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March 21 2019
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E. Oregon lumber mill gets new life processing animal feed
By GEORGE PLAVEN -Capital Press
  Tuesday March 12, 2019 - 7:21 AM
 
HINES, Ore. — The old lumber mill sits at the entrance of Hines, Ore., shuttered since 2006, a mere ghost of the industry that once fueled economic growth in the region.

A new owner plans to have the facility humming again, but instead of making wood products, it will use state-of-the-art technology imported from Germany to process locally grown alfalfa hay into animal feed, supporting dairy farms across the state in the Willamette Valley.

Chuck Eggert, who founded Pacific Foods in Tualatin, Ore., before selling the business to Campbell Soup Co. in 2017, bought the 220,000-square-foot mill building with the idea of putting the historically significant plant back to use.

The Eggert family owns four organic dairies in Western Oregon, including two near Aurora, one in Millersburg and one in Carlton. Most of the milk is sold to Organic Valley, the country's largest organic farming cooperative, which operates a creamery in McMinnville that makes butter and powdered milk.

Eggert also purchased the Salem-based Willamette Valley Cheese Co. last year.

To feed the dairies, the family farms about 6,300 acres of organic alfalfa in Harney County in southeast Oregon, not far from Hines. The newly renovated mill will be capable of converting hay into pellets, Eggert said, ensuring precise and balanced nutrition for cows.

Reuse and remediation is a big part of the organic story, Eggert said, and the mill project is a natural extension of that ethos.

"We think it's going to be a really good project for our needs," he said. "It's going to be easily expanded, and we think that will happen fairly quickly based on what we're seeing in the marketplace."

Lumber to feed

The mill is just one building left over from the Edward Hines Lumber Co. complex, which opened in 1930 and was one of the largest producers of pine lumber in the world.

During its heyday, the mill reportedly produced more than 134 million board-feet of lumber annually. It gave birth to the city of Hines, which along with nearby Burns reached a peak population of nearly 8,000.

Soaring timber prices and deteriorating markets hampered the industry in the 1970s, and by the 1980s, parts of the Edward Hines complex were sold and gutted. The building purchased by Eggert was last operated by the Louisiana-Pacific Corp. before it, too, was closed and reduced to nothing more than a shell.

Kirby Letham, city administrator of Hines, said the mill was once the lifeblood of the community. As of 2017, the combined population of Hines and Burns had dropped to 4,309, a roughly 47% decline.

"It's been dormant for so long," Letham said.

Eggert said the pellet mill should open by June, and will create 10 to 15 new jobs right away. At peak production, the facility will require as many as 80 employees working in three shifts around the clock, processing up to 4 tons of alfalfa an hour.

"While we won't come close to replacing the vibrancy of what the sawmill once was, our operation will help support local agriculture," Eggert said.

Letham, who moved into area in 2012 working as a real estate agent, said 80 jobs might not sound like much, but it would be a huge boost to the community. Percentage-wise, 80 jobs in Hines and Burns is like creating 12,000 jobs in Portland.

"That right there is a huge benefit," Letham said.

'Amazing opportunity'

Retrofitting the mill will cost an estimated $22 million, with financing through Craft3, a nonprofit business loan fund with offices in Oregon and Washington.

Wisewood Energy, a group of experts specializing in biomass energy, is responsible for the site design and installing the new equipment, which includes a high-efficiency biomass boiler and drying system. Eggert said a lot of northern European countries are using the same technology for oil and gas production.

Beyond animal feed, Eggert said the mill is also awaiting state approval to begin processing logs under 12 inches in diameter into wood pellets, which could lead to a renewable fuel from forest waste and clearing invasive western juniper on the range.

"We've tried to make the mill as versatile as we can," Eggert said.

As dairies become larger and more automated, Eggert said the feed the mill produces will help ensure cows receive the right balance of vitamins and nutrition each time they are milked. The pellets — produced under the brand Silver Sage Farms — will also be available for sale commercially.

"Agriculture in Oregon is at a crossroads," Eggert said. "We think it's critical for people to recognize the need to support local agriculture."

In Hines, Letham said he is seeing more properties coming back to life, and resurrecting the mill should only help to keep up the positive momentum.

"They are going to be producing something that is going to be bringing jobs and growing the economy in our little town," Letham said. "It is an amazing opportunity here."

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