Enjoying that new oak entertainment center in your living room? That deck you built last summer? The picket fence that lines your property? The furniture in your house? Thank forestry tires, which continue to play a vital role in moving timber from the woods to the mill to the store and, ultimately, into your home.
Forestry tires remain highly profitable items. "But the market is, at best, flat and has been for the past two or three years," says Ralph Burchfield, president of the Firestone Agricultural Tire Co. (FATC). "Our average selling price has dropped 15% over the past five years."
Demand for forestry tires also has decreased due to the strong American dollar, according to Larry Jensen, manager of forestry tire sales for Nokian Tyres Inc. "Customers can go to other countries and buy wood products. There's less exporting being done."
And recent logging industry consolidation has had a major impact. "You have fewer loggers," says Stu Miller, FATC's senior project engineer. "And those that are left are bigger and are buying larger equipment."
Trendy market
Trends in the North American forestry industry -- some emerging, others already established -- are profoundly affecting the forestry tire market. Logging companies are employing fewer workers due to high labor costs and are using larger machines instead. "Bigger machines are tougher on tires," says Jensen, so larger tires, which can absorb more punishment, are growing in popularity.
Bigger tires are more expensive but they minimize long-term cost-per-hour losses, says Miller, "so in the end, it all evens out." Popular sizes include 28L-26 and 30.5L-32, which fit medium-to-large skidders. Forestry tire ply ratings also are increasing. Fourteen and 16 plies were considered high in the past, according to Jensen. "Now we're looking at 20-ply tires."
"When you add up the cost of down-time and lost production, it's easy to see the value of using a reliable tire," says Neil Rayson, farm and forestry tire specialist for Continental General Tire Inc.
More plies generally equal increased cost and extra weight, "but if you need them, you need them. For very severe conditions, regular skidder tires won't hold up."
There's been a gradual increase in the use of Scandinavian-style, cut-to-length logging in North America over the past 10 years, especially in Canada. Cut-to-length logging generally involves two machines, according to Miller: harvesters, which chop down trees, strip their limbs and cut them into logs; and forwarders, which pick up fresh logs, stack them and transport them out to the road, where they're hauled away by trucks. The process is more expensive than using conventional skidders but "more environmentally friendly." Both Bridgestone/Firestone Inc. and Continental General are looking at adding metric tires in various sizes to fit these machines.
Logging companies also must deal with increasingly stringent environmental regulations. Soil compaction is a major concern. "When soil is compacted, trees can't obtain the moisture they need as easily," Rayson says. "Repeated compaction impedes their growth."
To minimize compaction, loggers are using more flotation tires with wider footprints -- which are popular in the southeastern U.S. where soil tends to be softer and wetter -- and tires with lower ground pressures.
Taking their lumps
Dealers should always emphasize service when marketing forestry tires, says BFS' Burchfield. "That's the most important issue."
Bill Tolleson, a forestry tire wholesaler in Jackson, Miss., says it's more economical to let his retail customers service end users in their areas. "But we educate them." His dealership, Bill Tolleson Tire Station, holds an intensive, day-long forestry tire training course once a year with help from BFS and provides on-site training throughout the year via five in-the-field company salesmen.
Tolleson, who has been selling Firestone brand forestry tires for 25 years, has 16 to 20 associate dealer/customers throughout Mississippi. He promotes forestry tires by co-sponsoring Mississippi Logger Association meetings and setting up a booth at the organization's annual Logger Expo, "where we demonstrate the features of our product."
Unfortunately, forestry tire sales fluctuations are often beyond dealers' control, Tolleson concedes. "They're profitable tires, but the problem is volume. Usage is down." Mills in his area are closing at a rapid clip, "and we've probably lost 50% of our loggers over the past three years due to decreased demand."
In addition, Tolleson's forestry tire service income has been dramatically affected by Mississippi's unusual lack of rainfall this year. "When it rains a lot, loggers might not be able to get into the woods for a couple of weeks. During that time, mills' log inventories get lower, which gives loggers the opportunity to harvest more the following week."
Al Pierce, retail manager for Basin Tire Service in Klamath Falls, Ore., says environmental regulations have indirectly hurt his company's forestry tire sales by making it tough for lumber mills, particularly smaller ones, to stay in business. "The bigger mills are the only ones still going." Basin Tire, a multiple-location dealership, primarily sells Firestone brand forestry tires, but has sold General-brand products in the past.
If demand is there, forestry tires can be extremely profitable, according to Pierce. Basin Tire charges nearly $2,100 for a 24.5x32-sized Firestone skidder tire. "We'll make about 15% on that."
Furthermore, marketing forestry tires is a cinch, Pierce says. "We never advertise them. The tires' performance sells itself." But right now sales are low. "I'd like to see it turn around but I don't see it happening soon. But we're going to be here and if business does pick up, we'll be back in it."
Forestry tire manufacturers understand the plight of the dealer. "We have to keep our prices competitive to our customers because they're being squeezed by their customers," says BFS' Burchfield. To stay profitable, dealers will have to stay on top of the business and "work closely with their suppliers to meet customers' needs."
"We, the manufacturers and our forestry tire customers, are in the same boat," says Continental General's Rayson. "We're all vulnerable if the industry shrinks. I don't think one group or the other can reverse the course on their own. But this shakeout is like any shakeout anywhere in the tire business. The well-run, efficient dealerships will pull through."
