Commentary - June 24th, 2013
9:19 am
Tue June 25, 2013

Nothing is quite as loud as the silence of a sawmill not running

Nothing is quite as loud as the silence of a sawmill not running.  Unfortunately, the sound of the closure of 28 sawmills in Montana since 1990, and the loss of over 3,200 direct, good paying, mill manufacturing jobs has been deafening.  These closures and job losses are the direct result of the increase in federal timber harvest litigation during that same time.

The last mill closure was the Smurfit-Stone pulp and paper mill in Frenchtown.  It was incredible that a mill, sitting right smack in the middle of Western Montana’s wood basket, could not get enough residual wood supply to keep the doors open.  When Smurfit-Stone locked the gate for the last time, just after Christmas 2009, 425 mill workers lost their jobs. 

The propaganda of habitual litigators would have one believe the reason we have lost so many mills, was because Montana’s milling infrastructure was simply unsustainable.  Don’t you believe it!  During this same period of decline, net growth exceeded removals by a factor of 7.5 to 1.  Take a walk in the woods.   Montana’s forests are bloated with too many trees per acre that are now succumbing to insect and disease at an alarming rate.  Yet, a sustainable supply of wood fiber was the issue then, as it is now. 

Historically, Montana mills have relied on roughly 60 to 70 percent of the timber harvest being supplied by private timberlands, 5 percent from state forestlands and 25 to 35 percent from federal forestlands.  In recent years, federal timber, making its way to Montana sawmills, has dropped to roughly 8 to 15 percent of the total harvest; even though 67 percent of the non-reserved timber is on federally managed ground. 

Montana sawmills have not run at full capacity, for any significant length of time, since the late 1980’s.  Before the mills started closing down one-by-one, lumber production was averaging 1.2 billion board of timber.  Since the closure of Smurfit-Stone, lumber production dropped to an all-time low of 374 million board feet.  I doubt there are many businesses that could have survived a 70 percent drop in the supply they needed to run their operations, especially for a prolonged period of time. 

In 1990, Montana forests supported 12,646 direct jobs with a payroll of roughly $400 million and $1.2 billion in annual sales.  By 2012, forest products employment dropped to roughly 6,650 workers, with a payroll of $295 million and $880 million in annual sales.

It is not just the loss to Montana’s economy that is at stake when a mill closes; there is also an associated cost to the tax payer.  Absent a sawmill, the cost of treating federal timber shifts to the tax payer and becomes a net drain on the federal budget.  Whereas, treating federal timber within a log haul distance to a sawmill, is a net benefit to the federal budget, as timber receipts are generated and returned to the U.S. Treasury.

Over the past couple of years, lawsuits affecting timber harvest thankfully started to decline.  Those in the forest products industry believed, by developing relationships with the conservation community, we had turned a corner.  However, not all calling themselves environmentalists want to communicate and collaborate to find solutions to natural resource management.  It is these outliers that are now back to the litigation business model of a few years ago. 

So why the sudden increase in lawsuits?  I certainly cannot suppose to read their minds, but one could assume a couple factors.  One being, congress attached a “pre-objection” process to a recent budget bill.  By the end of the 2013 fiscal year, disagreements over Forest Service projects must go through a pre-objection and resolution process before going to court.   Habitual litigators do not want to sit down with the Forest Service and other stakeholders to resolve their concerns.  Another reason could be that the increase is a pre-emptive response to federal lawmakers currently seeking to curtail those that “game the system” by filing numerous and frivolous lawsuits.

Montana communities have taken a hit in recent years, and are not likely to survive another blow brought on by the increase in litigation.  The sound of a sawmill not running is deafening. Every time a lawsuit is filed in federal court, the logging contractor, log hauler, mill manufacturer and the community are all adversely impacted. 

On behalf of the Montana Wood Products Association, I am Julia Altemus, thanks for listening.

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