In 2021, Katrina Amaral, co-owner of Timberdoodle Farm in New Hampshire, spoke about running a lumber business amid high demand for lumber. However, the housing market is now challenged by supply shortages and rising mortgage rates, and changing conditions are impacting the lumber industry.
“Marketplace” host Kai Ryssdal talks with Amaral about moving his business into new territories and peering into the crystal ball of 2023. Below is an edited transcript of their conversation.
Kai Risdal: So it’s been a year, maybe a little longer, since we spoke.What about the world of boutique sawmills?
Katrina Amaral: We’re definitely slowing down, but they’re still pretty busy. Our business is heavily associated with new housing starts at this time. And it hasn’t been as strong as the last two years.
Risdal: Yes, she’s kind of like, “Oh my god, what’s going on with my business?” What’s going on with your business now that housing is slowing down? [Federal Reserve] Chairman Jay Powell, it may go on for a while.
Amaral: yes. Honestly, it’s somewhat okay. In fact, we’ve diversified so that we’re not completely tied to new housing starts. There are many other elements in the timber business that can be leveraged.
Risdal: Well, do some of them. How do you diversify?
Amaral: of course. So I think we’ve actually been completely vertically integrated since the last time we spoke. So we can go to the land and cut down trees, convert them to timber and finish the timber for our house. yeah, that’s a lot.
Risdal: yes. No, wait. Let’s take this one by one. how did you do Did you hire more people? Have you consulted on what to do? I mean, what was the business model like, ‘Okay, this is what you should do’?
Amaral: of course. We spend a lot of time on equipment that is well sized to operate, including forestry equipment that has very little impact on the ground and is easy to operate in the woods, while being more efficient and less impactful. We have also invested in some new processing equipment. We also added his second kiln for drying wood.
Risdal: Basically what you did was spend money to make money.
Amaral: yes.
Risdal: Well, is it working for you?
Amaral: is.
Risdal: What else have you done to diversify?
Amaral: We got another piece of equipment focused on our ability to deal with storm damage.
Risdal: So basically you’re starting a service?
Amaral: Slightly.
Risdal: how did you get into this
Amaral: Technically speaking, my husband is a machinist and built his own sawmill. Then I started sawing. I like working together, and I like stacking things up. So in the end you get a very tangible result. And we both like being in the woods.
Risdal: With inflation still on the table and the economy slowing going into 2023, what do you think of next year’s Timberdoodle?
Amaral: Well, it’s definitely a blurry crystal ball. Yes, the equipment parts have increased. We still feel a lot of the supply chain impact, especially when it comes to trying to modify equipment to better suit our business. It will definitely be a challenge. But you can also pursue markets with less added value. Chicken coops, timber stilts, things that people are always trying to build. That’s not a very high profit margin for us.
Risdal: Katrina, what’s your stress level?
Amaral: Not too bad so far. We still have some projects in the book that have been helpful and some that we are looking forward to.
Risdal: fair enough. fair enough.
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