Success is paper thin for Northland logging industry

When the housing industry collapsed beginning in late 2005, the single silver lining for many Northland loggers who chopped trees for home construction was the paper industry.

The Eighth District U.S. Court of Appeals has upheld a lower court decision saying the Superior National Forest management plan for forests around the perimeter of the Boundary Waters Canoe Area Wilderness were properly developed. News Tribune file photo

When the housing industry collapsed beginning in late 2005, the single silver lining for many Northland loggers who chopped trees for home construction was the paper industry.

"As the housing market crashed ... paper mills have helped keep a lot of loggers in business, and have provided an ongoing and strong market," said Wayne Brandt, executive vice president of the Minnesota Forest Industries and the Timber Producers Association.

Now, even that market is splintering under the global economic recession.

"We are seeing softening of paper markets, no question about that," Brandt said.

Profits, already dismal on the home-building side, turned sour especially during the third quarter of 2008.


Shipments of printing and writing paper during November 2008 slid by more than 20.1 percent compared to November 2007, to 1.6 million tons, according to the American Forest & Paper Association.

And analysts don't predict a turnaround until 2010 at the earliest.

During the third quarter of 2008, the most recent data available, Boise Inc., of Boise, Idaho, reported $4.4 million in net income, compared with $50.2 million for the same quarter a year earlier.

And NewPage lost $61 million for the third quarter of 2008, compared with earning $16 million in the fall of 2007.

"I think it's a little more severe than we've seen in some of the past recessions," said Bob Anderson, public affairs manger of Boise's International Falls mill. That mill has cut production by about 15 percent to 20 percent for now, Anderson said. He estimated the Boise plant has had to furlough 5 percent -- or about 40 people -- of its more than 825 workers for a few days to a few weeks.

For now, his mill still is buying about as much wood this winter as last year, which they'll turn into copying paper.

So far, there have only been a handful of slowdowns at local paper mills, although Ohio-based NewPage also closed mills in Niagara and Kimberly, Wis.

Some loggers are nervous that the Duluth area hasn't been hit quite yet.


"If that mill goes down, we're done," said Darwin Rasmusson of Forest Fuels Inc., referring to NewPage's Duluth mill. "I have to pray every morning to get through it."

NewPage is owned by New York City-based private investment firm Cerberus Capital Management LLC, which is grappling with its own financial troubles, even suspending most investor withdrawals for a year.

Although neither Cerberus nor NewPage corporate officials would comment for this story, there are no signs Cerberus will sell NewPage.

Like many Northland loggers, Rasmusson, current president of the Associated Contract Loggers & Truckers, used to haul nearly half his wood to mills like Ainsworth in Cook that make oriented strand board for home construction. The mills were far closer to his base between Virginia and Tower than the 100-mile hauls to paper mills in Duluth or Cloquet.

Despite the added drives, without them there's no way he and a lot of other loggers would remain in business, Rasmusson said.

That Rasmusson even remains in the logging industry at all is a testament to how loggers like him have had to diversify beyond just logging.

About 10 years ago he started installing septic systems, which his crew does during the summer when they can't cut trees.

That move is keeping the company afloat these days.


"I would have lost it all probably two years ago with Ainsworth closing down," he said.

While some loggers remain in the black, the job requires millions of dollars in expensive equipment. Many loggers are just trying to nurse equipment along for now, while they hope for better days.

"Some are just hanging on," said Peter Wood, Wood Forest Products, Inc., a third-generation logger from Canyon.

Northland paper and board mills

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