"The amount of relief coming from the federal government is not meant to make these businesses whole, but rather to serve as a stop gap while they adjust their business plans to be able to operate under this new economy,”
WASHINGTON (PRWEB) December 22, 2020
Members of Congress recognized the important role the timber harvesting industry plays in the United States economy by including both logging and log hauling businesses in the Emergency Coronavirus Relief Act of 2020. The bill includes language appropriating $200 million in funding for logging and log trucking businesses who saw a greater than 10 percent loss in revenues from January 1 through December 1, 2020 related to the COVID-19 pandemic, as compared to revenues for the same period in 2019.
Logging and log hauling businesses were deemed to be essential service providers, but have struggled with making fixed cost payments as a result of reduced markets for the unrefined forest products they produce.
Many logging companies experienced severe losses when lumber and paper mills across the country reduced or ceased production in response to drops in demand. Nationwide production curtailments have led to lower prices for log delivery to mills. Virtually all raw material delivered to mills by loggers and truckers have experienced price drops greater than 5% in 2020 compared to 2019. According to a third-party analysis by Forests2Market, a 6.7% (21.4 million tons) reduction in nation-wide wood consumption reduced wood prices and generated a $1.83 billion (-13.0%) loss in revenue.
Insurance, equipment, fuel and other costs associated with the industry make up the vast majority of expenses as compared to payroll which some were able to take advantage of under the Payroll Protection Program issued earlier during the pandemic. "Those costs continue to be incurred by the businesses, regardless if they are able to work or not, and with the tight margins and quotas that the industry has seen over the past several months, many logging businesses were not able to keep up with their fixed costs, causing concern about the future of their businesses. The amount of relief coming from the federal government is not meant to make these businesses whole, but rather to serve as a stop gap while they adjust their business plans to be able to operate under this new economy,” stated Daniel Dructor, Executive Vice President for the American Loggers Council (ALC).
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. "The logging industry is just like farming except for the rotation age of our crop," stated Tim Christopherson, President of the ALC and co-owner of DABCO, Inc. a timber harvesting and hauling company located in Kamiah, Idaho. "To see Christmas trees and other agricultural commodities and specialty crops included in the first and second versions of Coronavirus Food Protection Program (CFAP) while not including those same trees that can be turned into paper and other consumables, simply did not make sense. We applaud members of Congress for recognizing and including the loggers and log haulers in this historic legislation.”
Senator Susan Collins (R-ME) first secured logger relief funds in draft legislation released in December by a bipartisan coalition of Members of Congress. Her provision built upon the “Loggers Relief Act” that Sen. Collins and Rep. David Rouzer (R-NC) sponsored earlier this year. Ultimately, Collins’ provision was retained in the final COVID relief package passed by Congress this week.
Dructor applauded members of Congress and logging associations for the roles they played in securing this funding, ”Special thanks to Senator Collins of Maine and Congressman Rouzer of North Carolina and to all of the State and Regional Logging Associations for making your voices heard up in Washington, DC. To my knowledge, this is the first time in history that loggers have sought relief from Congress and they have delivered. Loggers are a tough bunch and have a way of working things out, but the Coronavirus is something never before seen and the economic impacts have been felt by everyone."
For several months, ALC worked with congressional offices and the White House National Economic Council to raise awareness about the impact of COVID to the logging sector. While it will be up to the United States Department of Agriculture (USDA) to determine how the funds will be distributed, legislation states that the intent of the bill is to provide the logging sector with a measure of equity alongside other agricultural producers impacted by COVID-19.