BEMIDJI -- It was a year of both difficulty and success for the Minnesota timber industry, as some segments of the trade fared better than others during the coronavirus pandemic.
During 2020, none of the timber companies across the state such as PotlatchDeltic near Bemidji or Blandin in Grand Rapids had to be shut down because of the pandemic. Ray Higgins of the Minnesota Timber Producers Association said the facilities were deemed essential by state and federal governments.
However, what those factories produced meant some did better than others. Building products, Higgins said, did well during the pandemic, resulting in lumber mills to have a good year.
"Paper was a little bit different, in that a lot of loggers in the northern area will take products to Grand Rapids for Blandin or PCA (Packaging Corp. of America) in International Falls," Higgins said. "With schools and offices being closed, there was a lot less paper being used, so that market was kind of soft. The Duluth mill closed own, so that has affected folks from that standpoint."
The Duluth mill was owned by Verso Corp., which also shut down a paper mill in Wisconsin over the summer.
"It really depended on the type of logger you are," Higgins said. "If you're a logger that brings products to West Fraser (near Solway) or PotlatchDeltic, then you may not have seen a lot of impact, but if you're one that brings products to PCA or Blandin, you probably saw more of an affect."
"There's definitely been some challenges out there," said Minnesota DNR Timber Program Supervisor Jon Drimel. "Our winter harvest season will likely see a lower harvest this year simply because Verso isn't there, which had used about 60,000 cords per year."
A cord is a unit in the industry, which means a harvested pile of wood with 4-foot long pieces stacked 4 feet high and 8 feet long, containing 128 cubic feet of space.
Despite fluctuations, though, the timber industry remains one of the state's largest. According to the most recent numbers compiled by the DNR, the timber and fuelwood industries harvested and used 2.8 million cords in 2018.
Based on early analysis of 2019, the harvest levels will likely be similar.
For 2017, the industry had an economic impact of $9.8 billion in direct shipments and $17.8 billion in total impacts, making it the fifth largest manufacturing sector for the state. In terms of employment, the industry supports 30,500 direct jobs. Along with the economic impact, the industry also has a $458 million effect in state and local taxes.
As of 2018, Minnesota was home to 329 sawmills and wood product plants, as well as seven pulp and paper-related mills. There were also 328 wood kitchen cabinet and countertop manufacturers, as well as 62 custom architectural woodwork shops.
The pellet potential
Many of the previously mentioned sawmills produce leftover wood material and residuals. Locally, there's a desire to create a wood pellet plant which would use the leftover material for its products.
"The use of wood in industrial pellets is the largest growing market for wood in the world," said Pete Aube, a member of the Greater Bemidji Economic Development board and chair of the Minnesota Forest Resources Council. "What's driving it is climate change and carbon, as countries replace coal with lower-carbon emission wood. The industry uses two and a half million metric tons per year."
A company in formation to make the product, with plants in Bemidji and Grand Rapids, is NorthStar Pellets. The proposed plants would each create about 45 jobs. Locally, the plan is to build the plant near the PotlatchDeltic lumber mill, about nine miles southeast of Bemidji off of U.S. Highway 2.
"It's a new company made from a consortium of investors," Aube said. "The parent company, so to speak, is a family out of International Falls, who built the third largest pellet plant in the United States in Arkansas. They know the market and wanted to build plants in Minnesota."
"The NorthStar Pellets plant came from a local need as there's a market for those residuals," said Dave Hengel, Greater Bemidji executive director. "Last year, it was a victim of COVID-19. There was a bill to provide a production incentive to help get the product to ports that had been going through the Legislature, and then the pandemic hit. So, we were put off for a year, but we're back now."
Because there's a big international market, the legislation introduced last year was to provide dollars to the company to transport the product to a port in Vancouver for exporting to Asia. This session, a new bill providing up to $3.75 million per year until June 2033 has been introduced.
The legislation is sponsored by District 11A Rep. Mike Sundin, DFL-Esko, and co-sponsored by District 5A Rep. Matt Bliss, R-Pennington.
"It's an emerging market," Bliss said. "There are a lot of places overseas doing it and we have a lot of waste from the forest products in the area. I know we're in a tight budget, but that's more than 40 jobs in those areas and we have the residual products already. Whether we can get it done in this budget cycle, I'm not sure, but we're going to try. I think it makes sense."
A companion bill has been introduced in the Senate chamber by Districts 2 and 5 Sens. Paul Utke, R-Park Rapids, and Justin Eichorn, R-Grand Rapids. Eichorn has also introduced a bill in the Senate to assist loggers who were impacted by market changes caused by the pandemic when obtaining permits.
"It would be a good thing," Drimel said. "It may not be direct wood cut from the forest, but for a place like PotlatchDeltic, they have a lot of leftover product and it becomes a cost for them. This would be an outlet for those residuals and make things more efficient."
Should the pellet-related legislation go through, Aube said the two plants could launch production in either late 2022 or early 2023.
Pellet operations aren't entirely new to the area, though. In March 2020, the company Green Friendly Wood Pellets moved from New Richmond, Wis., to Bagley. According to Sally Goossen, the company owner, the relocation was based on the abundance of sawdust in the area.
The company produces pellets used for bedding in horse stables, BBQ cooking and heating systems. Goossen said this year the company can make up to 20,000 tons of wood pellets.