ASHLAND (AP) – Fraser Papers Inc. is temporarily laying off 85 employees at its sawmill because of a downturn in the U.S. lumber market.

The company told employees this week that the layoffs are necessary because of a glut of lumber brought on by a slowdown in U.S. housing starts and the recent approval of a softwood lumber agreement between the U.S. and Canada, resulting in more lumber imports.

Fraser, which is based in Toronto, will reassess market conditions during the next three weeks, said Pierre McNeil, senior vice president of wood products.

The company has already had shutdowns at its Canadian sawmills, but these are first layoffs in a U.S. facility, he said.

The affected workers are on the main line in the stud mill at Ashland, but the company will keep running a processing line for pine sawing. The market price for stud lumber leaves the company no alternative but to shut down the line, McNeil said.

“Right now we need to see how the market will evolve,” McNeil said. “Indicators are down in the U.S. markets.”

Ron Beaulieu, the mill’s manager, said the plant has been losing money for a couple of months. Lumber is now selling for $300 per thousand feet delivered in Boston, he said, the same price lumber was selling for 15 years ago.

The layoffs are a blow to this small northern Maine town, which has less than 1,500 people. Fraser is the major employer in town, said Town Manager Jim Gardner.

“I haven’t heard what the extent will be, but it’s a somber message,” he said.

In addition to its sawmills in Ashland and Masardis, Fraser Papers owns paper mills in Madawaska and Millinocket.