Mike Nielsen bought timber permits from the state to harvest thousands of cords of wood on state-managed lands.
But Nielsen, like other loggers, now has no reason to cut the wood and try to sell it.
“I've got about 20,000 cords of wood that doesn't have a home,” Nielsen, owner of Mike Nielsen Logging in Ely said. “So now, I'm stuck with that much volume of wood and no place to bring it to.”
Loggers like Nielsen are in a world of hurt.
With the June 2020 shutdown of the Verso Corp., mill in Duluth, the market for spruce and balsam in the region, has dried up.
That's left loggers holding contracts for vast amounts of timber on state land and few mills to which haul the species.
“Loggers were hurt like everyone else during the pandemic and a lot of loggers ended up in a tough spot,” Sen. Justin Eichorn, R-Grand Rapids, said. “A lot of them went ahead and bought big plots of wood and there's now nowhere for it to go.”
It's estimated that loggers paid the state about a million dollars for timber harvesting contracts where there's now a minimal market for that wood, according to Mike Birkeland, executive vice president of the Minnesota Timber Producers Association and Minnesota Forest Industries in Duluth.
But a tri-partisan group of northeastern Minnesota legislators are proposing a solution.
Eichorn and Rep. Rob Ecklund, DFL-International Falls, are advancing companion legislation that would provide loggers with relief from state timber contracts.
A hearing on the issue is today in the Minnesota Senate Mining and Forestry Policy Committee. Eichorn chairs the committee.
“The odds of it passing my committee is 100 percent,” Eichorn said. “We're figuring out where to go from there.”
Under the legislation, all unexpired timber permits issued before January 1, 2021, could be extended two years beyond the permit's expiration date.
Loggers holding a contract for a state parcel of at least 25 percent spruce, balsam or birch that hasn't been cut, could cancel permits and receive a full refund of down payments and security deposits already made on the timber.
Or, a logger who has already begun harvesting a timber parcel containing at least 25 percent spruce, balsam or birch, could cancel their permit and only owe the state for the amount of timber already cut.
If approved, the legislation would help keep a number of already-struggling loggers from going out of business, Scott Dane, Associated Contract Loggers & Truckers of Minnesota executive director said.
“It will be the difference between some guys surviving and some not surviving,” Dane said. “It will have a very positive impact on the timber industry and in preserving the infrastructure for when new mills might come into Minnesota.”
Assistance for the struggling logging industry has already come from northeastern Minnesota counties, the U.S. Forest Service and the federal government, Birkeland said.
That leaves the state as the remaining piece.
Sen.'s Tom Bakk, I-Cook, David Tomassoni, I-Chisholm, Carrie Ruud, R-Breezy Point, and Paul
Utke, R-Park Rapids, are co-authors of Eichorn's bill.
Rep.'s Julie Sandstede, DFL-Hibbing, Dave Lislegard, DFL-Aurora, Josh Heintzeman, R-Nisswa, and Spencer Igo, R-Grand Rapids, co-author Ecklund's companion bill.
Logging industry representatives have been seeking timber contract sales relief from the state for months. Legislation is required to modify timber permit terms.
“This is a good step forward,” Birkeland said of the legislation. “We still need to get it through both levels (Senate and House) and get it approved. The goal is to have timber relief.”
“We're really excited about it,” Dane said. “It will strengthen loggers' financial positions. It's a win-win-win for everybody. There's really no downside.”
Birkeland and Dane are both testifying today before the mining and forestry policy committee.
If relief is approved, loggers and industry officials say that loggers will reinvest the money back into timber contracts as the market improves or as new outlets for wood develop in northeastern Minnesota.
Losing additional logging businesses would not be good for the industry, the state, or forest health, say loggers and industry officials.
“The thing is they could refund the money and we would put it into something else like aspen or pine and not have that liability having over your head,” Nielsen said. “It would be a pretty big deal to still be on the hook for this and they still own the trees. It doesn't do them a lot of good for a whole bunch of us to go out of business. We're in this together. They need us as much as we need them.”