Koochiching County has adopted a balsam fir market interim policy in response to the depressed Minnesota timber market caused in part by the August closure of the Verso Paper Corp. mill in Sartell.
The policy is intended to give members of the logging community additional time to cut wood purchased from the county on tracts containing 20 percent or more of balsam. It won’t cost loggers additional money to hold their wood while they watch the market and hope for an improvement in conditions, said county Land Commissioner Dennis Hummitzsch.
Purchasers will be allowed to turn back those tracts with a minimum penalty if they feel they need to, he added.
Verso, he said, was considered a large user of balsam fir in the United States.
The policy adopted by the county board this week says that the depressed market has caused significant hardship and the interim policy change is an effort to improve timber sale operating conditions for the logging community and timber industry.
“Blandin Paper is a big user and they are shifting their uses higher toward black spruce,” said Hummitzsch. “So that’s affecting things and also they had a surplus in their yard late summer, which created a worse situation. It was bad enough with Verso going down.”
The policy will grant a one-year free extension for timber sales containing 20 percent or more balsam fir sale volume upon request. The current policy that requires a timber sale installment payment of 20 percent of the total sale value to grant a first-year extension will be postponed for the one-year free extension. However, 20 percent extension payments already made on permits in extension will not be refunded.
In addition, any tracts having 20 percent or more balsam volume can be turned back to the county. The current policy of the loss of the down payment will apply. However, continues the second part of the interim policy, existing forfeiture policy of an additional 10-percent penalty and the prohibition of bidding for two auctions is waived for permits forfeited under the the interim policy prior to April 1, 2013, at which time the interim policy ceases.
District 5 Commissioner-elect Wayne Skoe, who cuts balsam fir, said the interim policy is a place to start.
“Some real issues are coming,” he said of the timber market. “I hope some of those issues right themselves over time.”
District 5 Commissioner Mike Hanson, who leaves office at the end of the year, said he appreciated that Hummitzsch developed the interim policy and believed his neighbors in the logging industry would, too.
“We can’t have them going into the woods and working for free,” he said. “If this helps out, that’s fine.”
In other business, Hummitzsch reported that more wood has been sold and more money gained at the end of November by those sales than throughout all of last year.
Hummitzsch reported that as of the end of November, 116,379 cords have been sold for a gross revenue of $3.08 million, which allows $2.26 million to be apportioned to the county’s general fund, cities, school districts, parks and other entities. In 2011, the county sold 106,256 cords of wood at $2.8 million gross revenue with $2 million apportioned.
Hanson credited Hummitzsch and his staff for helping to provide about $800,000 more from sales in 2012 to school districts in the county without impacting their other funding sources.
“This helps keep property taxes down – personal property and schools,” he said.
Hummitzsch predicted that 2012 will provide from $300,000 to $500,000 more to provide to the entities through apportionment.
“Hope the cold weather stays and the snow stays away so we keep the frost in the ground,” urged Hummitzsch about the conditions of logging sites.
Meanwhile, Hummitzsch reported on the Nov. 14 timber auction, which featured wood from tracts that were damaged by high winds in July.
He said 31,752 cords of wood were sold for a total auction sale value of $513,700, which includes 18 sales totaling 21,284 cords with blow-down damage and reduced value. The total sale value for aspen ranged from $16.75 to $34.34 per cord; $8 to $25.87 per cord for wind damaged wood. The average sale price for all species averaged $16.18 per cord.
