Jan/Feb 2024 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 January/February 2024

Market Impact Committee Insights Carbon Markets and Hardwoods and the European Union Deforestation Regulation (EUDR)

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

CONTENTS Jan/Feb 2024 • Issue 252

WHAT'S INSIDE

EXECUTIVE COMMITTEE Jon Syre, Chairman Cascade Hardwood, LLC

features 20

Bucky Pescaglia, Vice Chairman Missouri-Pacific Lumber Co., Inc.

Market Impact Committee Insights Carbon Markets and Hardwoods and the European Union Deforestation Regulation (EUDR)

Jeff Wirkkala, Past Chairman 2020-2022 Hardwood Industries, Inc.

MISSION LEADERS

Sam Glidden, ITS and ITSEF GMC Hardwoods, Inc.

20 departments

One Common Ground The Imperfect Journey of Decision-Making by Dallin Brooks, Executive Director

Joe Pryor, Education Services Oaks Unlimited

Accolades

Stephanie VanDystadt, Membership & Networking DV Hardwoods, Inc.

Membership Matters A New Year-A New Resolution by John Hester, Chief Development Officer

Rob Cabral, Market Impacts Upper Canada Forest Products, Ltd.

reader services 4 26 32 33

Chairman’s Message Market Trends NHLA Job Board Educational Calendar

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Ray White, Lumber Services Harold White Lumber Inc.

Rich Solano, Convention Pike Lumber Company, Inc.

DEPUTY MISSION LEADERS

Burt Craig, Membership & Networking Matson Lumber Company

Rules Corner Unveiling Ambiguities: Exploring Controversial Terms in the NHLA Rules Book by Dana Spessert, Chief Inspector

Tom Coble, Market Impacts Hartzell Hardwoods, Inc. Dennis Mann, Convention Baillie Lumber Co.

Member Spotlight Combilift

Education Spotlight Congratulations to the Graduates of the 204th Class of the NHLA Inspector Training School

Tom Oiler, Lumber Services Cole Hardwood, Inc. Brant Forcey, ITS and ITSEF Forcey Lumber Company George Swaner, Education Services Swaner Hardwood Co., Inc.

COMMITTEE CHAIRMAN Sam Glidden, Rules GMC Hardwoods, Inc.

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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.

ADVERTISER INDEX

NHLA STAFF Dallin Brooks, Executive Director dallin@nhla.com John Hester, Chief Development Officer j.hester@nhla.com Renee Hornsby, Chief Operating Officer r.hornsby@nhla.com Dana Spessert, Chief Inspector d.spessert@nhla.com

ACCOUNTING Desiree Freeman, Controller d.freeman@nhla.com Jens Lodholm, Database Manager j.lodholm@nhla.com Amber Signaigo, Assistant Controller a.signaigo@nhla.com

INDUSTRY SERVICES

BID Group

Mark Bear, National Inspector m.bear@nhla.com

DMSi Software

DeltaERC

Tom Byers, National Inspector t.byers@nhla.com

King City Forwarding USA

Lumber Marketplace

IFC

Pike Lumber Company, Inc.

Showcase Equipment, LLC

For advertising contact: John Hester j.hester@nhla.com or 901-399-7558 Vicky Simms v.simms@nhla.com or 901-399-7557

Mark Depp, National Inspector m.depp@nhla.com Kevin Evilsizer, National Inspector k.evilsizer@nhla.com Simon Larocque, National Inspector s.larocque@nha.com Benji Richards, Industry Services Sales Manager b.richards@nhla.com

INSPECTOR TRAINING SCHOOL Geoff Webb, Dean of the Inspector Training School g.webb@nhla.com Roman Matyushchenko, Instructor of the Inspector Training School r.matyushchenko@nhla.com

MARKETING/COMMUNICATIONS Amanda Boutwell, Marketing and Communications Manager a.boutwell@nhla.com Melissa Ellis Smith, Creative Director m.ellis@nhla.com

MEMBERSHIP Julia Ganey, Member Relations Manager j.ganey@nhla.com

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Vicky Quiñones Simms, Membership Development Manager v.simms@nhla.com W W W. N H L A .C O M

ESTABLISHED 1977

ESTABLISHED 2013

MOVING YOUR FREIGHT FORWARD

SPECIALIZING IN LUMBER EXPORTS OUT OF NORTH AMERICA

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kingcitynorthamerica.com

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CHAIRMAN'S MESSAGE

Chart a Course for the New Year

Happy New Year! am always enthused at the beginning of a new year. What lies ahead? How can we take advantage of unforeseen opportunities and unforeseen obstacles? The New Year is always a time to start again, try something new, and engage new ideas. Our team has finished the year-end accounting, completed employee reviews, finalized our best thoughts for next year’s budget, and prepared our plan to implement a portion of our company’s strategic plan.

It feels good to finish all those year-end tasks and finally get to the new year and a time for action, not simply planning. A few years back, the idea of implementing a portion of a company-wide strategic plan was entirely foreign. Where are we going? What are we doing? Who are we? What do we want to do? For many years, our strategic plan was to produce lumber quickly, safely, and on grade. While these objectives were commendable, they lacked the depth of a true strategic plan. The absence of a comprehensive strategy meant that proposed improvements were approached haphazardly, lacking structure. This lack of direction led to inefficiencies, as every new idea became a distracting novelty, receiving undue attention and consuming valuable time without a disciplined approach. Enter a new year and a New Year’s resolution…a strategic plan! A strategic plan can be a complex process, or it can be straightforward. Sometimes, the strategic plan is to operate the next day! Other plans might be a 12-month, two-year, or 5-year plan. Strategic plans might be concrete, such as installing a new gang saw or molding machine center. Other strategic plans might be vaguer, like increasing safety or becoming the low-cost producer in a segment of your business.

A well-structured strategic plan encompasses broad overarching goals and concepts. Within these larger objectives, there exist specific, measurable milestones. For example, I needed to enhance the value of my log supply; my goal was to maximize the hourly yield from each head rig. This involved sourcing higher-value logs or developing a way to extract the high-value lumber hidden inside. I didn’t know how to successfully achieve my strategic plan, but my entrepreneurial instincts led me to discover a solution through Microtec. Consequently, my strategic focus shifted towards implementing log scanning equipment as a project within the revised plan. Consider making a New Year’s resolution to dedicate January to evaluating your existing strategic plan or, if you haven’t established one yet, to initiate and implement your inaugural strategic plan. Challenge yourself to engage in the classic strengths, weaknesses, opportunities, and threats discussion (SWOT analysis). Change is ever-present, and change is happening faster than ever before; having a strategic plan that creates focus and discipline in the direction you think is best for your company is a good New Year’s Resolution! Good Luck! As always, thank you for taking the time to read through my article. I hope it has spurred on some thoughts of a strategic plan for your company and maybe even your personal life! I hope this letter finds you and your families in good health this New Year! Happy New Year to all of you.

Jon Syre NHLA Chairman | Cascade Hardwood

Whatever the plan, once adopted, adherence to the program is critical. All the spokes on the wheel help support the hub, just as with a strategic plan. All decisions, whether daily or weekly, support the strategic plan. A singular goal is excellent, laser-focused, and an eye on the prize, but the hardwood industry is entrepreneurial. How does that work with a strategic plan?

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A N E W WAY T O H A N D L E L U M B E R .

W W W. N H L A .C O M

BUY & SELL WHOLESALE LUMBER ONLINE AT L U M B E R M A R K E T P L A C E . C O M

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ONE COMMON GROUND

THE IMPERFECT JOURNEY OF DECISION-MAKING

have lived in Canada and the United States. I have experienced the difference between the two systems of government. It has given me a perspective that few enjoy and an appreciation that a perfect system doesn’t exist. Notice I didn’t say perfect government. It has also helped me to see that we often have a dilemma regarding the best way forward whenever we make business decisions, change procedures, or support policies. We take that dilemma and decide how to solve it based on ROI (Return On Investment), EBITDA (Earnings before interest, taxes, depreciation, and amortization), or non-financial factors such as environment and community. The different directions you can take seem like such a big decision, but they often lead to the same place. Nothing highlights the different ways to get to the same place more than the two times I experienced kidney stones. The first time I had kidney stones, I lived in Vancouver, BC. I worked for FPInnovations, conducting contractor and consumer surveys while studying Wood Products Processing at The University of British Columbia. I was sitting in my office entering survey results when suddenly I was hunched over in my chair with excruciating pain. I fell on the floor and couldn’t stand up straight. My boss, David Fell, heard me scream and rushed over. I had gone out to dinner the night before and eaten a lot of seafood, and I had surmised that I had food poisoning, but I had gone to work anyway. My pain tolerance was so high that I didn’t think anything of it until it became excruciating. I remember waiting for David to find someone in the building who had a car so he could take me to the university hospital. My wife Sariah met me there, and we waited a short time in the emergency room for a doctor. Eventually, the doctor diagnosed me with kidney stones and handed me a filter. I was given a prescription for light painkillers and told to go home and filter my urine until a

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day after my pain stopped. That was it, no bill, no X-ray, no details. Two days later, I was okay and never used the filter to determine the size or number of stones. My wife had little sympathy for me even though everyone told her kidney stones were worse than childbirth; she had already given birth twice. The second time I had kidney stones was ten years and five kids later. I lived in Camas, WA, and worked for the Western Wood Preservers Institute. I had driven to Vancouver, Canada, for a Wood Preservation Canada meeting and woke up in my hotel room in pain. I knew the symptoms and took a bunch of Advil and Tylenol as I had a presentation to give. I went to the afternoon meetings just in time to give my presentation and could barely stand behind the podium. Everyone told me I should go to the doctor, but I knew what the Canadian doctor would do, so I left the meeting and drove back to the USA. I remember having to pull over at a gas station right before the border to take a quick nap, as the pain was so bad I could hardly keep my eyes open. I got across the border, with the guard being no wiser of my pain. I drove to the Bellingham, WA hospital and checked myself into emergency. I was in so much pain I couldn’t sit in a chair, but the nurses didn’t like me lying on the floor, so they hunched me over two chairs, and I waited an exorbitantly long time to see a doctor. They eventually took me back to a room where I stayed on a bed. I told them my self-diagnosis, and they gave me a painkiller and sent me for an X-ray. I had three stones, all less than 3mm in diameter. The practitioner explained that they only operate when the stones are 7mm or larger. (roughly 3/8 an inch). I was given more drugs and discharged. I took Dilaudid, and because I was 5 hours from home and now drugged, I slept in my truck. My wife and daughter came and picked me up the following day, and I rode home unaware of when I passed the stones.

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From these two experiences, I determined that one cost less and was quicker; the other cost more and took longer (and had more equipment) but gave me precise answers and better results. The outcome was the same. My point is there is no perfect system. You can’t always make perfect decisions. But the story’s moral isn’t about you or me or kidney stones. It is about those around us. The systems and people around us can’t make perfect decisions, don’t have the correct answers, or do things exactly how we want. Not having a perfect system doesn’t mean you give up; you must continuously improve. There will be some pain; things may be out of our control, but when making hard decisions, we ultimately must keep progressing. This is why we must speak up as an industry. We shouldn’t let our pro-conservation, sustainable environment, strong rural community, and advanced business voices be drowned out by

others. We must work with what we have and push for the changes we know would improve our environment, communities, and businesses. Often, in forestry, these are the same thing. That is one common ground we should build on.

Dallin Brooks NHLA Executive Director dallin@nhla.com | 360-823-3898

We are a Forestry Related company! We have years of experience under the belts of our staff!

In Stock: •mills •debarkers •chippers •resaws •edgers (and much more) •We can help with complete layout/blueprints for your setup •We can rebuild existing equipment to like new specs •We manufacture NEW EQUIPMENT as SUPREME MFG ~log decks ~green chains ~rollcases ~lumber carts

We also have a monthly catalog advertising our equipment and we will list your equipment to sell in our catalog and also on our website! We have room to advertise your business in our monthly catalog. Call Gaylord to get a free quote!

Need your equipment shipped or delivered? We can help find a truck for you! Call Benny for a free quote!

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Ph: 260.633.4047 ~Wayne or Jerry (sales): ext 1 or 2 ~Gaylord (advertising): ext 3 ~Benny (trucking): ext 4 website: ShowcaseEquipment.us - email: Sales@ShowcaseEquipment.us W W W. N H L A .C O M

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ACCOLADES

MORE CAN BE DONE BECAUSE OF

YOU Abenaki Timber Corp Alan McIlvain Co. Angelbeck Lumber Co., Inc. Baillie Lumber Co. Battle Lumber Co., Inc. Besse Forest Products Group Billsby Lumber Company Bingaman & Son Lumber, Inc. BPM Lumber LLC Brenneman Lumber Co. C. B. Goodman & Sons Lumber, Inc. Cascade Hardwood LLC Cersosimo Lumber Co., Inc. Clark Lumber Company, Inc. Classic American Hardwoods Clear Lake Lumber Inc. Collins Corporate Dwight Lewis Lumber Co., Inc. East Ohio Hardwood Lumber Co.

We would like to thank the following companies who have generously donated to NHLA and its affiliated associations in 2023. Your support plays a pivotal role in enabling these organizations to fulfill their missions and make a meaningful impact within the industry.

r o f u o Thank yenerosity! your g

Falcon Lumber, Ltd. Farrow Lumber Co. Forest City Trading Group Frost Hardwood Lumber Co. Gates Milling, Inc. GMC Hardwoods, Inc. Goodfellow, Inc. Granite Valley Forest Products - Welter Greentree Forest Products, Inc. Hanafee Bros. Sawmill Co., Inc. Harold White Lumber Inc. Hochstetler Milling Ltd. Huron Forest Products, Inc. J. M. Wood Products Johnny Asal Lumber Co., Inc. Josey Lumber Company, Inc. Kepley-Frank Hardwood Co. Inc. Krueger Lumber Co., Inc. Lakeside Lumber Mill LLC Lumbra Hardwoods Inc. M. T. Forest Products Maley & Wertz, Inc. Middle Tennessee Lumber Co., Inc. Middleton Lumber Co., LLC MO PAC Lumber Company Mount Storm Forest Products, Inc. Mueller Bros. Timber, Inc.

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Neff Lumber Mills, Inc. Northern Hardwoods Ohio Forest Products LLC Parton Lumber Co., Inc. Peach State Lumber Products, Inc. Pierson Lumber Co., Inc. Primewood Quality Hardwoods LLC dba Forks Lumber Co. Reel Lumber Service Ron Baltzley Hardwoods, Inc. Ron Jones Hardwood Sales, Inc. Saroyan Lumber Co. Schaller Hardwood Lumber Co. Shaver Wood Products Inc. Stoltzfus Forest Products Stutzman Lumber Thomas & Proetz Lumber Co. Thompson Hardwoods Tigerton Lumber Co. Tioga Hardwoods, Inc. Townsend Lumber, Inc. Trumbull County Hardwoods Vexco Inc. W. R. Deacon & Sons Timber, Inc. W.M. Cramer Lumber Co., Inc. Walnut Creek Planing Yoder Lumber Co., Inc. W W W. N H L A .C O M

Abenaki Timber Corp Acme Pallet Inc. ACPI Wood Products Co. AFS Energy Systems AHF Products AikenControls American Eagle Hardwoods LTD arxada Assured Partners Baillie Lumber Co. Baird Brothers Sawmill, Inc. Batesville Casket Co. Battle Lumber Co., Inc. Besse Forest Products Group BID Group Technologies Ltd Billsby Lumber Company Bingaman & Son Lumber, Inc. Blair Logistics Boa-Franc G.P. Boldesign, Inc. BPM Lumber LLC Bradford Forest, LLC Brenneman Lumber Co. Brewco Inc. C. B. Goodman & Sons Lumber, Inc. Carbotech Carbotech-Autolog Cascade Hardwood LLC Central Wisconsin Lumber, Inc. Century Furniture Co., Inc. Cersosimo Lumber Co., Inc. Clark Lumber Company, Inc. Classic American Hardwoods Clear Lake Lumber Inc. Cleereman Industries, Inc. Colonial Millworks Ltd. Combilift USA Conestoga Wood Specialties Corp. - Beavertown Branch Connor Sports Continental Underwriters Inc. Cooper Machine Co., Inc. Corley Manufacturing Co. Crow Works Cumberland Lumber & Manufacturing Deer Park Lumber, Inc. DMSi Software W W W. N H L A .C O M

Dunavant Global Logistics Group Dwight Lewis Lumber Co., Inc. Ethan Allen, Pine Valley Division Farm Credit East Farrow Lumber Co. Forestry Systems, Inc. Fr. Meyer's Sohn NA LLC Frank Miller Lumber Co., Inc. Froedge Machine & Supply Co., Inc. Frost Hardwood Lumber Co. G. F. Hardwoods, Inc. Gates Milling, Inc. GMC Hardwoods, Inc. Granite Valley Forest Products - Welter Greenbridge Greentree Forest Products, Inc. Gutchess Lumber Co., Inc. Hanafee Bros. Sawmill Co., Inc. Hardwood Market Report Hardwoods Specialty Products Harold White Lumber Inc. Hasko Industries Hassell & Hughes Lumber Co., Inc. Henry County Hardwoods, Inc. HUB International Hurst Boiler & Welding Co., Inc. Independent Stave Company, Inc. Interglobo North America ISK Biocides, Inc. J. M. Wood Products JoeScan John Boos & Co. Johnny Asal Lumber Co., Inc. Jones Lumber, LLC Josey Lumber Company, Inc. Keiver-Willard Lumber Corp. Kepley-Frank Hardwood Co. Inc. Kiln-direct.com King City/Northway Forwarding Ltd. Koppers, Inc. Krueger Lumber Co., Inc. Kuehne + Nagel Inc Laufer Group International La-Z-Boy Dayton, TN Lebanon Oak Flooring Co., LLC Lico Machinery Inc. Lumbra Hardwoods Inc. M. T. Forest Products Maley & Wertz, Inc. Marsh Lumber Co., Inc. MAVIN Maxwell Hardwood Flooring McDonough Manufacturing Co. McGriff Insurance Services Messersmith Manufacturing, Inc.

MiCROTEC - Corvallis Middle Tennessee Lumber Co., Inc. MO PAC Lumber Company Mount Storm Forest Products, Inc. Mueller Bros. Timber, Inc. Mullican Flooring Neff Lumber Mills, Inc. Newman Machine Company, Inc. Noland Lumber Co., Inc. Northland Forest Products Oakman Hardwood Inc. Ohio Forest Products LLC Parton Lumber Co., Inc. Patrick Lumber Co. Peach State Lumber Products, Inc. Pierson Lumber Co., Inc. Point Global Logistics Precision Husky Corporation Prime Lumber Co. Primewood Redwood Plastics and Rubber Ron Baltzley Hardwoods, Inc. Ron Jones Hardwood Sales, Inc. Saroyan Lumber Co. Schaller Hardwood Lumber Co. Shaver Wood Products Inc. Sheoga Hardwood Flooring & Paneling Somerset Hardwood Flooring - Eagle Plant Stella-Jones Corp. Stiles Machinery Stutzman Lumber Superior Hardwoods of Ohio, Inc. The AGL Group Thomas & Proetz Lumber Co. Thompson Hardwoods Tigerton Lumber Co. Tioga Hardwoods, Inc. TMX Shipping Co. Townsend Lumber, Inc. Trumbull County Hardwoods UFP Miami UFP Union City, LLC USNR Vexco Inc. W. R. Deacon & Sons Timber, Inc. W.M. Cramer Lumber Co., Inc. WAGNER METERS Walnut Creek Planing Wellborn Cabinet, Inc. Wood-Mizer LLC Wood-Mizer, LLC Yoder Lumber Co., Inc. Yukon Door & Plywood, Inc.

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Abenaki Timber Corp Acme Pallet Inc. ACPI Wood Products Co. AFS Energy Systems AHF Products AikenControls American Eagle Hardwoods LTD arxada Assured Partners Baillie Lumber Co. Baird Brothers Sawmill, Inc. Batesville Casket Co. Battle Lumber Co., Inc. Besse Forest Products Group BID Group Technologies Ltd Billsby Lumber Company Blair Logistics Boa-Franc G.P. Boldesign, Inc. Bradford Forest, LLC Brenneman Lumber Co. Brewco Inc. C. B. Goodman & Sons Lumber, Inc. Carbotech Carbotech-Autolog Cascade Hardwood LLC Century Furniture Co., Inc. Cersosimo Lumber Co., Inc. Clark Lumber Company, Inc. Classic American Hardwoods Cleereman Industries, Inc. Cole Hardwood, Inc. Colonial Millworks Ltd. Combilift USA Conestoga Wood Specialties Corp. - Beavertown Branch Connor Sports Continental Underwriters Inc. Cooper Machine Co., Inc. Corley Manufacturing Co. Crow Works Cumberland Lumber & Manufacturing DMSi Software Dunavant Global Logistics Group DV Hardwoods Inc. Dwight Lewis Lumber Co., Inc.

Ethan Allen, Pine Valley Division Falcon Lumber, Ltd. Farm Credit East Forestry Systems, Inc. Fr. Meyer's Sohn NA LLC Froedge Machine & Supply Co., Inc. Frost Hardwood Lumber Co. G. F. Hardwoods, Inc. Gates Milling, Inc. GMC Hardwoods, Inc. Goodfellow, Inc. Granite Valley Forest Products - Welter Greenbridge Greentree Forest Products, Inc. Hardwood Industries, Inc. Hardwood Market Report Hardwoods Specialty Products Harold White Lumber Inc. Hartzell Hardwoods, Inc. Hasko Industries Henry County Hardwoods, Inc. Hermitage Hardwood Lumber Sales, Inc. HUB International Huron Forest Products, Inc. Hurst Boiler & Welding Co., Inc. Independent Stave Company, Inc. Interglobo North America ISK Biocides, Inc. J M Hardwoods J. M. Wood Products JoeScan John Boos & Co. Johnny Asal Lumber Co., Inc. Josey Lumber Company, Inc. Keiver-Willard Lumber Corp. Kepley-Frank Hardwood Co. Inc. Kiln-direct.com King City/Northway Forwarding Ltd. Koppers, Inc. Kuehne + Nagel Inc L. L. Johnson Lumber Mfg. Co. Laufer Group International La-Z-Boy Dayton, TN Lebanon Oak Flooring Co., LLC Lico Machinery Inc. Lumbra Hardwoods Inc. M. T. Forest Products Maley & Wertz, Inc. Maple Rapids Lumber Mill, Inc. Marsh Lumber Co., Inc. Matson Lumber Co. MAVIN Maxwell Hardwood Flooring McDonough Manufacturing Co. McGriff Insurance Services McRae Lumber Co., Ltd.

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Messersmith Manufacturing, Inc. MiCROTEC - Corvallis Middle Tennessee Lumber Co., Inc. MO PAC Lumber Company Mount Storm Forest Products, Inc. Mueller Bros. Timber, Inc. Mullican Flooring Neff Lumber Mills, Inc. Newman Machine Company, Inc. Noland Lumber Co., Inc. Northern Hardwoods Northland Forest Products Oakman Hardwood Inc. Oaks Unlimited, Inc. Ohio Forest Products LLC Parton Lumber Co., Inc. Peach State Lumber Products, Inc. Pierson Lumber Co., Inc. Point Global Logistics Precision Husky Corporation Prime Lumber Co. Primewood Quality Hardwoods Ltd. Quality Hardwoods, Inc. Redwood Plastics and Rubber Reel Lumber Service Ron Baltzley Hardwoods, Inc. Saroyan Lumber Co. Schaller Hardwood Lumber Co. Shaver Wood Products Inc. Sheoga Hardwood Flooring & Paneling Somerset Hardwood Flooring - Eagle Plant Stella-Jones Corp. Stiles Machinery Superior Hardwoods of Ohio, Inc. The AGL Group Thomas & Proetz Lumber Co. Tigerton Lumber Co. Timber Products Co. Tioga Hardwoods, Inc. TMX Shipping Co. Trumbull County Hardwoods UFP Miami UFP Union City, LLC USNR Vexco Inc. W. R. Deacon & Sons Timber, Inc. W.M. Cramer Lumber Co., Inc. WAGNER METERS Walnut Creek Planing Walters Brothers Lumber Mfg., Inc. Wood-Mizer, LLC Yoder Lumber Co., Inc. Yukon Door & Plywood, Inc.

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Abenaki Timber Corp Acme Pallet Inc. ACPI Wood Products Co. AFS Energy Systems AHF Products AikenControls American Eagle Hardwoods LTD arxada Assured Partners Baillie Lumber Co. Baird Brothers Sawmill, Inc. Batesville Casket Co. Battle Lumber Co., Inc. Besse Forest Products Group BID Group Technologies Ltd Billsby Lumber Company Blair Logistics Boa-Franc G.P. Boldesign, Inc. Bradford Forest, LLC Brenneman Lumber Co. Brewco Inc. C. B. Goodman & Sons Lumber, Inc. Carbotech Carbotech-Autolog Cascade Hardwood LLC Century Furniture Co., Inc. Cersosimo Lumber Co., Inc. Clark Lumber Company, Inc. Classic American Hardwoods Cleereman Industries, Inc. Cole Hardwood, Inc. Colonial Millworks Ltd. Combilift USA Conestoga Wood Specialties Corp.- Beavertown Branch Connor Sports Continental Underwriters Inc. Cooper Machine Co., Inc. Corley Manufacturing Co. Crow Works Cumberland Lumber & Manufacturing DMSi Software Dunavant Global Logistics Group Dwight Lewis Lumber Co., Inc. Ethan Allen, Pine Valley Division Farm Credit East W W W. N H L A .C O M

Forest City Trading Group Forestry Systems, Inc. Fr. Meyer's Sohn NA LLC Froedge Machine & Supply Co., Inc. Frost Hardwood Lumber Co. G. F. Hardwoods, Inc. Ganahl Lumber Company Gates Milling, Inc. GMC Hardwoods, Inc. Granite Valley Forest Products - Welter Greenbridge Greentree Forest Products, Inc. Hardwood Market Report Hardwoods Specialty Products Harold White Lumber Inc. Hasko Industries Henry County Hardwoods, Inc. Hermitage Hardwood Lumber Sales, Inc. HUB International Hurst Boiler & Welding Co., Inc. Independent Stave Company, Inc. Interglobo North America ISK Biocides, Inc. J. Gibson McIlvain Co. J. M. Wood Products JoeScan John Boos & Co. Johnny Asal Lumber Co., Inc. Jones Lumber, LLC Josey Lumber Company, Inc. Kepley-Frank Hardwood Co. Inc. Kiln-direct.com King City/Northway Forwarding Ltd. Koppers, Inc. Kuehne + Nagel Inc Laufer Group International La-Z-Boy Dayton, TN Lebanon Oak Flooring Co., LLC Lico Machinery Inc. Lumbra Hardwoods Inc. M. Bohlke Veneer Corp. M. T. Forest Products Maley & Wertz, Inc. Marsh Lumber Co., Inc. MAVIN Maxwell Hardwood Flooring McDonough Manufacturing Co. McGriff Insurance Services Messersmith Manufacturing, Inc. MiCROTEC - Corvallis Middle Tennessee Lumber Co., Inc. MO PAC Lumber Company Mount Storm Forest Products, Inc. Mueller Bros. Timber, Inc.

Mullican Flooring Neff Lumber Mills, Inc. Newman Machine Company, Inc. Noland Lumber Co., Inc. Northland Forest Products Northland Forest Products, Inc. Oakman Hardwood Inc. Ohio Forest Products LLC Parton Lumber Co., Inc. Patrick Lumber Co. Peach State Lumber Products, Inc. Pierson Lumber Co., Inc. Point Global Logistics Precision Husky Corporation Prime Lumber Co. Primewood Quality Hardwoods LLC dba Forks Lumber Co. Quality Hardwoods, Inc. Redwood Plastics and Rubber Reel Lumber Service Ron Baltzley Hardwoods, Inc. Ron Jones Hardwood Sales, Inc. Saroyan Lumber Co. Schaller Hardwood Lumber Co. Shaver Wood Products Inc. Sheoga Hardwood Flooring & Paneling Somerset Hardwood Flooring - Eagle Plant Stella-Jones Corp. Stiles Machinery Stoltzfus Forest Products Superior Hardwoods of Ohio, Inc. The AGL Group Thomas & Proetz Lumber Co. Thompson Hardwoods Tigerton Lumber Co. Tioga Hardwoods, Inc. TMX Shipping Co. Townsend Lumber, Inc. Trumbull County Hardwoods UFP Miami UFP Union City, LLC USNR Vexco Inc. W. R. Deacon & Sons Timber, Inc. W.M. Cramer Lumber Co., Inc. WAGNER METERS Walnut Creek Planing Wood-Mizer, LLC Yoder Lumber Co., Inc. Yukon Door & Plywood, Inc.

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MEMBERSHIP MATTERS

A NEW YEAR A NEW RESOLUTION

here is a drinking game, or so I’ve been told, called “Never have I ever.” A player says “never have I ever” and then they make a statement about something they have never done. If any of the other players HAVE done what was stated, they have to take a drink. Ready to play? Never have I ever made a New Year’s Resolution! Ok, that’s not 100% true. We’ve ALL made New Year’s “Resolutions” but did we really? A true resolution is a commitment to achieving a specific goal. So, with that in mind, working backwards, you have to have a goal, you have to be committed to achieving that goal and you have to have the resolve to see it through. NHLA and its Market Impacts Committee have done just that, and you will see the fruits of our Resolution throughout 2024. 1. SET THE GOAL: Our first step was to set the goal – a commitment to producing a series of videos that dive deep into the realms of Forest Management, Science, Economic Impact, and the “happiness impact” of hardwood. We weren’t content with just preaching to the choir. We aimed to influence those who shape the landscapes of our living spaces.

2. COMMITMENT TO ACHIEVING THE GOAL: To make this resolution a reality, we sought out experts from fields beyond our usual circles. Scientists, academics, and architects – voices with no strings attached to the hardwood industry. We weren’t just looking for information. We were committed to bringing a fresh perspective, free from any bias. These individuals, committed to our cause, were ready to share their knowledge and insights. 3. THE RESOLVE TO SEE IT THROUGH: And now, as December unfolds, we’ve pulled the trigger on the first video. Dr. Sally Augustine, PhD, an environmental/design psychologist, led the charge, unraveling the secrets of biophilic design. It’s not just about hardwood. It’s about creating spaces that resonate with life, nature, and well-being. As we head into the New Year, these videos are not just about showcasing the hardwood industry. They’re about inspiring a resolution. A resolution for architects, designers, and specifiers to rethink the way they approach their projects. A resolution for all of us to embrace hardwood in a way that goes beyond tradition. So, here’s to a new year and a new resolution. Together we will build a future where hardwood isn’t just a choice. It’s a commitment to a better way of living and designing.

John Hester NHLA Chief Development Officer j.hester@nhla.com | 901-399-7558

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RULES CORNER

Unveiling Ambiguities:

Exploring Controversial Terms in the NHLA Rules Book By DANA SPESSERT, Chief Inspector

he National Hardwood Lumber Association created the Rules for Inspection of Hardwood Lumber in 1898; since then, the rules have been modified many times. The outlined Rules occasionally leave a lot up to the inspector’s judgment, which is good in some cases but not in others.

Another term in the Rules Book that causes confusion is “Incipient Decay.” In the Definition Section of the Rules Book, it states:

In this month’s article, I want to mention a couple of areas in the Rules Book that have some controversial terms, beginning with yellow poplar. Under the Standard Inspection by Species, Poplar (American Tulipwood) on page 27 of the 2023 version it states:

“The early stage of decay that has not proceeded far enough to soften or otherwise perceptibly impair the hardness of the wood. It is usually accompanied by a slight discoloration or bleaching of the wood.”

I believe this definition has a minimal purpose as it attempts to describe a stage of stain that is borderline rot. In my experience, the inspector must decide whether it is stain or rot, and having incipient decay as an option is not very useful. “Incipient decay” may have a purpose when looking at Poplar 1 Common, where the slight stain is accepted. Due to the nature of color variation, which can be very subjective, using the definition of incipient decay RU LES can help classify light gray (as I described above). If I see FOR TH E M EASU RE M ENT white streaks in the rough, I will decide that the stain is & INSPEC TI ON OF HAR DWO too severe to be considered slight. O D & CY PR

“NO. 1 COMMON: Standard, except slight stain is admitted.” If you read the above exception, you would not know what “slight stain” is because it is not covered in the Definition Section of the Rules Book. One may think that this is a small area or may compare this stain to the stain you saw three years ago on a rotten board. I do not favor this type of ambiguity, and it appears that other Chief Inspectors didn’t either because NHLA adopted the following line under the 1 Common description: “Note: Stain will be light gray when the piece is surfaced two sides to standard surfaced thickness.”

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When I interpret this from the written word to practical application, this statement still leaves a lot to the opinion and experience of the inspector. I have inspected a lot of stained poplar, rough and surfaced. Many boards as black as coal will surface to a gray color, leading me to believe that stain will most always be gray after surfacing. The only time I have personally seen stained poplar surfaced boards, not gray, is when the board showed white streaks, indicating softening of the wood, better known as rot. The distinction between light gray and dark gray is so subjective that this would be hard to judge in a dispute inspection, as the variance between Inspectors can be enormous.

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de & tions 23

I trust this article will raise questions. I realize that most inspectors will have varying opinions, and we must strive to have similar opinions while grading hardwood lumber to ensure suppliers and customers are on the same page. As always, please send your hardwood lumber grading questions to Dana Spessert at d.spessert@nhla.com or call 901-399-7551.

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MEMBER SPOTLIGHT Combilift

Combilift: Seeing is Believing

ind-blowing. Tremendous. Amazing. These are words that companies want people to think of when describing their products. NHLA Member Combilift heard those exact adjectives uttered by professionals in the hardwood lumber industry at the 2023 NHLA Annual Convention. Following the educational session on Technology and AI, Robinson Lumber Company invited all convention attendees to tour their yard to experience their new Combilift Container Loader CSS (Container Slip Sheet), specifically designed for fast-loading of ocean freight containers in under 6 minutes. The demonstration was a wake-up call to many in the industry as they began to see futuristic technology entering the hardwood lumber space. Patrick Keenan Patrick Keenan, Sales Engineer and Product Specialist for Combilift CSS was at the NHLA Annual Convention to show attendees Combilift’s latest piece of technology, saying, “I was so happy to demonstrate what the Combilift Container Loader CSS can do. My favorite part of the job is the challenge and satisfaction of introducing new disruptive technologies and products.” Disruptive technologies may sound like something from a scary sci-fi movie, where AI takes over the world, but it is nothing like that. Disruptive technologies are innovations that significantly alter

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how consumers, industries, or businesses operate. For example, the telephone was a disruptive technology when it was invented, replacing the telegram. GPS navigation was a disruptive technology when it came along, replacing paper maps. Combilift is well-versed in the field of disruptive technology. One of W W W. N H L A .C O M

“The Combilift CSS demonstration at the NHLA Annual Convention was a tremendous success and helped us with the ‘time challenge’ we faced. The number of attendees at the demonstration far exceeded our expectations. I will always remember the ecstatic response from the audience, with everyone taking pictures and videos of the technology in action.” the co-founders of Combilift is Robert Moffett, who invented the Moffett Truck Mounted Forklift (the 3-Wheel Forklift), which revolutionized job-site delivery across the globe. Then, in 1998 Robert Moffett & Martin McVicar founded Combilift taking their expertise & vision to design & manufacture the world's first 3-Wheel multidirectional forklift for handling long length products. These machines have indoor & outdoor capabilities giving safer load handling and the capability to travel in narrow aisles giving increased warehouse & yard storage capacity. Now, they have invented the new Combilift CSS, and Keenan talks about it passionately, saying, “It gives fast and consistent loading times, so it’s a one-person operation, replacing the traditional method that required two large Lift Trucks with skilled operators. It’s also electric, so it reduces emissions. Plus, the best part is that it can both load and unload, saving time and money.”

ber the ecstatic response from the audience, with everyone taking pictures and videos of the technology in action.” Combilift is on a hot streak of accomplishments, with Keenan crediting many things to their success, saying, “We believe we cannot be still; we must continually develop new products and drive new strategies. We earn our customers and build our brand by delivering excellence before, during, and after the sale. Ultimately, this is a people business, internally and externally. We truly believe in listening to the customers’ voices as a guidepost to keep us on the right path.” Keenan remarks, “Our membership with NHLA brings us closer to the hardwood industry as a whole and helps us to understand our customer’s unique needs and challenges. We consider membership a ‘must’ for anyone within the hardwood lumber supply chain, from forest to flooring.

Every business has challenges, be it supply chain issues or an inability to find labor. For Combilift, Product Demonstration was their biggest challenge this year. Keenan explains, “Introducing the Combilift Container Loader CSS as a new concept/product takes a lot of time. It’s not a product that can easily be demonstrated at traditional conventions or shows. So, we are incredibly grateful to our ‘First Movers’ (lifetime partners) like Meherrin River Products and Robinson Lumber. They have allowed us to bring people to their mills and yards to give first-hand demonstrations of how the machine works and how much time it saves.”

Looking toward the future, Keenan gave a long list of things Combilift wants to accomplish this year. To highlight a few, Keenan says, “We want to continue our focus on promoting the Combilift CSS Container Loader to the hardwood sector with the strategic goal of making it the preferred global solution for container loading and unloading of forest products. We also have identified a need for a container log loader, so we have a prototype built that we plan to introduce in 2024. Perhaps we’ll be talking about a new log-loading disruptive technology soon.”

Keenan continues, “The Combilift CSS demonstration at the NHLA Annual Convention was a tremendous success and helped us with the ‘time challenge’ we faced. The number of attendees at the demonstration far exceeded our expectations. I will always remem-

You can find more information about Combilift online at www.combilift.com or by calling or vising our Parts & Product Support Center in Greensboro, NC: 877-266-2456.

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EDUCATION SPOTLIGHT

Congratulations to the Graduates of the 204th Class of the NHLA Inspector Training School

Left to Right: Standing: Jeremy Prosser, Billy Joe Blackburn, Eric Osborne, Dylan Maggert, Michael Janjigian Seated: Lucian Gratz, Roman Matyushchenko (Instructor), Freddy Guevara

he National Hardwood Lumber Association celebrated the graduation of Class 204 from the Inspector Training School on November 17, 2023.

Geoff Webb, Dean of NHLA Inspector Training School, kicked off the celebration, saying, “It’s an honor to welcome this class into the ranks of lumber inspectors. This is just the start of your career, and it is essential to remember that the lumber inspector is a key employee and a vital part of the team at the sawmill, the concentration yard, and the entire hardwood lumber operation." Nick Thompson, President and Co-Owner of Thompson Appalachian Hardwoods, gave the graduates an energizing keynote address. As a graduate of NHLA Inspector Training School (Class 166), he told students, “I’m emotional about this School; it has been a cornerstone of my life since childhood; graduating from

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Inspector Training School was a foundational point for my career and allowed me to preserve my family’s legacy.” Thompson continued, “We sent our employee, Freddy Guevara, to the School. He graduates today. We paid for Freddy’s education because we know it’s essential to continue to develop quality talent, especially talent that is part of the next generation. Trust me. You will look back when you are my age and realize this was the best eight weeks you ever spent.” Class President Jeremy R. Prosser of Ontario Hardwood Products spoke to his fellow students, saying, “This class has been a great experience for all of us; we gained valuable knowledge to further our careers and have formed priceless memories at the School that will stay with us for the rest of our lives.”

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GRADUATES OF THE 204TH CLASS WERE: • Billy Joe Blackburn IV, D & T Sawmill, LLC • Lucian H. Gratz, Midwest Hardwood Company LLC • Freddy Guevara, Thompson Appalachian Hardwoods, Inc. • Dylan J. Maggert, Hartzell Hardwoods, Inc. • Jeremy R. Prosser, Ontario Hardwood Products, Ltd. • Eric V. Osborne, Connor Sports • Michael A. Janjigian, Independent Roman Matyushchenko presented the individual achievement awards. Outstanding individual awards recipients were as follows: • Jeremy R. Prosser, ITS Educational Foundation Award for Highest Overall Average • Lucian H. Gratz, Howard Hanlon Award for Second Highest Overall Average • Jeremy R. Prosser, Westside Hardwood Club Award for Highest Board Run Average • Billy Joe Blackburn IV, Milt Cole Award for Best Attitude/ Citizenship

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REGISTRATION IS NOW OPEN FOR THE FOLLOWING INSPECTOR TRAINING SCHOOL PROGRAMS SPRING CLASS

When: January 8-March 1 Where: Memphis, TN NHLA Headquarters

SUMMER CLASS

When: June 10-August 2 Where: Montgomery, PA Pennsylvania College of Technology To enroll and learn more please visit www.nhla.com/education or call 901-377-1818.

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MIC Insights Dear Readers, We are excited to unveil a new addition to Hardwood Matters—a dedicated quarterly column entitled “MIC Insights,” showcasing the ongoing market research efforts of the Markets Impact Committee (MIC). At NHLA, we understand the pivotal role that market dynamics and regulations play in shaping the hardwood industry. With this in mind, the Market Impacts Committee was established as a driving force behind our strategic initiatives, particularly in understanding market influences and advocating for industry interests. Through MIC Insights, we will provide valuable insight, analyses, and strategic implications regarding factors that could potentially impact the hardwood lumber markets. In this inaugural edition, we delve into two prominent areas under examination by the MIC: ‘Carbon Markets and Hardwoods’ and the ‘European Union Deforestation Regulation (EUDR).’ These topics have emerged as focal points due to their significant implications on market dynamics, sustainability practices, and trade regulations within the hardwood industry. This new column will serve as a valuable resource, providing you with actionable insights and a deeper understanding of the market forces influencing the hardwood industry.

Renee Hornsby, NHLA Chief Operating Officer/Editor-in-Chief

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INSIGHT 1

Carbon Markets and Hardwoods – Key Players By DANA COLE, Executive Director of the Hardwood Federation

he U.S. has witnessed an exponential increase in the number of private carbon market programs that pay the forestry sector to generate offsets that third parties, including some of the world’s largest companies, can purchase in the form of credits, allowing a private company to characterize itself as environmentally responsible. The credits are effectively financial instruthat monetize the capture and For a carbon market to ments storage of atmospheric carbon to achieve Greenhouse Gas (GHG) reduction goals. get off the ground, it are two types of carbon markets: must receive a creden- There regulatory, which are structured around mandatory carbon reduction programs tial certifying that its as California’s Cap and Trade Promethodologies mitigate such gram; and voluntary, whereby companies and landowners can buy and sell credits carbon emissions. that may satisfy Environmental and Social Governance (ESG) objectives.

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Although several states are weighing regulatory GHG emissions schemes, the increase in private carbon markets poses a more significant challenge to the hardwood sector because of their rapid proliferation. Another challenge confronting the industry focuses on the types of landowners targeted for participation in a private market. While most carbon markets have initially focused on large landowners as the source of their credits, many players have begun to target small landowners, posing more challenges for the industry, especially when structured in a manner that discourages timber harvest. Be on the lookout for the below key players, all of which claim to target small landowners: Anew Climate LLC – A consortium led by Anew Climate announced in 2022 that it would buy 1.7 million acres of forest to maximize how much carbon is stored “in standing trees rather than how much wood is produced from cutting them down.” Significant purchases have been made,

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particularly in West Virginia, which has had some impacts on local hardwood interest. The announcement of this massive purchase placed the issue firmly on the industry’s radar screen. American Forest Foundation – Much of the publicly available information about AFF’s program, a partnership with the Nature Conservancy, is “prospective” since the initiative is a work in progress. In 2023 meetings with the Federation, AFF acknowledges the importance of considering the amount of carbon stored in wood products as a key factor in providing accurate offsets. AFF is currently enrolling landowners in Maryland, Massachusetts, New York, Pennsylvania, Vermont, and West Virginia. Forest Carbon Works (FCW) - Based in Minnesota and Vermont, the FCW Program directly targets small landowners using a smartphone app to expedite timber inventories. FCW stands out by listing 15 specific project criteria necessary to enroll in their programs. Natural Capital Exchange (NCX) – NCX reaches out to smaller landowners it claims are “locked out” of the carbon market by larger players. It works with vertically integrated wood products companies as well as landowners of all sizes. Although NCX promotes delays in timber harvest, the company suffered a major setback in late 2022 when verification of its project methodology stalled, causing a 40% reduction in its workforce. In 2021, NCX entered contracts with more than 650 landowners, including properties in 45 states ranging from 40 acres to more than 500,000.

Finite Carbon - Based in Pennsylvania, Finite Carbon plans to launch a free digital platform to allow landowners with as little as 40 acres to receive payments for sustainable management. According to a market expert, the program “is struggling, but not yet out of the game.” The company’s footprint includes 2000+ acre-sized properties in Alabama, Alaska, Maine, Massachusetts, Michigan, New Hampshire, New York, Texas, and West Virginia. Third-Party Verifiers – For a carbon market to get off the ground, it must receive a credential certifying that its methodologies mitigate carbon emissions. The fact that there are several verification groups creates more uncertainty. While third-party verification entities such as Verra certify many projects that capture small landowners, other third-party verifiers such as the American Carbon Registry and Climate Action Reserve have established criteria of their own, creating a patchwork of project certification criteria. Despite the proliferation of carbon markets in recent years, 2023 has witnessed a pullback from large corporate players, undermining momentum for these programs. A recent article in MIT Technology Review shows that many companies are expressing concerns with private carbon markets on the grounds that they provide more public relations than environmental benefits. In the current climate, few corporate players want to be characterized as “greenwashing” their business model.

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INSIGHT 2

The European Union “Deforestation Regulation” (EUDR) Represents a Significant Change in the International Regulatory Environment and a Major Challenge for Small, Non-Industrial Timber Operators, Including the US Hardwood Industry

By MIKE SNOW, Executive Director of AHEC

he EU Deforestation Regulation (EUDR) represents a very significant change in the regulatory environment not only for primary wood products exported to the EU but also because of the global nature of trade in finished wood products. The implications and potential trade distortions will reverberate around the world. This dramatic change, which, unlike the previous EU Timber Regulation (EUTR), was introduced and passed with almost ZERO stakeholder consultation, requires an immediate response from AHEC and the wider US hardwood industry. The regulation is also raising questions about the nature and scale of demand for traditional “certified” products in the long term and is likely to create confusion in the marketplace, with the end result very likely being a reduction in demand for renewable and sustainable materials such as American hardwoods and increased market share for non-renewable materials such as plastics and metals which have a much higher environmental footprint. It is hard to believe that this is the goal EU regulators had in mind, but when a seemingly “simple” solution is introduced to address W W W. N H L A .C O M

a very complex problem, unintended consequences tend to outweigh what are otherwise good intentions. The EU Timber Regulation (EUTR), which was replaced by the EUDR in July 2023, required that the origin of wood products placed on the EU market be identified to the extent necessary to demonstrate negligible risk of illegal harvesting. This favored a jurisdictional risk-based approach to conformance, particularly for smallholders where tracking to a specific harvest location is extremely expensive, inefficient, and unnecessary to meet regulatory objectives. AHEC’s experience of the Seneca Creek U.S. hardwood risk-assessment studies, combined with evidence from other sectors, notably biomass, implies the jurisdictional riskbased approach may be extended for delivery of “certified sustainable” claims for wood from smallholder operations in regions with generally good governance to satisfy procurement policies in the public and private sector and to ensure fair market access. J A N U A R Y/ F E B R U A R Y 2 0 2 4 H A R D W O O D M AT T E R S |

Husnul Mochtar / Shutterstock.com

However, with EUDR, the EU is effectively offering smallholders a “new deal” for market access. Rather than extending support to certification frameworks that provide access to smallholders through jurisdictional risk assessment, it has chosen to focus on legality and a narrow range of requirements for “deforestation-free” products, which, the EC argues, will be more achievable by smallholders than conformance to sustainable forestry certification systems. If only that were true. The catch is that the EU has combined this with a requirement that all products placed on the EU market (or exported from it) must be traced to harvest sites with zero risk of illegal harvesting or forest conversion. In theory, that sounds great, but the reality is a bit more complicated.

". . . it will be necessary for U.S. hardwood exporters to the EU to provide “adequately conclusive and verifiable information” that harvesting is “in accordance with the relevant legislation of the country of production .”

There are very real technical challenges for U.S. hardwood suppliers to deliver against the EU geolocation requirements. Over 90% of U.S. hardwood logs are derived from private land, the vast majority from non-industrial family forest owners. The EUDR defines the “plot of land” for which geolocation data is required as an individual “real estate property” and requires that this data be

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provided with each consignment placed on the EU market. This requirement does not adequately reflect the extent to which it is essential to aggregate and mix material from large numbers of small harvests in numerous properties to deliver high-quality and consistent consignments of graded kiln-dried U.S. hardwood lumber supplied to European customers. Nevertheless, now that the EUDR has passed into law, AHEC/ SHC is determined to leave no stone unturned in its efforts to find a workable solution to the challenges of providing geolocation data in the U.S. hardwood sector. The first priority is to implement a set of procedures that will enable U.S. hardwood suppliers to conform to EUDR, including requirements for geolocation to the “plot(s) of land” where harvesting takes place, legal harvesting, and zero risk of deforestation and forest degradation in accordance with narrow definitions. In delivering against EUDR, AHEC aims to exploit the ready availability of good quality property boundary data and satellite data in the U.S. and the EU’s apparent acknowledgment that operators may provide all “potential” plots of land from which wood may have been derived in each consignment. POTENTIAL TECHNICAL SOLUTION FOR THE PROVISION OF GEOLOCATION DATA In July this year, within days of enactment of the law, AHEC commissioned an independent consultant - to assess whether such a W W W. N H L A .C O M

technical solution might exist, and rather against the odds, the consultant has come up with a proposal for a mechanism that exploits the following facts: • The U.S., unlike nearly every other country in the world, has nationwide access in digital form to geolocation data that meets EUDR requirements for ALL property boundaries that are updated annually (this is the foundation of online apps such as www.OnXmaps.com); • The U.S. has remote sensing data available that allows for forest degradation and deforestation to be identified using this data and AI; • The risk of commodity-driven deforestation or forest degradation in line with EUDR definitions in the U.S. hardwood sector is likely to be extremely low. It may be readily assessed for individual properties by combining the two data sources identified above. AHEC is currently pilot-testing a system that includes the following: • A central database of all “plots of land” in the U.S. with hard wood forests. • Regular centralized monitoring of satellite data to identify any plot of land where deforestation or forest degradation in line with EUDR definitions is detected (i.e., converted to agriculture or plantation). • Regularly updated quantification of EUDR deforestation/ degradation risk at national and state level. • A framework by which U.S. primary processing mills supplying hardwood into the EU can register and be given access to the regularly updated list of geolocations of all “EUDR conformant” and “EUDR non-conformant” plots of land in their supply area. • A mechanism by which registered mills can mitigate any risk of hardwood logs derived from non-conformant geolocations enter ing supply chains destined for the EU. In jurisdictions where risks are known to be negligible, a self-declaration may be adequate. Where risks are non-negligible, there would likely be a need for an onsite audit that would ensure that appropriate mitigation measures are in place. • Mills then supply the complete list of all “EUDR conformant” geolocations in their supply area from which logs might have been sourced with every consignment for onward delivery. • A standardized framework for downstream traders to amalgamate geolocations from all mills with which they do business. This set of procedures could, conceivably, serve to ensure U.S. hardW W W. N H L A .C O M

wood conformance to the EUDR requirements for geolocation and to demonstrate a negligible risk of deforestation and degradation. Alongside this, it will be necessary for U.S. hardwood exporters to the EU to provide “adequately conclusive and verifiable information” that harvesting is “in accordance with the relevant legislation of the country of production .” This evidence may be most effectively provided through a jurisdictional risk assessment focused on compliance with laws that fall within the scope of the EUDR definition of “relevant legislation .” In order to facilitate this requirement on behalf of the entire industry, AHEC has recently contracted a well-respected environmental consultant to carry out risk assessments based on EUDR indicators for all 33 primary hardwood producing States. The risk assessments are scheduled to be delivered by July 2024. Whether or not the AHEC strategy will ultimately satisfy EU regulators remains to be seen. However, it is difficult to imagine that ANY other timber supplier—including the domestic European timber industry—will be in a position to provide the robust data that the US hardwood sector will be able to supply. The question remains: does the EU really want to promote the use of renewable, carbon-storing, and sustainable materials such as American hardwoods, or are we willing to turn over material use to petroleumbased plastics and other high-carbon products?

LET’S TALK MORE EUDR WEBINAR WEDNESDAY JANUARY 10 at Noon CST

Learn firsthand about the EUDR and its Global Implications for the U.S. Hardwood Industry on our January 10th free webinar. AHEC Executive Director Mike Snow and Environmental Policy Director Rupert Oliver will give a detailed update on the current status of the European Union Deforestation Regulation (EUDR) and its implications for the American Hardwood industry. The talk will focus on the potential for trade disruptions not only for bi-lateral US exports to Europe but the implications for downstream manufacturers in other markets as well. Potential solutions, including satellite data and Artificial Intelligence to reassure European regulators will be addressed, as well as potential legal remedies through the WTO and other international bodies.

Hosts: Mike Snow (left) and Rupert Oliver (right)

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MARKET TRENDS

HARDWOOD MARKETS

MATTER

Hardwood Markets Matter, and it is important for NHLA to share market details of the entire Hardwood Industry. We appreciate the support of allied associations and publishers in gathering and sharing this important market information that can help you understand the complete hardwood industry picture.

Hardwood Lumber Price Indexes $1,400

Six-month Change: -2% www.hardwoodreview.com

Gross Tally ($/MBF)

$1,300 $1,200

KD Index $1,100

Green Index

Sawmill and yard profitability has been strained on $1,000 several levels in 2023. For the past 25 years, HardSix-month Change: +6% wood Review has maintained kiln-dried and green $900 hardwood lumber price indices. They represent the average prevailing KD and green prices of seven Source: Hardwood Review $800 items selected from the three eastern producing re6/1/2023 8/1/2023 10/1/2023 12/1/2023 gions to represent broad market trends. The spread between those indices has narrowed in the second half of 2023, with green prices rising 6% since June but kiln-dried prices 2% lower. Yards have particuand retain employees, which has only eaten into already strained larly been impacted by the shrinking spread, or margin, with most production margins. kiln-dried prices struggling to find traction while green prices have seen at least modest increases. Looking ahead, lower U.S. diesel prices should help producer profitability, with retail diesel prices expected to trend slightly In addition, both KD and green sawmill profitability has been lower through the first half of 2024 (Energy Information Adminisimpacted by log prices, which have come down (except for White tration). Lumber and log-wise, price spreads will not widen until Oak) since lumber prices started falling in the second half of 2022, kiln-dried prices begin to grow faster than green prices, and green but generally not as quickly as lumber prices. Further, it is not prices faster than log prices, but that will require a healthy uptick likely log prices will fall as far as sawmills need them to, as conin demand. Barring a sudden and significant rebound in global tacts say fewer hardwood tracts are available because landowners economies and consumer pocketbooks, which does not appear are unwilling to sell at today’s lower prices. Lastly, sawmills have likely, compressed margins will reign through the first half of 2024. been forced to raise wages over the last several years to attract

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www.hmr.com

The HMR Demand Index (HDI) is a feature in HMR Executive® that illustrates monthly trends in reported demand from 10 major domestic markets for hardwood lumber. Components of the index are color coded with various shades of blue when demand is slow, they transition to gray when demand is fair, and then to light red and deep red when demand moves from good to strong.

Nov-21 Dec-21 Jan-22 Feb-22 Mar-22 Apr-22 May-22 Jun-22 Jul-22 Aug-22 Sep-22 Oct-22 Nov-22 Dec-22 Jan-23 Feb-23 Mar-23 Apr-23 May-23 Jun-23 Jul-23 Aug-23 Sep-23 Oct-23 Nov-23

Index for November, which is published the first week of December.

Cabinets Residential Flrg. Truck Trailer Flrg. Upholst. Furniture Wood Furniture Moulding/Millwork Wood Components Board Road Pallets Railroad Ties Quite Slow

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Slow

Fair/Steady

Good

Quite Good

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gray stain (enzymatic), and the occurrence is often a precursor to decay if conditions allowed to prolong.

www.rta.org

WOOD TIE GRADING MINISERIES: STAIN AND DECAY By Nate Irby, Railway Tie Association (RTA)

Wood ties and timbers used on our nation’s railroad infrastructure support freight, passenger trains, and help us continue to thrive as a country. There are over 136,000 miles of track in North America to maintain. This requires a large effort, and annually, wood tie and timber producers bring 18-20 million ties to the marketplace. These ties and timbers are not simply “industrial” products, these are integral pieces of architecture, with strength and structural integrity at the forefront of the procurement process. Railway Tie Association is the membership group that represents those tie producing entities and end-users that run railroads on them, and more, and helps to keep wood tie markets strong and sustainable - and has been doing so since 1919. One of our annual tenants is providing education in our premiere event called the Tie Grading Seminar. This article is a representative snapshot highlight of that prestigious educational offering focusing on stain and decay in wood ties and timbers.

Decay fungi, in wood, are categorized in two broad categories: white rot and brown rot. The former encapsulated to hardwoods, with the latter predicated to softwoods, generally speaking. Decay penetrate wood interior and breakdown cell walls while growing, thus severely lowering wood strength by the relevant weight loss of the fungi consuming the wood. Visually, decay fungi alter the appearance of wood, and the severity is noticeable by virtue of macro cell structure changes. Wood appears to lose its “grain”, it can appear “spongy”, and if physically probed, lose rigidity and proportionality. Limitations for crosstie defects are delineated in the AREMA 30 standards and covered extensively at the RTA annual Tie Grading Seminar. Please visit rta.org for more information on wood ties and timbers, the Tie Grading Seminar, and other offerings RTA provides to our industry.

SOURCES: • Railway Supply Institute: https://www.rsiweb.org/data-technical- resources/rail-supply-economic-impact-study/ • Railway Tie Association: https://www.rta.org/why-rta • American Railway and Engineering Maintenance-of-way Association: https://www.arema.org/AREMA_MBRR/Committees/30.aspx

Mainline railroad crossties today are generally 7”x9”x8’6” grade 5, predominately oak and hickory, “sleepers” or pieces of wood utilized to hold up rail, anchor in ballast, and have locomotives and railcars roll over the top of them. When it comes to wood tie grading, defects can express themselves in various ways and in a myriad of capacities. Stain and Decay are often misidentified, as they are encased in the xylem, and if substantial in presence, one can drastically reduce wood tie quality. Stain observed in wood ties is mostly the result of fungi inhabiting wood inner surface (not bark). Fungi grows on wood as it is a good food source and retain moisture, and if other conditions are favorable simultaneously, sunlight and non-extreme temperatures, the spores that land on wood propagate. A fungal network is referred to as a mycelial network, and develops by consuming wood nutrients, and growing throughout wood to find more. Stain fungi are superficial and do not deteriorate wood, only absorb nutrients and not breakdown cell structure. Many in the discipline refer to stain fungi as blue stain (mostly in softwoods), sapstain, or

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Examples of stain and decay in wood ties pulled from production due to reject.

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WHAT IS YOUR VIEW OF CROSSTIE COMPETITIVE POSITION RELATIVE TO OTHER HARDWOOD PRODUCTS?

REGARDING YOUR ABOVE ANSWER, PLEASE PROVIDE CONTEXT FOR MARKET, WEATHER OR OTHER CONDITIONS.

EASTERN US LAKE STATES Minnesota, Iowa, Wisconsin, Michigan, N Indiana, N Illinois: Reserves are dwindling - we will likely see decreases in production soon. Log inventories are going down which could translate to softer tie production in the coming months. ATLANTIC West Virginia: Most mills have lower log decks than they typically would want for this time of year going into winter. Virginia: November was a dry month. Flooring, pallet, and poplar markets have all slowed. Ties are the main product most mills are sawing. NEW ENGLAND New England 1: Log prices are stabilizing but still very high. Winter weather is approaching but conditions are still not great for logging. Hunting seasons are in full swing so most logging production has stopped. Most mills are on short work weeks and running low production.

MIDSOUTH SE Missouri, N Arkansas: logs moving things looking good E Texas, NW Louisiana: As a broken record if pallet and chips and grade lumber would all get good the sawmills would be doing good but this is not the case once again ties are the best thing going but its hard to cut ties when you have trouble selling the other. SOUTHEAST Kentucky, Tennessee: Winter and holidays are hurting log production. Uncertainty in lumber demand has many guessing what to do. Alabama, Florida, Georgia: Log inventory is fair in Alabama. There is a shortage of logs in Georgia due mostly to hardwood pulpwood quotas. Red Oak log prices have fallen to pallet log prices in some areas of the region. Pallet demand is soft. Mississippi: Demand remains strong for crossties. Crossties are in a good position relative to competitive products.

Pennsylvania: Slight increase in demand for some grades of lumber. November was dry and good for logging.

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www.nwfa.org

For expected demand by type in 2024: National Wood Flooring Association (NWFA) members report in Hardwood Floors magazine’s 2024 Industry Outlook that white oak has become a dominant selection by consumers and builders alike, with nearly 70 percent of respondents expecting demand to increase in 2024.

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DIFFICULT YEAR ACROSS EXPORT MARKETS By Tripp Pryor, AHEC International Program Manager

www.ahec.org

It’s no secret that global consumer demand has been weak in 2023. The latest export market statistics show a 21% drop in lumber exports by volume from last year, taking us to the lowest lumber export volume since 2011. China, which is still the largest export market for American hardwood lumber, has continued to shrink since the Trade War in 2017. Other markets expanded during the consumer booms of 2021 and 2022, but unfortunately that demand has softened this year. One bright spot this year has been Mexico, which makes up the majority of the “Latin America” bar shown here in purple. Even though most of our major markets have shrunk by 20-30%, Mexico is still having one of its best years on record for imports of US Hardwood lumber. Through the first 9 months of this year, Mexico has imported

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roughly 15 million board feet of red oak lumber, 15 million bf of hickory, 9 million bf of western red alder, 8 million board feet of yellow poplar, 6 million bf of maple, 5 million bf of white oak, and over 36 million board feet of “other temperate” lumber. Looking forward into 2024, AHEC has a very busy schedule of events that will provide opportunities for your company to get in front of interested global buyers. Even in difficult markets, there is always a case to be made for specifying American hardwoods. For more information on the American Hardwood Export Council and our upcoming events please check our website: www.ahec.org.

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NHLA JOB BOARD Here you will find our current job listings. To see more details of the job or to post a job, visit www.nhla.com/resources/careers-center

HARDWOOD LUMBER INSPECTOR

DONALDS, SC ETT Fine Hardwoods is seeking a full-time lumber inspector for our Donalds, SC, location. This position will initially be for our incoming green chain, inspecting all green lumber purchased from local sawmills while being put on sticks. But in time will lead to inspecting kiln-dried lumber coming off of sticks on our production line. The selected candidate will also be inspecting various imported hardwoods and be willing to learn to grade and inspect new species. The position will also include supervising a small crew and ensuring the workflow is handled properly. HOW TO APPLY Send your resume to: nhascher@ettfinewoods.com

ETT Fine Woods 1106 Drake Rd. | Donalds, SC 29638 864-378-0258

LUMBER INSPECTOR

COOKEVILLE, TN Hermitage Hardwood Lumber Sales seeks an experienced lumber inspector for their Cookeville, TN, yard. The position will be for grading both green and kiln-dried lumber, as well as supervising a crew.

TIMBER BUYER

WILKESBORO, NC Church and Church Lumber Company, LLC seeks to hire an experienced Timber Buyer. Extensive knowledge and experience will be required within the following: • Evolve business around cost and profitability within its procurement practices. • Purchasing and maintaining adequate stumpage inventory. • Maintaining solid relationships with timber/land owners. • Developing and upholding strong relationships with logging contractors. • Directing foresters in cruising, purchasing, and negotiating timber sales. • Coordinating with sawmill and log yard managers on log grades, yields, and scheduling. • Managing log re-sale program. • Analyzing and providing detailed reporting. HOW TO APPLY Send your resume to: wilma@churchandchurchlumber.com

Church & Church Lumber Company, LLC 863 New Browns Ford Rd. | Wilkesboro, NC 28697 36-973-5700

HOW TO APPLY Send your resume to: wesley@hermitagehardwood.com

Hermitage Hardwood Lumber Sales 105 Ridgedale Dr. | Cookeville, TN 38501 931-526-6832

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ITS CALENDAR

NHLA PROVIDES EDUCATION AND TRAINING TO IMPROVE YOUR BOTTOM LINE Register for classes at www.nhla.com/Education. MAR March 4-7

Hardwood Processing 101

NHLA will host a workshop to broaden the knowledge of hardwood processing for those industries and people who support sawmills and mill operations. The 3-day workshop will explore the process path from tree to kiln and includes a tour of a local sawmill and concentration yard. Housing and meals are included. Venue: NHLA Headquarters Location: Memphis, TN

March 20-22 Intro to Hardwood Lumber Grading

APR April 8-19

Inspector Training School Online Training Program MODULE 1 Two weeks of hands-on training.

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

April 15-18

Intro to Hardwood Lumber Grading

JUN

AUG

June 10-Aug. 2

August 28-30

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

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

Inspector Training School 207th Class

Venue: Pennsylvania College of Technology Location: Montgomery, PA Instructor: Roman Matyushchenko, ITS Instructor

AUG August 12-23

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

Inspector Training School Online Training Program MODULE 1

Venue: NHLA Headquarters Location: Memphis, TN

Venue: WV Wood Technology Center Location: Elkins, WV

Venue: NHLA Headquarters Location: Memphis, TN

Instructor: Roman Matyushchenko, ITS Instructor

Instructor: Mark Depp, National Inspector

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

Two weeks of hands-on training.

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

Intro to Hardwood Lumber Grading

Venue: NHLA Headquarters Location: Memphis, TN Instructor: Roman Matyushchenko, ITS Instructor

SEPT Sept. 9-Nov. 1

Inspector Training School 208th Class

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

Your Education

Doesn't Have To Wait If you are unsure of your next steps, consider the choices at the NHLA Inspector Training School. SPRING CLASS When: January 8-March 1 Where: Memphis, TN | NHLA Headquarters

ITS ONLINE TRAINING PROGRAM MODULE 1 When: April 8-19 Where: Memphis, TN | NHLA Headquarters

HARDWOOD PROCESSING 101 When: March 4-7 Where: Memphis, TN | NHLA Headquarters

SUMMER CLASS When: June 10-August 2 Where: Montgomery, PA Pennsylvania College of Technology

INTRO TO HARDWOOD LUMBER GRADING When: March 20-22 Where: Memphis, TN | NHLA Headquarters

To enroll and learn more please visit www.nhla.com/education or call 901-377-1818.