Softwood lumber companies will vote this month on a long-discussed proposal to create a group that would add an assessment to lumber sales and use the money for marketing and promotions similar to milk producers' "Got Milk?" campaign.
If passed, a Softwood Lumber Research, Promotion, Consumer Education and Industry Information Order would be created to "strengthen the position of softwood lumber in the marketplace, maintain and expand markets for softwood lumber, and develop new uses for softwood lumber within the United States," according to an April 22 notice in the Federal Register. It would be financed through an assessment fee and administered by a board comprised of industry members selected by the secretary of the federal Department of Agriculture. The initial assessment fee would be 35 cents per thousand board feet moved within or imported into the country. Manufacturers and importers who bring in less than 15 million board feet per year would be exempt from the assessment fee.
One ultimate goal of the new group would be to increase the popularity of softwood lumber in American buildings. While the assessment scheme and organizational intent is similar to what milk producers are doing with "Got Milk?", an official familiar with the plan stressed to ProSales today that the marketing money wouldn't be used for consumer advertising but rather would be directed at the builders, architects, and others who have the greatest influence on choosing construction materials.
Voting for the rule will take place between May 23 and June 10 and is open to all domestic softwood importers and producers who manufacture or imported at least 15 million board feet in 2010. The rule must be favored by a majority of voters who also represent a majority of the volume of softwood lumber manufactured and imported in the country. Ballots will be mailed to all known domestic producers and importers of softwood on or by May 16, 2011.
The proposed assessment represents the latest attempt by softwood lumber interests to join together and promote their wood in the face of competition from products such as vinyl siding and fiber cement. "In the past, the industry attempted voluntary efforts to promote forest products, but they were sporadic, underfunded, and narrowly targeted," the U.S. Department of Agriculture (USDA) said. "These campaigns did not last long enough to succeed." The latest initiative was led by a Blue Ribbon Committee of 21 major softwood producers from the United States and Canada, The committee was formed in 2008 and submitted its proposal to USDA in February 2010.
If successful, the proposed program would grow softwood lumber markets "by stopping the erosion of market share in single-family residential market, increasing the market share in multi-family residential construction, significantly increasing the use of softwood lumber in non-residential markets, and rebuilding softwood lumber's share in the outdoor living market," USDA said. It cited a Blue Ribbon Committee estimate that the long term market growth opportunity in the non-residential market and the raised wood segment of the residential market would total between 10 billion to 12 billion board feet.
U.S. sawmills produced about 29.5 billion board feet of softwood lumber in 2007-2008, the USDA's Forest Service reports, while Canada exported about 12 billion feet of softwood lumber to the United States annually at that time, and another billion board feet came from other countries.
While the assessment would be imposed on all softwood lumber companies, entities that domestically ship or import less than 15 million board feet would be exempt. USDA figures that about 232 of the 595 domestic manufacturers--or roughly 39% of the total--would thus be exempt from the assessment scheme. Larger entities would not pay any assessments on the first 15 million board feet shipped or imported into the U.S. Of the 883 importers, USDA estimates 780, or 88%, would be exempted.
"Thus, about 363 domestic manufacturers and 103 importers would pay assessments under the order," USDA said.
