three or four different jobs, everybody’s pitching in, it’s like a family here. But I think a lot of it depends on that.”

Ward said he was confident that if the mill can get enough people who are willing to work, it can stay open even after the current log inventory runs out, which he estimated would happen in about two months at current production rates. Until then, Ward wants everyone to remain positive while doing what they can to keep Malheur Lumber’s saws running.

“I’ve been trying to tell everyone just, they need to stay positive, keep our hopes up and do whatever they can to get the word out,” he said. “Write your congressman, whatever.”

County judge candidates react

Both candidates for Grant County judge have expressed alarm over the potential closure of Malheur Lumber, highlighting the trickle-down effects it would have on the economy and demographics of the county.

Candidate Mark Webb, the executive director of Blue Mountains Forest Partners, said Malheur Lumber’s issues stem in part from the Forest Service’s inability to adapt to changing circumstances.

“What it reflects is the lack of the federal government’s ability to reconfigure how they manage actively managed public lands,” he said.

Historically, Webb said, timber sales would go to the highest bidder while the service work involved in wildfire fuels reduction would generally go to the lowest bidder. That dynamic, he said, will not work in today’s world.

“The way the Forest Service wants to package work will not support or sustain mills like Malheur Lumber or even Prairie Wood or the timber industry, the timber or the loggers the way that it used to,” Webb said. “You’ve got to reconfigure how things are offered, use different contract mechanisms that will reflect the fact that this isn’t about just timber production and getting service work at the lowest price you can.”

Webb stressed that local and regional Forest Service leaders understand the need to adapt, saying that the change has to come at the federal level.

Grant County Commissioner Jim Hamsher, the other candidate for county judge in the November election, said he has seen the community impact of a mill closure firsthand, citing the 2009 closure of Prairie Wood Products in his hometown of Prairie City.

“You know, families hang out for a while, try and find other employment, (but) eventually they have to move out of the area,” he said.

The loss of those families leads to things like a drop in school enrollment, Hamsher said, which translates to a loss of school funding and a hit to local business owners because there are fewer residents spending less money in their stores.

Hamsher said he doesn’t want to see the same thing happen again, but he’s not sure how to remedy Malheur Lumber’s workforce woes.

“It’s hard to understand,” Hamsher said. “People complain they don’t have a job when they see so many Help Wanted signs. I wish I knew what the answer to that was.”

Both Hamsher and Webb said they have reached out to representatives in the Legislature to see if there is anything that can be done at the state level to keep Malheur Lumber’s doors open.

“I mean, tourism is great, you know, but we only see a little boost to that, maybe in the summer months — your mills, your logging industry, your agricultural industry, those are the mainstays of our county,” Hamsher said. “We have to do whatever we can do to support those because that’s been the way it is for 100 years, and that’s what we have here.”

Wyden pledges help

Sen. Ron Wyden, who was instrumental in putting together the deal that saved Malheur Lumber in 2012, said he’s already reached out to higher-ups within Malheur Lumber’s parent company, Ochoco Lumber, to see what can be done.

“I am concerned about Malheur Lumber’s situation and have called (Ochoco Lumber executive) John Shelk to discuss any and all options to help this signature Eastern Oregon business,” he said.

“I am exploring every avenue at the federal level that could help to meet the challenges outlined in the letter by Malheur Lumber: workforce, housing and capacity to handle responses to the wildfires ripping through Eastern Oregon.”

Wyden said he is willing to work with anybody in the community who wants to pull together and find solutions to keep Malheur Lumber alive and thriving into the future.

“This company has been a mainstay in Grant County for (decades),” he said, “and has a proud history of defying the odds before.”