Have you stopped to think about the landscape of the Forest Industry as it relates to the Forest Service? Very few people realize the reality is that much of the industry has written off timber from public lands. For many of these companies, it seems to be counterproductive for our public timberlands to become a significant supply again. Why is that and what is the New Reality of the US Forest Industry?
History shapes this New Reality
Let’s take a look back in time. In the 1980’s there were mills all over the western US. Some were large companies with large land holdings. Others were family owned with mills that were highly dependent on logs sold by the Forest Service and BLM. The system worked. Most mills had enough logs in their “wood basket” to run and invest their earnings back into their mills to keep costs down. It was still hard work, but there was a great deal of opportunity for a lot of people in a wide area. There was even a Small Business Set Aside program that ensured that the Timber Sales were competitive with the historical buying percentages.
When the timber wars hit in the early 90’s guess what places were hit the hardest? Many of you already know the answer to that. It was the small, family-owned operations that didn’t have timberlands to fall back on. Many of the large businesses were impacted as well, but many of them had options to adapt. Mill towns throughout the West sawmills close, jobs go away, and depression replacing opportunity.
Collaboration is working
Now, after 30 years of anemic management on our public lands, we have started to build a foundation of collaborative support in a few areas. Some groups have more success than others. The success is usually centered around a locally owned company that has agreed to work with conservation groups and local citizens. Most of these have been small, family-owned businesses that can grow if the timber supply improves.
The collaborative agreements and momentum have come from a new way of looking at the forest. One that looks at a vision of the forest after it has been managed. This is balancing the needs of the forests with the concerns of ordinary people that want to restore forests while providing economic opportunities in their communities. This is an amazing story. It’s one that needs to be told and shared.
The large companies changed their ways when the timber went away. They consolidated operations and made the mills they chose to keep running, much more efficient. They moved the focus to areas where timber was readily available from private sources. This was a sound business decision. Until the 2000’s most of the companies still held their private lands as a supply for the mills they owned.
Who else owns Timber?
In the early 2000’s we started to see companies convert the lands they owned into Real Estate Investment Trusts (REIT’s) and then a few years later, many sold to Timberland Investment Management Organizations (TIMO’s). Both of these transactions were completed because of favorable tax situations. I’m not writing this to pass judgment on this, but to rather explain the landscape of the Industry today.
All of these changes impact how the Industry interacts with the Forest Service and BLM. Do you think the TIMO’s or REIT’s have any incentive to see more volume come from better forest management on our public lands? How many mills of the big companies are in locations ideally situated to buy those public logs in most cases? Some, but not many. Some companies export logs overseas, so they are automatically exempt from buying federal logs by law.
I say all this to help people understand that the Forest Industry is fractured into many pieces with different views and incentives when it comes to the management of our public lands. In many cases, they would be better off if the status quo remains. Some large companies would see benefits. That’s only if they have sawmills in markets that are in close to the federal forests identified for management.
Small, Family-owned Companies
What’s at stake here are the companies that never abandoned their communities. They figured out how to survive. Company owners and representatives have spent the time and the hours working collaboratively with what many would have considered enemies. These professionals have spent time in hours of meetings, month after month, year after year. They have created great progress that just now might be on the precipice of real change. What benefit do they get? Competition from companies that did not put in the effort?
It’s important that we understand these factors and what story needs to be told. Who are the ones that should be influencing policy? Is it the big industry players that walked away from the forests when they dried up? No one blames these companies for doing so, but they cannot be the ones informing Congress on what needs to be done next to fix the forest. The small, locally owned companies headquartered in timber towns should be the ones at the head table, not companies whose offices are in high-rise buildings in urban centers. Their business model does just fine without actively managing our federal forests.
We all need new policies
The collaborative groups should be driving policy. Agreements between sawmill owners and conservation groups should be a much more powerful indicator of what we need to do. Our forests and our rural communities deserve a chance to do it the right way. The United States needs a new public land management policy that is balancing the ecological needs of the forests with the economic engine that can be built to support it. We need investments in our forests that support the communities adjacent to them. We’ve made real progress. It’s now time to honor that progress with legislation that reflects the energy and sacrifice of community collaboration.