New federal relief will provide $200M for logging industry
Courtesy / Professional Logging Contractors of Maine
A $200 million federal relief fund for logging and log hauling businesses opened today and can be used for operating expenses, including payroll.
The logging industry has seen a steep decline in demand for wood fiber since the pandemic began, leading to an estimated 20% drop in the timber harvest this year. But federal help may be on the way.
Beginning Thursday, the Loggers Relief Act makes $200 million available for logging and log hauling businesses that have been seriously affected by the pandemic.
Timber harvesting and hauling businesses that experienced a gross revenue loss of at least 10% in 2020 compared to 2019 are eligible, according to a news release.
The direct payments will be equal to 10% of their gross revenue from 2019, with the funds to be used for operating expenses, including payroll.
The bill was sponsored by U.S. Sen. Susan Collins, R-Maine, and U.S. Rep. Jared Golden, D-Maine 2nd District, and co-sponsored last year by U.S. Sen. Angus King, I-Maine, and U.S. Rep. Chellie Pingree, D-Maine 1st District.
The $200 million was included in a bipartisan $900 billion COVID-19 relief package that was signed into law in December. Since then, the U.S. Department of Agriculture has been developing its application process.
The direct-payment program, called the Pandemic Assistance for Timber Harvesters and Haulers program, will be administered by the USDA Farm Service Agency in partnership with the U.S. Forest Service from July 22 through Oct. 15.
Loss of wood markets
Maine’s timber harvesters and haulers were hit hard by the pandemic’s economic effects in 2020, and continue to struggle today, according to Professional Logging Contractors of Maine’s executive director Dana Doran.
Professional Logging Contractors is the state’s trade association for timber harvesters and haulers. Most Maine logging contractors who are members of the organization reported a 30% to 40% reduction in wood markets in 2020.
Many suffered severe revenue losses, layoffs, loss of clients, reduced productivity and inability to plan for the future. The loss of the Pixelle Specialty Solutions pulp mill in Jay to an explosion in April 2020 worsened an already deteriorating economic storm for most in the industry.
“Since the onset of the COVID-19 pandemic, our small, family-owned and -operated logging business has been hurt significantly by strict quotas in some markets and completely shut off in others,” Randy Kimball, president of Kimball & Sons Logging and Trucking LLC in Poland, said in a separate release.
He continued, “This, all occurring on the heels of our seasonal shut down time, multiplies the financial burdens on our business and family. We also don’t see the future getting any better and are struggling for survival.”
Kimball said the financial assistance would significantly help the company pay its fixed costs so it can survive limited production.”
Jim Nicols, president of Nicols Brothers Logging Inc. in Mexico, said wood markets have dried up and many mills are either on quotas or not taking wood at all.
“We have certainly been challenged in these unprecedented times,” Nicols said.
Elliot Jordan & Son Inc. in Waltham was forced to shut down its logging operations in April due to lack of markets and price reductions statewide, said the company’s president, Duane Jordan.
“For the first time in my 40-year career, my sons and I have decided not to return to the forest for the summer season,” Jordan continued. “We will wait until fall and then choose a path forward.”
Doran noted that the year’s economic uncertainty and loss of markets hit the Maine logging and forest trucking industry at a time when it was already suffering from the effects of a mild winter and low profit margins.
Doran said the relief program is a first for timber harvesters and haulers in Maine and across the U.S., in that the funds are designated specifically for the industry.
Maine’s logging industry contributed an estimated $619 million to the state economy in 2017, supported more than 9,000 jobs directly or indirectly, pumped an estimated $25 million into state and local tax coffers, and generated $342 million in labor income to around 9,000 Mainers, most of whom live in rural communities.
The logging industry suffered a serious setback in April when a digester at the Androscoggin Mill in Jay exploded, shutting the facility down temporarily and reducing its capacity upon reopening. The facility was one of the largest timber purchasers in the state, receiving approximately 150-175 truckloads of wood each day under normal conditions.
The Loggers Relief Act is modeled after the USDA’s Coronavirus Food Assistance Program, which has been providing direct relief to growers and producers experiencing dramatic drops in prices and overall business activity due to the pandemic.
Under the CARES Act, Congress has provided $300 million to the nation’s fishing industry and $16 billion for dairy and livestock producers as well as fruit and vegetable growers.
For more information about the relief program, click here.
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