The backdrop for President Trump’s visit to Duluth, Minnesota, last week featured two powerful American symbols. Air Force One, a symbol of American leadership and strength, and three loaded logging trucks, personifying one of the nation’s most important agricultural products and the many hard-working small-business owners that make up the logging industry.
The forest products and logging sector was deemed critical during the COVID pandemic as the nation continued to rely on sustainably harvested timber to produce everything from home building materials to toilet paper. Logging has a rich American history going back to building the original settlements, ship building, and the expansion of railroads. Today it is no less important, with countless commodities produced from forest products used in every home and office.
Unfortunately, for many logging companies, the COVID pandemic has taken a heavy toll. Lumber and paper mills across the country have reduced or ceased production in response to drops in demand. The closure of major paper mills in Wisconsin Rapids and Duluth, Minnesota, are among the most devastating regional examples. Nationwide production curtailments have led to lower prices for log delivery to mills. Logging companies are generally small, family-owned businesses that have high operating costs and are more susceptible to prolonged periods of economic decline. Many are in danger of permanent closure. That means when the economy recovers, there simply will not be as many loggers to do the work and respond to demand. Consequently, consumer costs will rise dramatically across the nation.
Virtually all raw material delivered to mills by loggers and truckers have experienced price drops greater than 5 percent in 2020 compared to 2019. A 6.7 percent (21.4 million tons) reduction in nation-wide wood consumption has reduced wood prices and generated a $1.83 billion (-13.0 percent) loss in revenue.
The Coronavirus Aid, Relief, and Economic Security (CARES) Act was intended to provide much-needed relief to businesses struggling to survive during this economic shutdown, and for most industries the stimulus was very helpful. However, CARES Act programs like the Payroll Protection Program (PPP) are limited to a percentage of actual payroll and don’t take into consideration fixed costs, such as monthly payments on expensive equipment that many in the logging industry are faced with. These fixed costs are like a mortgage — they must be paid whether a person is working or not. Loggers in some regions are experiencing 40 percent losses, making it impossible to keep up with overhead costs.
Logging is categorized as an agriculture product by the United States Department of Agriculture (USDA), but when it comes to providing assistance it is not given the same consideration as other products by the agency. Congress authorized $9.5 billion to support agricultural producers affected by COVID. In May, USDA launched the Coronavirus Food Assistance Program in the CARES Act for a limited number of commodities. In July, it expanded the program for additional commodities. Timber and logs were not included. This Fall USDA created CFAP-2 which allocates additional funds to agricultural producers impacted in the second two quarters of 2020. This now includes Christmas trees that have yet to be harvested this year, ornamental fish and tobacco -- but not commercial timber harvest.
Six U.S. Senators -- including Susan Collins (R-ME), Tammy Baldwin (D-WI), and Tina Smith (D-MN) -- have urged the USDA to provide financial assistance to American loggers and log haulers who have experienced serious financial strain due to the COVID-19 pandemic. In a letter to USDA Secretary Sonny Perdue, the senators stated that, “Loggers and log haulers are critical to America’s forest products industry – which is a top-10 manufacturing industry in 45 U.S. states. Our nation’s loggers and haulers harvest and transport the raw material that supports over $283 billion in value-added wood and paper products – with a supply chain that includes nearly one million Americans earning over $54 billion in combined payroll. In light of the dire situation facing loggers and log haulers, we urge the Department to use its broad authority and funds already provided by Congress to immediately make financial assistance available to loggers and log haulers impacted by the pandemic.”
These U.S. Senators are right: the logging and forest products industry needs a lifeline like other similarly situated agricultural producers. President Trump has been an ally of hardworking blue-collar workers in our forests, mines, and factories. He understands how critical these jobs are. He also knows the important role logging plays in manufacturing, trade, and wildfire mitigation. Hopefully USDA will be able to find a way to include logging in CARES funds that have already been allocated so logging can continue to remain an American symbol of greatness.