A Forestry Financial expert says the crunch that will determine how long the US lumber crisis lasts will not hit until March or April of 2008, according to a report from online news service, Opinion250. “The sub prime mortgage issue will hit home next spring when all of the mortgages become due” says the analyst.

“The banks and the major financial institutes have already taken their write downs on the loans , now we will have to wait and see what the US consumer does when these mortgages come due. Will it frighten the rest of the public or not is a major question. “That confidence will say whether we are in for the long haul or whether things will loosen up.”  According to the website’s source, most economists are saying that there will be no significant change in the forest industry until the early part of 2009: “We think it will be 12 to 14 months before things pick up.” Asked about the current state of the lumber industry in Canada, he said the “cash burn”, has resulted in companies taking more down time in an effort to cut costs. “The flack is coming from the board rooms; they are saying cut the cloth to fit.” According to the analyst the industry is nowhere near the level that the forest industry needs to operate. In order to cover the costs of the export tax, the US dollar and production costs companies in all of Canada need a price of $275 to $285 for random length 2x4s. “With a price of $225 to $230 right now, you don’t have to be an accountant to see just what is happening.”