< Back to Current Version

COVID-19 and the U.S. Timber Industry

Changes from December 10, 2020 to July 29, 2021

This page shows textual changes in the document between the two versions indicated in the dates above. Textual matter removed in the later version is indicated with red strikethrough and textual matter added in the later version is indicated with blue.


COVID-19 and the U.S. Timber Industry
December 10, 2020July 29, 2021
The timber industry is a diverse commodity industry, wherein cut trees ( The timber industry is a diverse commodity industry, wherein cut trees (timber) are converted to ) are converted to
a wide variety of a wide variety of productsarticles made from wood ( made from wood (wood products). The ). The Coronavirus Disease 2019
Anne A. Riddle
(COVID-19) pandemic has impacted the timber industry by changing consumer and producer
Analyst in Natural
behavior and threatening the health of timber industry workers. Effects to the wood products
Resources Policy
supply chain have been spread unevenly across sectors and regions and have varied over time as

the pandemic has progressed. Congress has not provided specific assistance to the timber
industry generally, although some timber-related businesses may have received assistance under

the provisions of the Coronavirus Aid, Relief, and Economic Security Act (CARES Act; P.L.
116-136). The timber industry recommends additional assistance, such as loans or direct payments, to prevent further impacts
to the sector.
COVID-19 has affected demand for some wood products and disrupted wood supply chains. Impacts have differed greatly
across sectors, due to the differing final uses of wood products. Paper is a diverse sector, comprising cardboard, bath tissue,
writing and printing paper, and other products, and demand comes from public places (e.g., offices and schools), home use,
and shipping. Thus, although some disruptions to the sector have occurred, overall impacts have been minimallargest wood product sectors in Anne A. Riddle the United States are lumber, engineered wood products (such as particleboard and fiberboard), Analyst in Natural and pulp and paper products, such as cardboard, tissue, and printing and writing paper. The Resources Policy Coronavirus Disease 2019 (COVID-19) pandemic has impacted the timber industry by changing consumer and producer behavior and threatening the health of timber industry workers. Effects to the wood products supply chain have been spread unevenly across sectors and regions and have varied over time as the pandemic has progressed. COVID-19 has affected demand for some wood products and disrupted wood supply chains. Impacts have differed greatly across sectors, due to the differing final uses of wood products. Overall U.S. demand for timber decreased in early 2020 compared with 2019, as did timber prices, but timber prices began to rise in late 2020 and 2021. Demand for . Demand for
lumber and engineered wood products is driven primarily by residential construction. Early in the pandemic, producers of lumber and engineered wood products is driven primarily by residential construction. Early in the pandemic, producers of
these products anticipated these products anticipated lower demand due to a declining housing market and therefore a declining housing market and therefore decreased productionlower demand. However, . However,
demand demand from the residential construction sector remained strong, resulting in shortages, and prices for some products rose to historically high levels. remained strong, resulting in shortages, and prices for some products rose to historically high levels. Despite strong
demand for some wood products, overall demand for timber decreased compared with 2019, as did timber prices, although
the decline in timber prices was in line with recent trends. Disruptions to the sector likely will continue until the virus is
contained and use of public places resumesThese price increases prompted concern about the costs of home construction and the effects to consumers and related businesses, although they led to increased margins for sawmills . Paper is a diverse sector, comprising products such as cardboard, bath tissue, and writing and printing paper, and demand comes from public places (e.g., offices and schools), home use, and shipping. Thus, although some disruptions to the sector have occurred, overall impacts have been minimal. Disruptions to the wood products sector as a whole likely will continue until the spread of the virus is contained, and these disruptions may evolve further along with economic conditions. , and these disruptions may evolve further along with economic conditions.
Although Congress has not provided specific assistance to the timber industry, the CARES ActCongress has provided $200 million in assistance to specified timber harvesters and haulers through the FY2021 Consolidated Appropriations Act (P.L. 116-260). Other timber-related businesses may have received assistance under the provisions of other laws, such as the Coronavirus Aid, Relief, and Economic Security Act (CARES Act; P.L. 116-136), which provided general assistance to provided general assistance to
businesses and employees in the form of loans, advances, supplements to state unemployment benefits, tax relief, and paid businesses and employees in the form of loans, advances, supplements to state unemployment benefits, tax relief, and paid
leave. The leave. The U.S. Forest Service (FS) also has authorized additional time to harvest timber on federal lands for specified timber Forest Service (FS) also has authorized additional time to harvest timber on federal lands for specified timber
contracts.contracts.
Market disruptions have led some stakeholders to conclude that Market disruptions have led some stakeholders to conclude that additional assistancecongressional action is needed to provide relief to producers and consumers along the wood supply chain. Although Congress has already provided some funding for specified industry sectors, some may support additional funding or different approaches to providing congressional relief to the timber industry. In the past, Congress has authorized relief for federal timber purchasers, such as contract buyouts, and relief for forest landowners. Congress may decide that further assistance to the timber industry is not warranted if, for example, existing assistance is considered sufficient, assistance to businesses generally is thought to cover the timber industry sufficiently, or impacts are seen as transient. Market disruptions also have led some stakeholders to express the view that federal action is needed to protect consumers from high commodity prices, particularly lumber prices. In general, such proposals have not identified specific congressional action but may identify either broad policy goals or potential actions by the executive branch. If desired, options for congressional action regarding lumber prices are varied, such as oversight of executive branch actions, authorization of market development programs, or regulatory reform. Alternatively, Congress may decide that action related to lumber prices is not desirable at this time, for example, if lumber price fluctuations and their effects on related industries are viewed is needed to provide relief to the timber
industry. In the 116th Congress, S. 4233 and H.R. 7690 would authorize the Secretary of Agriculture to make relief payments
to timber harvesting and hauling businesses that experienced specified economic losses; these relief payments could be used
to cover operating expenses. Members of Congress also have requested that the U.S. Department of Agriculture (USDA)
make timber harvesting and hauling businesses eligible for support payments for agricultural producers authorized under the
CARES Act. Other stakeholders have proposed additional approaches to providing congressional relief to the timber
industry, such as low-interest loans or programs to increase demand for wood products. In the past, Congress has authorized
relief for federal timber purchasers, such as contract buyouts, and for forest landowners. Congress may decide that specific
assistance to the timber industry is not warranted if, for example, existing assistance is considered sufficient, assistance to
businesses generally is thought to cover the timber industry sufficiently, or industry impacts are seen as transient. as transient.

Congressional Research Service Congressional Research Service


link to page 4 link to page 4 link to page 7 link to page 7 link to page 9 link to page 10 link to page link to page 4 link to page 4 link to page 7 link to page 7 link to page 9 link to page 10 link to page 1016 link to page link to page 1217 link to page link to page 1317 link to page link to page 1418 link to page link to page 1519 link to page link to page 1722 link to page link to page 1823 link to page link to page 1923 link to page link to page 1924 link to page 8 link to page link to page 8 link to page 12 link to page 11 link to page 11 link to page 2025 COVID-19 and the U.S. Timber Industry

Contents
Introduction ................................................................................................................... 1
The U.S. Timber Industry ................................................................................................. 1
Effects of COVID-19 on the Timber Industry ...................................................................... 4
Timber Harvesting ..................................................................................................... 4
Processing and Manufacturing ..................................................................................... 6
Trade ..Lumber ..................................................................................................................... 7
LumberPaper Products ......................................................................................................... 13 Trade ........... 7
Paper Products .......................................................................................................... 914
COVID-19 and Timber Harvesting on Federal Lands.......................................................... 1014
Forest Service Timber Contract Flexibilities ................................................................ 1115
Federal Assistance to the Timber Industry ......................................................................... 1216
Options for Congress ..................................................................................................... 1419
Financial Assistance to the Timber Industry ................................................................. 15
Expansion of Programs Created Under the CARES Act 20 Action on Commodity Prices......................................................................... 16............ 20
Timber Harvesting on Federal Lands .......................................................................... 1622


Figures
Figure 1. Producer Price Index: Logs, Bolts, Timber, and Pulpwood ....................................... 5
Figure 2. Lumber Futures Prices, 2016-20202021 ....................................................................... 9 Tables Table 1. Quarterly Southern Yellow Pine (SYP) Average Lumber Prices .................................. 8

Contacts
Author Information ....................................................................................................... 1722

Congressional Research Service Congressional Research Service


COVID-19 and the U.S. Timber Industry

Introduction
The Coronavirus Disease 2019 (COVID-19) pandemic has impacted the timber industry by The Coronavirus Disease 2019 (COVID-19) pandemic has impacted the timber industry by
changing consumer and producer behavior and threatening the health of timber industry workers. changing consumer and producer behavior and threatening the health of timber industry workers.
These effects have been felt throughout the supply chain, which includes timber landowners, These effects have been felt throughout the supply chain, which includes timber landowners,
timber harvesting and hauling businesses, timber processors and manufacturers, distributers, timber harvesting and hauling businesses, timber processors and manufacturers, distributers,
retailers, and consumers. The pandemic’s impacts on the timber industry have varied according to retailers, and consumers. The pandemic’s impacts on the timber industry have varied according to
regional differences in the industry, changing demand for different products made from wood, regional differences in the industry, changing demand for different products made from wood,
and the severity and timing of the pandemic’s supply chain effects. and the severity and timing of the pandemic’s supply chain effects.
Impacts to the timber industry have been spread unevenly across sectors and regions and have Impacts to the timber industry have been spread unevenly across sectors and regions and have
varied over time as the pandemic has progressed. Some sectors have experienced minor overal varied over time as the pandemic has progressed. Some sectors have experienced minor overal
changes; for example, the pulp and paper industry’s overal prices in 2020 changes; for example, the pulp and paper industry’s overal prices in 2020 and 2021 have been have been similar to similar to
prices in 2019. However, in some timber industry sectors, such as lumber and consumer tissue, prices in 2019. However, in some timber industry sectors, such as lumber and consumer tissue,
markets have experienced supply shortages or historical y high prices as consumers and markets have experienced supply shortages or historical y high prices as consumers and
producers struggle to anticipate and adjust to the pandemic’s effects. In others, such as newsprint producers struggle to anticipate and adjust to the pandemic’s effects. In others, such as newsprint
and glossy paper, the pandemic has accelerated trends toward low demand brought on by other and glossy paper, the pandemic has accelerated trends toward low demand brought on by other
economic forces, such as declines in print media. Industry pressureseconomic forces, such as declines in print media. Industry pressures —some potential y related to or exacerbated by COVID-19, but also other factors—have led to layoffs, closures, have led to layoffs, closures,
and other and other impacts. Some effects have been transient, and some predictions about market impacts. Some effects have been transient, and some predictions about market
conditions (such as predictions about residential construction activity) have not conditions (such as predictions about residential construction activity) have not occurredbeen realized. The . The
pandemic’s pandemic’s ultimate impacts to the industry cannot yet be ascertained. ultimate impacts to the industry cannot yet be ascertained.
Congress Congress has not provided specific assistance to provided specific assistance to the timber industry general y, although some
timber-related businesses timber harvesters and haulers through the FY2021 Consolidated Appropriations Act.1 Timber-related businesses also may have received assistance available to businesses general y, such as assistance authorized may have received assistance under the provisions of the Coronavirus under the provisions of the Coronavirus
Aid, Relief, and Economic Security Act (CARES Act; P.L. 116-136). The Aid, Relief, and Economic Security Act (CARES Act; P.L. 116-136). The U.S. Forest Service (FS) has Forest Service (FS) has
implemented relief measures for timber harvesting on the federal lands implemented relief measures for timber harvesting on the federal lands under its jurisdiction. Stakeholders have proposed a variety of further actions, such as disbursement of existing funding, additional funding, and relief to those affected by high lumber pricesunder its jurisdiction.
Further assistance has been proposed in the 116th Congress, such as S. 4233 and H.R. 7690. The
timber industry recommends additional assistance, such as loans or direct payments, to prevent
further impacts to the industry. .
The U.S. Timber Industry
The timber industry is a diverse commodity industry, wherein cut trees (The timber industry is a diverse commodity industry, wherein cut trees (timber)) are converted to a are converted to a
wide variety of products made from wood (wide variety of products made from wood (wood products), such as lumber, paper products, , such as lumber, paper products,
furniture, and many others.furniture, and many others.12 The United States is the largest producer of wood for industrial use in The United States is the largest producer of wood for industrial use in
the world, harvesting 15.9 bil ion cubic feet in 2017.the world, harvesting 15.9 bil ion cubic feet in 2017.23 Characteristics of the U.S. timber industry Characteristics of the U.S. timber industry
vary by region and are influenced by each region’s land ownership patterns, tree species, vary by region and are influenced by each region’s land ownership patterns, tree species,
transportation and processing infrastructure, and geography. The individual sectors within the
timber industry also vary widely in their production methods, trade relationships, and consumers.

1 1 P.L. 116-260, Division N—Additional Coronavirus Response and Relief, T itle VII, Subtitle B, Section 751. As of May 29, 2021. 2 T he timber industry does not include trees grown to provide crops for human consumption, such as orchards and T he timber industry does not include trees grown to provide crops for human consumption, such as orchards and
vineyards. vineyards.
23 James Howard and Shaobo Liang, James Howard and Shaobo Liang, U.S. Timber Production, Trade, Consumption, and Price Statistics, Forest Service , Forest Service
(FS), FPL-RP-701, 2019 (hereinafter Howard and Liang, (FS), FPL-RP-701, 2019 (hereinafter Howard and Liang, U.S. Tim ber Production);); and Food and Agriculture and Food and Agriculture
Organization (FAO), Organization (FAO), FAOSTAT Forestry Database, Forest Product Consum ption and Production , 2020. T imber may , 2020. T imber may
be measured in cubic feet or in board feet be measured in cubic feet or in board feet (BF)(BF), a unit of wood equaling 1 inch by 12 inches by 12 inches. T he BF in a a unit of wood equaling 1 inch by 12 inches by 12 inches. T he BF in a
log is not equal to the cubic feet in a log, as some wood is lost in the processing of a log to squared dimensions, and BF log is not equal to the cubic feet in a log, as some wood is lost in the processing of a log to squared dimensions, and BF
cannot be directly converted to cubic feet. cannot be directly converted to cubic feet.
Congressional Research Service Congressional Research Service

1 1

COVID-19 and the U.S. Timber Industry

transportation and processing infrastructure, and geography. The individual sectors within the timber industry also vary widely in their production methods, trade relationships, and consumers. Timber is divided into two general categories with different supply chains, end uses, and Timber is divided into two general categories with different supply chains, end uses, and
production methods: production methods:
  Softwood timber refers torefers to the wood of coniferous trees such as pine (the wood of coniferous trees such as pine (Pinus sp.), sp.),
fir ( fir (Abies sp.), Douglas fir (sp.), Douglas fir (Pseudotsuga menziesii), and spruce (), and spruce (Picea sp.). sp.).
Softwood timber is the primary material used in the construction industry in the Softwood timber is the primary material used in the construction industry in the
form of form of lumber (products sawn from logs), panel products (e.g., plywood, (products sawn from logs), panel products (e.g., plywood,
particle board), and other products.particle board), and other products.34 Softwood timber also is processed into pulp Softwood timber also is processed into pulp
to produce to produce paper products (e.g., cardboard, tissue, and writing paper) and used in (e.g., cardboard, tissue, and writing paper) and used in
other applications. other applications.
  Hardwood timber usual y refers to the wood of broadleaved trees such as oak usual y refers to the wood of broadleaved trees such as oak
( (Quercus sp.), maple (sp.), maple (Acer sp.), walnut (sp.), walnut (Juglans sp.), and ash (sp.), and ash (Fraxinus sp.).sp.).45
Hardwood timber often is used in applications where durability, appearance, or Hardwood timber often is used in applications where durability, appearance, or
other specific traits are desirable, such as furniture, cabinetry, and flooring. It is other specific traits are desirable, such as furniture, cabinetry, and flooring. It is
also used as pulp and lumber. Hardwoods are sometimes combined with also used as pulp and lumber. Hardwoods are sometimes combined with
softwoods to reduce cost; for example, hardwood veneers may be bonded to softwoods to reduce cost; for example, hardwood veneers may be bonded to
engineered softwood softwood plywoodpieces to create less costly finished products with the appearance of to create less costly finished products with the appearance of
hardwood. hardwood.
In 2017, about 41% of U.S. wood production was for lumber and engineered wood products, 35% In 2017, about 41% of U.S. wood production was for lumber and engineered wood products, 35%
was for pulp, and the remainder was for other uses. was for pulp, and the remainder was for other uses. 56 Approximately 80% of U.S. lumber Approximately 80% of U.S. lumber
production and 75% of U.S. pulp production were from softwoods.production and 75% of U.S. pulp production were from softwoods.6 The 7 The residential construction industry is construction industry is
an important source of U.S. timber demand; in 2017, about 69% of U.S. softwood an important source of U.S. timber demand; in 2017, about 69% of U.S. softwood lumber was lumber was
used for housing construction, along with significant amounts of other hardwood and softwood used for housing construction, along with significant amounts of other hardwood and softwood
products.products.78 The majority of softwood timber is produced in the South and the Pacific The majority of softwood timber is produced in the South and the Pacific Northwest.8
HardwoodNorthwest; hardwood timber general y is produced in the eastern United States. timber general y is produced in the eastern United States.9 The South is the The South is the largest U.S. largest U.S.
timber region, producing nearly 60% of al timber in the United States.timber region, producing nearly 60% of al timber in the United States.910
The timber supply chain is characterized by many smal forest landowners. Approximately 63% The timber supply chain is characterized by many smal forest landowners. Approximately 63%
of U.S. forests and woodlands are privately owned by corporations, individuals, nonprofits, or of U.S. forests and woodlands are privately owned by corporations, individuals, nonprofits, or
other nongovernmental groups.10 Approximately 43% of al forests and woodlands are owned by

34 In 2017, about 69% of softwood lumber was used in residential construction, including 30% used for new residential In 2017, about 69% of softwood lumber was used in residential construction, including 30% used for new residential
construction and 39% used for remodeling or upkeep of existing construction. Howard and Liang, construction and 39% used for remodeling or upkeep of existing construction. Howard and Liang, U.S. Tim ber
Production.

45 Despite the Despite the hardwood and and softwood nomenclature used for these categories, there is great variation in actual wood nomenclature used for these categories, there is great variation in actual wood
hardness within these groups. However, within the commercial specieshardness within these groups. However, within the commercial species prevalent in the U.S. timber industry, softwoods prevalent in the U.S. timber industry, softwoods
tend to be relatively fast -growing and softtend to be relatively fast -growing and soft compared to hardwoods. compared to hardwoods.
56 Howard and Liang, Howard and Liang, U.S. Timber Production.
6Engineered wood products are products made by affixing relatively small pieces of wood, such as strands, chips, or veneers, into larger pieces. Examples include oriented strandboard (OSB), fiberboard, and particleboard. 7 Howard and Liang, Howard and Liang, U.S. Timber Production.
78 Howard and Liang, Howard and Liang, U.S. Timber Production.
89 For the purposes of this report, the South consists of the states of Virginia, North Carolina, For the purposes of this report, the South consists of the states of Virginia, North Carolina, So uthSouth Carolina, Georgia, Carolina, Georgia,
Florida, Alabama, Mississippi, Arkansas, Louisiana, T exas, Kentucky, and T ennessee; however, sources cited may use Florida, Alabama, Mississippi, Arkansas, Louisiana, T exas, Kentucky, and T ennessee; however, sources cited may use
the term the term the South to refer to a subset of this region. T he Pacific Northwest consists of Washington and Oregon. In to refer to a subset of this region. T he Pacific Northwest consists of Washington and Oregon. In
addition, the timber industry may refer to addition, the timber industry may refer to Southern or or Pacific Northwest (PNW) timber, which usually refers to species timber, which usually refers to species
of timber that generally grow in those respective areas but may occasionally grow outside them. of timber that generally grow in those respective areas but may occasionally grow outside them.
910 Jeffrey Prestemon and Robert Abt, “ T he Southern T imber Market to 2040,” Jeffrey Prestemon and Robert Abt, “ T he Southern T imber Market to 2040,” Journal of Forestry, vol. 100, no. 7 , vol. 100, no. 7
(2002), pp. 16-22. (2002), pp. 16-22.
10 Sonja Oswalt et al., Forest Resources of the United States, 2017: A Technical Document Supporting the Forest
Service 2020 RPA Assessm ent
, FS, GT R-WO-97, March 2019 (hereinafter Oswalt, Forest Resources).
Congressional Research Service Congressional Research Service

2 2

COVID-19 and the U.S. Timber Industry

other nongovernmental groups.11 Approximately 43% of al forests and woodlands are owned by an estimated 10.6 mil ion families.an estimated 10.6 mil ion families.1112 The remaining 37% is publicly owned by the federal The remaining 37% is publicly owned by the federal
government, states, counties, or other units of government, with 28% of al U.S. forests and government, states, counties, or other units of government, with 28% of al U.S. forests and
woodlands owned by the federal government.woodlands owned by the federal government.1213 Most timber harvesting in the United States takes Most timber harvesting in the United States takes
place on private lands; for example, in 2012, approximately 90% of U.S. wood and paper place on private lands; for example, in 2012, approximately 90% of U.S. wood and paper
products originated on private lands.products originated on private lands.1314 Timber harvesting and hauling businesses vary in size, and Timber harvesting and hauling businesses vary in size, and
there are many smal firms, although relatively larger businesses harvest the majority of timber in there are many smal firms, although relatively larger businesses harvest the majority of timber in
most areas. most areas.1415
After timber is harvested, it is transported and processed. Making final products out of timber After timber is harvested, it is transported and processed. Making final products out of timber
may be a single- or multi-stage process. In general, it involves a first step of transforming logs may be a single- or multi-stage process. In general, it involves a first step of transforming logs
into a primary product such as lumber, wood chips, or wood pulp (into a primary product such as lumber, wood chips, or wood pulp (timber processing). Some of ). Some of
these products may not undergo further alteration (e.g., lumber). Others may act as materials for these products may not undergo further alteration (e.g., lumber). Others may act as materials for
further processing into other final products (further processing into other final products (wood product manufacturing, for the purposes of this , for the purposes of this
report).report).1516 Timber processing or wood product manufacturing facilities are often Timber processing or wood product manufacturing facilities are often capital intensive
(i.e., require costly, specialized equipment). Timber processing also may exhibit (i.e., require costly, specialized equipment). Timber processing also may exhibit economies of
scale (i.e., costs that decrease with higher levels of production) and may require large quantities (i.e., costs that decrease with higher levels of production) and may require large quantities
of timber to meet a minimum level of efficient production.of timber to meet a minimum level of efficient production.1617 This scale economy, combined with This scale economy, combined with
the general y high transportation cost of unprocessed wood, means that timber processing the general y high transportation cost of unprocessed wood, means that timber processing
businesses may be spatial y dispersed (i.e., relatively few, large facilities may be located in a businesses may be spatial y dispersed (i.e., relatively few, large facilities may be located in a
given area) and that buying and sel ing timber usual y occur relatively close to the harvest given area) and that buying and sel ing timber usual y occur relatively close to the harvest
location. location.1718
In the short term, supply of some wood products may be relatively In the short term, supply of some wood products may be relatively inelastic (i.e., may not change (i.e., may not change
much in response to changes in price), due to the time and expense needed to increase capacity, much in response to changes in price), due to the time and expense needed to increase capacity,
open facilities, or switch products in capital-intensive industries.open facilities, or switch products in capital-intensive industries.1819 These factors may contribute 11 Sonja Oswalt et al., Forest Resources of the United States, 2017: A Technical Document Supporting the Forest Service 2020 RPA Assessm ent, FS, GT R-WO-97, March 2019 (hereinafter Oswalt, Forest Resources). 12 These factors may contribute
to facilities permanently or temporarily closing rather than switching to produce a new product if
demand decreases, although the reasons for such closures are complex and may involve other

11 Families is defined as individuals, families, trusts, estates, and family partnerships. Oswalt, is defined as individuals, families, trusts, estates, and family partnerships. Oswalt, Forest Resources.
1213 Oswalt, Oswalt, Forest Resources.
1314 Sonja Oswalt and W. Brad Smith, Sonja Oswalt and W. Brad Smith, U.S. Forest Resource Facts and Historical Trends, FS, FS-1035, 2014. , FS, FS-1035, 2014.
1415 Joseph Conrad IV, W. Dale Greene, and Patrick Heisl, “A Review of Changes in U.S. Logging Businesses, 1980s- Joseph Conrad IV, W. Dale Greene, and Patrick Heisl, “A Review of Changes in U.S. Logging Businesses, 1980s-
Present,” Present,” Journal of Forestry, vol. 116, no. 3 (2018), pp. 291-303. For example, a survey in the state of Washington , vol. 116, no. 3 (2018), pp. 291-303. For example, a survey in the state of Washington
found that the majority of log-hauling companies were owner-driver companies with a single truck and trailer, found that the majority of log-hauling companies were owner-driver companies with a single truck and trailer,
according to Larry Mason et al., according to Larry Mason et al., The Washington Log Trucking Industry: Costs and Safety Analysis, Rural T echnology , Rural T echnology
Initiative, University of Washington, and T ransportation Research Group, Washington State University, Initiative, University of Washington, and T ransportation Research Group, Washington State University, Report to the
Washington State Legislature
, 2008. , 2008.
15 16 When used colloquially, When used colloquially, wood product manufacturing may not be inclusive of products made of wood pulp, such as may not be inclusive of products made of wood pulp, such as
paper, cardboard, or tissue. paper, cardboard, or tissue.
1617 Brian Murray and Jeffrey Prestemon, “Structure and Efficiency of T imber Markets,” in Brian Murray and Jeffrey Prestemon, “Structure and Efficiency of T imber Markets,” in Forests in a Market
Econom y
, ed. Erin Sills and Karen Abt (Dordrecht, the Netherlands: Kluwer Academic Publishers, 2003), pp. 153 -176. , ed. Erin Sills and Karen Abt (Dordrecht, the Netherlands: Kluwer Academic Publishers, 2003), pp. 153 -176.
Hereinafter, Murray and Presemon, “Hereinafter, Murray and Presemon, “ T imber Markets.” T imber Markets.”
1718 Murray and Presemon, “T imber Markets.” Logs generally are a costly commodity to transport compared to their Murray and Presemon, “T imber Markets.” Logs generally are a costly commodity to transport compared to their
value, due to their weight and size. T ransport costs also may be affected by accessibility; for logs value, due to their weight and size. T ransport costs also may be affected by accessibility; for logs transport edtransported by road, by road,
federal law controls both maximum gross vehicle weight and weight per axle of trucks on the Interstate Highway federal law controls both maximum gross vehicle weight and weight per axle of trucks on the Interstate Highway
System, which may limit the travel routes available to log trucks carrying certain loads (23 U.S.C. §127), and logs in System, which may limit the travel routes available to log trucks carrying certain loads (23 U.S.C. §127), and logs in
rugged terrain sometimes must be transported by air. T imber processing businesses tend to locate in spatially rugged terrain sometimes must be transported by air. T imber processing businesses tend to locate in spatially
distributed clusters of a few facilities each. See Glenn Ellison, distributed clusters of a few facilities each. See Glenn Ellison, EdwardEdwar d Glaeser, and William Kerr, “ Glaeser, and William Kerr, “ What Causes What Causes
Industry Agglomeration? Evidence from Coagglomeration Patterns,” Industry Agglomeration? Evidence from Coagglomeration Patterns,” Am ericanAmerican Economic Review, vol. 100 (2010), pp. , vol. 100 (2010), pp.
1195-1213, and Consuelo Brandeis and Donald Hodges, “ Sawmill Industry in T ennessee: Assessing Location1195-1213, and Consuelo Brandeis and Donald Hodges, “ Sawmill Industry in T ennessee: Assessing Location Pattern Pattern
Changes and T heir Effects on Sawlog Procurement Distribution,” Changes and T heir Effects on Sawlog Procurement Distribution,” Forest Science, vol. 64, no. 3 (2018), pp. 280-289. , vol. 64, no. 3 (2018), pp. 280-289.
1819 Nianfu Song, Sun Joseph Chang, and Francisco Aguilar, “U.S. Softwood Lumber Demand and Supply Estimation Nianfu Song, Sun Joseph Chang, and Francisco Aguilar, “U.S. Softwood Lumber Demand and Supply Estimation
Using Cointegration in Dynamic Equations,” Journal of Forest Economics, vol. 17 (2011), pp. 19-33.
Congressional Research Service Congressional Research Service

3 3

link to page 8 link to page 8 COVID-19 and the U.S. Timber Industry

to facilities permanently or temporarily closing rather than switching to produce a new product if demand decreases, although the reasons for such closures are complex and may involve other factors. If few facilities are located in a given area, closures may have a large effect on local factors. If few facilities are located in a given area, closures may have a large effect on local
timber industry profitability and employment. timber industry profitability and employment.
Wood products are highly traded commodities in world markets, and supply chains may be Wood products are highly traded commodities in world markets, and supply chains may be
integrated across regions and trading partners to varying degrees. The United States is a net integrated across regions and trading partners to varying degrees. The United States is a net
importer of timber and wood products. For example, in 2017, U.S. timber-related imports totaled importer of timber and wood products. For example, in 2017, U.S. timber-related imports totaled
approximately 3.5 mil ion cubic feet and timber-related exports totaled approximately 2.3 mil ion approximately 3.5 mil ion cubic feet and timber-related exports totaled approximately 2.3 mil ion
cubic feet.cubic feet.1920 As of 2017, Canada was the United States’ largest source of timber imports and As of 2017, Canada was the United States’ largest source of timber imports and
China was the largest single U.S. timber export market, though a substantial share is exported to China was the largest single U.S. timber export market, though a substantial share is exported to
Canada and Mexico.Canada and Mexico.2021 A portion of the wood produced and exported from the United States is A portion of the wood produced and exported from the United States is
processed into intermediate and finished products overseas, particularly in China, and processed into intermediate and finished products overseas, particularly in China, and
subsequently imported back into the United States. subsequently imported back into the United States.
Effects of COVID-19 on the Timber Industry
The COVID-19 pandemic has impacted timber and wood product markets, with substantial The COVID-19 pandemic has impacted timber and wood product markets, with substantial
variation across sectors. The timber industry’s diversity has resulted in uneven impacts. Some variation across sectors. The timber industry’s diversity has resulted in uneven impacts. Some
sectors of the industry have been negatively affected through shortages, price fluctuations, sectors of the industry have been negatively affected through shortages, price fluctuations,
closures, and other disruptions; others have maintained or increased sales. The diversity of the closures, and other disruptions; others have maintained or increased sales. The diversity of the
industry’s businesses and supply chains may have provided some resilience to the system as a industry’s businesses and supply chains may have provided some resilience to the system as a
whole, but this resilience may mask stresses on different sectors. In addition, the pandemic’s whole, but this resilience may mask stresses on different sectors. In addition, the pandemic’s
impacts have evolved over time, with demand, supply, and price sometimes changing over the impacts have evolved over time, with demand, supply, and price sometimes changing over the
space of weeks or months. Current and comprehensive information on some industry sectors is space of weeks or months. Current and comprehensive information on some industry sectors is
lacking due to the rapidly evolving situation, the diffuse nature of some timber industry sectors, lacking due to the rapidly evolving situation, the diffuse nature of some timber industry sectors,
and other reasons. The following sections discuss impacts on various parts of the wood product and other reasons. The following sections discuss impacts on various parts of the wood product
supply chain and wood product markets. supply chain and wood product markets.
Timber Harvesting
Overal , demand for wood and the prices producers received for timber have been lower in 2020
than in 2019. Wood raw material consumption from January to July 2020 was 6.7% lower than
the same period in 2019, representing a 13% reduction ($1.83 bil ion) in value of the delivered
wood, although this figure does not account for demand from August 2020 onward.21
In the year immediately prior to the pandemic, timber prices were relatively stable. According to the Bureau of Labor Statistics (BLS), the average prices obtained by timber According to the Bureau of Labor Statistics (BLS), the average prices obtained by timber
producers in 2020 increased through April, then decreased through July, before increasing
through October (see Figure 1)producers changed by 1% or less from March 2019 to April 2020 (see Figure 1).22 Then, in May 2020, they decreased by 2.6% in one month. According to BLS, producers received lower average prices According to BLS, producers received lower average prices
year-over-year-over-year (i.e., compared with the same month in 2019) from March to September 2020. These prices may reflect a decline in wood raw material consumption from January to July 2020, when consumption was 6.7% lower than the same period in 2019.23 However, from October 2020 through March 2021, producer prices showed a volatile but general y increasing trend and general y were higher year-over-year. In October 2020, prices were 3% higher than in October Using Cointegration in Dynamic Equations,” Journal of Forest Economics, vol. 17 (2011), pp. 19-33. 20 Howard and Liang, U.S. Timber Production. 21 Howard and Liang, U.S. Timber Production. year (i.e., compared with the same month in 2019) in every month except October. The
smal est year-over-year difference in average prices was in March (producers received 1.1% less
in March 2020, compared with March 2019), the beginning of the pandemic in the United States.
The greatest year-over-year difference was in July (4.4% less in July 2020 than in July 2019).22

19 Howard and Liang, U.S. Timber Production.
20 Howard and Liang, U.S. Timber Production.
21 Forest2Market, United States Economic Impact: Forest Products Consumption , American Logger’s Council, August
28, 2020.
22 CRS calculation from Bureau of Labor Statistics (BLS), Producer Price Index (PPI) Commodity Data for lumber and 22 CRS calculation from Bureau of Labor Statistics (BLS), Producer Price Index (PPI) Commodity Data for lumber and
wood products, “logs, bolts, timber, and pulpwood,” accessed wood products, “logs, bolts, timber, and pulpwood,” accessed December 9, 2020, previously updated November 13,
2020.
July 12, 2021, PPI data updated June 15, 2021. 23 Forest2Market, United States Economic Impact: Forest Products Consumption , American Loggers Council, August 28, 2020. Congressional Research Service Congressional Research Service

4 4


COVID-19 and the U.S. Timber Industry

2019, and in May 2021, prices were 7% higher than in May 2019.24 Overal , average prices from January to May 2021 were 6% higher than during the same period in 2019. Figure 1. Producer Price Index: Logs, Bolts, Timber, and Pulpwood

Source: Bureau of Labor Statistics, Producer Price Index (PPI), Commodities, Logs, Bolts, Timber, and Bureau of Labor Statistics, Producer Price Index (PPI), Commodities, Logs, Bolts, Timber, and
Pulpwood, monthly, not seasonal y adjusted, December 2011 = 100. Pulpwood, monthly, not seasonal y adjusted, December 2011 = 100.
Notes: The PPI represents the average price producers receive for their products, expressed as a unitless index The PPI represents the average price producers receive for their products, expressed as a unitless index
where average prices in December of 2011 equal 100. Therefore, percentage changes in the PPI are the best where average prices in December of 2011 equal 100. Therefore, percentage changes in the PPI are the best
expression of price changes. expression of price changes.
Price trends in different regions and products in 2020 sometimes differed from national averages, Price trends in different regions and products in 2020 sometimes differed from national averages,
although directly comparable data across regions and time periods are not available. although directly comparable data across regions and time periods are not available. However, 2021 prices in the major wood-producing regions (the Southeast and the Pacific Northwest) general y have been higher than average. For example, For example,
the industry analysis firm Forest2Market found that average prices of standing timber (the industry analysis firm Forest2Market found that average prices of standing timber (stumpage
prices
) for al southeastern timber ) for al southeastern timber products decreased 11.5% between the first and second
quarters of 2020.23 Industry analytics firm TimberMart-South found that both stumpage prices
and average prices for harvested timber delivered to mil s (delivered prices) in the South fel in
the third products increased 15% in the first quarter of 2021, compared with the 2020 average.25 As of July 2021, average southeastern pine stumpage prices were at their highest level since the first quarter quarter of 2015.26 Similarlyof 2020.24 Conversely, information from surveys by the Washington Department , information from surveys by the Washington Department
of Natural Resources shows of Natural Resources shows average overal average prices of logs delivered to mil s (delivered pricesdelivered prices) in Oregon, in Oregon, Washington, and Idaho were higher in April 2021 than in April 2020, with prices differing markedly between species and grades.27 Conversely, Forest2Market found that Lake States prices 24 CRS calculation from BLS, PPI Commodity Data for lumber and wood products, “logs, bolts, timber, and pulpwood,” accessed July 12, 2021, PPI data updated June 15, 2021. Prices in May of 2020 may have been affected by the onset of the COVID-19 pandemic and may be an inappropriate time period for comparison. 25 Mike Powell, “ Wet Weather Driving Southern T imber Prices Higher in 1Q202 1,” Forest2Market Blog, February 25, 2021. T hroughout this report, quarters refer to the quarters of the calendar year. 26 Joe Clark, “Lumber Prices Freefall, but Log Prices T rend Higher,” Forest2Market Blog, July 12, 2021. 27 CRS calculation from Washingt on Department of Natural Resources, “Survey Prices for Delivered Logs,” each of January 2020-April 2021. For example, prices for some Douglas fir grades rose by over 50% and prices for some Western red cedar grades rose by over 93%. Conversely, prices for lodgepole pine rose by 8% and prices for white fir rose by 17%. T he timber industry uses both stumpage and delivered prices to assess market performance, and the popularity and availability from publicly available sources of these prices differ by region a nd industry; however, the Congressional Research Service 5 COVID-19 and the U.S. Timber Industry for harvested timber delivered to mil s in April 2021 were at their lowest point in over eight years.28 It is difficult to disentangle timber market changes due to the COVID-19 pandemic in 2020 from other short- and long-term influences. For example, despite the average southern timber price increases, Forest2Market reported that price changes differed markedly by region, as winter weather constrained harvesting in certain areas, and prices were volatile.29 Similarly, despite quarter-over-quarter increases in prices, per-ton average delivered prices for many southern timber types in early 2021 did not deviate more than 5.6% (increase or decrease) from long-term averages.30Washington, and Idaho general y
fel between the first and second quarters of 2020 but rose in the third quarter.25 Regional
performance between 2019 and 2020 similarly differs, with stumpage prices for sawtimber in the

23 Mike Powell, “ Despite Record Lumber Prices, Southern T imber Prices Plummeted During Lockdown,”
Forest2Market Blog, September 7, 2020. T hroughout this report, quarters refer to the quarters of the calendar year.
24 T imberMart-South, Quarterly Market Bulletin, Third Quarter 2020,” accessed October 27, 2020 (hereinafter,
T imberMart -South, Quarterly Market Bulletin). CRS calculation from Washington DNR, “ Survey Prices for Delivered
Logs,” each of January 2020-October 2020. T he timber industry uses both stumpage and delivered prices to assess
market performance, and the popularity and availability from publicly available sources of these prices differ by region
and industry; however, the two prices reflect different stages in the timber supply chain, and therefore their levels
generally differ. Stumpage prices reflect the value of standing timber at the time it is purchased (e.g., by a timber
harvesting business), and delivered prices reflect the value of harvested timber when purchased for primary processing
(i.e., “at the mill gate”). T hese prices have different strengths and weaknesses: for ex ample, stumpage may not reflect
current demand for wood because timber is not always harvested immediately, whereas delivered prices incorporate the
costs of harvesting and transporting the timber in addition to the timber’s value. Although the topic is un derstudied,
trends in stumpage and delivered prices may be related over time. See Zhuo Ning and Changyou Sun, “Vertical Price
T ransmission in T imber and Lumber Markets,” Journal of Forest Economics, vol. 20 (2014), pp.17-32.
25 CRS calculation from Washington DNR, “Survey Prices for Delivered Logs,” each of January 2020 -October 2020.
Congressional Research Service

5

COVID-19 and the U.S. Timber Industry

South lower in 2020 than in the same period in 2019 and delivered prices in the Pacific Northwest
higher in 2020 than in the same period in 2019.26
It is unclear to what degree timber market changes in 2020 were directly related to the COVID-19
pandemic and to what degree they are attributable to the general long-term trend of stable or
declining timber prices.27 For example, TimberMart-South reports that, including the third quarter
of 2020, delivered prices for southern softwood sawtimber have remained “essential y
unchanged” since 2013, deviating no more than 3.4% (increase or decrease) from the per ton
average.28 Similarly, southern hardwood sawtimber per-ton average delivered prices have not
deviated more than 2.9% (increase or decrease) since 2014.29 Although the market situation for Although the market situation for
some wood products changed rapidly throughout some wood products changed rapidly throughout 20202020 and 2021 (see “Lumber” and “Paper Products (see “Lumber” and “Paper Products,”
below), overal timber prices general y do not change much as wood product markets fluctuate, below), overal timber prices general y do not change much as wood product markets fluctuate,
for a variety of reasons.for a variety of reasons.3031 In particular, timber prices are driven primarily In particular, timber prices are driven primarily by the inventory of by the inventory of
standing timber at any given time, along with the demand for timber from processors, and large standing timber at any given time, along with the demand for timber from processors, and large
standing timber inventories in important standing timber inventories in important timber-producing regions have contributed to lower timber-producing regions have contributed to lower
timber prices.31 Any impacts of the COVID-19 pandemic, compared with other long-term trends,
may not be possible to ascertain in the near term.timber prices.32
Processing and Manufacturing
Businesses throughout the wood product supply chain, such as timber processors, wholesalers, Businesses throughout the wood product supply chain, such as timber processors, wholesalers,
and consumers, have experienced varying impacts from the COVID-19 pandemic. and consumers, have experienced varying impacts from the COVID-19 pandemic. SinceAt the the
beginning of the pandemic, federal guidance beginning of the pandemic, federal guidance has designated businesses that “support the designated businesses that “support the
manufacture and distribution of forest products, including, but not limited to timber, paper, and manufacture and distribution of forest products, including, but not limited to timber, paper, and
other wood products,” as components of critical infrastructure within the food and agriculture other wood products,” as components of critical infrastructure within the food and agriculture
sector.sector.32 33 However, state-mandated stay-at-home orders However, state-mandated stay-at-home orders have varied, andvaried and, in some states, wood in some states, wood
product-related product-related businesses were ordered to close for some period of time.34 Some industry sectors that were two prices reflect different stages in the timber supply chain, and therefore their levels generally differ. Stumpage prices reflect the value of standing timber at the time it is purchased (e.g., by a timber harvesting business), and delivered prices reflect the value of harvested timber when purchased for primary processing (i.e., “at the mill gate”). T hese prices have different strengths and weaknesses: for example, stumpage may not reflect current demand for wood because timber is not always harvested immediately, whereas delivered prices incorporate the costs of harvesting and transporting the timber in addition to the timber’s value. Although the topic is little studied, trends in stumpage and delivered prices may be related over time. See Zhuo Ning and Changyou Sun, “ Vertical Price T ransmission in T imber and Lumber Markets,” Journal of Forest Economics, vol. 20 (2014), pp.17-32. 28 Mike Powell, “ T imber Prices & Inventories Plummet in the Lake States,” Forest2Market Blog, April 7, 2021. T he author refers to the states of Minnesota and Wisconsin in this article, but it is unclear what other states (if any) are included in the definition of Lake States. 29 Mike Powell, “ Wet Weather Driving Southern T imber Prices Higher in 1Q2021 ,” Forest2Market Blog, February 25, 2021. T hroughout this report, quarters refer to the quarters of the calendar year. 30 CRS calculation from T imberMart -South, Quarterly Market Bulletin, 3rd Quarter 2020 through 1st Quarter 2021. For example, the first quarter 2021 delivered price for hardwood sawtimber was 2.6% higher than the 2014 through 2020 average, and the first quarter 2021 delivered price for pine chip -and-saw was 5.6% higher than the 2014-2020 average. T he firse quarter 2021 delivered price for pine sawtimber was 1 cent less than the 2013 -2020 average (a percentage change of less than 0.1%). 31businesses were ordered to close.33 Some industry sectors that were declared
essential nonetheless reduced capacity or curtailed operations for various reasons, such as to
reduce risk to workers or due to expectations of adverse market conditions.34 Some processing
and manufacturing facilities have closed permanently. Such closures may disrupt local

26 For example, industry firm T imberMart -South found that third-quarter stumpage prices for pine sawtimber in the
Southeast region decreased by 4.8% when compared with 2019 and hardwood sawtimber decreased by 4.6%. However,
third-quarter average delivered log prices in Oregon, Washington, and Idaho increased 7.0% compared with 2019.
T imberMart -South, “ Southeastern Average Stumpage Prices,” quarterly averages, accessed October 28, 2020, and CRS
calculation from Washington DNR, “Survey Prices for Delivered Logs,” each of July -September 2019 and 2020.
27 T imberMart-South, Quarterly Market Bulletin.
28 CRS calculation from T imberMart -South, Quarterly Market Bulletin.
29 CRS calculation from T imberMart -South, Quarterly Market Bulletin
30 Mo Zhou and Joseph Buongiorno, “Price T ransmission Between Products at Different Stages of Manufacturing in Mo Zhou and Joseph Buongiorno, “Price T ransmission Between Products at Different Stages of Manufacturing in
Forest Industries,” Forest Industries,” Journal of Forest EconomicsEconom ics, vol. 11 (2005), pp. 5-19, vol. 11 (2005), pp. 5-19.
31 Brooks Mendell, “ Forest Industry Q&A: Lumber Prices Versus T imber Prices and Other Recent T opics; Pete Stewart, “ What’s Driving the Disparity Between Log and Lumber Prices?,” Forest2Market Blog, March 17, 2021. 32 Brooks Mendell, “Why Are T imber Prices So Low?,” ,” Forisk
Blog
, , September 1, 2020April 7, 2021; Joe Clark, “ How Does a Soaring; Joe Clark, “ How Does a Soaring Lumber Lumber Market Impact T imber Prices?,” Market Impact T imber Prices?,” Forest2Market
Blog
, August 24, 2020. , August 24, 2020.
32 33 Christopher C. Krebs, Christopher C. Krebs, Memorandum of Identification of Essential Critical Infrastructure Workers During COVID-19
Response
, U.S. Department of Homeland Security, Cybersecurity and Infrastructure Security Agency, March 19, 2020. , U.S. Department of Homeland Security, Cybersecurity and Infrastructure Security Agency, March 19, 2020.
3334 For example, in Pennsylvania, manufacturers of veneer plywood, engineered wood products, furniture, and cabinets For example, in Pennsylvania, manufacturers of veneer plywood, engineered wood products, furniture, and cabinets
were ordered to close. Karl Forth, “Is Your Company an Essential Business? It Depends,”were ordered to close. Karl Forth, “Is Your Company an Essential Business? It Depends,” Woodworking Network, Woodworking Network,
March 24, 2020.
34 For example, see T ed Sickinger, “Coronavirus Undercuts Oregon’s Wood Products Industry, Forestry Department
Budget,” Oregonian, April 4, 2020.
Congressional Research Service Congressional Research Service

6 6

link to page 11 COVID-19 and the U.S. Timber Industry declared essential nonetheless reduced capacity or curtailed operations for various reasons, such as to reduce risk to workers or due to expectations of adverse market conditions.35 As state stay-at-home orders have expired or been replaced and businesses have resumed operations, some businesses have lifted capacity reductions or curtailments. However, since the start of the pandemic, some processing and manufacturing facilities have closed permanently. Such closures may disrupt local communities due to the regional nature of timber markets, which sometimes means individual facilities purchase a large proportion of local timber supply or are significant for local employment.36 A number of factors may influence permanent closures, including (but not limited to) COVID-19; these factors have contributed to a long-term trend in timber industry consolidation since the 1990s.37 How the pandemic may affect long-term trends remains to be seen. Lumber Early in 2020, the lumber supply chain contracted for numerous reasons.38 Housing starts declined precipitously, fal ing 22.3% in March 2020COVID-19 and the U.S. Timber Industry

communities due to the regional nature of timber markets, which sometimes means individual
facilities purchase a large proportion of local timber supply or are significant for local
employment.35 A number of factors may influence permanent closures, including (but not limited
to) COVID-19; these factors have contributed to a long-term trend in timber industry
consolidation since the 1990s.36 How the pandemic may affect this trend remains to be seen.
Trade
Lower economic activity in other countries and disruptions to parts of the transportation network
disrupted U.S. wood product trade. Early in the pandemic, some ports were closed, which
curtailed shipments, and worldwide shutdowns in construction and manufacturing weakened
international demand.37 As a result, trade activity in timber-related products general y decreased.
As of October 2020, the United States had exported approximately $24.0 bil ion in timber-related
products and had imported approximately $35.3 bil ion, in contrast to the year-to-date export
value of approximately $26.6 bil ion and the year-to-date import value of $35.8 bil ion in 2019.38
Lumber
Early in 2020, the lumber supply chain contracted for numerous reasons.39 Housing starts
declined precipitously, fal ing 22.3% in March, and the lumber industry anticipated low overal , and the lumber industry anticipated low overal
demand.demand.4039 Consequently, lumber mil s idled or curtailed production, with the industry analytics Consequently, lumber mil s idled or curtailed production, with the industry analytics
firm Forisk estimating an overal reduction of softwood lumber capacity offirm Forisk reporting that overal softwood lumber capacity had been reduced by over 15.6% in the first over 15.6% in the first
quarter of 2020 and curtailments quarter of 2020 and curtailments were continuing into April.continuing into April.4140 However, housing starts However, housing starts rosebegan to rise in June and, for the remaining months of 2020, exceeded starts in the same months in 2019. Starts in 2021 continued this increasing trend; for example, in March 2021, housing starts reached their highest level since 2006.41 Demand for lumber for remodeling in 2020 remained steady.42 Although lumber mil s responded by reopening or ending curtailments, in June and
exceeded starts in 2019 through October.42 Demand for lumber for remodeling remained steady.43
As a result, lumber demand exceeded supply, leading to softwood lumber shortages and prices lumber demand exceeded supply, leading to softwood lumber shortages and prices
that rose to that rose to record record-high levels high levels beginning in late August and early September 2020in late August and early September 2020 (see Figure 2).44

35.43 March 24, 2020. 35 For example, see T ed Sickinger, “Coronavirus Undercuts Oregon’s Wood Products Industry, Forestry Department Budget,” Oregonian, April 4, 2020. 36 For example, a Wisconsin paper plant that closed in July 2020 purchased approximately 25% of the pulpwood in For example, a Wisconsin paper plant that closed in July 2020 purchased approximately 25% of the pulpwood in
Wisconsin. T he closure was projected to affect more than 14,000 jobs, including 1,000 mill workers. Carey Biron, Wisconsin. T he closure was projected to affect more than 14,000 jobs, including 1,000 mill workers. Carey Biron,
“Paper Cuts: U.S. Coronavirus Downturn Hits T imber-Reliant T owns,” “Paper Cuts: U.S. Coronavirus Downturn Hits T imber-Reliant T owns,” ReutersReuters, September 23, 2020, and Great Lakes T imber Professionals Association, “Economic and Environmental Impact of Verso Announcement,” press release, June 2020. 37, September 23, 2020.
36 T imber industry consolidation includes timber processing and manufacturing plant closures, T imber industry consolidation includes timber processing and manufacturing plant closures, plan tplant expansions, and expansions, and
product changes at existing plants. Peter Ince et al., product changes at existing plants. Peter Ince et al., Globalization and Structural Change in the U.S. Forest Sector: An
Evolving Context for Sustainable Forest Managem ent
, FS, FPL-GT R-170, 2007; C. Woodall et al., “ An Overview of , FS, FPL-GT R-170, 2007; C. Woodall et al., “ An Overview of
the Forestthe Forest Products Sector Downturn in the United States,” Products Sector Downturn in the United States,” Forest Products Journal, vol. 61, no. 8 (2011), pp. 595-603. , vol. 61, no. 8 (2011), pp. 595-603.
37 For example, see Hal Bernton, “In Rural Washington, Coronavirus Outbreak T akes a Big Bite Out of Pulp and
Shellfish Exports to China,” Seattle Times, March 7, 2020.
38 CRS, from Bureau of Economic Analysis, “U.S. International T rade in Goods and Services,” Exports, Imports, and
Balance of Goods by Selected NAICS-Based Product Code, Not Seasonally Adjusted, each of October 2019 and
October 2020. Sum of Forestry Products, Wood Products, and Paper Products.
3938 Pete Stewart, “Why Are Lumber Prices at a Record High?,” Pete Stewart, “Why Are Lumber Prices at a Record High?,” Forest2Market Blog, August 18, 2020. , August 18, 2020.
4039 “U.S. Home Construction Fell 22.3% in March,” “U.S. Home Construction Fell 22.3% in March,” CNBC, April 16, 2020. , April 16, 2020.
4140 Brooks Mendell, “ Forisk Q1 2020 Update of Forest Industry Capital Investments and T imberland T ransactions,” Brooks Mendell, “ Forisk Q1 2020 Update of Forest Industry Capital Investments and T imberland T ransactions,”
Forisk Blog, April 22, 2020. , April 22, 2020.
4241 United States Census Bureau, “Historical T ime Series Data,” Housing Units Started, New Privately Owned Housing United States Census Bureau, “Historical T ime Series Data,” Housing Units Started, New Privately Owned Housing
Units Started (Monthly), Not Seasonally Adjusted, accessed Units Started (Monthly), Not Seasonally Adjusted, accessed November 23, 2020.
43May 13, 2021. 42 John Greene, “ Lumber Prices Continue to Freefall,” John Greene, “ Lumber Prices Continue to Freefall,” Forest2Market Blog, October 22, 2020. , October 22, 2020.
4443 John Greene, “ Breaking: Have North American Lumber Prices Peaked?, John Greene, “ Breaking: Have North American Lumber Prices Peaked?, Forest2Market Blog, September 21, 2020; , September 21, 2020;
John Greene, “ Lumber Prices Continue to Freefall,” John Greene, “ Lumber Prices Continue to Freefall,” Forest2Market Blog, October 22, 2020. , October 22, 2020.
Congressional Research Service Congressional Research Service

7 7

link to page 11 link to page 11
COVID-19 and the U.S. Timber Industry

Figure 2. Lumber Futures Prices, 2016-2020

Source: NASDAQ Commodity Trading Prices, Lumber, Daily Closing Prices, accessed November 5, 2020.
Notes: Lumber futures are exchange-traded contracts to deliver a specified amount of lumber at a given future
date. Lumber futures prices are not equivalent to prices of lumber transactions occurring in real time ( lumber
prices
). Existing research suggests lumber futures may forecast lumber prices. link to page 8 COVID-19 and the U.S. Timber Industry Table 1. Quarterly Southern Yellow Pine (SYP) Average Lumber Prices (second quarter 2020 through June 16, 2021, per MBF) Quarter and Year Average Quarterly Price 2nd Quarter 2020 $442/MBF 3rd Quarter 2020 $728/MBF 4th Quarter 2020 $595/MBF 1st Quarter 2021 $946/MBF Year-to-Date 2nd Quarter 2021 $1,041/MBF Source: John Greene, “Breaking: Have North American Lumber Prices Peaked?, Forest2Market Blog, September 21, 2020, and Mike Powel , “Lumber Prices Plummet; Is the Rol er Coaster Ride Over?,” Forest2Market Blog, June 16, 2021. Notes: Years and quarters refer to calendar years. Second quarter 2021 data reflect data up to June 16, 2021. MBF = thousand board feet; a board foot is a traditional unit for measuring lumber and equals 1 inch by 12 inches by 12 inches. Although the available data sources for lumber vary by region and species, various sources agree an extraordinary rise in lumber prices began in August 2020. For example, industry sources reported average southern softwood lumber prices rose 67% between the second and third quarters of 2020 (see Table 1). Although prices have varied since, they general y remained high compared with historic averages and rose to record high levels beginning in early 2021. Prices declined in the fourth quarter of 2020 but remained about 40% higher than the 2019 quarterly average; seasonal declines in the fal and winter are typical of lumber markets.44 In 2021, prices increased precipitously: prices nearly doubled between the fourth quarter of 2020 and the first quarter of 2021. These changes were preceded by record-high lumber futures prices beginning in late August and continuing through mid-July 2021 (see Figure 1). 44 In the fourth quarter of 2019, t he average southern softwood lumber price was $348 per MBF. John Greene, “SYP Lumber Prices Deflate in 2019; What’s in Store for 2020?,” Forest2Market Blog, January 13, 2020, and John Greene, “Southern Yellow Pine Prices Shatter Previous Record,” Forest2Market Blog, May 10, 2021. Congressional Research Service 8 COVID-19 and the U.S. Timber Industry Figure 2. Lumber Futures Prices, 2016-2021 Source: NASDAQ Commodity Trading Prices, Lumber, Daily Closing Prices, accessed July 16, 2021. Notes: Lumber futures are exchange-traded contracts to deliver a specified amount of lumber at a given future date. Lumber futures prices are not necessarily equivalent to prices of lumber transactions occurring in real time (lumber prices). Existing research suggests lumber futures may forecast lumber prices. Lumber futures closing prices are Lumber futures closing prices are
reported daily on trading days. The figure has been smoothedreported daily on trading days. The figure has been smoothed between trading days. MBF = thousand board feet; between trading days. MBF = thousand board feet;
a board foot is a traditional unit for measuring lumber and equals 1 inch by 12 inches by 12 inches.a board foot is a traditional unit for measuring lumber and equals 1 inch by 12 inches by 12 inches.
Although the available data sources for lumber vary by region and species, various sources agree
an extraordinary spike in lumber prices occurred in August and September 2020. Industry sources
reported average southern softwood lumber prices rose 67% between the second and third
quarters of 2020, from $442 to $738 per thousand board feet (MBF).45 In some weeks the price
was higher stil : in early September, some softwood lumber prices reached over $920 per MBF,
representing increases of 140% or more compared with the same weeks in 2019, depending on
the species and region.46 This increase was preceded by record-high lumber futures prices in late
August (see Figure 2). Some businesses, These quarterly averages may mask additional short-term volatility or price fluctuations, or they may differ across regions and species. In particular, some prices reached al -time highs in early- to mid-May 2021 and began to decline toward the end of the month. For example, in the week of May 10, 2021, average southern softwood lumber prices were $1,091 per MBF, over 166% higher than the same week in 2020, but had declined to $979 per MBF by the week of June 11, 2021.45 Similarly, in the week of June 17, 2021, certain western spruce-pine-fir (SPF) lumber products were $1,048/MBF, compared with $1,618 one month prior—a decrease of almost 20%.46 It is unclear what overal factors may be contributing to the decline in prices, but they may include a combination of decreased demand from the housing sector and increased production and delivery.47 As of July 12, 2021, prices for southern yel ow pine had reached $689/MBF,48 a decline from their peak. As of July 16, 2021, futures prices for lumber had fal en even farther, below $600/MBF. It remains unclear if (or when) real-time transaction prices wil fal to prices similar to those before the pandemic, although futures prices often predict real-time prices. In 2019, the average quarterly prices of southern yel ow pine never rose above $410/MBF and weekly prices 45 Mike Powell, “Southern T imber Prices Push T oward 2-Year High,” Forest2Market Blog, May 24, 2021, and Mike Powell, “Lumber Prices Plummet; Is the Roller Coaster Ride Over?” Forest2Market Blog, June 16, 2021. 46 Madison’s Lumber Reporter, “Madison’s Softwood Lumber Reporter Weekly Comment,” June 29, 2021. T he price given is the price for Western spruce-pine-fir 2x4’s, grade 2 or better. 47 Lance Lambert, “Lumber Prices Continue to Plummet —Down 49% from the Peak,” Fortune, July 7, 2021. 48 Lance Lambert, “Hitting bottom? Lumber’s Price Is Down 55%, But a Rebound Looms,” Fortune, July 12, 2021. Congressional Research Service 9 COVID-19 and the U.S. Timber Industry for certain western SPF products never rose above $420/MBF.49 According to a graph published by Forest2Market, southern yel ow pine prices varied between approximately $320/MBF and $620/MBF in the years 2017, 2018, and 2019; lumber futures from 2016 onward similarly show prices that rarely reach beyond $600/MBF.50 Increased lumber prices have affected associated businesses in a variety of ways. Businesses for which lumber is an input (such as lumber wholesalers, distributers, and members such as lumber wholesalers, distributers, and members
of the construction industryof the construction industry,) reported shortages and rationing. For some, such as the construction reported shortages and rationing. For some, such as the construction
industry, the effect of higher lumber prices or shortages may have decreased revenues or outputindustry, the effect of higher lumber prices or shortages may have decreased revenues or output.47

45 John Greene, “ Breaking: Have North American Lumber Prices Peaked?, Forest2Market Blog, September 21, 2020.
46 For example, in the week ending September 11, 2020, prices for “Southern yellow pine” softwood lumber reached
$928 per MBF, a 146% increase over the same week in 2019. In the week ending September 4, 2020, “Western spruce -
pine-fir” 2x4 lumber reached $966 per MBF, an increase of 161% over 2019. “ Southern yellow pine” refers to four
pine species that grow in the South and have similar wood characteristics; most softwood lumber from the South is
Southern yellow pine. John Greene, “ Breaking: Have North American Lumber Prices Peaked?, and may have affected consumers.51 For example, the National Association of Home Builders (NAHB) estimated that, in August 2020, the average price of a new single-family home was $16,000 higher than in April 2020 due to the increase in softwood lumber prices; in May 2021, NAHB estimated the average single-family home price had increased by $35,872 and the average multifamily home price had increased by $13,000.52 Businesses that produce lumber, such as sawmil s, saw increased profits.53 For example, in the second quarter of 2020, gross margins for sawmil s in the Pacific Northwest (the cost of logs compared with the price of lumber) were at their highest level in 15 years.54 Although overal reasons for lumber price increases in 2020 and 20201 are complex, as discussed above, industry groups general y have stated that market forces—such as supply shortages, higher-than-expected demand, and production capacity issues—have been the primary drivers.55 Industry sources have identified features of lumber mil ing, such as narrow margins and long timelines needed to increase capacity, that may slow supply increases.56 Others have pointed out conditions brought on by the pandemic. For example, during shutdowns early in the pandemic, buyers depleted lumber inventory, and continued high demand means mil s cannot rebuild 49 Western prices are for Western spruce-pine-fir 2x4’s, grade 2 or better, weekly for 2019 up to October 8. Madison’s Lumber Reporter, “ Benchmark Western Spruce-Pine-Fir 2×4 Price Matches One-Year-Ago,” October 8, 2019. Southern prices given at John Greene, “ SYP Lumber Prices Deflate in 2019; What’s in Store for 2020?,” Forest2Market Blog,
September 21, 2020, and Keta Kosman, “ Softwood Lumber Prices Increase By Smaller Amounts as Demand Slows,”
Madison’s Lumber Reporter, September 9, 2020.
47, January 13, 2020. 50 Mike Powell, “Lumber Prices Plummet; Is the Roller Coaster Ride Over?,” Forest2Market Blog, June 16, 2021. 51 For example, see “Rising Price of Lumber Putting People in a Pinch,” For example, see “Rising Price of Lumber Putting People in a Pinch,” KMOV4-St. Louis, October 12, 2020, and Russ , October 12, 2020, and Russ
O'Reilly, “O'Reilly, “ Building Concerns: Lumber Shortage a ‘Strange Disaster’ amid COVID-19,” Building Concerns: Lumber Shortage a ‘Strange Disaster’ amid COVID-19,” Tribune-Dem ocratDemocrat, August 8, 2020. 52 National Association of Home Builders, “ Average New Home Price Now $16,000 Higher Due to Lumber,” NAHBNow, August 28, 2020, National Association of Home Builders, “ Skyrocketing Lumber Prices Add Nearly $36,000 to New Home Prices,” April 28, 2021. 53 Wood Resources International, “Lumber Companies in the U.S. Reached Record Profits T hanks to High Lumber Prices and Declining Sawlog Costs,” Cision PR Newswire, September 30, 2020. 54 Ibid. 55 For example, see Mike Powell, “2020 Lumber Price Surge Was Demand Driven,” Forest2Market Blog, April 15 2021, Robert Dalheim, “Homebuilders Respond, Say Lumber Producers Are Misleadingly Underrating Cost of Lumber in a Home,” Woodworking Network, April 29, 2021. 56 For example, see Ryan Dezember, “Despite Lumber Boom, Few New Sawmills Coming,” Wall Street Journal, May 17, 2021; and Pete Stewart, “Making More Lumber Is Not So Simple,” Forest2Market Blog, May 26, 2021. T imelines to increase lumber capacity are long; Forest2Market provides the example of a new sawmill in Alabama that started construction in 2018, finished construction in 2019, and is still increasing overall production in 2021. Data from Forisk show that overall U.S. sawmill capacity was similar in 2020 and 2019, with a slight increase in 2020 (CRS was unable to locate data from 2021). For a technical discussion of lumber market dynamics, see Nianfu Song, Sun Joseph Chang, and Francisco Aguilar, “U.S. Softwood Lumber Demand and Supply Estimation Using Cointegration in Dynamic Equations,” Journal of Forest Economics, vol. 17 (2011), pp. 19-33; and Jeffrey Prestemon et al., “Projecting Housing Starts and Softwood Lumber Consumption in the United States,” Forest Science, vol. 64, no. 1 (2017), pp. 1-14. Congressional Research Service 10 COVID-19 and the U.S. Timber Industry inventory while also meeting immediate needs, contributing to supply issues.57 Some of these market features have been apparent in the past, when other price swings occurred due to mismatched supply and demand.58 Some have pointed to the potential effects of nature-related timber supply shocks. For example, in 2020, some expressed concern that the impacts of wildfires, Hurricane Laura, and winter weather would cause lumber prices to increase further.59 However, Forest2Market found that overal U.S. lumber production was higher in 2020 than in 2019, including in regions influenc ed by such shocks (for example, lumber production was higher in the Pacific Northwest despite wildfires).60 Forest2Market states that this provides evidence that supply constraints were less of an issue than demand expansion in terms of driving prices in 2020. However, long-term regional timber supply issues could affect regional timber industry health and therefore could reduce lumber supply. For example, the online business publication Quartz wrote that sawmil capacity in British Columbia—and consequently, lumber available for export to the United States—may have been fal ing for some time due to a long-term regional insect infestation.61 In general, however, formal analysis of the impact of long-term timber supply shocks is lacking. Similarly, some have expressed the view that trade in wood products may be influencing lumber markets. In particular, some have contended that duties imposed on Canadian softwood lumber as part of the U.S-Canada softwood lumber dispute (see text box) have exacerbated shortages or high prices.62 As Canada supplied about 25% of U.S. lumber demand in 2020, this question is consequential for U.S. lumber markets.63 The specific impact of Canadian imports (including duties) on U.S. lumber markets in 2020 and 2021 is not wel understood. However, general studies of U.S. lumber markets under the 2017 duty rates may inform some potential impacts. These studies general y have found smal increases in U.S. production, smal decreases in Canadian imports, and smal increases in U.S. prices from application of 2017 duty rates, with duty-related effects much smal er than the large price increases of 2020 and 2021.64 These studies 57 Lance Lambert, “Southern Loggers Are Pushing Wood Production to a 13 -Year High. So Why Is the Price of Lumber up 288%?,” Fortune, June 10, 2021. 58 For example, see John Greene, “SYP Lumber Prices Finish 2018 in a Slump; Outlook for 2 019,” Forest2Market Blog, January 4, 2019. 59 Forestry Economic Advisers, “After Hitting Record Levels, Production Disruptions from Hurricane Laura Are Likely to Drive Lumber Prices Even Higher,” news release, September 10, 2020. Hurricane Laura impacted over 757,000 acres of timber in Louisiana, and it also affected Alabama, Mississippi, and T exas. Bruce Schultz, “AgCenter Estimates Ag, Forestry Losses from Hurricane Laura Exceed $1.6 Billion,” Louisiana State University AgCenter, September 15, 2020. For information on wildfire, see CRS In Focus IF10244, Wildfire Statistics, by Katie Hoover and Laura A. Hanson. 60 Mike Powell, “2020 Lumber Price Surge was Demand Driven,” Forest2Market Blog, April 15 2021; T imberMart -South, Quarterly Market Bulletin, 1Q2020. 61 Samanth Subramanian, “T he U.S. Wood Shortage Can Be T raced to a Decades-Old Beetle Infestation in Canada,” Quartz, May 17, 2021. 62 Joe Bousquin, “AGC Asks Biden for Relief from Soaring Lumber Prices,” ConstructionDive, February 22, 2021, T imberLine Staff, “Home Builders Applaud Canadian Lumber T ariff Cuts,” TimberLine, March 1, 2021. 63 Zoltan van Heyningen, “Home Price Rises Aren’t Explained by Duties,” Wall Street Journal, April 19, 2021. 64 For example, J. Buongiorno, “Projected Effects of U.S. T ariffs on Canadian Softwood Lumber and Newsprint Imports: A Cobweb Model,” Canadian Journal of Forest Resources, vol. 48 (August 18), pp. 1351-1357, found that an application of the average 2017 duty decreased Canadian imports by up to 8%, increased U.S. production by up to 2%, and increased U.S. prices by up to 2%. T he article did not examine total supply, as it did not include U.S. trade with other countries, and did not account for differing duties across firms. Craig Johnson and Rajan Parajuli, “ What’s Next in the U.S.-Canada Softwood Lumber Dispute? An Economic Analysis of Restrictive T rade Policy Measures,” Forest Policy and Econom ics, vol. 85, no. 1 (December 2017), pp. 135 -146, found that nationwide application of the highest Congressional Research Service 11 COVID-19 and the U.S. Timber Industry often do not account for U.S. lumber trade with other nations, which caused an overal 4.5% year-over-year increase in lumber imports in 2020.65 These studies support the assertion that duties on Canadian lumber imports affect U.S. consumers and markets. However, they do not suggest that such duties are likely to induce large, short-term price volatility or supply impacts. The U.S.-Canada Softwood Lumber Trade Dispute Softwood lumber trade between the United States and Canada has been a contentious issue since the 1980s. U.S. lumber producers claim they are at an unfair competitive disadvantage in the domestic market against Canadian lumber producers because of Canada’s timber pricing policies. Consequently, there have been five major trade disputes regarding softwood lumber between the United States and Canada. The current dispute started when the 2006 Softwood Lumber Agreement (SLA) expired on October 12, 2015. Under that agreement, Canadian softwood lumber shipped to the United States was subject to export charges and quota limitations when the price of U.S. softwood products fel below a certain level. In 2016, after a year-long grace period, a coalition of U.S. lumber producers filed trade remedy petitions, which claimed that Canadian firms dump lumber in the U.S. market and that Canadian provincial forestry policies subsidize Canadian lumber production. In 2017, federal agencies determined Canadian imports of softwood lumber were subsidized and dumped (sold at a lower price in the United States than in Canada), causing material injury to U.S. producers. As such, the United States imposed firm-dependent duties of up to 24% on Canadian exporters. In December 2020, the United States lowered this duty to approximately 9%, also firm dependent, for products imported during the 2017-2018 review period. U.S. duties are retrospective, meaning importers must pay a cash deposit of the estimated duty upon import and the final duty may not be determined until later. Thus, current imports may not be subject to the lower duty levels imposed in 2020. Sources: CRS Report R42789, Softwood Lumber Imports from Canada: Current Issues, by Katie Hoover and Ian F. Fergusson; International Trade Administration, “Fact Sheet: Commerce Finds Dumping and Subsidization of Imports of Softwood Lumber from Canada,” November 2017; International Trade Administration, “Certain Softwood Lumber Products From Canada: Final Results of the Countervailing Duty Administrative Review, 2017-2018,” 85 Federal Register 76519, November 30, 2020; International Trade Administration, “Certain Softwood Lumber Products From Canada: Final Results of the Countervailing Duty Administrative Review, 2017 -2018,” 85 Federal Register 77163, December 1, 2020. Members of Congress and members of the construction industry have expressed concern about the impact of increased construction prices on homebuyers and construction businesses.66 Since 2020, these groups have asked the Trump and Biden Administrations to promote greater lumber production and resolve the softwood lumber trade dispute with Canada.67 The Biden Administration has not committed to any particular action or remedy, although Secretary of Commerce Gina Raimondo and U.S. Trade Representative Katherine Tai have expressed that they wil work on varying aspects of the lumber price issue.68 2017 duty increased U.S. prices by up to 4%, increased U.S. production by up to 4%, and decreased the Canadian share of U.S. imports by up to 5%. T he article also did not examine total supply and did not ac count for differing duties across firms. 65 Wood Resources International LLC, “ Softwood Lumber Imports to the U.S. Were up 4.5% in 2020, Contrary to China, Japan and MENA Where Imports Fell,” Canadian Forest Industries, March 30, 2021. 66 For example, see Letter from National Association of Home Builders to President Joe Biden, January 29, 2021, and David Lawder and Jarrett Renshaw, “U.S. T rade Chief Pressured to Lift Duties on Canadian Lumber,” Reuters, May 16, 2021. 67 For a timeline of industry and congressional communications with the T rump Administration prior to October 21, 2020, see National Association of Home Builders, “Working Closely with NAHB, Nearly 100 Lawmakers Urge T rump to Act on Lumber,” NAHB Now, October 10, 2021. Since October 10, see, for example, Letter from Rep. Jim Costa and Rep. Jodey Arrington to President Biden and U.S. Department of Justice, May 2021, and Letter from National Association of Home Builders et al. to Gina Raimondo, U.S. Department of Commerce Secretary, March 29, 2021. 68 David Lawder and Jarrett Renshaw, “U.S. T rade Chief Pressured to Lift Duties on Canadian Lumber,” Reuters, May Congressional Research Service 12, August 8,
Congressional Research Service

8

COVID-19 and the U.S. Timber Industry

Other businesses, such as sawmil s, saw increased profits.48 Some expressed concern that supply
shocks, such as the impacts of wildfires and Hurricane Laura, would cause prices to increase
further.49 Members of the construction industry and Members of Congress expressed concern that
increased construction prices would impact homebuyers and construction businesses, and they
asked the Trump Administration to promote greater lumber production and resolve a softwood
lumber trade dispute with Canada.50 The National Association of Home Builders estimated that,
in August 2020, the average price of a new single-family home was $16,000 higher than in April
2020 due to the increase in softwood lumber prices. 51
Lumber prices fel sharply in October 2020, sometimes by over 25% a week.52 The decrease in
prices is likely due to many factors, such as the typical seasonality in lumber demand (due to the
end of construction season in some regions), increased processing capacity, and others. However,
prices remained higher compared with the same period in 2019—for example, in late October
2020, the price of some lumber was stil nearly 67% higher than the same time in 2019.53
Paper Products
Wood is the primary raw material for paper products, such as cardboard and bath tissue. During
the pandemic, demand for paper products used in offices, schools, restaurants, and other public
places has decreased, whereas demand for products used in residential settings has increased. As a
result, the pandemic has had differential and offsetting impacts across the pulp and paper sector,
sometimes within industries or geographic regions.54 For example, despite widely publicized
shortages in bath tissue and other personal-use paper products in early 2020, the increased
household demand for these products has been countered by decreased demand in schools,
offices, and other public places.55 Similarly, demand for paper packaging materials for shipping to

2020.
48 Wood Resources International, “Lumber Companies in the U.S. Reached Record Profits T hanks to High Lumber
Prices and Declining Sawlog Costs,” Cision PR Newswire, September 30, 2020.
49 Forestry Economic Advisers, “After Hitting Record Levels, Production Disruptions from Hurricane Laura Are Likely
to Drive Lumber Prices Even Higher,” news release, September 10, 2020. Hurricane Laura impacted over 757,000
acres of timber in Louisiana, and it also affected Alabama, Mississippi, and T exas. Bruce Schultz, “AgCenter Estimates
Ag, Forestry Losses from Hurricane Laura Exceed $1.6 Billion,” Louisiana State University AgCenter, September 15,
2020. For information on wildfire, see CRS In Focus IF10244, Wildfire Statistics, by Katie Hoover and Laura A.
Hanson.
50 Letter from Representatives Norma T orres et al. to Donald J. T rump , President, October 20, 2020; and Letter from
Gerald M. Howard, President and Chief Executive Officer of the National Home Builders Association, to Donald J.
T rump, President, August 7, 2020.
51 National Association of Home Builders, “ Average New Home Price Now $16,000 Higher Due to Lumber,”
NAHBNow, August 28, 2020.
52 John Greene, “ Lumber Prices Continue to Freefall,” Forest2Market Blog, October 22, 2020; and Keta Kosman,
“Softwood Lumber Prices Increase by Smaller Amounts as Demand Slows,” Madison’s Lumber Reporter, September
9, 2020.
53 Keta Kosman, “ Softwood Lumber Prices Stabilize as Demand Remains Strong,” Madison’s Lumber Reporter,
November 3, 2020.
54 For example, two Wisconsin paper plants producing glossy paper (primarily used for print advertising, magazines,
and similar products) announced they would close in 2020 due to declining demand and the high cost of retrofitting the
plants. Carey Biron, “Paper Cuts: U.S. Coronavirus Downturn Hits T imber-Reliant T owns,” Reuters, September 23,
2002. However, demand for bath tissue from other Wisconsin mills doubled, leading mills and distribution centers to
operate at 120% of their normal capacity. Rick Barrett, “Demand for T oilet Paper is Rising, and Wisconsin’s $13
Billion Paper Industry Could T hrive,” Milwaukee Journal-Sentinel, March 18, 2020.
55 Jen Weiczner, “T he Case of the Missing T oilet Paper: How the Coronavirus Exposed U.S. Supply Chain Flaws,”
Congressional Research Service

9

COVID-19 and the U.S. Timber Industry

COVID-19 and the U.S. Timber Industry Paper Products Wood is the primary raw material for paper products, such as cardboard and bath tissue. During the pandemic, demand for paper products used in offices, schools, restaurants, and other public places has decreased, whereas demand for products used in residential settings has increased. As a result, the pandemic has had differential and offsetting impacts across the pulp and paper sector, sometimes within industries or geographic regions.69 For example, despite widely publicized shortages in bath tissue and other personal-use paper products in early 2020, the increased household demand for these products has been countered by decreased demand in schools, offices, and other public places.70 Similarly, demand for paper packaging materials for shipping to homes has increased, whereas demand for these materials from restaurants and hotels has homes has increased, whereas demand for these materials from restaurants and hotels has
decreased.decreased.5671 Some sectors that primarily supply offices and schools (e.g., printing and writing Some sectors that primarily supply offices and schools (e.g., printing and writing
paper) paper) have reported decreased demand in 2020.reported decreased demand in 2020.5772 Overal , producers of pulp, paper, and related Overal , producers of pulp, paper, and related
products reported products reported improvementsrelatively little change in the average prices they received in the average prices they received as 2020 progressed: in
January 2020, prices were 2% lower than in January 2019, whereas in October 2020, they were
2% higher than in October 2019.58 In general, prices throughout the year were fairly similar to
prices in 2019.
in 2020 (which varied no more than 1% over the year), which were similar to average prices in 2019.73 Producer prices rose 5% from January to May 2021.74 Industry sources have pointed to increases in the cost of inputs, including wood pulp, energy, freight, and chemicals, and to increases in demand as driving price increases.75 It is unclear how trends across different industry sectors are continuing in 2021, as more facilities, offices, and public places increase capacity. Industry analytics firm Fastmarkets RISI reported that 43 pulp- and paper-related facilities in the Industry analytics firm Fastmarkets RISI reported that 43 pulp- and paper-related facilities in the
United States curtailed production temporarily or permanently closed between March and
September 2020 due to COVID-19.59 According to the Industrial Resources Council, there are
430 pulp and paper mil s in the United States, although it is unclear what year this statistic
reflects or whether it and the Fastmarkets RISI data include the same types of facilities.60 Some of
these events may be directly related to the COVID-19 pandemic, such as measures to prevent or
forestal outbreaks.61 In other cases, these curtailments and closures have occurred in response to
changing market conditions, some of which predated the pandemic and were accelerated by
changes to consumer behavior related to the pandemic.62
COVID-19 and Timber Harvesting on Federal Lands
Timber harvesting takes place on federal lands managed by the Forest Service (FS), within the
U.S. Department of Agriculture (USDA), and the Bureau of Land Management (BLM), within
the Department of the Interior). These agencies are broadly authorized to sel federal timber under
their multiple-use authorities.63 FS and BLM general y authorize timber harvesting through a
timber sale, wherein an interested party (timber purchaser) bids on a contract to harvest specified
timber (such as a given species in a given location) over a contract term, which is general y 3
years, with a maximum term of 10 years for FS timber.64 Most timber harvested on federal lands
is from FS lands.

Fortune, May 18, 2020, and Sharon T erlep, “ T oilet Paper Giant Pivots from Scratchy Office Rolls to Batt le Home
Shortages,” Wall Street Journal, April 23, 2020.
56United States curtailed production temporarily or permanently closed between March and September 2020 due to COVID-19.76 CRS was unable to locate information on curtailments or permanent closures since that time. According to the Industrial Resources Council, there are 430 16, 2021, and Alex Seitz-Wald and Jonathan Allen, “ Should Joe Biden worry about soaring lumber prices?,” NBC News, May 17, 2021. 69 For example, two Wisconsin paper plants producing glossy paper (primarily used for print advertising, magazines, and similar products) announced they would close in 2020 reportedly due to declining demand and the high cost of retrofitting the plants. Carey Biron, “ Paper Cuts: U.S. Coronavirus Downturn Hits T imber -Reliant T owns,” Reuters, September 23, 2020. However, demand for bath tissue from other Wisconsin mills doubled, leading mills and distribution centers to operate at 120% of their normal capacity. Rick Barrett, “ Demand for T oilet Paper is Rising, and Wisconsin’s $13 Billion Paper Industry Could T hrive,” Milwaukee Journal-Sentinel, March 18, 2020. 70 Jen Weiczner, “T he Case of the Missing T oilet Paper: How the Coronavirus Exposed U.S. Supply Chain Fl aws,” Fortune, May 18, 2020, and Sharon T erlep, “ T oilet Paper Giant Pivots from Scratchy Office Rolls to Battle Home Shortages,” Wall Street Journal, April 23, 2020. 71 Brenna Butler, Brenna Butler, Cardboard Box & Container Manufacturing in the U.S., IBISWorld, U.S. Industry (NAICS) Report , IBISWorld, U.S. Industry (NAICS) Report
32221, October 2020. 32221, October 2020.
5772 For example, see American Forest and Paper Association, “American Forest & Paper Association Releases For example, see American Forest and Paper Association, “American Forest & Paper Association Releases
September 2020 Printing-Writing Monthly Report,” press release, October 16, 2020. September 2020 Printing-Writing Monthly Report,” press release, October 16, 2020.
5873 CRS calculation from BLS, P PI Commodity Data for pulp, paper and allied products, “Pulp, Paper, and Allied products,” not seasonally adjusted, accessed July 6, 2021, PPI data updated June 15, 2021. 74 CRS calculation from BLS, PPI Commodity Data for pulp, paper and allied products, “Pulp, Paper, and Allied CRS calculation from BLS, PPI Commodity Data for pulp, paper and allied products, “Pulp, Paper, and Allied
products,” not seasonally adjusted, accessed products,” not seasonally adjusted, accessed November 24, 2020, previously updated November 13, 2020.
59July 6, 2021, PPI data updated June 15, 2021. In May 2021, prices were 3% lower than in May 2019. 75 Faustine Loison, “Paper Price Rises Continue,” Print Industry News, April 16, 2021. 76 Fastmarkets RISI, “ COVID-19-Related North American Pulp and Paper Mill Shuts, March-September 2020,” Fastmarkets RISI, “ COVID-19-Related North American Pulp and Paper Mill Shuts, March-September 2020,”
accessed November 3, 2020. Fastmarkets RISI specified that companies were “ listed for downtime, either novel accessed November 3, 2020. Fastmarkets RISI specified that companies were “ listed for downtime, either novel
coronavirus or market -related or maintenance if deemed relevant, or for indefinite or permanent shutdowns, announced coronavirus or market -related or maintenance if deemed relevant, or for indefinite or permanent shutdowns, announced
since early March.” Reported downtime was based on publicly reported announcements by companies and information since early March.” Reported downtime was based on publicly reported announcements by companies and information
reported to the organization’s editors. Fastmarkets RISI estimates that COVID-19-related mill downtime throughout reported to the organization’s editors. Fastmarkets RISI estimates that COVID-19-related mill downtime throughout
North America represents 2.684 million short tons of production. North America represents 2.684 million short tons of production.
60 Industrial Resource Council, “Pulp and Paper Manufacturing: Industry Snapshot,” accessed November 25, 2020.
61 For example, see Nicole Bales, “Georgia-Pacific Wauna Mill Discloses Virus Case,” Astorian, July 10, 2020.
62Congressional Research Service 13 COVID-19 and the U.S. Timber Industry pulp and paper mil s in the United States, although it is unclear what year this statistic reflects or whether it and the Fastmarkets RISI data include the same types of facilities.77 Some of these events may be directly related to the COVID-19 pandemic, such as measures to prevent or forestal outbreaks.78 In other cases, these curtailments and closures have occurred in response to changing market conditions, some of which predated the pandemic and were accelerated by changes to consumer behavior related to the pandemic.79 Trade Lower economic activity in other countries and disruptions to parts of the transportation network have affected U.S. wood product trade throughout the pandemic, though conditions improved in early 2021. Early in the pandemic, some ports were closed, which curtailed shipments, and worldwide shutdowns in construction and manufacturing weakened international demand.80 As a result, trade activity in timber-related products general y decreased. For example, as of October 2020, U.S. exports of timber-related products were approximately 32% lower than the year-to- date export value in 2019 and U.S. imports of timber-related products were approximately 26% lower than in 2019.81 However, by early 2021, trade activity had increased. As of March 2021, U.S. exports of timber-related products were nearly identical to March 2020 and U.S. imports of timber-related products were approximately 36% higher than in March 2020.82 COVID-19 and Timber Harvesting on Federal Lands Timber harvesting takes place on federal lands managed by the Forest Service (FS), within the U.S. Department of Agriculture (USDA), and the Bureau of Land Management (BLM), within the Department of the Interior. These agencies are broadly authorized to sel federal timber under their multiple-use authorities.83 The FS and BLM general y authorize timber harvesting through a timber sale, wherein an interested party (timber purchaser) bids on a contract to harvest specified timber (such as a given species in a given location) over a contract term, which is general y 3 77 Industrial Resource Council, “Pulp and Paper Manufacturing: Industry Snapshot,” accessed November 25, 2020. 78 For example, see Nicole Bales, “Georgia-Pacific Wauna Mill Discloses Virus Case,” Astorian, July 10, 2020. 79 For example, Bruce Ferrin, “Layoffs Loom as Rumford Mill Expands into Packaging Grades,” For example, Bruce Ferrin, “Layoffs Loom as Rumford Mill Expands into Packaging Grades,” Sun Journal, October , October
30, 2020; Peter Kendall, “A Warning from Wisconsin,” 30, 2020; Peter Kendall, “A Warning from Wisconsin,” Washington Post, July 30, 2020. , July 30, 2020.
63 16 U.S.C. §475, 30 U.S.C. §601. For more information, see CRS Report R45688, Timber Harvesting on Federal
Lands
, by Anne A. Riddle.
64 16 U.S.C. §472a(c). Bureau of Land Management timber contracts must be completed in three years, unless extended
Congressional Research Service

10

COVID-19 and the U.S. Timber Industry

Forest Service Timber Contract Flexibilities
The USDA has the authority to modify timber contracts to provide relief to purchasers if adverse
timber market conditions develop. The Secretary of Agriculture (Secretary) may extend the length
of timber sale contracts if the Secretary finds that a “substantial overriding public interest” (SOPI
finding
) justifies the extension.6580 For example, see Hal Bernton, “In Rural Washington, Coronavirus Outbreak T akes a Big Bite Out of Pulp and Shellfish Exports to China,” Seattle Times, March 7, 2020. 81 CRS, from Bureau of Economic Analysis, “U.S. International T rade in Goods and Services,” Exports, Imports, and Balance of Goods by Selected NAICS-Based Product Code, Not Seasonally Adjusted, each of October 2019 and October 2020. Sum of Forestry Products, Wood Products, and Paper Products. In October 2020, the United States had exported approximately $24.0 billion in timber-related products and had imported approximately $35.3 billion, in contrast to the year-to-date export value of approximately $26.6 billion and the year -to-date import value of $35.8 billion in 2019. 82 CRS, from Bureau of Economic Analysis, “U.S. International T rade in Goods and Services,” Exports, Imports, and Balance of Goods by Selected NAICS-Based Product Code, Not Seasonally Adjusted, each of March 2020 and March 2019. Sum of Forestry Products, Wood Products, and Paper Products. In March 2021, the United States had exported approximately $7.7 billion in timber-related products and had imported approximately $13.3 billion, in contrast to the year-to-date export value of approximately $7.7 billion and the year-to-date import value of $9.8 billion in 2019. It is unclear to what degree March 2020 trade figures may have been influenced by the COVID -19 pandemic, particularly as it impacted U.S. trade partners abroad. 83 16 U.S.C. §475, 30 U.S.C. §601. For more information, see CRS Report R45688, Timber Harvesting on Federal Lands, by Anne A. Riddle. Congressional Research Service 14 COVID-19 and the U.S. Timber Industry years, with a maximum term of 10 years for FS timber.84 Most timber harvested on federal lands is from FS lands. The FS responded to COVID through various authorized timber contract flexibilities. It is unclear if BLM used any timber contract flexibilities to relieve timber purchasers. Forest Service Timber Contract Flexibilities The USDA has the authority to modify timber contracts to provide relief to purchasers if adverse timber market conditions develop. The Secretary of Agriculture (Secretary) may extend the length of timber sale contracts if the Secretary finds that a “substantial overriding public interest” (SOPI finding) justifies the extension.85 In addition, if specific “adverse wood products market In addition, if specific “adverse wood products market
conditions” develop, defined as a specified percentage decrease over two or more consecutive conditions” develop, defined as a specified percentage decrease over two or more consecutive
quarters in the Producer Price Indexes for hardwood lumber, softwood lumber, and wood chips, quarters in the Producer Price Indexes for hardwood lumber, softwood lumber, and wood chips,
this constitutes an automatic SOPI finding. Under these conditions, the FS can issue a market-this constitutes an automatic SOPI finding. Under these conditions, the FS can issue a market-
related contract term addition (MRCTA) to an affected timber sale contract.related contract term addition (MRCTA) to an affected timber sale contract.6686 MRCTAs are a MRCTAs are a
subset of the Secretary’s authority to issue SOPI findings, which are more general and flexible subset of the Secretary’s authority to issue SOPI findings, which are more general and flexible
(e.g., (e.g., they can be issued for a variety of reasons or can respond to conditions occurring over time can be issued for a variety of reasons or can respond to conditions occurring over time
scales shorter than two quarters). FS timber sale contracts can be extended longer than 10 years, if scales shorter than two quarters). FS timber sale contracts can be extended longer than 10 years, if
the Secretary finds that doing so would al ow for better use of forest resources. the Secretary finds that doing so would al ow for better use of forest resources.
On April 15, 2020, the USDA issued a SOPI finding, announcing the FS would extend certain On April 15, 2020, the USDA issued a SOPI finding, announcing the FS would extend certain
timber contracts and permits due to a combination of factors affecting the timber market.timber contracts and permits due to a combination of factors affecting the timber market.6787 The The
announcement specified that a confluence of several factors, beginning in late 2019, has created announcement specified that a confluence of several factors, beginning in late 2019, has created
“unprecedented worldwide instability” in timber markets, citing factors such as the COVID-19 “unprecedented worldwide instability” in timber markets, citing factors such as the COVID-19
pandemic, tariffs on hardwood products exported to China, and others.pandemic, tariffs on hardwood products exported to China, and others.6888 In April 2020, the FS In April 2020, the FS
found total hardwood export value had fal en by over 42%.found total hardwood export value had fal en by over 42%.6989 Stakeholders reported that Stakeholders reported that
hardwood mil s had closed, instituted layoffs, reduced production, and lost revenues and that hardwood mil s had closed, instituted layoffs, reduced production, and lost revenues and that
National Forest System hardwood timber sales were at risk of default. National Forest System hardwood timber sales were at risk of default.70
Under the SOPI finding, most contracts may be extended for a total of two years, including time
provided under other MRCTA or SOPI findings, either those made in the past or those made in
the future. Market conditions in Alaska have been particularly affected (e.g., due the region’s

90 84 16 U.S.C. §472a(c). Bureau of Land Management timber contracts must be completed in three years, unless ex tended at the timber purchaser’s written request. 43 C.F.R. §§5463.1, 5473.4. at the timber purchaser’s written request. 43 C.F.R. §§5463.1, 5473.4.
6585 16 U.S.C. §472a(c) 16 U.S.C. §472a(c). 86
66 36 C.F.R. §223.52 36 C.F.R. §223.52. 87
67 FS, “Extension of Certain T imber Sale Contracts; Finding of Substantial Overriding Public Interest,” 85 FS, “Extension of Certain T imber Sale Contracts; Finding of Substantial Overriding Public Interest,” 85 Federal
Register
20984-20987, April 15, 2020. This substantial overriding public interest (SOPI) finding is not applicable to all 20984-20987, April 15, 2020. This substantial overriding public interest (SOPI) finding is not applicable to all
timber sales. Sales where timber is in urgent need of removal (e.g., to mitigate wildfire risk) will not be extended. T he timber sales. Sales where timber is in urgent need of removal (e.g., to mitigate wildfire risk) will not be extended. T he
SOPI does not apply to certain contracts called SOPI does not apply to certain contracts called stewardship contracts, if they include timber harvesting but are , if they include timber harvesting but are
primarily for restoration services. For more information on stewardship contracting, see CRS In Focus IF11179, primarily for restoration services. For more information on stewardship contracting, see CRS In Focus IF11179,
Stewardship End Result Contracting: Forest Service and Bureau of Land Managem ent , by Anne A. Riddle. , by Anne A. Riddle.
6888 Beginning in 2018, China responded to import tariffs instituted by the T rump Administration by placing a series of Beginning in 2018, China responded to import tariffs instituted by the T rump Administration by placing a series of
retaliatory retaliatory t ariffstariffs on American wood products. T hese tariffs particularly influenced hardwood markets, due to the high on American wood products. T hese tariffs particularly influenced hardwood markets, due to the high
proportion of U.S. hardwood exported to China. In the first months of 2020proportion of U.S. hardwood exported to China. In the first months of 2020 , the, the United States and China signed the United States and China signed the
first phase of a trade deal, under which China issued tariff exclusions for some (but not all) hardwood products, first phase of a trade deal, under which China issued tariff exclusions for some (but not all) hardwood products,
beginning February 28, 2020. For a summary of tariffs, see International T rade Administration, beginning February 28, 2020. For a summary of tariffs, see International T rade Administration, Foreign Retaliation
Product Matrix
, November 13, 2020. , November 13, 2020.
6989 FS, “Extension of Certain T imber Sale Contracts; Finding of Substantial Overriding Public Interest,” 85 FS, “Extension of Certain T imber Sale Contracts; Finding of Substantial Overriding Public Interest,” 85 Federal
Register
20984-20987, April 15, 2020. 20984-20987, April 15, 2020.
7090 Letter from Representatives Ann McLane Kuster et al. to Sonny Perdue, Secretary of Agriculture, and Robert Letter from Representatives Ann McLane Kuster et al. to Sonny Perdue, Secretary of Agriculture, and Robert
Lighthizer, U.S. T rade Representative, November 19, 2019; and FS, “Lighthizer, U.S. T rade Representative, November 19, 2019; and FS, “ Extension of Certain Timber Sale Contracts; Extension of Certain Timber Sale Contracts;
Finding of Substantial Overriding Public Interest,” 85Finding of Substantial Overriding Public Interest,” 85 Federal Register 20984-20987, April 15, 2020. For a summary 20984-20987, April 15, 2020. For a summary
of affected products, see Foreign Agriculture Service, of affected products, see Foreign Agriculture Service, China Issues Tariff Exclusions on U.S. Hardwood Products, ,
CH2020-0020, February 28, 2020. CH2020-0020, February 28, 2020.
Congressional Research Service Congressional Research Service

1115

COVID-19 and the U.S. Timber Industry

Under the SOPI finding, most contracts may be extended for a total of two years, including time provided under other MRCTA or SOPI findings, either those made in the past or those made in the future. Market conditions in Alaska have been particularly affected (e.g., due to the region’s reliance on foreign demand), so timber sale contracts in Alaska may be extended for up to three reliance on foreign demand), so timber sale contracts in Alaska may be extended for up to three
years. years.7191
As of As of November 13, 2020June 22, 2021, the FS had granted extensions to , the FS had granted extensions to 9431,000 timber contracts under the April timber contracts under the April
1515, 2020, SOPI finding. In addition, SOPI finding. In addition, 505as of June 25, 2021, 346 timber contracts had been extended under MRCTA provisions timber contracts had been extended under MRCTA provisions related to softwood lumber prices. .
It is unclear whether some sales had It is unclear whether some sales had extensions under both provisions. extensions under both provisions.
Federal Assistance to the Timber Industry
Congress has provided general assistance to U.S. businesses and employees, including those in
The ultimate effect of timber contract flexibilities on timber harvesting on FS lands is unclear. Timber harvesting in FY2020 on FS lands was very similar to FY2019 (in both years, approximately 2.6 bil ion board feet); flexibilities are to remain in effect for some time. Federal Assistance to the Timber Industry The FY2021 Consolidated Appropriations Act directed the Secretary of Agriculture to al ocate $200 mil ion to provide relief to timber harvesting and timber hauling businesses.92 The act specified that relief be provided to timber harvesting and hauling businesses that experienced at least a 10% decline in gross revenue from January 1, 2020, through December 1, 2020, as compared to the gross revenue generated from January 1, 2019, to December 1, 2019. On July 20, the USDA announced that the relief would be administered through the Farm Services Agency, in conjunction with the FS, as the Pandemic Assistance for Timber Harvesters and Haulers program.93 Timber harvesters and haulers may apply for relief between July 22 and October 15, 2021. In addition, the FY2021 Consolidated Appropriations Act authorized the Secretary of Agriculture to make payments to producers of specified biofuels produced in the United States for “unexpected market losses” as a result of COVID-19, which may be inclusive of some wood- based biofuels.94 Congress also has provided general assistance to U.S. businesses and employees, including those in the timber industry. Some of the main federal assistance programs include the following: the timber industry. Some of the main federal assistance programs include the following:
  Small Business Administration (SBA) Loans and Advances. Congress has Congress has
authorized several programs authorized several programs through the CARES Act that provide loans or advances to eligiblethat provide loans or advances to eligible businesses businesses
through the SBA. Certain eligible businesses through the SBA. Certain eligible businesses (such as smal businesses, sole (such as smal businesses, sole
proprietors, nonprofit organizations, and cooperatives) may apply for Economic proprietors, nonprofit organizations, and cooperatives) may apply for Economic
Injury Disaster Loans (EIDLs). The SBA is authorized to provide amounts of up Injury Disaster Loans (EIDLs). The SBA is authorized to provide amounts of up
to $2 mil ion, but some have reported EIDLs are unofficial y capped at
$150,000.72 Eligible businesses also may apply for bridge loans of up to $25,000
and advances of $1,000 per employee, up to a maximum of $10,000.73
SBA Paycheck Protection Program (PPP).74to $500,000, although this amount has changed over time due to the availability of funds in the SBA Disaster Loan Account. The CARES Act also provided $10 bil ion for emergency EIDL grants 91 For more information on stewardship contracting, see CRS In Focus IF11179, Stewardship End Result Contracting: Forest Service and Bureau of Land Managem ent, by Anne A. Riddle. 92 P.L. 116-260, Division N—Additional Coronavirus Response and Relief, T itle VII, Subtitle B, Section 751. For more information on the U.S. Department of Agriculture’s (USDA’s) Pandemic Assistance to Producers program, see https://www.farmers.gov/pandemic-assistance. 93 U.S. Department of Agriculture, “USDA Announces Pandemic Assistance for T imber Harvesters and Haulers,” press release, July 20, 2021. 94 P.L. 116-260, Division N—Additional Coronavirus Response and Relief, T itle VII, Subtitle B, Section 751. Applicable biofuels are defined at 42 U.S.C. §7545(o)(1). For more in formation on biofuels, contact Kelsi Bracmort at kbracmort@crs.loc.gov or 7-7283. Congressional Research Service 16 COVID-19 and the U.S. Timber Industry of up to $10,000 to borrowers adversely affected by the COVID-19 pandemic. The emergency EIDL grant did not have to be repaid, even if the applicant was subsequently denied an EIDL. Due to high demand, the SBA limited grants to $1,000 per employee, capped at $10,000.95  SBA Paycheck Protection Program (PPP).96 Smal businesses, cooperatives, Smal businesses, cooperatives,
nonprofits, sole proprietors, and self-employed individuals general y were nonprofits, sole proprietors, and self-employed individuals general y were
eligible for a PPP loan if they were in operation on February 15, 2020, and (1) eligible for a PPP loan if they were in operation on February 15, 2020, and (1)
were eligible for the SBA’s 7(a) loan program or (2) had either (a) not more than were eligible for the SBA’s 7(a) loan program or (2) had either (a) not more than
500 employees or, (b) if applicable, the SBA’s “size standard” in number of 500 employees or, (b) if applicable, the SBA’s “size standard” in number of
employees for the industry in which they operate. The PPP was designed to help employees for the industry in which they operate. The PPP was designed to help
businesses retain workers (maintain payroll) and make mortgage, rental, and businesses retain workers (maintain payroll) and make mortgage, rental, and
utility payments. Businesses general y received a two-year loan at a 1% interest utility payments. Businesses general y received a two-year loan at a 1% interest
rate equal to 2.5 times average monthly payroll costs (capped at $10 mil ion), and rate equal to 2.5 times average monthly payroll costs (capped at $10 mil ion), and
they could apply for al or part of the loan to be forgiven if they met certain job they could apply for al or part of the loan to be forgiven if they met certain job
retention and rehiring criteria. The retention and rehiring criteria. The statutory deadline for submitting PPP applications was May 31, 2021. However, on May 4, 2021, the SBA informed lenders that due to budgetary limitations it was limiting new PPP loan applications to community financial institutions and would continue to process applications that already had been submitted.97deadline for PPP applications was August 8,
2020.
  Enhanced Unemployment Insurance (UI)..98 Congress created several Congress created several temporary
temporary UI benefits in response to the pandemic, including providing an extra UI benefits in response to the pandemic, including providing an extra $600 in weekly benefits, expanding benefits to certain groups of unemployed workers who usual y do not qualify for UI benefits, and providing an extra 13 weeks of UI benefits. Some states have opted out of federal UI agreements.99 Benefits general y expire in September 2021.  Paid Leave and Sick Leave.100 If employees are unable to work for certain reasons associated with COVID-19, private-sector employers with fewer than 500 employees were required to provide two weeks of paid leave in 2020. These employers also were required to provide their employees an additional 10 weeks of paid expanded family and medical leave to care for a child whose school or 95 T he SBA stopped accepting new EIDL and emergency EIDL grant applications on April 16, 2020, because funding for the programs was nearly exhausted, but it continued to process EIDL and emergency EIDL grant applications that already had been submitted on a first -in, first -out basis. T he American Rescue Plan Act (P.L. 117-2) established a T argeted EIDL Advance to provide grants of up to $10,000 to businesses located in low-income communities, with 300 or fewer employees, and a revenue reduction of more than 30% during an eight -week period beginning on March 2, 2020, or later. Businesses and nonprofits that received a previous emergency EIDL grant in an amount less than $10,000 have first priority. 96 For more information, see CRS Report R46284, COVID-19 Relief Assistance to Small Businesses: Issues and Policy Options, by Robert Jay Dilger, Bruce R. Lindsay, and Sean Lowry ; and CRS Insight IN11341, SBA’s Paycheck Protection Program (PPP) Loans and Self-Em ployed Individuals, by Sean Lowry. 97 For more information, see CRS Report R46284, COVID-19 Relief Assistance to Small Businesses: Issues and Policy Options, by Robert Jay Dilger, Bruce R. Lindsay, and Sean Lowry . 98 For more information, see CRS In Focus IF11475, Unemployment Insurance Provisions in the CARES Act, by Katelin P. Isaacs and Julie M. Whittaker. 99 For more information, see CRS Insight IN11679, States Opting Out of COVID-19 Unemployment Insurance (UI) Agreem ents, by Julie M. Whittaker and Katelin P. Isaacs. 100 For more information, see CRS In Focus IF11487, The Families First Coronavirus Response Act Leave Provisions, by Sarah A. Donovan and Jon O. Shimabukuro and CRS In Focus IF11739, Payroll Tax Credit for COVID-19 Sick and Fam ily Leave, by Molly F. Sherlock. Congressional Research Service 17 COVID-19 and the U.S. Timber Industry $600 in

71 For more information on stewardship contracting, see CRS In Focus IF11179, Stewardship End Result Contracting:
Forest Service and Bureau of Land Managem ent
, by Anne A. Riddle.
72 Darla Mercado, “Federal Business Disaster Loans Now Capped at $150,000 and Limited to Agriculture,” CNBC,
May 7, 2020.
73 For more information, see CRS Insight IN11232, SBA Economic Injury Disaster Loans for COVID-19, by Bruce R.
Lindsay. On July 11, 2020, the Small Business Administration (SBA) announced it had stopped accepting Emergency
Economic Injury Disaster Loans Advance Payment grant applications because the program had reached its
authorization limit of $20 billion in grants. See SBA, “ Jobs Act Supported More T han $12 Billion in SBA Lending to
Small Businesses in Just T hree Months,” at https://www.sba.gov/content/jobs-act-supported-more-12-billion-sba-
lending-small-businesses-just-three-months.
74 For more information, see CRS Report R46284, COVID-19 Relief Assistance to Small Businesses: Issues and Policy
Options
, by Robert Jay Dilger, Bruce R. Lindsay, and Sean Lowry ; CRS Insight IN11324, CARES Act Assistance for
Em ployers and Em ployees—The Paycheck Protection Program , Em ployee Retention Tax Credit, and Unem ploym ent
Insurance Benefits: Overview (Part 1)
, coordinated by Molly F. Sherlock; and CRS Insight IN11341, SBA’s Paycheck
Protection Program (PPP) Loans and Self-Em ployed Individuals
, by Sean Lowry.
Congressional Research Service

12

COVID-19 and the U.S. Timber Industry

weekly benefits, expanding benefits to certain groups of unemployed workers
who usual y do not qualify for UI benefits, and providing an extra 13 weeks of
UI benefits.75 The extra $600 in benefits expired July 25, 2020, 76 with other
provisions scheduled to expire December 26, 2020.
Paid Leave and Sick Leave. If employees are unable to work for certain reasons
associated with COVID-19, private-sector employers with fewer than 500
employees are required to provide two weeks of paid leave. These employers are
also required to provide their employees an additional 10 weeks of paid expanded
family and medical leave to care for a child whose school or child care is closed child care is closed
or unavailable.or unavailable.77 Employers Employers cancould claim a payroll tax credit to offset the cost of claim a payroll tax credit to offset the cost of
providing the required leaveproviding the required leave.78 These provisions apply through in 2020. The tax credits for employers choosing to provide paid leave are available through September 30, 2021, although the paid leave requirement expired at the end of 2020. the end of 2020.
  Tax Relief. Through the CARES Act, Congress enacted a number of provisions Congress enacted a number of provisions
providing tax relief for providing tax relief for businesses. Congress authorized businesses. Congress authorized a refundable payroll tax
credit of 50% of qualified wages (up to $10,000)for 2020, and later expanded and extended for 2021, a refundable employee retention payroll tax credit for employers subject to for employers subject to
closures or closures or experiencing reduced revenues due to COVID-19.reduced revenues due to COVID-19.79101 Congress also provided tax Congress also provided tax
relief through expanded net operating lossesrelief through expanded net operating losses.80 Congress also recorded in tax years 2018, 2019, and 2020.102 In addition, Congress authorized deferred authorized deferred
payment of payment of the employer share of Social Security payroll taxes for employers and the employer share of Social Security payroll taxes for employers and
self-employed individualsself-employed individuals through the end of 2020,through the end of 2020,81103 along with other business along with other business
tax relief provisions.tax relief provisions.82104
Some timber industry sectors have used these programs. For example, a survey by the American Some timber industry sectors have used these programs. For example, a survey by the American
Logger’s CouncilLoggers Council from June of 2020 found that 72% of respondents applied for federal assistance. Of those, 84% found that 72% of respondents applied for federal assistance. Of those, 84%
applied for assistance with the PPP and 12% applied for assistance with the EIDL program.applied for assistance with the PPP and 12% applied for assistance with the EIDL program.83105 The The
majority of respondents (92%) who applied for assistance were approved. majority of respondents (92%) who applied for assistance were approved. ItAlthough it is unclear what timber industry sectors were included in this survey, the American Loggers Council represents independent loggers and log truck operators. In a later example, industry analytics firm Forisk reported that, as of January 2021, 5,532 logging businesses (up to 69% of the U.S. logging industry) had been granted PPP loans, with the majority of loan funding issued in April 2020 and consisting of loans of $50,000 or less.106 It is unclear how many businesses throughout the wood product supply chain are included in figures from both sources or to what degree they represent the industry as a whole. In addition to the federal programs above, the CARES Act provided $150 bil ion in direct assistance to state governments, collectively known as the Coronavirus Relief Fund, which may be used for expenses related to the COVID-19 pandemic.107 Some states have used this funding to assist sectors of the timber industry. For example, some states have used Coronavirus Relief Fund monies to establish grant programs that assist forest landowners and timber-related businesses.108 States also have used Coronavirus Relief Fund money to assist businesses general y. 101 CRS Insight IN11299, COVID-19: The Employee Retention Tax Credit, by Molly F. Sherlock. 102 CRS Insight IN11296, Tax Treatment of Net Operating Losses (NOLs) in the Coronavirus Aid, Relief, and Econom ic Security (CARES) Act, by Jane G. Gravelle. 103 CRS Insight IN11260, COVID-19 Economic Stimulus: Business Payroll Tax Cuts, by Molly F. Sherlock and Donald J. Marples. 104 CRS Report R46279, The Coronavirus Aid, Relief, and Economic Security (CARES ) Act—Tax Relief for Individuals and Businesses, coordinated by Molly F. Sherlock. 105 American Loggers Council, “Results: Loggers COVID-19 Federal Assistance Survey,” June 16, 2020. 106 Shawn Baker, “Felling a T ree with the PPP: Small Business Loan P rogram Aids the Logging Industry,” Forisk Blog, January 12, 2021. 107 CRS Report R46298, General State and Local Fiscal Assistance and COVID-19: Background and Available Data, by Grant A. Driessen. 108 For example, the State of Alabama established a grant program for qualifying timber owners that sold timber between March and July 2020, and the State of Vermont established a grant program for forest product businesses that experienced economic harm due to the COVID-19 pandemic. Alabama: “ Memorandum of Understanding Between Alabama Department of Finance and the Alabama Forestry Commission for the Distribution of CARES Act Coronavirus Relief Funds,” August 24, 2020; Vermont: Vermont Act 138, “ An Act Relating to Providing Financial Relief Assistance to the Agricultural Community due to the COVID-19 Public Health Emergency,” enacted July 2, Congressional Research Service 18 COVID-19 and the U.S. Timber Industry Options for Congress Decreases in timber prices over certain periods, mil closures, and other pandemic-related market disruptions led some stakeholders to conclude that financial assistance was is unclear how many
businesses were polled or to what degree they represent the industry as a whole.

75 For more information, see CRS In Focus IF11475, Unemployment Insurance Provisions in the CARES Act, by
Katelin P. Isaacs and Julie M. Whittaker.
76 On August 8, 2020, President Donald T rump issued a memorandum that authorized Lost Wages Assistance (LWA)
grants to supplement the weekly benefits of certain eligible unemployment insurance (UI) claimants in participating
states. LWA grants were authorized in the amount of $300 a week in federal funds; if a state chose to contribute an
additional $100 a week in state funds, the total would be $400 a week. LWA grants are available through December
2020, but the program terminates earlier if certain conditions (related to funding or enactment of legislation) are met.
For more information, see CRS Insight IN11492, COVID-19: Supplem enting Unem ployment Insurance Benefits
(Federal Pandem ic Unem ployment Com pensation vs. Lost Wages Assistance)
, by Katelin P. Isaacs and Julie M.
Whittaker.
77 For more information, see CRS In Focus IF11487, The Families First Coronavirus Response Act Leave Provisions,
by Sarah A. Donovan and Jon O. Shimabukuro .
78 For more information, see CRS Insight IN11243, Tax Credit for Paid Sick and Family Leave in the Families First
Coronavirus Response Act (H.R. 6201) (Updated)
, by Molly F. Sherlock.
79 CRS Insight IN11299, COVID-19: The Employee Retention Tax Credit, by Molly F. Sherlock.
80 CRS Insight IN11296, Tax Treatment of Net Operating Losses (NOLs) in the Coronavirus Aid, Relief, and Economic
Security (CARES) Act
, by Jane G. Gravelle.
81 CRS Insight IN11260, COVID-19 Economic Stim ulus: Business Payroll Tax Cuts, by Molly F. Sherlock and Donald
J. Marples.
82 CRS Report R46279, The Coronavirus Aid, Relief, and Economic Security (CARES) Act—Tax Relief for Individuals
and Businesses
, coordinated by Molly F. Sherlock.
83 American Loggers Council, “Results: Loggers COVID-19 Federal Assistance Survey,” June 16, 2020.
Congressional Research Service

13

COVID-19 and the U.S. Timber Industry

In addition to the federal programs above, the CARES Act provided $150 bil ion in direct
assistance to state governments, collectively known as the Coronavirus Relief Fund, which may
be used for expenses related to the COVID-19 pandemic.84 Some states have used this funding to
assist sectors of the timber industry. For example, some states have used Coronavirus Relief Fund
monies to establish grant programs that assist forest landowners and timber-related businesses.85
States also have used Coronavirus Relief Fund money to assist businesses general y.
Options for Congress
Decreases in timber prices, mil closures, and other market disruptions have led some
stakeholders to conclude that additional assistance is needed to provide relief to the timber needed to provide relief to the timber
industry.86industry.109 As described above, Congress provided financial assistance to some sectors of the timber industry through the FY2021 Consolidated Appropriations Act. Should Should Congress Congress wishseek to provide to provide suchadditional assistance assistance, it or assistance to other timber industry sectors, such assistance could take the form of additional could take the form of additional
legislation,legislation, changes to the implementation of existing changes to the implementation of existing programs, or other measures. As the pandemic has progressed, some stakeholders also have expressed that federal action is needed to protect consumers from high commodity prices, particularly lumber prices. In general, such proposals have not identified specific congressional action; however, Congress has acted on commodity prices from time to time. The programs, or other measures. The
discussion below covers assistance proposed specifical y for the timber industry in relation to discussion below covers assistance proposed specifical y for the timber industry in relation to the the
impacts of the COVID-19 pandemic.impacts of the COVID-19 pandemic.87110 Broad assistance to businesses or individuals, such as that Broad assistance to businesses or individuals, such as that
provided by the CARES Act, may be inclusive of the timber industry; such options are beyond provided by the CARES Act, may be inclusive of the timber industry; such options are beyond
the scope of this reportthe scope of this report. The discussion below does not cover potential actions by the executive branch. .
Congress also may decide that assistance specific to the timber industry is not warranted at this Congress also may decide that assistance specific to the timber industry is not warranted at this
time. For example, Congress may decide existing time. For example, Congress may decide existing assistance ispolicies are sufficient or the pandemic’s sufficient or the pandemic’s
impacts do not warrant industry-specific impacts do not warrant industry-specific assistanceintervention. In general, Congress has declined to pass . In general, Congress has declined to pass
legislation providing assistance specific to al sectors of the timber industry under other adverse legislation providing assistance specific to al sectors of the timber industry under other adverse
market situations. For example, in response to the economic downturn and housing market market situations. For example, in response to the economic downturn and housing market
collapse of 2008-2010, sectors of the timber industry experienced severe declines.collapse of 2008-2010, sectors of the timber industry experienced severe declines.88111 Congress Congress
provided certain flexibilities to purchasers of federal timber sale contracts (see “Timber provided certain flexibilities to purchasers of federal timber sale contracts (see “Timber
Harvesting on Federal Lands”) but did not provide other specific assistance to the timber industry. Harvesting on Federal Lands”) but did not provide other specific assistance to the timber industry.
In other situations, Congress has assisted some parts of the timber industry (such as forest In other situations, Congress has assisted some parts of the timber industry (such as forest
landowners) but not others.landowners) but not others.89112 2020. For more information on the Coronavirus Relief Fund, see CRS Report R46298, General State and Local Fiscal Assistance and COVID-19: Background and Available Data , by Grant A. Driessen. 109

84 CRS Report R46298, The Coronavirus Relief Fund (CARES Act, Title V): Background and State and Local Data, by
Grant A. Driessen.
85 For example, the State of Alabama established a grant program for qualifying timber owners that sold timber
between March and July 2020, and the State of Vermont established a grant program for forest product businesses that
experienced economic harm due to the COVID-19 pandemic. Alabama: “ Memorandum of Understanding Between
Alabama Department of Finance and the Alabama Forestry Commission for the Distribution of CARES Act
Coronavirus Relief Funds,” August 24, 2020; Vermont: Vermont Act 138, “ An Act Relating to Providing Financial
Relief Assistance to the Agricultural Community due to the COVID-19 Public Health Emergency,” enacted July 2,
2020. For more information on the Coronavirus Relief Fund, see CRS Report R46298, The Coronavirus Relief Fund
(CARES Act, Title V): Background and State and Local Data
, by Grant A. Driessen.
86 For example, see Edward Murphy, “Coronavirus and Papermaking Woes Bring T ough T imes to Maine’s Logging For example, see Edward Murphy, “Coronavirus and Papermaking Woes Bring T ough T imes to Maine’s Logging
Industry,” Industry,” Portland Press Herald, July 20, 2020. , July 20, 2020.
87110 In the 116th Congress, bills In the 116th Congress, bills have beenwere introduced that would introduced that would provide have provided relief to parts of the timber industry under relief to parts of the timber industry under
adverse market conditions not directly related to COVID-19. For example, the Forest Recovery Act (S. 1687 and H.R. adverse market conditions not directly related to COVID-19. For example, the Forest Recovery Act (S. 1687 and H.R.
1444) would 1444) would modifyhave modified the tax deduction for casualty losses to establish special rules the tax deduction for casualty losses to establish special rules for lossesfor losses of uncut timber dueof uncut timber due to to
natural disasters, theft, or other reasons. natural disasters, theft, or other reasons.
88111 See D. Hodges et al., “Recession Effects on the Forests and Forest Product Industries of the South,” See D. Hodges et al., “Recession Effects on the Forests and Forest Product Industries of the South,” Forest Products
Journal
, vol. 61, no. 8 (2012), pp. 614-624; and Charles Keegan et al., “ Impact of the Great Recession on the Forest , vol. 61, no. 8 (2012), pp. 614-624; and Charles Keegan et al., “ Impact of the Great Recession on the Forest
Products Industry in the Western United States,” in Products Industry in the Western United States,” in Moving from Status to Trends: Forest Inventory and Analysis (FIA)
Sym posium 2012
, ed. Randall Morin and Greg Liknes (FS, 2012). , ed. Randall Morin and Greg Liknes (FS, 2012).
89 112 For example, in P.L. 116-20, the Additional Supplemental Appropriations for Disaster Relief Act of 2019, Congress For example, in P.L. 116-20, the Additional Supplemental Appropriations for Disaster Relief Act of 2019, Congress
Congressional Research Service

14

COVID-19 and the U.S. Timber Industry

Financial Assistance to the Timber Industry
Stakeholders have cal ed for Congress to pass legislation providing specific assistance to the
timber industry, and some such legislation has been introduced. In the 116th Congress, S. 4233
and H.R. 7690 would authorize the Secretary of Agriculture (Secretary) to make relief payments
to timber harvesting and hauling businesses that experienced specified economic losses and
would establish a permanent appropriation for any amounts necessary to make such payments.
Eligible businesses that saw a 10% or greater loss in gross revenue between January 1 and July
31, 2020, compared with the same period in 2019, would be eligible. Payments to eligible entities
would equal their gross revenue from January 1 to July 31, 2019.90 Eligible business would be
required to certify to the Secretary that the relief payment would be used only for operating
expenses.
Stakeholders in the timber industry have proposed other legislative approachesdelegated broad authority to the FS’s state and private forestry mission area to administer $12.0 million for expenses related to specified hurricanes and wildfires; delegated broad authority to the U.S. Department of Agriculture (USDA) to administer $3.0 billion for expenses related to losses from natural disasters in 2018 and 2019, including for forest restoration; and appropriated additional funds to existing forest restoration programs, among other actions. Congressional Research Service 19 COVID-19 and the U.S. Timber Industry Financial Assistance to the Timber Industry Stakeholders have previously cal ed for Congress to pass legislation providing specific assistance to the timber industry. As described above (see “Federal Assistance to the Timber Industry”), Congress authorized relief to timber harvesting and hauling businesses that experienced specified economic losses. Although CRS did not locate any specific cal s for Congress to authorize new relief, stakeholders in the timber industry have proposed other legislative approaches should Congress aim to do so. For example, the . For example, the
American LoggersAmerican Loggers Council proposed that Congress authorize low-interest loans for timber Council proposed that Congress authorize low-interest loans for timber
harvesting or hauling businesses’ operating expenses based on lost production or revenue.harvesting or hauling businesses’ operating expenses based on lost production or revenue.91113 In In
general, legislationgeneral, legislation authorizing loans, direct support, or other authorizing financial financial mechanismsassistance can be can be
tailored as narrowly or broadly as Congress desires; for example, such legislation could specify tailored as narrowly or broadly as Congress desires; for example, such legislation could specify
firm size, type of business, magnitude of economic impact, or other factors for eligibility, or it firm size, type of business, magnitude of economic impact, or other factors for eligibility, or it
could have broad eligibility criteria. Stakeholders also have proposed approaches that would
increase demand rather than directly support businesses; for example, the Hardwood Federation
proposed that Congress create tax credits for buildings using U.S.-grown wood, increase
government purchases of U.S.-grown wood, and fund wood research programs.92

delegated broad authority to the FS’s state and private forestry mission area to administer $12.0 million for expenses
related to specified hurricanes and wildfires; delegated broad authority to the U.S. Department of Agriculture (USDA)
to administer $3.0 billion for expenses related to losses from natural disasters in 2018 and 2019, including for forest
restoration; and appropriated additional funds to existing forest restoration programs, among other actions.
90 Funding would remain available until September 30, 2021.
91 Letter from Daniel Dructor, Executive Vice President, American Loggers Council, to Congress, 2020.
92 Robert Dalheim, “Hardwood Industry Proposes COVID-19 Relief Policies to U.S. Senate,” Woodworking Network,
June 15, 2020. CRS has been unable to locate the original letter. T he 116 th Congress has introduced bills with
provisions related to increasing wood demand, such as the T rillion T rees Act, H.R. 5859, although such legislation
generally predates the COVID-19 pandemic.
Congressional Research Service

15could have broad eligibility criteria. Congress also might broadly use its oversight powers to review executive branch activities related to the timber industry, particularly the USDA’s administration of the relief to timber harvesting and hauling businesses authorized in the Consolidated Appropriations Act, 2021. Congress could \ oversee potential uses of other USDA funding to the agriculture sector.114 Such approaches might include overseeing any applicable rulemaking processes, directing the USDA to inventory or report on uses of the funding, or directing the USDA to review the funding’s effects on the timber harvesting and hauling sectors. Congress also could oversee the timing and effectiveness of any eventual relief disbursement, as some have criticized the delay in disbursement. Action on Commodity Prices As the pandemic has progressed, some stakeholders have expressed the view that federal action is needed to protect consumers from high commodity prices, particularly lumber prices. In general, such proposals have not identified specific congressional action but may have identified either broad policy goals or potential actions by the executive branch. For example, the National Association of Home Builders (NAHB) has advocated extensively on lumber prices to both the Trump and Biden Administrations. In one letter to the Biden Administration, the NAHB asked President Biden the following: We respectfully request that you reach out to domestic lumber producers to urge them to increase lumber production to address these shortages and to ask the Department of Commerce to investigate why production remains at such low levels during this period of high demand. Additionally, returning to the negotiating table with Canada to achieve a new softwood lumber agreement with our northern neighbor and end at various times, tariffs on Canadian lumber shipments into the U.S. would be a significant step forward.115 Other stakeholders also have been active in this area; for example, a coalition of dozens of industry organizations asked Secretary of Commerce Raimondo to “undertake a thorough 113 Letter from Daniel Dructor, Executive Vice President, American Loggers Council, to Congress, June 1, 2020. 114 Congress has authorized a variety of aid to the agriculture sector in response to the COVID-19 pandemic. In some instances, Members of Congress and other stakeholders have asserted that such funding should be available to some timber-related businesses. For more information on aid to the agriculture sector, see CRS In Focus IF11764, U.S. Agricultural Aid in Response to COVID-19, by Randy Schnepf and Stephanie Rosch. 115 Letter from John Fowke, Chairman of the Board, National Association of Home Builders, to President Joe Biden, January 29, 2021. Congressional Research Service 20 COVID-19 and the U.S. Timber Industry examination of the lumber supply chain and seek remedies that wil increase production.”116 Congress has engaged with the lumber price situation through various means, such as hearings, correspondence with the Biden and Trump Administrations, and others. If desired, options for congressional action regarding lumber prices are varied, although CRS was not able to locate any direct congressional intervention in lumber markets in recent decades. Alternatively, Congress may decide that action related to lumber prices is not desirable at this time. For example, Congress may elect to observe whether lumber price fluctuations and their effects on related industries continue for an extended period. As described above (see “Lumber”), prices have been volatile and have changed rapidly in relatively short periods. This volatility makes it particularly unclear what federal actions, if any, could respond in a timely manner to the developing situation. Congress might use its oversight powers to review executive branch activities related to lumber markets. Such approaches might include overseeing executive branch actions related to lumber trade, directing federal agencies to inventory or report on lumber market conditions, or directing federal agencies to review the effects of federal authorities on lumber markets (for example, authorities governing timber harvesting on federal lands, federal procurement, weight limits on federal interstate highways, or others).117 Congress also could consider legislation to address lumber prices, taking a variety of approaches. There are various examples of congressional action in other markets for different purposes, such as to authorize producer revenue or price protection programs, to authorize the executive branch to regulate wholesale prices, or to govern trade.118 Other legislative options to reduce consumer prices or increase supply may use indirect approaches, such as reforming federal regulations.119 Congress also has created or authorized grants, loans and loan guarantees, research and development programs, and other federal programs to facilitate development of certain industries or businesses.120 116 Letter from American Gas Association, American Public Gas Association, and American Supply Association et al. to Gina Raimondo, Secretary of Commerce, March 12, 2021. 117 For more information on the trade policy authorities Congress has delegated to the executive branch, see CRS Report R45148, U.S. Trade Policy Prim er: Frequently Asked Questions, coordinated by Cathleen D. Cimino-Isaacs. 118 For example, Congress has regularly authorized various farm revenue and price support programs, has authorized the executive branch to regulate wholesale prices of electricity, and has authorized the executive branch to take a variety of actions on international trade. For more information, see CRS In Focus IF10718, Farm Bill Prim er: Title I Com m odity Program s, by Randy Schnepf, CRS In Focus IF11411, The Legal Fram ework of the Federal Power Act, by Adam Vann, and CRS Report R45148, U.S. Trade Policy Prim er: Frequently Asked Questions, coordinated by Cathleen D. Cimino-Isaacs. 119 For example, Congress has contemplated a variety of legislative approaches to reforming consumer drug prices, such as reforming patent laws and regulations. In response to meat shortages early in the COVID-19 pandemic, the USDA granted some plants waivers to federal processing speed regulations. For more information, see CRS Report R46741, Drug Pricing and Intellectual Property: The Legislative Landscape for the 117th Congress, by Kevin J. Hickey, Kevin T . Richards, and Erin H. Ward, and CRS Insight IN11366, COVID-19 Disrupts U.S. Meat Supply; Producer Prices Tum ble, by Joel L. Greene. 120 For example, Congress has authorized loan guarantees for clean energy technology development, grant programs for certain projects involving innovative wood products, and funding for a wide variety of research and development programs. For more information, see CRS Insight IN11432, Departm ent of Energy Loan Program s: Title XVII Innovative Technology Loan Guarantees, by Phillip Brown et al., CRS Report R45219, Forest Service Assistance Program s, by Anne A. Riddle and Katie Hoover, CRS Report R46341, Federal Research and Developm ent (R&D) Funding: FY2021, coordinated by John F. Sargent Jr. Congressional Research Service 21 COVID-19 and the U.S. Timber Industry Timber Harvesting on Federal Lands In the past, Congress has at times acted to relieve federal timber purchasers under adverse market conditions. For example, in relation to the 2008 housing market downturn, some sectors of the U.S. timber industry experienced historic declines. In addition to a USDA-issued SOPI finding that authorized timber sale contract extensions, in the 2008 farm bil , Congress authorized additional timber sale contract flexibilities, such as contract value recalculations to reflect changing timber prices, contract buyouts, and adjustment of required periodic payments for qualified contracts.121 Such flexibilities were intended to assist federal timber purchasers if they experienced chal enging market conditions.122 Congress may consider similar actions as a model if federal timber purchasers experience hardships related to COVID-19.

COVID-19 and the U.S. Timber Industry

Expansion of Programs Created Under the CARES Act
Under the CARES Act, Congress delegated broad authority to the USDA to administer $9.5
bil ion in support of agricultural producers affected by COVID-19, which the USDA did through
successive rounds of funding through the Coronavirus Food Assistance Program (CFAP).93
Commercial timber harvesting or hauling are not eligible for this funding. In the August 2020
round of CFAP funding, the USDA specified that those requesting assistance for timber and
pulpwood did not provide sufficient data for the agency to determine eligibility; therefore, the
USDA determined timber was not eligible for CFAP funding.94 In September, a group of six
Senators requested the USDA immediately make this funding available to timber harvesters and
haulers.95 These Senators and other stakeholders asserted that USDA precedent al ows timber
harvesting and hauling to be considered an “agricultural commodity” and therefore eligible for
the relief provided in the CARES Act.96 However, it is not clear whether the definition of timber
as an agricultural commodity is the reason it was excluded from CFAP funding, as other
commodities also have been deemed ineligible due to lack of information, failure to meet
eligibility criteria (e.g., not experiencing the required decline in prices), or other reasons.97
Congress could clarify that timber should be included or excluded in any successive rounds of
CFAP funding through amendments to the CARES Act, other legislative action, or other means.
Timber Harvesting on Federal Lands
In the past, Congress has acted to relieve federal timber purchasers under adverse market
conditions. For example, in relation to the 2008 housing market downturn, some sectors of the
U.S. timber industry experienced historic declines. In addition to a USDA-issued SOPI finding
that authorized timber sale contract extensions, in the 2008 farm bil , Congress authorized
additional timber sale contract flexibilities, such as contract value recalculations to reflect
changing timber prices, contract buyouts, and adjustment of required periodic payments for
qualified contracts.98 Such flexibilities were intended to assist federal timber purchasers if they
experienced chal enging market conditions.99 Congress may consider similar actions as a model if
federal timber purchasers experience hardships related to COVID-19.


93 For more information, see CRS Report R46395, USDA’s Coronavirus Food Assistance Program: Round One
(CFAP-1)
, by Randy Schnepf.
94 USDA, “Notification of Funding Availability; Coronavirus Food Assistance Program (CFAP) Additional Eligible
Commodities,” 85 Federal Register 49589, August 14, 2020.
95 Letter from Senators Susan Collins et al. to Sonny Perdue, Secretary of Agriculture, September 18, 2020.
96 In the letter from Senators Susan Collins et al. to Sonny Perdue, Secretary of Agriculture, September 18, 2020, th e
Senators stated that “USDA’s Value-Added Producer Grants define ‘agricultural producer’ as ‘an individual or entity
that produces as Agricultural Commodity [including timber and forestry products] through participation in the day -to-
day labor, management , and field operations; or has the legal right to harvest an Agricultural Commodity,’ providing
precedent for timber harvesting and hauling to be considered ‘agricultural commodities.’” T he American Logger’s
Council cites 7 U.S.C. §1518, which includes “ timber and forests” in the definition of “ agricultural commodity” for 7
U.S.C. Chapter 36 (Crop Insurance).
97 USDA, “Notification of Funding Availability; Coronavirus Food Assistance Program (CFAP) Additional Eligible
Commodities,” 85 Federal Register 49589, August 14, 2020.
98 P.L. 110-246 §§8401 et seq.
99 For example, see explanatory material at FS, “Extension of Certain T imber Sale: Contracts; Finding of Substantial
Overriding Public Interest,” 85 Federal Register 20984, April 15, 2020, and FS, “ Extension of Certain T imber Sale
Contracts; Finding of Substantial Overriding Public Interest,” 77 Federal Register 65169, October 25, 2012.
Congressional Research Service

16

COVID-19 and the U.S. Timber Industry


Author Information

Anne A. Riddle Anne A. Riddle

Analyst in Natural Resources Policy Analyst in Natural Resources Policy



Disclaimer
This document was prepared by the Congressional Research Service (CRS). CRS serves as nonpartisan This document was prepared by the Congressional Research Service (CRS). CRS serves as nonpartisan
shared staff to congressional committees and Members of Congress. It operates solely at the behest of and shared staff to congressional committees and Members of Congress. It operates solely at the behest of and
under the direction of Congress. Information in a CRS Report should n ot be relied upon for purposes other under the direction of Congress. Information in a CRS Report should n ot be relied upon for purposes other
than public understanding of information that has been provided by CRS to Members of Congress in than public understanding of information that has been provided by CRS to Members of Congress in
connection with CRS’s institutional role. CRS Reports, as a work of the United States Government, are not connection with CRS’s institutional role. CRS Reports, as a work of the United States Government, are not
subject to copyright protection in the United States. Any CRS Report may be reproduced and distributed in subject to copyright protection in the United States. Any CRS Report may be reproduced and distributed in
its entirety without permission from CRS. However, as a CRS Report may include copyrighted images or its entirety without permission from CRS. However, as a CRS Report may include copyrighted images or
material from a third party, you may need to obtain the permission of the copyright holder if you wish to material from a third party, you may need to obtain the permission of the copyright holder if you wish to
copy or otherwise use copyrighted material. copy or otherwise use copyrighted material.

121 Food, Conservation, and Energy Act of 2008, P.L. 110-246 §§8401 et seq. 122 For example, see explanatory material at FS, “Extension of Certain T imber Sale: Contracts; Finding of Substantial Overriding Public Interest,” 85 Federal Register 20984, April 15, 2020, and FS, “Extension of Certain T imber Sale Contracts; Finding of Substantial Overriding Public Interest,” 77 Federal Register 65169, October 25, 2012. Congressional Research Service R46636 · VERSION 2 · UPDATED 22 Congressional Research Service
R46636 · VERSION 1 · NEW
17