September 2021 Hardwood Matters by National Hardwood Lumber Association

TH E VOIC E O F THE HARDWOOD IN DUSTRY

H A R D W O O D M AT T E R S September 2021

THE NEW NORMAL?

Hardwood Exports in a Changed World

pl us GRADUATION OF THE ITS 195TH CLASS INSPECTION SERVICES CARRIES ON WITH THE MISSION DESPITE CHALLENGES

T H E O F F I C I A L P U B L I C AT I O N O F T H E N AT I O N A L H A R D W O O D L U M B E R A S S O C I AT I O N S T R O N G R O O T S . G L O B A L R E A C H . | W W W. N H L A . C O M

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CONTENTS September 2021 • Issue 226

WHAT'S INSIDE feature 20 The New Normal? Hardwood Exports in a Changed World by Mike Snow

departments

ONLINE TOP POST OF THE MONTH at facebook.com/NHLAOfficial It's an exciting day at NHLA! The thermally modified oak has arrived from Bingaman & Son Lumber, Inc. for our deck remodel. Can't wait to show you the finished product. And hats off to the students of Class 195 for helping with the heavy lifting.

6 Accolades 8 Education Spotlight Graduation of the 195th Class 12 Legislative Log The Hardwood Federation:

Working for You by Dana Cole

16 Member Spotlight Mountian Top Floors 28 Rules Corner Inspection Services Department

Carries on With the Mission Despite Challenges by Dana Spessert

reader services 4 30 32

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President’s Message Educational Calendar Job Board

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H A R D W O O D M AT T E R S T H E VO I C E O F T H E H A R DWO O D I N D U ST RY National Hardwood Lumber Association PO Box 34518 • Memphis, TN 38184-0518 901-377-1818 • 901-382-6419 (fax) info@nhla.com • www.nhla.com

THE MISSION OF NH LA To serve NHLA Members engaged in the commerce of North American hardwood lumber by: maintaining order, structure and ethics in the changing global hardwood marketplace; providing unique member services; promoting North American hardwood lumber and advocating the interest of the hardwood community in public/private policy issues; and providing a platform for networking opportunities.

EXECUTIVE COMMITTEE

MISSION LEADERS

Jeff Wirkkala Hardwood Industries, Inc. President

Bucky Pescaglia Missouri-Pacific Lumber Co., Inc. Unique Services

Jon Syre Cascade Hardwood, LLC Vice President

Ray White Harold White Lumber Inc. Rules

Darwin Murray McClain Forest Products Past President 2018-2020

Joe Pryor Oaks Unlimited Industry Advocacy & Promotion

NHLA STAFF Amanda Boutwell Marketing and Communications Manager Desirée Freeman Controller

ADVERTISER INDEX

COMMITTEE CHAIRS Burt Craig Matson Lumber Company Membership Rob Cabral Upper Canada Forest Products, Ltd. Promotion & Advocacy

A.W. Stiles Contractors

King City Forwarding USA

American Wood Technology, LLC

Kuehne + Nagel, Inc.

Renee Hornsby Director of Marketing/ Communications

Northwest Hardwoods

Jens Lodholm Data Administration Specialist

Nyle Dry Kilns

Carol McElya Inspector Training School Administrator

Baillie Lumber Company

13 Continental Underwriters, Inc.

IFC

Pike Lumber Company, Inc.

IBC DMSi

TS Manufacturing Co.

EZLOG Company, Inc.

TMX Shipping Co.

Hurst Boiler

Tropical Forest Products

14 VisionTally

U•C Coatings, LLC

27 JoeScan

25 USNR

Stephanie VanDystadt DV Hardwoods, Inc. Membership & Networking

Julia Ganey Member Relations Manager John Hester Director of Membership and Business Development

Rich Solano Pike Lumber Company, Inc. Structure

Roman Matyushchenko ITS Instructor and Associate Dean of Education Vicky Quiñones Simms Membership Development Manager Melissa Ellis Smith Graphic Designer Dana Spessert Chief Inspector

Dennis Mann Baillie Lumber Co. Convention Scott Cummings Cummings Lumber Company, Inc. Inspection Services Bruce Horner Abenaki Timber Corp. ITS/Continuing Education George Swaner Swaner Hardwood Communications & Marketing Joe Snyder Fitzpatrick & Weller, Inc. Rules

For advertising contact: John Hester, Director of Membership and Business Development at j.hester@nhla.com or 901-399-7558 or Vicky Simms, Membership Development Manager at v.simms@nhla.com or 901-399-7557

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PRESIDENT’S MESSAGE

HOW DOES NHLA HELP OUR MEMBERS SUCCEED NOW AND IN THE FUTURE

love how our minds work. Each of us is super busy. Most of us always have more to do than time to do it. We have learned to prioritize the most important issues to cause the best results. During our hectic daily activity, your mind is working in the background on big picture issues. The goals and needs of the NHLA are always working in the back of my mind. The question, “How does NHLA help our members succeed now and in the future?” is a repeating theme that often comes to my mind.

Associations are created to do things for their members that members can’t individually do for themselves. The Annual Convention and the Inspector Training School are two good examples of such things. Of course, these things need funding to become a reality. Our attending members and sponsors pay for the convention. The grading school is paid in part by the participants, but NHLA dues cover most of this member benefit. About 20 years ago, our Industry leaders got together and created the Hardwood Federation and Hardwood Federation PAC. The base of the Federation membership is from multiple associations. The NHLA dues, contributions from other associations, and generous donations from companies and individuals fund the Federation. The HF PAC is funded by contributions from individuals committed to supporting our politicians who support the Hardwood Industry. The main goal of the HF and the HFPAC is to increase awareness of and encourage passing legislation that benefits our industry. Recent polling of our membership found that the most crucial future issue for NHLA is to create a marketing program that educates the consumer about the benefits of American Hardwoods and defends our industry against faux products and false information. Hence, the Real American Hardwood Coalition (RAHC) was formed using the same model as the Hardwood Federation. Our association directors are leading our initial efforts. They have been working diligently on this project and continuing to manage their various associations. Imagine that someone asked you to work on such a task and continue to run your normal business. It requires a

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big commitment. Our association executive directors deserve a big thank you from all of us. When you take on a new project in your company, what is the first thing most of us question? How to fund it. Without funds, most initiatives don’t happen. To be successful with both the Federation and the Hardwood Promotion Coalition, we need to develop a better funding model. Our associations and their members can implement a solution, and I’d like you to think it over. When we do something in our companies that requires funding, we would either line the funds upfront or plan for the funds to arrive over time. If you can get funding in a lump sum, that is great, but the amount limits you. Cash flow generated continuously over time is a better model because cash keeps coming in, and you can plan based on the cash flow. When you commit to hiring someone, you commit to funding their job well into the future. We commit to the employee to fund them over time. The goal of the hire is for the employee to cause the result you need. You want that benefit more than the cost of the employee. In the case of these two initiatives, we need to fund them over time. All of us understand the benefit will come over time too. If you have been involved with the Hardwood Federation, you know what has been accomplished. We have received an enormous value for what we have spent. Can you wrap your mind around committing to the Federation and the Promotion initiatives monthly? $3,000 annually is only $250 per month. It’s the cost of many of our employees for a day or two. It’s not very much money. If enough of us commit to monthly support, we can reach funding levels that will create opportunities for these two initiatives to thrive. We can’t do it ourselves. We must band together to cause a significant result. Can you wrap your mind around committing $100, $250, $500, or even $1000 per month for several years? We need the leadership of these two initiatives to be able to plan for future success. Annual fundraising takes our leaders out of doing what we need them to

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do. We are the key to the success of the Federation and Promotion initiatives for our industry. Big-time results require regular commitments from hundreds if not thousands of our members. I’ll conclude with this takeaway. I’m 66 years old, and I am working on transitioning out of the day-to-day operations of our company. I’m so fortunate to have family members who have the energy, ability, and desire to continue the passion of leading our company. I’ve hired a coach to help me. He brought the following YouTube video to me. It’s about leadership and a leadership style that has caused great results. I am sharing the link with you to plant some seeds of leadership that can empower you and the employees you work with to perform at a level you probably don’t comprehend today.

https://www.youtube.com/watch?v=HYXH2XUfhfo Best wishes for your continued health and success. May God bless you, your families, and your business now and in the future.

Jeff Wirkkala NHLA President | Hardwood Industries, Inc.

DON'T MISS OUT! The BIGGEST networking event of the year is coming to West Palm Beach, FL

September 22-24! Be there for a great line-up of keynote speakers, industry-specific educational sessions, exhibitors, and networking opportunities.

Let’s Catch Up! REGISTER TODAY www.nhla.com W W W. N H L A .C O M

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ACCOLADES

Welcome New Members ACTIVE U1 MEMBERS Cochran & Zandi Lumber, LLC, Sheffield, PA Dave's Sawmill, Rebersburg, PA ASSOCIATE MEMBERS Concord Flooring, Inc., Corona, CA EndGrain, Louisville, KY

Milestone Members

Congratualtions to these companies who are celebrating a significant milestone anniversary with NHLA this month.

SUSTAINING MEMBERS Connor & Gallagher OneSource, Lisle, IL EBI Electric Saint-Georges, Quebec, Canada Precision Husky Corp., Moody, AL Stiles Machinery, Grand Rapids, MI Trade Credit Specialty, Philadelphia, PA

YEARS STUTZMAN LUMBER Active U1 | May 2016

10 20

DRAKE SAWMILL LLC Active U1 | June 2016

YEARS

DUNAVANT GLOBAL LOGISTICS GROUP Sustaining | June 2011

YEAR DAM ASSOCIATED HARDWOOD SERVICES Sustaining | April 2020 ERNEST BRENNEMAN Active U1 | June 2020

YEARS

CORSAW HARDWOOD LUMBER LLC Active U1 | May 2001

IPE WOODS USA Active U1 | May 2020

CLASSIC AMERICAN HARDWOODS Active U3 | June 2001

JM HARDWOODS Active U1 | April 2020

HOFFMAN BROTHERS LUMBER, INC. Active U2 | June 2001

LIVE OAK BANK Sustaining | June 2020

OAKRIDGE LUMBER LLC Active U2 | May 2001

MOUNTAIN TOP FLOORS, INC. Active U2 | May 2020

SIMPLY COMPUTING INTERNATIONAL, INC. Sustaining | May 2001

NATIVE LUMBER LLC Active U1 | June 2020

TIMBERMART-SOUTH Research | June 2001

RAY FLECK GRADE MILL Active U1 | April 202

(March, April and May)

SHADE MOUNTAIN FOREST PRODUCTS LLC

| S E P T E M B E R 2 0 2 Active 1 H A R D U1 W O| O D M2020 AT T E R S May

YEARS R.J. WILLIAMS , INC. Active U2 | March 1971

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EDUCATION SPOTLIGHT

Congratulations to the Graduates of the 195th Class of the NHLA Inspector Training School

Seated left to right: Terry Tussey, Stephen Graham, Roman Matyushchenko (Instructor), Joseph Coburn Standing left to right: Jonathan Flores, Nathan Hayes, Austin Davidson, Derek Arthur, Jason Hutson, Allen Hargrove

he National Hardwood Lumber Association celebrated the graduation of the 195th class of the Inspector Training School on Friday, August 6, 2021. Five students completed the traditional 8-week program, while four students completed the online program. Dana Spessert, NHLA Chief Inspector and ITS Dean of Education, welcomed and thanked the families, friends, and employers who supported the students during their time away from home. Instructor Roman Matyushchenko addressed the graduates, telling them, “You did a great job. In the future, try to improve your skills every day, every hour, and every minute. Give more than you are expected to give, and be more than you are expected to be.”

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Bruce Horner with Abenaki Timber Corporation, a graduate from ITS Class #108 in August of 1992, gave the keynote address. He congratulated the graduates and told them, “Your company sent you to Inspector Training School because they know this is where the industry leaders start, and they saw something in you that told them you could be a great leader because you showed a solid work ethic and initiative.” Austin Davidson with York Legacy Mill was elected class president. He spoke to his fellow students during the ceremony saying, “The knowledge we have gained here will lead us into a bright and successful future, not just as lumber graders, but as part of a family in the everlasting industry of hardwood lumber. Let us leave here today with our heads held high and strive for nothing but the best!” W W W. N H L A .C O M

“ The knowledge we have gained here will lead us into a bright and successful future, not just as lumber graders, but as part of a family in the everlasting industry of hardwood lumber.” - Austin Davidson, Class President GRADUATES OF THE 195TH CLASS WERE: • Derek Arthur, Graf Brothers • Joseph Coburn, Missouri Walnut • Austin Davidson, York Legacy Mill • Jonathan Flores, Associated Hardwoods • Stephen Graham, Hammes Brothers Sawmill • Allen Hargrove, Winston Hardwood Lumber • Nathan Hayes, Hartzell Hardwoods • Jason Hutson, Hermitage Hardwood Lumber • Terry Tussey, Salem Hardwood Lumber Company

Roman Matyushchenko presented the individual achievement awards. Outstanding individual awards recipients were as follows: • Austin Davidson, ITS Educational Foundation Award for Highest Overall Average • Terry Tussey, Howard Hanlon Award for Second Highest Overall Average • Terry Tussey, Westside Hardwood Club Award for Highest Board Run Average • Jonathan Flores, Milt Cole and NHLA Award for Best Attitude/Citizenship

Enrollment is now open for the 196th class, which begins at NHLA headquarters in Memphis, Tennessee, on September 13, 2021. To enroll or learn more about the program, please visit www.nhla.com. W W W. N H L A .C O M

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LEGISLATIVE LOG

THE HARDWOOD FEDERATION: Working for You By DANA COLE, Executive Director Hardwood Federation

elcome to West Palm Beach! The Hardwood Federation is excited to be a part of this wonderful event. After more than a year of confinement, we are excited to once again engage with members of the industry one on one. We have missed seeing you. Congratulations to the Board of Managers, Board President Jeff Wirkkala, and the entire staff of the National Hardwood Lumber Association for putting together what promises to be another successful, exciting, and inspiring Annual Convention.

The Hardwood Federation has fought for you, your companies, and your employees for almost 20 years. We remain steadfast in our mission to strongly advocate on behalf of U.S. hardwood businesses and their employees to federally elected officials regardless of party. We are on the political front line for you, fighting every day so you can have a successful tomorrow. The Hardwood Federation leverages the voices of NHLA leaders to make sure the Biden White House, Administration Officials, and Congressional Leaders clearly understand the valuable contributions the production of hardwood timber and products can make on multiple levels of the U.S. economy. In 2021 the Hardwood Federation’s top priorities are engaging the hardwood industry in economic recovery and linking the industry’s environmental stewardship to the Biden Administration’s carbon reduction goals. In addition, we will continue to advocate on other vital issues that impact hardwood companies’ bottom line, including: • Regulatory and tax reform, • Transportation, • International trade, • Renewable energy, and • Green building.

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The Hardwood Federation is proud to partner with and represent NHLA and its members in our nation’s capital, Washington, D.C. Having a coordinated and united voice in Washington is critical for the U.S. hardwood industry, particularly in light of the many issues the federal government and elected officials deal with daily. Although making our message heard can feel like an almost impossible task, we must continue to reach out, communicate and advocate. Failure is only assured by inaction. NHLA and its members are significant and highly valued contributors to our efforts. The NHLA provides crucial financial and advocacy support to the Hardwood Federation. Still, at the same time, the direct participation of the NHLA’s membership cannot be underestimated, and we are grateful. NHLA members: • come to Washington to meet and discuss policies impacting the industry with Members of Congress; • educate Members of Congress by hosting them in mills, yards, and facilities to give them a first-hand look at the industry; • write letters to, email, and call Congressional offices to share concerns about bad policy and applaud good policy; and • contribute financial resources, both on an individual and company basis, to the Hardwood Federation’s Political Action Committee and Administrative Operating Fund, both essential to our continued success. Please support us at www.hardwoodfederation.com. The Hardwood Federation staff will be at the NHLA convention and look forward to meeting you and discussing our efforts in Washington. Have a wonderful convention!

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MEMBER SPOTLIGHT MOUNTAIN TOP FLOORS

MOUNTAIN TOP FLOORS: FINDING SUCCESS WITHIN THE COVID19 LANDSCAPE

OVID19 threw the entire hardwood lumber industry for a loop. NHLA members were faced with many challenges, from labor shortages to travel restrictions and supply chain hiccups. Mountain Top Floors, based in Naperville, Illinois, was no different.

Mountain Top Floors sources logs and provides related supply chain solutions. They work hand-in-hand with fellow NHLA members to make sure their customers worldwide get what they need from suppliers in North America, with export opportunities covering all major U.S. and Canada ports and rail rents. Like other NHLA members, Mountain Top Floors was negatively impacted by COVID19. Tomoko Kato, a manager for Mountain Top Floors, explains, “We faced a shortage of equipment, containers, and deep freeze capacity. It was a logistic nightmare. We also

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had issues in Europe after a large storm hit in March. The only way to get through it was to make sure that everyone on the supply chain (our vendors, suppliers, and customers) knew what was happening at all times, and we worked with them individually to find solutions. Our vendors trusted and supported us through all of these difficulties.” Kato continues, “The state of Illinois (where our headquarters are) was severely affected by COVID19. We asked our employees to work from home to keep them safe. They only recently returned to W W W. N H L A .C O M

Storms and flood in New York caused logs to roll into the river, crushing cars along the way, Fortunately, the driver was safe.

Mountain Top Floors was negatively impacted by large storms in Europe. Above, a logging truck turned over in heavy storm. the office in August. Now that everyone is back in the office, we will provide even more efficient service when solving logistic problems. Mountain Top Floors has an exciting concept when it comes to helping others understand what they do. They call it TAAS, “Trading As A Service.” They define TAAS as sourcing the type of logs and lumber that are needed from North America and connecting the goods to customers through their expanded network. At the same time, with the help of logistic suppliers, they ensure goods are delivered to customers in a safe and timely manner. Once the goods have arrived at their destination, Mountain Top also helps with customs clearance and inland trucking.

“We want to build a strong network, so when a crisis like COVID-19 arises, we can make it through, remain calm, and help each other. ” — Tomoko Kato Mountain Top Floors also experienced healthy growth during the pandemic’s peak - growth that they attribute to their TAAS program. Kato points out, “We accrued many new customers and suppliers, which gave us more experience, and we were able to expand our team so that we can keep up with the increase in demand. We have a full team in the U.S. and China, which other forwarders do not have. So, just like our headquarters in Illinois, we have W W W. N H L A .C O M

the same thing in Shanghai that includes a business development team, a customer service team, and an accounting team. Having two teams enables us to provide exceptional service in both the U.S. and China. I think the unique composition of having teams in both countries completes the supply chain and gives us a solid structure to support our business model.” Mountain Top covers all the significant U.S. rail rents (where you return your container) and ports. A good example of rail rents would be in Chicago. It’s a central hub where the shipping containers are collected and shipped to the port. Kato says, “Covering all the main rail rents and ports enables our customers to have more options because they aren’t limited to just one area. We export U.S. logs and lumber to China, Vietnam, and Cambodia. The ratio between logs and lumber is about 70 percent to 30 percent. The American market is still essential for China, which imports more U.S. logs than any other country, according to AHEC. With their employees back in the office, the TAAS program firing on all engines, and the expanded teams in Shanghai, Mountain Top Floors is looking at a bright future – not just for themselves, but for the hardwood industry as a whole. Kato continues, “Being a member of NHLA plays an important role for us because of the networking opportunities membership provides. We heard about NHLA through salespeople who work with NHLA members, so joining was natural for us. We want to build a strong network, so when a crisis like COVID-19 arises, we can make it through, remain calm, and help each other. It is our honor to be in the prestigious network of NHLA.” You can reach Mountain Top Floors by calling (630) 445-8999, emailing info@mountaintopfloors.com, or visiting their website, www.mountaintopfloors.com. S E P T E M B E R 2 0 2 1 H A R D W O O D M AT T E R S |

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An Experience Designed Around You. Hardwoods is an industry rooted in building trusting relationships. By focusing on each of our customers as our most important customer, we are able to learn and grow together every step of the way. Whether it’s species, supply, specialized production or logistics, we take the time to understand our customers need so we can take care of them. That’s the foundation of trust.

The New Normal?

Hardwood Exports in a Changed World By MIKE SNOW, Executive Director American Hardwood Export Council

he past two and half years have arguably brought more dislocation and uncertainty to the hardwood industry than any other period in living history. At the beginning of 2018, prospects for our industry had rarely looked more promising. The US economy was in its record 10th consecutive year of expansion, and unemployment was at historic lows. Years of market development work in China and elsewhere were paying off, and US hardwood exports reached their highest levels ever in both volume and value, accounting for over half all grade lumber and veneer production. Latent demand and a lingering housing shortage also promised significant growth in the US housing market, always an important driver of hardwood demand. All indications pointed to the need for increasing lumber volumes to meet growing demand, and pro-

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duction was on its way to full recovery from the depressed levels of the recession less than a decade earlier. Then we were blindsided. The American hardwood industry became collateral damage in an ill-advised trade war with China. As a result of its retaliatory tariffs, hardwood lumber shipments to China halved from 2.4 million m3 in 2017 to 1.2 million in 2019. By volume, that loss exceeded total exports to our next largest market, Vietnam, plus the EU and UK put together! n fact, before the trade war, more than one in every four grade lumber boards from American sawmills were destined for China. The risk of having so many eggs in one basket became apparent almost overnight. 2020 started with great promise as the US and China agreed to “Phase One” of a trade deal,

and Chinese tariffs on US hardwoods were suspended. Then came COVID. Lockdowns and economic uncertainty further decreased production, and economies worldwide began to see deep declines in economic activity. Yet, almost imperceptibly, things began to change. As people worldwide spent more time at home during the pandemic, their attention turned to home improvement, and the renovations and DIY markets soared. In addition, low-interest rates and the underlying housing shortage kept home builders in the US busy, further driving hardwood demand. The impacts were also felt overseas as demand in the west for furniture, cabinetry, and flooring increased manufacturing activity, particularly in markets like Vietnam. In addition to strong domestic demand through the first six months of this year, W W W. N H L A .C O M

exports of American hardwood lumber increased globally by 23% by value and nearly 12% by volume over the first half of 2020. However, they still lag behind pre-tariff and pre-COVID levels. (Graph #1 Above). Regional results have been uneven and largely dependent on the current state of COVID restrictions and will be addressed below: CHINA As recently as 2017, pre-COVID and pre-tariffs, China imported over $2 billion of American hardwood products, more than our exports to the rest of the world combined! This reliance was even stronger with some species like red oak, the dominant species in American hardwood forests, where China was the destination of nearly 80% of all exports. (Graph #2 Top of page 22) As a result of the US-China trade war and the extreme economic dislocation caused by the COVID outbreak, the Chinese market for American hardwood has contracted significantly, falling by almost half from $1.5 billion in 2017 to $770 million in 2020. A closer look at the past 12 months reveals a market in extreme flux, however. In early 2020, with hardwood trade between the United States and China at a historically low level, the spread of a global pandemic first shut down China and then the rest of the world. Encouragingly, in February 2020, China suspended tariffs on US hardwood products through September 2021. Then, as large swaths of China shut down during the first half of the year, trade levels remained at historic lows but roared back quickly in Q3 and Q4

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as consumer demand rose. The strong finish to 2020 helped the annual trade value surpass 2019 levels, and high demand continued through the first quarter of 2021, increasing by 22% over the first quarter of 2020. The rapid growth has proven short-lived, however. Chinese purchases of American hardwood largely collapsed in the second quarter and through 6 months are down 14% by volume from 2020 levels as Chinese buyers balked at making new purchases as supply issues and rising prices from the US as well as the fourth wave of COVID outbreaks combined to put a damper on Chinese demand. (Graph #3 Top of page 23) EUROPE Taken together as a block (including the UK), the European Union is the second-largest market for US hardwoods after China. The onset of the COVID pandemic in Europe coincided with the EU economy already slowing. Manufacturing and international trade slackened, and unemployment and public and private sector debt levels were still high, particularly in southern Europe. As a result, US exports to the EU dropped by just over 20% in 2020. However, they have come roaring back in 2021, as US exports grew by 20% in value through June, erasing last year’s losses and totaling more than $131 million. Even more encouraging has been Europe’s opening to a broader range of species in recent years, especially red oak, which is up a whopping 92% so far this year compared to 2020. (Graph #4 Bottom of page 23)

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SOUTHEAST ASIA By far, the largest market in the region is Vietnam, and in early 2020 it had overtaken Canada as the second-largest single market for US hardwoods (although through 6 months of 2021, Canada has since retaken second place). Much of the recent surge in demand by Vietnam (and elsewhere in Southeast Asia) results from some re-export manufacturing relocating to Vietnam from China due to the trade tensions between the two superpowers. Vietnam survived the first wave of COVID with very few infections or dislocations, and US hardwood exports for the first six months of 2021 were up 28% by value over last year totaling $174 million, the highest six month total ever for the country. Similarly, Indonesia’s imports of US hardwoods for the first two quarters of 2021 increased by 60%. However, at a much lower level totaling just over $13 million, Malaysia saw a jump of 45% to $9 million. Nevertheless, beginning in June, a new wave of COVID cases hit the region hard, and the summer has been hampered by lockdowns and supply shortages which in all likelihood will lead to a slowdown in the second half of the year. (Graph #5 Top of Page 24) MEXICO Mexico is the 4th largest market for American hardwood exports, just behind China, Vietnam, and fellow NAFTA (now USMCA) partner Canada. While Mexico’s long-term potential remains very

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promising, the country has been severely crippled by the COVID pandemic and an anemic governmental response in led to a drop in industrial production by as much as 25% in 2020. Not surprisingly, US hardwood exports decline 16% in 2020 as the pandemic took hold. What is surprising as well as encouraging is the rebound in 2021. Mexico’s imports of American hardwood lumber jumped 65% through June, totaling more than $70 million—the highest 6-month total ever—despite reported issues and bottlenecks at many Mexican maritime and land ports. (Graph #6 Bottom of Page 24) INDIA Before the coronavirus pandemic, it was widely reported that India had surpassed the UK and France to become the world’s fifth-largest economy and optimism was very high. The second most populated country on the planet and its largest democracy was also the world’s fastest-growing major economy from 2014-2019, surpassing China. According to data from Trade Data Monitor, India imported some $214 million of hardwood lumber in 2019, marking it the fifth largest single-country importer in the world. Surprisingly, the US hardwood industry’s share of that market was less than 1%. Then came COVID, and in 2020 the country’s global imports decreased 26%. So far, in 2021, that trend appears to be reversing. The volume of US hardwood lumber shipped to India during the first half of this year was higher than the total volume shipped each year from 2016

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As people worldwide spent more time at home during the pandemic, their attention turned to home improvement, and the renovations and DIY markets soared. to 2018. (Graph #7 Top of Page 26) Shipments of hickory, white oak, ash, walnut, and western red alder were all up significantly compared to the same period in 2020. There is a definite shift towards importing more hardwood lumber in general, and there is clear evidence of growing interest in American hardwood lumber specifically. THE MIDDLE EAST/NORTH AFRICA While relatively small on their own, taken together, the Middle East region represents a growing niche market for US hardwoods. However, a significant drop in shipments of American hardwood lumber was seen by nearly all of the Middle East and North African markets last year. In total, exports were down 26% in volume to 69,268 cubic meters and 30% in value to $49.6 million, compared to the previous year. January-June 2021 saw a 25% increase in the volume of US hardwood lumber shipped to the MENA region. The most significant rises were seen in Israel, Pakistan, Turkey, Egypt, and Morocco. Shipments to the UAE (usually the biggest market in the region) decreased during the period by 17% as the tourism and hospitality industries in Dubai in particular—significant drivers of hardwood demand in the area—continue to suffer from COVID related travel restrictions. NORTHEAST ASIA/OCEANIA Japan, the 7th largest global market by value for American hardwood lumber, has historically been a strong, high-value partner for the hardwood lumber trade. However, in the last decade, a continuing economic slump and

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the migration of Japanese companies’ manufacturing hubs to the low-wage countries of Asia have limited direct exports to Japan. This, in combination with continued strict Government response to the global outbreak of COVID-19, resulted in a significant decline of US hardwood exports to Japan, which fell 23% from nearly $61 million in 2019 to just over $46 million in 2020. Through the first six months of 2021, exports to Japan have remained flat at 2020 levels. It is also concerning that the Japanese government is making a significant push for builders and manufacturers to source “local” Japanese wood.

While relatively small in volume, Australia and New Zealand are emerging as increasingly important high unit-value niche markets. However, in the first half of 2021, they seem to be moving in opposite directions. January-June shipments saw a 4% decrease in the volume of US hardwood lumber shipped to Australia but a 98% increase in shipments to New Zealand—a record six-month total for that country. Taken together, however, the two markets totaled less than $12 million.

WANT TO LEARN MORE? Make plans to attend Mike’s educational session at the 2021 NHLA Annual Convention & Exhibit Showcase Friday, September 24: 10:30-11:30am The New Normal? Hardwood Exports in a Changed World

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RULES CORNER

Inspection Services Department Carries on With the Mission Despite Challenges Contact us to see how we can help you! by Chief Inspector Dana Spessert

he hardwood industry has undergone significant changes over the past two years, and NHLA is no exception. We’ve had to make some tough decisions but through it all we have managed to carry on our mission, which is to “serve NHLA Members engaged in the commerce of North American hardwood lumber by maintaining order, structure, and ethics in the changing global hardwood marketplace; providing unique member services; promoting North American hardwood lumber and advocating the interest of the hardwood community in public/private policy issues; and providing a platform for networking opportunities.” As you are reading this, I hope you decided to join us at the NHLA Annual Convention, an event where you meet with old friends and make some new ones. The Annual Convention is one way that we help to ensure a vibrant and robust hardwood industry. Another significant role that we embrace is maintaining the NHLA Rules and the process by which they are refreshed and updated. We hold a special meeting on a quadrennial basis and allow our members to submit Rules change proposals that go through an extensive screening process by the Rules Committee. The committee consists of 13 members representing a variety of industry segments.The Rules Committee is tasked with verifying the efficacy and impact of the proposals to ensure that we do not create conflicting Rules changes. The Rules change proposals that pass the Rules Committee process will be voted on by our Active members in November – December this year. Throughout the ups and downs of the COVID pandemic, we have continued to deliver education to the industry. From 3-day short courses to the traditional 8-week Inspector Training School pro-

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gram. NHLA has created many news ways of offering education for everyone, including the ITS Online Training Program and industry specific webinar courses. The ITS Online Training Program provides hands-on training but allows some of the information to be studied from home. With the onset of the pandemic, NHLA embraced the webinar platform, offering more than 14 to date and will continue to provide those as an opportunity to learn in a short amount of time, in a streaming format wherever you may be. We continue to meet our members’ needs through our National Inspectors located throughout the US and Canada. We are a smaller staff than in the past, yet we are still delivering the services required to meet the demand throughout North America. Our National Inspectors have become much more than the National Inspectors of the past; they are ambassadors for the industry. They have the capability of working with owners, managers, supervisors, and the employees of our membership to help everyone reach their full potential, not only in lumber inspection but in management, quality control, yield studies, and many other aspects of the lumber production. Please contact a National Inspector or me to see how we can help you, your employees and your company. Dana Spessert at d.spessert@nhla.com or 901-399-7551. W W W. N H L A .C O M

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NHLA PROVIDES EDUCATION AND TRAINING TO IMPROVE YOUR BOTTOM LINE Register for classes at www.nhla.com/Education. SEPTEMBER

COVID-19 IMPACT:

At the time of publication, these educational courses are being offered. However, due to the unknowns of the COVID-19 pandemic please visit nhla.com for the latest information or call NHLA headquarters at 901-377-1818 to confirm that these courses are taking place.

OCTOBER

4-6 Intro to Hardwood Lumber Grading

Intro class to gain a basic understanding of the NHLA hardwood lumber grading rules and how the rules affect the value of lumber. Venue: Northwest Hardwoods - Marion Branch Location: Marion, NC Instructor: Mark Depp, NHLA National Inspector

SEPTEMBER

13-17

13-Nov. 5

Intro to Hardwood Lumber Grading

Inspector Training School 196th Class

Intro class to gain a basic understanding of the NHLA hardwood lumber grading rules and how the rules affect the value of lumber.

Traditional 8-week hands-on training to achieve the certificate of completion in Hardwood Lumber Inspection.

Hosted by: Indiana Hardwood Lumbermen's Association Venue: Wood-Mizer, LLC Location: Indianapolis, IN

Venue: NHLA Headquarters Location: Memphis, TN

Instructor: Kevin Evilsizer, NHLA National Inspector

Instructor: Roman Matyushchenko, ITS Instructor

OCTOBER

NOVEMBER

JANUARY

4-15

29-Dec. 10

10-March 4

Inspector Training School Online Training Program MODULE 1

Inspector Training School 197th Class

Two weeks of hands-on training.

Venue: Northwest Hardwoods - Marion Branch Location: Marion, NC

Venue: NHLA Headquarters Location: Memphis, TN

Module 2: Online study Module 3: Three weeks hands-on training and final testing at NHLA headquarters. Instructor: Mark Depp, NHLA National Inspector

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Module 2: Online study Module 3: Three weeks hands-on training and final testing at NHLA headquarters. Instructor: Roman Matyushchenko, ITS Instructor

Traditional 8-week hands-on training to achieve the certificate of completion in Hardwood Lumber Inspection. Venue: NHLA Headquarters Location: Memphis, TN Instructor: Roman Matyushchenko, ITS Instructor

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BE PART OF BUILDING SOMETHING

BIG

Where We’ve Been

It’s no secret, the hardwood industry has been losing market share to products that look like wood, but have none of the natural benefits or authentic attributes of Real American Hardwood™ products. In order to recapture market share and improve industry stability, hardwood organizations united to form the Real American Hardwood Coalition.

Where We Are

The goal is to develop a national consumer promotion campaign on a scale that’s never been seen before. And a lot has been accomplished in a short period of time—including the completion of an extensive consumer research initiative, establishing brand guidelines, registering trademarks, and launching social media profiles.

Where We’re Going, Together

The next steps will have the largest impact on the industry and require buy-in from all industry stakeholders. The Coalition is preparing to launch a comprehensive promotion campaign—including a consumer-oriented website, in-store promotion at top big box stores, a broad media relations campaign, social media influencer partnerships, print and web advertising, and much more.

How You Can Get Involved

Moving the campaign forward and expanding its reach will take the support of the entire industry—for the benefit of the entire industry.

■ Make a voluntary contribution to help fund the consumer promotion campaign.

■ Use the Real American Hardwood logo on your sales and marketing communications, facilities and vehicles, products, and website.

■ Follow @RealAmericanHardwood on Instagram and Facebook, and tag #RealAmericanHardwood in your social media posts.

Visit RealAmericanHardwood.org to learn more and get on board.

NHLA JOB BOARD Here you will find our current job listings. To see more details or to post a job, visit www.nhla.com/industry-services/job-board.

BAND SAW FILER Jim C. Hamer Co. is a business with a rich history that has been producing some of the finest quality lumber in the Appalachian region for multiple generations. We have three sawmills in West Virginia and one in Kentucky. We also have two dry kiln operations and a wood pellet plant in West Virginia. We are currently looking for an experienced band saw filer for either the Madison WV location or the Prestonsburg KY, location. Skills & Experience Required • Experience sharpening band saws with Armstrong file room equipment. • Ability to learn how to sharpen chipper knives and resurface guides for a gang saw. • Ability to help repair minor maintenance breakdowns in the file room. • The ability to communicate well with coworkers like saw filers, sawyers, mill managers, and maintenance is a must. • Perform other duties as assigned. Salary & Benefits Salary negotiable based on experience, benefits include medical, dental, vision, 401K, paid vacation, and holidays.

KILN MANAGER Missouri Walnut is looking for a Kiln Manager to oversee the steamer, kiln, and boiler operation. As the kiln manager, you are responsible for the overall performance of these 3 areas. Missouri Walnut is an industry leader in Kiln capacity with another million board feet of added capacity coming in the spring of 2022. Skills & Experience Required Minimum of 10 years lumber experience with a minimum of 5 years of kiln operation. Experience drying Walnut and White Oak preferred. Salary & Benefits Missouri Walnut offers a very strong compensation plan along with a great benefits package. 401K opportunities with company matching. How to Apply Send your resume to: gmckinnis@missouriwalnutgroup.com Missouri Walnut 11417 Oak Rd | Neosho, MO 64850 417-455-0972

How to Apply Send your resume to: pbrown@jimchamer.com Jim C Hamer Co. Box 425 | Madison, WV 25130 (304) 369-3889 or 304-634-1664

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“Previously, end tallyingnothing. was “The training is almost aPeople huge bottle neck. We were take pictures with their regularly paying 16 man-hours smartphones every day. It’s of overtime Saturdays just very familiaron technology. to catch up. has Basically, youTallyExpress show someone completely that extra how to use eliminated it on one bundle day of tallying because can and they’re ready to go.we It really process bundles does only take a faster coupleduring of the week.” minutes to train someone.” -Northwest Hardwoods – Allegheny Wood Products

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September 2021 Hardwood Matters

Articles inside

Legislative Log

Rules Corner

Education Spotlight

Member Spotlight