A pile of wood chips grows Sept. 20, 2024, at Malheur Lumber in John Day.

JOHN DAY — A new state analysis shows the impending shutdown of Malheur Lumber could cost Grant County’s economy $58 million, and local civic leaders are launching a desperate effort to keep the mill afloat.

Ochoco Lumber, Malheur’s parent company, announced on July 23 it would permanently close the John Day sawmill after its log inventory is processed — likely late this year or early in 2025.

Company officials cited numerous reasons for scrapping the 41-year-old mill, including a shortage of willing and drug-free workers, a lack of housing to recruit employees, poor market conditions for lumber, rising manufacturing costs and burdensome government regulations.

The closure would eliminate 76 jobs.

Economic ripple effects

State employment economist Gail Krumenauer conducted an analysis at the request of Catalyst Public Policy Advisors using a computer program called IMPLAN to model the first-, second- and third-tier effects the sawmill’s shutdown would have on the county’s economy.

According to Krumenauer’s analysis, closing Malheur Lumber would not only eliminate the mill’s 76 jobs, which generate an annual payroll of nearly $4.5 million, but would take an even bigger financial toll on the logging outfits, equipment manufacturers and other companies in the timber industry that provide goods and services to Malheur Lumber.

The total direct impact on the local economy, Krumenauer calculated, would be $38.2 million.

It doesn’t stop there.

The mill deals with other local companies outside the timber industry, and they also would take a financial hit. Krumenauer estimated the indirect impacts of the shutdown would include an additional 106 lost jobs representing $5.6 million in annual earnings and total spending of $16.2 million.

Finally, closing the mill would have induced effects on the displaced employees’ households, costing an estimated 25 additional jobs with annual payroll of $860,000 and a total loss to the economy of $3.6 million.

Altogether, according to the IMPLAN analysis, shuttering Malheur Lumber would eliminate 207 jobs with an annual payroll of nearly $11 million, delivering an overall economic wallop to Grant County of just more than $58 million.

No deal yet to keep mill going

Ochoco Lumber’s July announcement that it planned to close the mill generated a flurry of activity among local, state and federal leaders, who promised to take dramatic steps like those that saved the mill from an earlier crisis a little more than a decade ago.

In 2012, when the mill was on the verge of shutting down in the face of a dramatically shrinking timber supply, government officials including U.S. Sen. Ron Wyden, helped broker an eleventh-hour deal to keep the mill running.

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

So far, at least, no concrete rescue efforts have materialized.

Fighting for the mill

The release of the IMPLAN analysis, however, has created a new sense of urgency among civic groups in Grant County, which are joining forces to light a fire under elected officials to take urgent action.

On Thursday, Sept. 19, Grant School District Superintendent Mark Witty and School Board Chair Will Blood went before the Grant County Chamber of Commerce to ask for the group’s support.

Witty said the school board had drafted a letter to the community asking residents to push local, state and federal officials to save the mill and asked chamber leaders to join the pressure campaign.

Pointing to the state economic analysis, Witty said the loss of Malheur Lumber would have serious consequences for local schools.

“We ran the numbers,” he said. “Conservatively, if this closes, it’s (a loss) of 60 students for Grant School District No. 3.”

That would translate into a loss of $707,000 in annual state and federal funding, he said, forcing the district to lay off teachers and cut back on sports, electives and other programs.

“The board recognizes this is a huge deal,” Blood said. “It would be catastrophic for our community and the district.”

The chamber’s executive committee expressed support for the board’s efforts and voted unanimously to send a letter to local, state and federal elected officials urging them to intervene on the mill’s behalf.

Mill operations could end in 3-4 months

Ochoco Lumber spokesman Bruce Daucsavage said the company was working behind the scenes to keep the mill’s doors open, although he said he couldn’t share details.

“We’re still trying,” he said. “We haven’t given up.”

He added he was happy to see local civic organizations mobilizing to call for government support.

“We’re encouraged by the movement of the local community in support of what we’re attempting to do,” he said. “There’s more in the works, and we’re certainly hoping for a positive result.”

Wyden and fellow Oregon U.S. Sen. Jeff Merkley on Sept. 20 sent a letter to U.S. Agriculture Secretary Tom Vilsack and Forest Service Chief Randy Moore asking them to intercede on the mill’s behalf.

The senators requested two things: a financial incentive to help cover the cost of hauling small-diameter logs and biomass to the mill “or other regional processing infrastructure,” and funding for Malheur Lumber to purchase and install a sorter-stacker system that would make the mill more efficient and eliminate the need for 12 jobs that are unfilled.

At current rates of production, General Manager Rich Fulton said the mill would probably finish processing all the logs in its decks and be ready to wrap up operations in three or four months.

Fulton, who has worked for Ochoco Lumber since 1988, said if the mill shuts down he’ll be out of a job, too.

He’s hoping that won’t happen — not only for his own sake, but for the community’s as well.

“I live here,” said. “I have family here. I care about John Day. I truly do.”

In his pitch to the chamber leaders, Witty said he didn’t think it was too late to save the mill — but time is running out.

“I’m not throwing in the towel — I’m saying let’s do something,” he said in the meeting. “I and the board feel like this is an existential moment for Grant County.”