Wis. Legislature holds joint Forestry Committee hearing

MADISON, Wis. – How to deal with a forest products industry in a “crisis situation” was the focus of the Wisconsin Legislature’s joint Forestry Committee hearing at the State Capitol in late December. The committee’s Chair, Mary Felzkowski, (R-Irma) labeled the situation a crisis, noting that if any other industry was experiencing a similar loss of market, the capitol building “would be in an uproar.” None of the other legislators (of either party) disputed her characterization, given the industry’s significant employment base, including 64,000 manufacturing jobs.

A spokesman for the forest products industry tied the current market situation and its impact on forest management to a significant risk to forest health. Henry Schienebeck, Executive Director of the Great Lakes Timber Professional Association, pointed out this realization after massive forest fires in Western states. There is a need to harvest an oversupply of pulpwood on the land to reduce future fire risk, but an elimination of mill infrastructure meant there were “no mills left to use the wood” in those states, Schienebeck said.

He said many of the members of his association are struggling 18 months after closure of two central Wisconsin mills — the Verso mill in Wisconsin Rapids and the Park Falls Pulp and Paper Mill in Park Falls, Wisconsin.

He noted that hard maple pulpwood has been losing market share to imported eucalyptus, with the South American wood volume growing by 20% in the last two years. He noted that eucalyptus is certified, but questions are increasing about the appropriateness of that certification due to possible displacement of Indigenous people caused by the plantation-style harvest operations.

Schienebeck noted the potential impact of these developments on forest landowners who have a requirement to carry out forest management operations (including harvests) as members of Wisconsin’s managed forest land tax group. He suggested that the legislature tie forest land taxes more closely to agricultural land tax rates in an effort to keep timber land as forests.

There were several other developments reported in the hearing. Sam Rikkers, Chief Operating Officer of the Wisconsin Economic Development Corporation, noted the promising effort of an industry coalition pursuing a grant up to $100 million for a federal Economic Development Agency grant. It passed on to become one of 60 finalists among what was an original group of 7,500 applicants.

The grant proposal focused on a cluster of diverse industry initiatives. The proposal group was led by the Wisconsin Paper Council, Great Lakes Timber Professionals Association, the Wisconsin Department of Natural Resources, and UW-Stevens Point.

Discussion of efforts to save the Park Falls and Wisconsin Rapids paper mills were discussed, but Rikkers and several legislators noted the need to repurpose these mills because of the market decline of their former product — general printing paper. This product had been in decline for years, but the drop in demand steepened based on the economic conditions around Covid-19. Rikkers mentioned that he had attended a ribbon cutting for reopening of the Park Falls mill two years ago. He questioned whether that mill needs a significant rebuild due to the market decline.

A bright spot in the discussion was the opening of the new Green Bay Packaging mill — the product of a $500 million investment in the state, Rikkers said. The demand for container board and also mass timber products for construction were noted as viable and growing use for waste wood.

Another promising development is the likely acquisition of the Wisconsin Central rail lines in Northern Wisconsin by the Fox Valley Lake Superior Railroad Company, which is part of WATCO, a short line rail group that operates nationally.

WATCO was able to have regulatory hurdles waived by the Surface Transportation Board, the U.S. government agency that regulates railroads. There is potential for rail service to be restored to Park Falls and several Northern Wisconsin cities.

The acquisition could allow a doubling of WATCO’s current Wisconsin Southern Railroad network. WATCO is based in Kansas and commenced operations in 1983.