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NH forest-products industry lumbers on amid COVID, other challenges

The Keene Sentinel
Published: 6/26/2020 12:17:34 PM

Even before the COVID-19 pandemic hit, the forest-products industry in New Hampshire was facing some challenges.

For example, biomass plants, which use wood chips, sawdust and other timber debris to produce energy, were struggling to remain financially viable, and exports of United States lumber to China were being hit with tariffs.

However, things were looking up for spring 2020, according to an article in the Timber Crier, a trade publication from the N.H. Timberland Owners Association. Pulp markets were strong, prices for some sawlog species were increasing, Chinese tariffs had been lifted on certain hardwood species, and some softwood markets were on the upswing.

And while the pandemic put a damper on some of that optimism, it’s not doom and gloom for all sectors of the industry, according to state experts. COVID-19-related restrictions have exacerbated labor challenges and harmed an already struggling low-grade timber market, but people stuck at home have provided boosts in some areas, including the softwood timber market that feeds home-improvement projects.

Within the industry, there are areas that are doing all right, specifically some of the white pine sawmills, Jasen Stock, executive director of the N.H. Timberland Owners Association, said Wednesday.

White pine lumber is frequently used in structural and building materials, and now that many people are home, they’re looking to do home-improvement projects, he said. Spruce and fir lumber is also benefiting from the increased interest in home repair and renovation, he said.

Likewise, the market for corrugated cardboard is holding its own, he said, as more people order items online, and the production of bathroom tissue is doing well, in part due to the demand for toilet paper in the weeks following the arrival of the novel coronavirus in the U.S.

Hardwood lumber, including oak and maple, is one of the markets that isn’t doing well right now, he said. Much of that lumber gets exported, and because of COVID-19, some of the ports are backed up, making it difficult to move the product, he said. In addition, many hardwoods are used in the making of furniture, and those facilities have been closed, he said.

Another market that is doing poorly focuses on coated paper, which is covered in different finishes to be used in products such as photo books and magazines, he said.

“A bunch of mills in northern New England make that paper, and they’re struggling,” Stock said.

Andy Fast, forest industry specialist with the University of New Hampshire Cooperative Extension, said that even before the pandemic, the loss of biomass plants in New Hampshire had negatively affected the low-grade timber market. It was an important market for loggers and sawmills because it gave them flexibility, he said.

The explosion at the Androscoggin Mill in Jay, Maine in April further exacerbated the problems facing the region’s low-grade timber market, he said, and left businesses across New England without a place to send their pulpwood, he said.

“What we’re seeing is there has been a number of really challenging market conditions that have really affected the industry separate from the COVID impacts,” he said. “There are a lot of complexities to it.”

Still, the biggest concern of all groups within the forest-products industry is the uncertainty COVID-19 is creating for timber markets, Stock said in recent testimony before the Governor’s Office of Emergency Relief and Recovery Stakeholder Advisory Board.

Forest-product companies by nature are resilient but facing circumstances he described to the advisory board as “extraordinary and unprecedented” because of the pandemic. They include market reductions and even collapses, idle sawmills and work-force impacts, he said.

The forest-products industry in New Hampshire employs more than 7,200 people and is tied to an additional 5,500 jobs in support and related industries, Stock said in his testimony. The industry generates $1.6 billion annually in economic activity and is a critical economic engine and source of jobs in rural areas, he added.

However, that labor pool is already somewhat limited, he said by phone Wednesday, because of the rural location of many of these mills.

In general, labor tends to be one of the greatest needs in the industry in both good and bad economic times.

“It’s an interesting dynamic because you’ll find, particularly on the lumber side of things, mills perennially are understaffed, and they’re trying to find workers,” he said.

The pandemic has exacerbated that staffing situation as people either refuse to work due to fear of contracting the virus or decide to stay home and collect unemployment benefits, he said.

Separate from the COVID-related employment problems, the forest-products industry has an aging workforce, especially in the logging sector, Fast said.

According to the U.S. Bureau of Labor Statistics, the logging workforce nationwide is projected to decline 14 percent, or 7,400 jobs, by 2028.

“Given the trends in logging productivity, even if the total jobs in the sector declined nationwide in coming years, there will still be a need to replace those retiring,” Fast said.

As for the next few months, Stock said he believes the softwood market will be fine, and as the economy starts to come back and exports start to resume, some of the hardwood markets will come back. But the market for low-grade timber remains a huge question mark, he said.

“We know biomass is a shadow of what it used to be at market, and the paper market is just full,” he said. “What we’re going to see is a very painful adjustment period where you have a lot of fiber in the market and that fiber in the supply chain needs to work itself through.”

 

These articles are being shared by partners in The Granite State News Collaborative. For more information visit collaborativenh.org. 


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