Logger Relief Package: COVID 19 Economic Damage Relief Package for Logging & Trucking Companies in the Forest Products Industry
PLEASE URGE YOUR FEDERAL REPRESENTATIVES TO APPROVE THESE MEASURES (HR 7690 AND S.4233) BY SUBMITTING YOUR LETTER TO CONGRESS NOW!
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THE LATEST LOGGER RELIEF NEWS
July 26, 2020: Time to Act: Support the Logger Relief Package (HR 7690 and S.4233)
July, 22, 2020: Timber Industry Asks Congress for $2.5B in COVID-19 Aid
July 21, 2020: Collins, Golden Propose Bipartisan Plan to Help Loggers, Timber Haulers Weather COVID-19 Economic Crisis
LOGGER RELIEF PACKAGE
The American Loggers Council (ALC) and state logging associations are asking Congress to support the proposed "COVID 19 Economic Damage Relief Package for Logging and Trucking Companies” in the Forest Products Industry.
May 28, 2020 — Consuming mills have reduced their consumption as a result of reduced or lost markets during the COVID 19 pandemic. The ripple effect of that has been a reduction in the amount of wood fiber being sourced from the forest by the small, family-owned logging and log trucking businesses. According to Matthew Pellki, Professor at the College of Forestry, Agriculture and Natural Resources at the University of Arkansas at Monticello, “With the COVID-19 pandemic, housing starts have fallen 22 percent, which is the fastest one-month fall since March 1984. The Association of General Contractors (AGC) has reported that 40 percent of the construction workforce in the United States has been laid off due to project delays and cancellations. No construction means orders for lumber fall, mills saw fewer logs, and less standing timber is bought and harvested.” In his article, Professor Pellki goes on to say, “If the general economic recovery is V-shaped and reopening the economy in May and June is successful, and a relatively "normal" economy persists afterward, stronger markets for pine timber for landowners has been pushed back at least two more years.”
This amount of time will be a significant challenge for loggers and log truckers to survive and remain whole to continue their operations. Loggers and log truckers could go out of business and the entire value supply chain could be significantly disrupted as a result. With high operating costs, diminished markets and low returns on investments, logging capacity throughout the United States could be deeply reduced and new investments into the logging sector will be limited.
In order to sustain the supply chain, federal resources should provide a program for those contractors that harvested/delivered wood to various mills across the country in 2019. Contractors should be able to apply for relief through the USDA to assist them with their ability to continue business operations for the next twelve months while their markets attempt to recover, much like the assistance already given to other producers of agricultural commodities.
Funds could be used for business operating expenses such as equipment loan payments, maintenance costs, consumables such as fuel and oil expenses, required insurance payments and other fixed and variable costs not already covered in existing federal payment programs such as the Payroll Protection Program and other Pandemic Unemployment Assistance.
To receive the funds, a contracting company must provide evidence of gross revenue received for 2019. This evidence could be provided through payment statements received in 2019 from contracts with mills or providing a copy of 2019 business tax return forms that have been submitted to the Internal Revenue Service to substantiate the amount of funds a logging business will receive. A company can receive up to 10% of their gross revenue for operations in the first seven months of 2019 in the form of a grant, similar to the CARES Act Coronavirus Food Assistance Program already made available to other agricultural commodities.
This program is intended to ensure that contractors can have the opportunity to remain in business over the next 12 months and to adjust their operations as markets begin to stabilize.
This is not a state or regional issue, but a national issue that needs to be addressed to sustain the essential service providers of the timber harvesting and hauling industry. Members of the American Loggers Council stand ready and able to assist members of Congress and the Department of Agriculture as they consider all available options in helping to assist the small family-owned businesses that consist of timber harvesters and haulers that are critical to timber dependent rural economies across the United States and provide the fiber that has proven to be a critical resource for all U.S. citizens during the current pandemic.
Sincerely,
Daniel J. Dructor Executive Vice President – American Loggers Council
Representing State and Regional Logging Associations in 34 States across the United States including: Alabama Loggers Council Independent Logging Contractors of Alabama Northern Arizona Loggers Association Arkansas Timber Producers Association Associated California Loggers Southeastern Wood Producers Association – Florida/Georgia Associated Logging Contractors, Inc. – Idaho Green River Loggers Council – Kentucky Louisiana Loggers Association Louisiana Logging Council Professional Logging Contractors of Maine Michigan Association of Timbermen Associated Contract Loggers & Truckers of Minnesota Mississippi Logging Association Missouri Logging Council Montana Logging Association New Hampshire Timber Harvesting Council Northeastern Loggers Association – New York, Pennsylvania, Vermont, New England States Carolina Loggers Association – North Carolina Logging Standards Council – Ohio Associated Oregon Loggers South Carolina Timber Producers Association Southern Loggers Cooperative Texas Logging Council Virginia Loggers Association Washington Contract Loggers Association West Virginia Loggers Council Great Lakes Timber Professionals Association – Wisconsin
Best Estimates of Loss of Volume and/or Revenue used to Generate Request As Reported by State Logging Association Executives:
Alabama
2018 total severance tax tons in Alabama was 38,626,190.
Estimate loggers have lost 15% of their tons. This would be 5,793,928 tons.
Estimate loggers lost $20.00 per ton. So total losses for Alabama loggers due to shut downs and stay/shelter at home emergency orders is $115,978,560.
California
1.6 billion board feet of timber harvested statewide in 2018.
Revenue for Loggers, Log Truckers, Forestry road builder and biomass producers is estimated at $250/mbf (mbf = thousand board feet)
Logging is a very seasonal trade with available working days in most areas approximately 150 working days per year. Since March of 2020 many Logging business have lost 15-20 working days due to Covid 19. This results in a 10% to 13% reduction in income for their businesses.
1.6 billion board feet * $250/mbf = $400,000,000.
Using 10% for the average reduction in days worked it can be assumed that this directly correlates to income for the affected Business. Therefore, California Logging, Log Trucking, Forest Road Building and Biomass Businesses have a direct impact of $40 million dollars.
Florida
As reported by the Southeastern Wood Products Association, assuming the trend is production is off 17 loads per week at 30 tons per load, for the last 2 months (9 weeks) lost production would be 4590 tons time $30/ ton equaling $137,700 per company and $52,188,300 total for 379 companies reported operating in Florida.
Georgia
As reported by the Southeastern Wood Products Association, assuming the trend is production is off 17 loads per week at 30 tons per load, for the last 2 months (9 weeks) lost production would be 4590 tons time $30/ ton equaling $137,700 per company equaling $99,419,400 total for 722 companies reported operating in Georgia.
Idaho
The State of Idaho Board of Scaling Practices estimates that the scaled harvest volume will fall 7.5 % to an estimated 875 mmbf from a 2019 level of 941 mmbf. This is an early estimate.
In 2019 harvest, transportation, and manufacturing of wood products in Idaho contributed $ 2.2 billion to Idaho’s Gross State Product.
Louisiana
Small three man crews and one man hauling operations have lost between 33%-40% production since the beginning of March. From each region: North West Louisiana shows reports of loss production of approximately 40% or 6,000 tons per week, North East Louisiana is showing a loss of nearly 33%, and mid-south Louisiana is seeing an upward of approximately 37% decrease of production.
Maine
12.3 million tons of timber harvested statewide in 2018. 10% harvest reduction would equate to 1.23 million tons.
According to a February 2019 study conducted by the University of Southern Maine, an average of 1 job in the logging industry is supported by the harvesting/trucking of 3,925 tons of wood, inclusive of sawlogs, pulpwood, and biomass (Maine Center for Business and Economic Research, USM, February 2019). As a result of the loss of 10% of harvesting volume (1.23 million tons), it is expected that up to 313 logging/trucking jobs will be impacted/eliminated directly.
Michigan
COVID-19 has resulted in a 10% reduction in log and pulpwood production.
Over a two month period in 2020 there has already been an estimated loss of 183,300 tons of production.
Minnesota
The Minnesota Department of Natural Resources, Division of Forestry, reports a 40% decrease in state timber scaling receipts for the month of March and April compared to the historical average during this period.
Recognizing that Minnesota harvests and utilizes approximately 2.5 million cords annually, a 40% reduction is 1 million cords.
At a delivered wood rate of $90 per cord (including stumpage cost, harvest costs and transportation), the direct economic loss in Minnesota would be $90 million annually.
Mississippi
The three year harvest average in Mississippi is 10,804,638 tons of wood fiber. The estimate 2020 volume will be 10,007,817 tons, a 7.34% shortfall.
North Carolina
With the guidance of the Carolina Forest Service and NC State, we were able to survey our membership with a strong and significant response from all corners of the state; North Carolina loggers' production has taken a 30% to 35% reduction.
Oregon
Approximate average 4.0 Billion Board feet of timber harvested in “normal year” reduced to estimated 3.4 Billion Board feet in 2020 with a 40% loss in volume occurring in 2nd Qtr. 2020 (15% loss of annual harvested volume)
South Carolina
Due to the Coronavirus impact in SC, there has been a decrease of 15% of delivered tons to wood receiving markets which equates to 4,380,000 tons on an annual basis. Because the wood receiving markets are still very fluid with wood deliveries and the changes occurring because of the pandemic impacting the markets finished products, there is ample reason to believe the slowdown will last well into the remaining of this year and potentially have carry over into next year. Based on an average blended per ton delivered price for all wood delivery products to wood receiving markets, the COVID-19 induced slowdown has the economic impact to the timber harvesting and timber trucking segments of South Carolina's wood supply chain at $ 153,300,000 for 2020.
Virginia
The Virginia Department of Forestry has examined its records for us for the periods of March 10 through May 10 for years 2016, 2017, 2018, 2019 and 2020. They conclude that our harvests are down by 25% during COVID-19 period when compared to the previous four years.
Washington
The annual timber harvest averages about 3 billion board feet. A 10% reduction in the annual harvest would result in 300 million board feet of lost production.
West Virginia
West Virginia has experienced a rapid decline in logging activities in the second quarter. the impact of slowing domestic markets for flooring, pallets, paper, and OSB has diminished markets by at least 15%, possibly much more . According to a recent West Virginia University Study, West Virginia Forest Products Industry provides $2.9 billion in economic contributions to the State, of which 12% is the logging sector.
Please click link below to submit your letter to congress. ALC would like to thank Healthy Forests Healthy Communities for creating the online submission letter.
The American Loggers Council exists to represent professional timber harvesters and log truckers. Membership helps to preserve the future of logging in our great country. Working together we can shape the future of logging.
