St. Louis County will consider a measure Tuesday that would allow loggers to extend or cut short their logging contracts with the county, which supporters hope will help drive down prices in the beleaguered industry.
"This is the only way we could devalue the contracts and get lower contracts on the market," St. Louis County land commissioner Bob Krepps said. "The [County] Board is very conscious here as far as the industry and producers. If we don't have a viable industry, we can't continue to manage the land base for the citizens of the county."
Under the proposal, timber sales contracts made with the county on state tax-forfeited land before Oct. 1, 2006, and due to expire in 2006, 2007, 2008 or 2009 could be extended or turned back to the county.
Extensions, which would be at the same rate as when the sale was made, would be for a maximum of two years and offered one year at a time.
Loggers who choose to turn a sale back to the county during 2007 would forfeit 15 percent of the sale's appraised value.
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High stumpage prices -- coupled with the temporary closure of Ainsworth Lumber Co. oriented strand board plants in Cook and Grand Rapids -- are harming Northeastern Minnesota's logging industry. Allowing loggers to turn in existing contracts and put the same parcels up for sale again in 2007 could reduce timber prices and help loggers survive, county officials say.
"What we're looking at doing is providing some relief to area loggers tostabilize market conditions as they exist," said Commissioner Keith Nelson of Fayal Township, chairman of the County Board. "It would help small operators and loggers weather the storm."
Money from county timber sales goes into a trust fund. Proceeds of the trust fund are distributed to the county, cities, townships and schools.
The county has 264 contracts with logging operations in effect through 2009, Krepps said.
If all of the contracts were turned in, county revenue would be reduced by about $12 million through 2009, he said.
"There's potentially a very significant financial hit on county revenues," Krepps said. "But I have some real concerns that if we don't make a short-term commitment to support the logging industry now, we are going to have a difficult time in the future."
While high demand and a shortage of timber in recent years in Minnesota forced higher prices, demand -- largely due to a decline in the housing market -- is down.
Loggers who currently hold high-priced contracts aren't likely to harvest those parcels under current market conditions, said Wayne Brandt, executive vice president of Minnesota Timber Producers.
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Brandt said the county proposal could help logging operations that currently hold contracts.
"It's certainly something that provides a little relief to people that hold timber sales," Brandt said. "This would be a positive step in the right direction."
LEE BLOOMQUST covers the St. Louis County Board. He can be reached weekdays at (800)368-2506, (218)744-2354 or by e-mail at leebloom@cpinternet.com .
