GLTPA's Director's Notes

02/07/2024

Today's Realities

Greetings,

Most folks do not like change, and it doesn’t matter if it is on a personal, local, state, national, or global level, change is constant. With computers and minicomputers called cell phones, change happens at the speed of thought. Change is change and it can be embraced or denied.  Change can sometimes be guided with comments such as those submitted for the old growth and mature issue. Then there are times when things such as mill closures happen with no advance warning like those which happened when Minnesota and Wisconsin Verso mills in closed 2020. The impacts of which are still prevalent in the Lake States.

The forest industry is as volatile and maybe more so than any other industry there is.  Its impact touches forest health, the climate, recreation, wildlife, wildfire, water quality, air quality, social behavior, mental wellbeing, and finally, rural, and global economics.

What did change and has stayed is discontinuation of the use of roundwood at several paper mills in the Lake States Region. Until the 1970’s most paper makers had their own onsite pulp mills.  After that date, they started shutting them down. Brokaw, Nekoosa, Badger Paper, Consolidated, Flambeau, Neenah, and several located in the Fox Valley are gone. I’m sure the owner of Great Lakes Trailers remembers most of these mills as French Transport played a key role in the transfer of peeled aspen from remote yards to mills located in the Fox Valley. The necessity to be efficient and competitive in hauling is probably what started the trailer business for them. Other pulp mills which disappeared are Blandon in Sartell, Biron, Rhinelander, and Ontonagon and I’m sure there are more. These mills all produced fine printer paper and before recycling, mills had to have a raw fiber source to produce their paper.  As you all know some of the mills named were torn down and scrapped, while others like Nine Dragons, have converted to recycled pulp for their processes or purchased pulp from Canada and other foreign countries such as Brazil.

That brings us to the million-dollar question as to whether the paper mill pulp markets at this moment in time are here to stay, or will they improve to what might be considered normal, whatever that means. From the articles and reports received at GLTPA, mills making fine printing paper and paper for publication and communications have not yet found the sweet spot where things will level off and become a consistent market. A report provided by Green Bay Innovation Group supports this and shows that in the seventies pulp and paper mills had 30,000 employees. In 2023 the number of pulp and paper employees is just over 8,200. No wonder demand for roundwood pulp in paper making is at an all-time low.

Another looming question is why is all the kraft pulp coming from other countries when the Lake States have such an abundance of raw material?  And what about recycled fiber? Does it really have a positive impact on the environment? A homeowner separates containers and packaging, a truck picks it up and hauls it to a landfill, the landfill puts it in another truck, it goes to another facility to be cleaned of debris like staples, plastic, tape and whatever might have been used to keep the box together, and then, depending on the facility that received it, it may get shipped again to where it might be made into a useable product.  Roundwood pulp on the other hand is cut, hauled, and delivered to be made into a useable product.  Other than making folks feel good about doing something useful, is recycling as “green” as we’re being told? I don’t have a concrete answer, but it begs asking the question.

In general, paper mill pulp mills are some of the largest consumers of round wood in the region. The reality is that with the closure of Rapids and Duluth, small diameter round wood production from logging is now exceeding what the market can purchase.  A great deal of credit goes to the remaining mills for trying to absorb some of the overabundance of production, but they can only absorb so much before hitting the lid in their operations. Several loggers have stated the fact they can sell little to no volume of pulpwood making it very difficult to remain a viable logging business. This is easily evidenced by the amount of pulp wood piled around the countryside and having no available market to ship it to. Even if there was a market uptick, some wood may be at the point where it is no longer of value for making products in markets requiring fresh wood.

What really comes to light is the fact of how dependent the Lake States Region has been on local pulp mills for paper production.  The closing of the Wisconsin Rapids and Duluth mills drove the proverbial nail in the coffin if you will, and from there inflation added more fuel to an already downward trend. Another undeniable contributor to the demise of local kraft pulp for paper production is the fact that companies no longer have a land base and no longer follow the local ownership concept put in place by the Mead family and Consolidated Paper.  These are all products of today’s global markets where it is becoming a rarity that companies are owned and controlled by American based companies. Don’t get me wrong, foreign owned companies employ local people who are very engaged in their local communities, but nowhere near to the extent as when they had a land base and supported local roads among other things.

Moving forward with lessons learned, if the three Lake States of Michigan, Minnesota, and Wisconsin want to maintain their forest health and a healthy forest management work force, it will be important to attract a diversity of wood consuming businesses while at the same time, either maintaining or helping to expand the businesses currently in place. For that to happen a couple of things must take place.

First is that the regulatory process must be examined and modified.  That doesn’t mean regulations have to change, it means the time it takes to get permits must change. I recently had a conversation with a retired engineer who dealt with permits for his entire 40-year career in the paper industry.  A new state of the art pulp mill would cost approximately $2 billion to construct. That is a lot of money but as he stated, the biggest problem is that it would take ten years to get the permits. Another example is the recently nixed Huber project which was slated for construction in Cohasset MN.  After nearly three years of the EIS and permitting process, the project was cancelled and moved to another state. From what GLTPA was told by company officials it took a total of eight months from the time permit applications were submitted for approval and construction to begin.  This is unheard of in the Lake States. Why is that?

The second issue is that timber supply data should be reexamined to determine the exact amount of raw material available for harvest on an annual basis.  Deforestation for solar panels, housing, wind turbines, conservation easements, carbon projects, pre-settlement grassland savannas are or will all have an impact on affordability and availability of raw material.  To what extent the impact is or will be, must be addressed and how much deforestation will happen within the next 5-year period. Until these items are addressed there is no need for a marketing plan to attract new businesses.

Several attempts have been and continue to be made by GLTPA and others such as The Timber Professionals Cooperative Enterprises to attract new wood consumers. Unfortunately, timely permitting processes and lack of government support for initial funding are often the deterrent for wood consumers to locate in this region. While work goes on to correct these issues, we’ll keep throwing ideas at the wall. Sooner or later, something will stick.  In the meantime, it is extremely important to implement every efficiency possible to maintain current markets.

Until next month,

Henry

“The way I see it, if you want the rainbow, you gotta put up with the rain.” Dolly Parton

             

 

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The Great Lakes Timber Professionals Association (GLTPA)

Provides proven leadership in the Lake States Forest products industry for over 70 years. GLTPA is a non-profit organization proud to represent members in Michigan and Wisconsin and is committed to leading Forest Products Industry in sustainable forest management.

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