June 2024 Hardwood Matters

Picture Perfect.

EXECUTIVE COMMITTEE

Jon Syre, Chairman Cascade Hardwood, LLC

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

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

MISSION LEADERS

Sam Glidden, ITS and ITSEF GMC Hardwoods, Inc.

Ray White, Lumber Services Harold White Lumber, Inc.

Joe Pryor, Education Services Oaks Unlimited

Rich Solano, Convention Pike Lumber Company, Inc.

Stephanie VanDystadt, Membership & Networking DV Hardwoods, Inc.

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

DEPUTY MISSION LEADERS

Burt Craig, Membership & Networking Matson Lumber Company

Tom Coble, Market Impacts Hartzell Hardwoods, Inc.

Dennis Mann, Convention Baillie Lumber Co.

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.

HARDWOOD MATTERS

THE VOICE OF THE HARDWOOD INDUSTRY

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 NHLA

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

For advertising contact:

John Hester

j.hester@nhla.com or 901-399-7558

Brandon Musso

b.musso@nhla.com or 901-399-7557

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

Ashley Johnson, Office Administrator a.johnson@nhla.com

Jens Lodholm, Database Manager j.lodholm@nhla.com

INDUSTRY SERVICES

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

Tom Byers, National Inspector t.byers@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

Melissa Ellis Smith, Creative Director m.ellis@nhla.com

Brennah Hutchison, Junior Copywriter b.hutchison@nhla.com

MEMBERSHIP

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

Brandon Musso, Member Services Advisor b.musso@nhla.com

The Spring Board Meeting Rocks!

Every Spring the NHLA board of directors meets for the “spring meeting.” As creative a name as it is, it is very informative from a scheduling point of view. This year, the meeting was held in late April with a high level of board member attendance. This was our second board meeting with the new and improved committee meeting schedule, and I believe we are nearly done getting the kinks worked out. The meeting was efficient, productive, and informative. As your Chairman, fulfilling my duty to provide transparency on board matters, the following is a brief description of the two-day meeting, emphasizing our commitment to prioritizing member value.

NHLA staff on day one gave a detailed and thorough report on each of their specific areas of responsibility. Then with great enthusiasm committee meetings began:

FINANCIAL REPORT:

NHLA Controller, Desiree Freeman, reported that first quarter financials were in line with the approved annual budget. NHLA continues to be in a strong financial position and is weathering the challenging hardwood markets admirably. The independent audit provided a clean report, and we continue to meet our cash reserve percentages. The NHLA board and staff review the financial reports regularly. We do this so if anomalies present themselves, we can be proactive instead of reactive.

MARKET IMPACTS COMMITTEE:

Rob Cabrals, Mission Leader of the Market Impacts Committee; discussion included an update on the EUDR challenge with commentary from Mike Snow, AHEC Executive Director, while he was in Europe discussing potential solutions with policy makers! Additional topics included log export challenges and reactive remarks towards misleading social media information regarding hardwoods. Two task forces were set up to further investigate these challenges, and report back at the fall board meeting.

MEMBERSHIP AND NETWORKING:

Stephanie Vandystadt is the Mission Leader of this committee and leads the conversation regarding bringing additional membership

value to your NHLA membership invoice. Topics discussed were enhancing the value of the yield analysis and quality control member only opportunities. Providing a new service in thermography, which would be helpful in identifying potential locations in your facility prone to failing bearings or friction fires. And lastly, the idea of a North American Wood Expo was presented. This expo would bring together all aspects of the wood industry from hardwood and softwood pavilions to flooring and industry supplier pavilions. This kind of industry expo could attract attendees from around the world.

CONVENTION:

Dennis Mann is at the helm here and leads the conversation about future convention locations to maximize attendance. Lots of exciting locations are in the future for sure. Even more exciting was the discussion about some new sponsors. With new sponsors come the potential for new giveaways and raffles, like no other NHLA convention has seen in the past. New educational seminars were also discussed but the conversation quickly turned back to the exciting new raffle plunder. See you all in St. Louis, Missouri - October 2nd-4th.

INSPECTOR TRAINING SCHOOL:

Sam Glidden might very well have the most challenging task of all board members. While Sam leads this committee, he has also taken on reviewing the revenue model of the School. He has raised several key questions. What does membership need regarding Hardwood Lumber Inspectors? How can we attract more students? How can we educate those students in a timely manner, so they are proficient in their skills? Sam and his committee reported on their results and explained more time was needed and would be reporting their findings and recommendations at the fall board meeting. Good luck Sam.

LUMBER SERVICES:

Ray White guided this committee and discussed potential structural opportunities for hardwood lumber and the process in which hardwood lumber is certified for such applications. This could be a new and emerging place for low grade fiber which might interest us all. Additionally, the committee discussed tightening the requirements a manufacturing facility would have to maintain to be awarded the NHLA Facility Grade Certification document.

EDUCATION SERVICES:

Joe Pryor is the Mission Leader of this committee, and had a lively discussion regarding the Hardwood Federation, the Hardwood Federation PAC, the Real American Hardwood Coalition, and the American Hardwood Export Council. Having NHLA representatives from the board on these Associations will keep information flowing efficiently and ensure that all groups are promptly informed about industry specific impacts.

Besides the board members I have mentioned, all board members made significant contributions to the dialogue in each committee. These were long meetings. I appreciate all the board members staying focused and engaged. There are impacts on our industry from all sides. The board and NHLA staff work tirelessly to represent and

defend our industry! Its is an honor to be at the table with all of them. Thank you, board members and staff!

If you have made it this far in my letter, God bless you, and your family and business.

Thanks!

Jon Syre NHLA Chairman | Cascade Hardwood

JUNE SPEAK UP AND SING OUT

Has there ever been something you liked but were terrible at? For me, that is singing. I like to sing, but my wife, Sariah, hates my singing. At church yesterday, she commented that the song had a lot of flats; I said, I know it has four “b’s” on it. She shook her head in disgust. I have never been invited to sing a duet, mainly because when I sing, everyone wishes I would do it someplace else.  How bad is my singing? Let me say this: at church, a family moved over on their bench to sit in front of us; when I questioned why, the dad explained that the senior sister in front of them was always offpitch. I took that as a sign they wanted to hear me sing, so I tried my best to sing loud and on key. The following Sunday, the family was sitting back behind the senior sister.

Honestly, being such a bad singer is not such a bad thing. I was asked by Sariah’s best friend, a gifted musician, to sing a solo at a road show. Little did I know that my part was that of a monotone Elder. I should have figured it out when she didn’t think I needed any practice. Still, I was a huge success and bowed several times after.

I grew up singing tenor, ten or twenty miles away from everyone as I worked in the forest. I liked to sing and write my own words to songs often because I could not remember the right ones, but also because I didn’t want the song to end.

I also sang in a choir, who said my singing was an acquired taste. So, I kept going. I am not joking; my illustrious singing career started in 1995. As a 17-year-old, I was part of a young men’s choir that sang in the Salt Lake City Tabernacle. I was distinguished for my facial expressions while singing. I raised my eyebrows, smiled, wrinkled my forehead, and sang loudly. After marriage, and not before, I joined a choir with my wife. I sang bass, bas-ically so bad that they asked me not to come anymore. So, I sang alto instead and all-tol-d me to stop singing. I understood and left without a fuss, knowing how hard it is to sing when someone else makes you look bad.  Other choir members couldn’t handle my greatness.

Why would I mention all this? Certainly not to brag, but because one voice off-key, whatever that means, can still contribute to the choir, just like an employee or board member can contribute to a company or association. One voice, singing out of tune, can still contribute a unique voice in a meeting. We need that perspective. What makes a choir so good is to have them sound like a single person, but soloists, harmonies, and instruments complement choirs. I have traveled throughout the industry, preaching to the choir about NHLA and RAHC. Many people approached me afterward and shared an experience or impression. They are all valid and essential.

My point is simple: speak up and sing out about hardwoods everywhere you go.  If we don’t speak up then we are part of the problem. No one knows hardwoods like we do, so tell them about what you do and why you do it. Don’t worry about being boring or offending someone; say something about wood to help them realize that it is a critical part of their life. That is the message we need to sing on one common ground.

Dallin Brooks NHLA Executive Director dallin@nhla.com

| 901-377-0182

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Event Snapshot: Framing the Moment

By THEA ROSE LEMBERGER

This past week, the U.S. Hardwood sector came together at the Hardwood Industry Needs Workshop–to push the industry forward and into the future. The event was hosted at the National Hardwood Lumber Association (NHLA) Headquarters in Memphis, Tennessee (May 8-10, 2024).

The last industry-wide event of this nature occurred over a decade ago. Back in 2010, the Hardwood Leaders Forum consisted of two forums held in Charlotte, NC, each with its own goals and objectives for strengthening the U.S. hardwood industry and setting Vision 2020. The Needs Workshop aimed to revisit and build on that vision.

All the latest and greatest in hardwood utilization and market share capture opportunities were covered in hopes of reinvigorating the Industry members to see that there is more we can do with wood.

While innovation is never boring, a bright future starts with solving the problems of today. That was the purpose of the Needs Workshop, facilitating conversation on what challenges exist, and brainstorming

While innovation is never boring, a bright future starts with solving the problems of today.

solutions to address those in the near and long term. The event split time between stimulating presentations with large group discussions to break out interactive smaller-group Socratic dialogue.

While in one of the breakout rooms, a poignant story was shared by one of the wood product producers–a story of success, where government, industry, and state and academic research supported a business opportunity and growth for a local sawmill. After years of trying to reach out to academics through gridlock phone systems, and unanswered emails – there was a change in the form of government. Shortly after the governor of Tennessee was elected, with strong ideals in supporting rural community health, Thompson

Appalachian Hardwoods was paid a visit. The governor and his team asked how they could serve the business and showed appreciation for the business’s accomplishments for the two decades before his seat in office. What transpired was a beautiful demonstration of collaboration, where data and market research provided to the mill, tooled them with new thinking and a new approach to adapt and pivot in the marketplace. During a time of turmoil when hundreds of mills are shutting down–they’re opening a second sawmill.

Many left the workshop invigorated, inspired, and enthusiastic. Other seasoned professionals left curious, wondering how their colleagues would implement the collaborative ideas.

If you were not able to attend the event, be assured your voice was missed. This event snapshot frames five key takeaways from the Workshop-a more thorough analysis and report on key themes, action items, and recommendations in the coming weeks.

Five Key Takeaways

1. Market Capture Opportunity Exists. There are existing American hardwood lumber needs that are getting fulfilled by foreign timber species, i.e., Military applications. Whether it’s in America or abroad, Hardwood’s market share is being left on the table.

2. Workforce and Adaptability. Labor shortages and mills' ability to adapt to market fluctuations are key challenges producers face. Career advocates and community-to-education-to-career pipelines are needed, while in some cases equipment-based technical assistance is a need. Others need market research to facilitate a shift.

3. Collaboration for Supply Chain Resiliency. The hardwood industry has a network of supply chains that are made up of essential and non-essential wood products–all with varying value and importance to resiliency. The networks require collaboration to foster supply chain resiliency, ranging from wood pellets to wood energy, sawlogs to biochar, and pulp to stairs to floors. Collaboration is needed across sectors, the electrical industry, and especially with the architecture, engineering, and construction (AEC) sector.

4. Communication and Competition. The environmental messaging and communication of the industry still have room to improve in consolidating its voice; especially in key promotional marketing that separates wood from competition substitute products. But also, through better synergies across associations and between government agencies.

5. Information sharing must continue. There are needs and frustrations on each side of any partnership in the Hardwood Industry. Information sharing both through associations or directly from industry to academia and environmental organizations is paramount to support the foundation of the Industry-loggers to the mills to the end users. And rinse and repeat. Let’s do this again.

NHLA Pushes the Design Community Forward

Iabsolutely love quotes. It’s amazing how someone has already eloquently said what you’re trying to say. Take this for what it is, but comedian Chris Rock said “Only dumb people try to impress smart people. Smart people just do what they do.” And man, do they. Last month I had the honor of interviewing three individuals for our ongoing video series aimed at capturing the attention of key decision-makers within the design industry, advocating for the integration of hardwood into their projects. Dr. Adam Taylor from the University of Tennessee, Dr. Brian Bond from Virginia Tech and Adam Senalik, General Engineer from the US Forest Service. I want to thank them for their time, their ability to share their extensive knowledge and for just doing what they do! Our newest interviews dive into a diverse range of topics, ranging from carbon sequestration to economic impact, selective harvesting, infrastructure, and the aesthetics and structural properties of hardwood. Each discussion serves as a building block, contributing to the overarching goal of advocating for the use of hardwood in design projects.

The journey began with a single interview, focusing on the concept of biophilic design. This initial step served as a testament to the dedication to our mission. Now, five months later, our one video has multiplied. With the completion of three additional interviews, the scope of the project has expanded exponentially. The completion of these interviews marks a significant milestone in NHLA's journey. Moving forward, NHLA's resolve remains unyielding as we continue to push boundaries, challenge perceptions, and advocate for the integration of hardwood into design practices.

We are committed to amplifying the voices of experts and driving meaningful change in the industry. Together, let’s continue mov-

ing forward, fueled by passion and purpose, toward a future where hardwood stands as a symbol of both aesthetic beauty and environmental stewardship.

John Hester NHLA Chief Development Officer j.hester@nhla.com

| 901-399-7558

Dr. ADAm TAylor from The UniversiTy of Tennessee

Welcome

New Members Milestone Members

(March - April)

ACTIVE MEMBERS

Bourne Lumber, Inc., Crockett, VA

Doe Run Lumber LLC, Mifflintown, PA

Jackson Hardwood, LLC, Jackson, LA

Rustic Lodge Works, Hanceville, AL

Unaka Forest Products, Inc., Jonesborough, TN

R & R Wood Products, Taylorsville, IL

ASSOCIATE MEMBERS

Crosswood Corporation, Waynesboro, VA

Dansons USA Inc., Scottsdale, AZ

Therma Wood Technologies, Polson, MT

SUSTAINING MEMBERS

Clifton Freight Services Inc., Little Rock, AR

Forestry Trader, Lincoln, NE

Hamilton Intermodal LLC, Nashville, TN

Congratulations to these companies who are celebrating significant milestone anniversaries with NHLA.

5 YEARS

ALTAIR INDUSTRIES, LLC

Active | June 2019

EFM TRANSPORTATION

Sustaining | May 2019

HART COUNTY HARDWOODS, LLC

Active | May 2019

MAPLE RIDGE FOREST PRODUCTS

Active | June 2019

QUALITY HARDWOODS LLC

DBA FORKS LUMBER CO.

Active | June 2019

10 YEARS

HIDDEN SAWMILL

Active | May 2014

INDUSTRIAL APPRAISAL COMPANY

Sustaining | May 2014

LAUFER GROUP INTERNATIONAL

Active | May 2014

25 YEARS

BAUMAN SAWMILL, INC.

Active | May 1999

50 YEARS

WAYNE LUMBER CO., INC.

Active | May 1974

75 YEARS

PATTERSON LUMBER CO., INC.

Active | June 1949

WAITING ON A TAX BILL

By DANA COLE, Executive Director of the Hardwood Federation

2024—from a tax policy perspective—started well. In a rare show of bipartisanship, the House of Representatives overwhelmingly passed H.R. 7024-the Tax Relief for American Families and Workers Act. The vote was 357-70. To summarize, the bill features several positive provisions for small and medium-sized businesses that populate our sector, including:

• Retroactive extension of the 100 percent bonus depreciation tax benefit, otherwise known as “full expensing.” This benefit allows companies to fully write off the cost of machinery and equipment in the same year those costs are incurred. Full expensing began to decrease at the beginning of 2023, when it dropped to 80 percent. At the beginning of 2024, it took another cut to 60 percent, and it is slated to phase out fully in 2027. H.R. 7024 restores this benefit to full strength—100 percent—starting January 1, 2023, and extends the benefit through 2025.

• Renewal of the Research and Development (R&D) tax credit, which expired in 2022. Like bonus depreciation, this provision allows companies to write off the total cost of R&D expenses in the same year the investments are made. The House bill retroactively restores this key benefit again and extends it through 2025.

• Reversion back to Earnings Before Interest, Taxes, Depreciation, and Amortization (EBITDA) for calculating interest expense deductibility. Under the Tax Cuts and Jobs Act (TCJA), this standard was shortened to EBIT, which is a less generous metric for calculat-

ing interest expenses. So, the net effect has increased costs for U.S. businesses.

• Increase in the Sec. 179 deduction limits. Right now, businesses may expense the cost of depreciable business assets up to $1.16 million. The bill raises that cap to $1.29 million.

These business provisions were paired with an increase in the Child Tax Credit, and, for the most part, Democrats and Republicans approved the bill. Things were looking positive until the Senate posed a significant challenge to this bipartisan progress.

Republican opposition in the upper chamber comes down to one part substance, one part process, and one part politics. On substance, there is concern around certain aspects of the Child Tax Credit provisions, namely the “look back” language, which allows families to use a prior year’s income to calculate the credit if their current year’s income is reduced. There is also some concern about how the bill is “paid for.” In terms of process, Senate Finance Committee Ranking Member Mike Crapo (R-ID) has raised the legitimate point that the legislation should proceed through regular order and be amended by the Senate Finance Committee. Senate Democrat leadership has avoided this step out of concern that too many changes to the bill would upset the delicate arrangement forged in the House that allowed the bill to pass the lower chamber. And finally, politics are ever present in all negotiations here in Washington—whether it’s a tax bill, appropriations, a farm bill, or anything in between. Next year is critical for tax policy as many benefits in the TCJA are set to expire—even our own Sec. 119A deduction for S-Corporations and pass-through entities. Senate Republicans are banking on the prospect of retaking control of the upper chamber after the November election and being able to hold the pen on tax policy. In sum, it appears Republicans want to hold off on this bill now and tackle all the expired and expiring provisions in one big bill next year.

It is hard to envision a scenario where H.R. 7024 becomes law in 2024. Nevertheless, the Hardwood Federation team is visiting with Senate offices on a near daily basis urging for action on these critical tax benefits. We remain committed to following its progress and will provide timely updates on any developments.

in Innovation: Navigating the Future of Hardwood Markets

By BRENNAH HUTCHISON

IN THE HEART OF THE HARDWOOD LUMBER INDUSTRY

lies a challenge that transcends mere marketing strategies—it’s about crafting a compelling narrative that resonates with the world beyond our sawmills and forests. At the recent Hardwood Industry Needs Workshop hosted at NHLA headquarters last month, attendees echoed concerns about the industry’s branding and the vital need to educate the broader public on the sustainable and environmentally conscious nature of hardwood products. Scott Dane, the Executive Director of the American Loggers Council, shed light on a pivotal truth during his presentation on “Timber Harvesting & Hauling”: our market’s image and potential hinge not just on facts and figures, but on the emotional connection we forge with our audience:

While participating in the NHLA [Hardwood] Industry Needs Workshop it was enlightening to learn about the threats and challenges to the domestic hardwood infrastructure and markets. Over 100 hardwood mills have been forced to shut down or reduce production, during a time when hardwood imports and substitution products have increased. Often from origins that do not follow sustainable forest management practice standards at the same level that American forests do. Then literally shipping products across the ocean and contributing to climate change inducing emissions thereby increasing the carbon footprint of imported forest products. But most disturbing, was to learn that the DOD sources wood species from foreign sources while domestic sources are capable of supplying

these products from American forests. Bottom line, the U.S. has the resource, capacity, and opportunity to supply domestic wood forest products; without the current level of imports and larger carbon footprints; with higher sustainable forest management standards; while improving U.S. Forest health. The question is twofold. Does society want to buy synthetic nonrenewable products from third world countries without sustainable forest management practices with higher carbon footprints or buy renewable American forest products from American forests practicing sustainable forest management that sequester carbon? Is it in the best interest of U.S security to spec material requirements that restrict U.S. material sources and depend upon foreign sources and the consequential transportation logistics increased carbon footprint?

In essence, it’s about storytelling—about merging the story of our heritage, our commitment to sustainability, and our vision for the future with the stark realities and challenges facing the hardwood industry. Dane’s plea underscores the urgent need to address threats to domestic hardwood infrastructure and markets, highlighting the detrimental effects of increased imports and substitution products on American forests and the environment. His message serves as a poignant reminder of the power of storytelling not just to educate but to inspire action and advocate for change. So, how do we, as a community, embark on this journey to tell our story in a way that not only captivates hearts and minds but also drives positive transformation in industry and beyond?

Market research company

Mordor Intelligence determined that the kitchen cabinets market is worth $75.66 billion this year alone. By 2029, they predict the kitchen cabinets market will grow to $96.05 billion, equaling a 4.89% average annual growth rate.

First off, by donating 5% of member dues to the Real American Hardwood Coalition (RAHC) and launching the website realamericanhardwood.pro, NHLA is not only investing in promoting hardwood products but also crafting a narrative that emphasizes its beauty, durability, and sustainability. This storytelling approach aims to educate and engage architects, designers, specifiers, builders, and other professionals, empowering them to spread the message to potential consumers.

Secondly, consider the upcoming generation of homeowners, particularly millennials, who are increasingly interested in sustainable design. According to a recent NKBA/John Burns Kitchen & Bath Market Index article, millennials (ages 27-42) are the consumer segment most interested in sustainable design in their kitchens and baths. The Mortgage Credit Availability Index (MCAI) showed a slight increase in mortgage availability in April, but the demand for sustainable materials remains significant—indicating continued interest in sustainable renovations among homeowners. NKBA’s Sustainability in Kitchen & Bath Design report also highlights the rising demand for sustainable features, with a significant portion of industry professionals noting an increase in demand over the past two years. Fifty-two percent of participants stated that sustainability practices in kitchens were on the rise, and forty-seven percent inferred the same thing about bathrooms respectively. Millennials prioritize sustainability due to its perceived impact on health and well-being, particularly for their young families. This demographic’s preference for environmentally conscious products illustrates the importance of storytelling that reiterates the sustainable and eco-friendly aspects of hardwood products.

Moreover, market research company Mordor Intelligence determined that the kitchen cabinets market is worth $75.66 billion this year alone. By 2029, they predict the kitchen cabinets market will grow to $96.05 billion, equaling a 4.89% average annual growth rate. The projected growth in the kitchen cabinets market presents an opportunity for hardwood markets to position themselves as the preferred choice for aesthetically pleasing and long-lasting kitchen solutions. This trend could strengthen the narrative of hardwood as a premium and durable material that enhances the communal aspect of modern kitchens, aligning with the principles of biophilic design and fostering community cohesion and individual welfare.

Apart from hardwood’s benefits as a biophilic design element, investing in hardwood floors is financially smart for homeowners. In May’s issue of Floor Focus, product director of wood/laminate for Mohawk echoed this sentiment. Though homebuying markets are down, Moore maintains that “A hardwood purchase is a question of cost versus value. With hardwood, flooring isn’t a cost but an investment.”

Thirdly, it is important to see the potential in current domestic markets, but also future markets for hardwood products. By recognizing the opportunities presented by current domestic markets alongside the potential of future markets, the hardwood industry can strategically position itself as flexible. With the crane mats market size surpassing 695 million in 2022 and projected to expand at a 4.5% CAGR from 2023 to 2032, this sector is a mainstay for the hardwood industry. However, looking forward is paramount.

For example, cross-laminated timber (CLT) is known to be a more

cost-effective and eco-conscience alternative to building materials like steel and concrete; however, as of right now, 100% of CLT is made with softwood like pine. Creating Hardwood CLT can help diversify wood as a building material and localize construction material to specific project cites. President and CEO of Crosswood, Jeremy Adams, is looking forward to establishing Virginia’s first Hardwood CLT facility, “Hardwood mass timber has the potential to transform the hardwood industry, blending sustainability with unparalleled strength and beauty. The integration of underutilized hardwoods in the production of Mass timber will have a significant impact upon future hardwood markets.” This is not just a response to market demands but also a strategic move towards sustainable construction practices. Leveraging the abundant Appalachian timber reserves (Yellow Poplar), Crosswood’s product lines, including HARDLAM panels and GLULAM beams, exemplify the fusion of innovation and eco-consciousness. By tapping into localized hardwood Mass Timber solutions and committing to sustainable sourcing and innovative manufacturing, Crosswood is not only setting new benchmarks in the hardwood and construction sectors but also contributing significantly to a greener future in building.

Furthermore, a study published this year in the journal of Transportation Research Record, examined the feasibility of using forest residues, particularly logging residues, as feedstock for sustainable aviation fuel (SAF) production. The study, focusing on the Southeast U.S.A., demonstrates that the choice of technology and facility scale significantly affects the breakeven cost and maximum supply quantity of SAF. The most economically efficient system, employing rotary shear milling and pyrolysis conversion, could potentially produce up to 650 million gallons of SAF, with approximately 62% sourced from hardwood residues. As advancements in technology continue to reshape industries, including forestry and lumber processing, insights from the hardwood industry echo the importance of staying at the forefront of innovation.

Consequently, this leads us to our final consideration. Insights on automation versus optimization highlight the importance of staying ahead of technological advancements in the hardwood lumber industry. Embracing optimization techniques not only improves efficiency but also supports the narrative of innovation and progress within the industry. By understanding and implementing these technologies, hardwood mills can enhance their operations and profitability, further reinforcing the industry’s image as forwardthinking and adaptive. NHLA’s Chief Inspector, Dana Spessert, pointed to the crucial difference between “Automation” and “Optimization” during his presentation at NHLA’s Hardwood Industry Needs Workshop and stressed the importance of evolving technologies in the hardwood lumber industry, “While automation is a way to avoid high cost, optimization replaces labor cost and takes automation to another level. For example, an optimized edger can produce dimension lumber more efficiently by maximizing yield and minimizing waste through precise cutting.” Moreover, Spessert underlined the significance of understanding and maintaining new technologies. For several years now, the NHLA Inspection Services

team has been helping hardwood mills improve their operations by providing courses like “$PC, Control the Process to Improve Lumber Value” that teach process control techniques developed by Spessert. These techniques have saved companies hundreds of thousands of dollars, improved their throughput, and increased profitability.

In conclusion, how can we, as a community, endeavor to tell our story in a way that resonates deeply and inspires positive change in the industry and beyond? The journey through the hardwood industry’s current and future landscape reveals a story of innovation, sustainability, and resilience. From the challenges highlighted at the NHLA’s Hardwood Industry Needs Workshop to the opportunities presented by emerging markets, the industry stands at a pivotal moment. By embracing storytelling and branding initiatives, the industry can amplify its message of beauty, durability, and sustainability to a wider audience.

Likewise, the shifting preferences of millennial homeowners towards sustainable design highlight the importance of aligning narratives with consumer values. As the kitchen cabinets market burgeons and the potential of hardwood cross-laminated timber (HCLT) becomes increasingly evident, hardwood products are poised to lead the way in providing premium, long-lasting solutions. The feasibility of utilizing forest residuals for sustainable aviation fuel production

NEW CLASSES THIS SUMMER

Are you ready to gain valuable skills? Then it’s time to consider the NHLA Inspector Training School. NHLA is excited to bring to you two new classes this summer.

KILN DRYING SHORT COURSE

Sponsored by SII Dry Kilns

When: June 18-21

Where: NHLA Headquarters | Memphis, TN

NHLA is offering a 3-day course on Kiln Drying. Speakers include Dr. Adam Taylor, University of Tennessee Extension, Mr. Dana Spessert, NHLA Chief Inspector; as well other industry experts. You will develop an understanding to dry wood for value and defect reduction.

Who should attend: Yard personnel, kiln operators and supervisors.

CONSTRUCTION GRADES AND GRADING

When: July 15-18

Where: NHLA Headquarters | Memphis, TN

This is a 3-day course on Construction Grades and Grading. This course will cover NHLA Construction Grades (Car Stock, Select Car Stock, etc.) as well as the concepts and definitions used in construction grading

Who should attend: This is a MEMBERS ONLY event. Graders and Inspectors from NHLA member companies are invited to attend and learn the “how-to” of Construction Grading.

Have questions? Contact Geoff Webb at 484-695-9029 or g.webb@nhla.com.

and the insights into automation versus optimization further emphasize the industry’s commitment to innovation. By staying at the forefront of technological advancements and implementing optimization techniques, hardwood mills can enhance efficiency, profitability, and sustainability, solidifying their position as forward-thinking leaders in the market.

Ultimately, the hardwood industry’s narrative is one of adaptation and evolution. Through strategic storytelling, innovative solutions, and a steadfast commitment to sustainability, the industry is poised to navigate the challenges of today and seize the opportunities of tomorrow.

By embracing storytelling and branding initiatives, the industry can amplify its message of beauty, durability, and sustainability to a wider audience.

SOURCES:

John Burns Kitchen & Bath Market Index, https://nkba. org/research/nkbas-sustainability-report-indicates-driversof-rising-demand/

Mortgage Bankers Association, https://www.mba. org/news-and-research/newsroom/news/2024/05/07/ mortgage-credit-availability-increased-inapril#:~:text=The%20MCAI%20rose%20by%200.1,MCAI%20 rose%20by%200.3%20percent.

Mordor Intelligence: https://www.mordorintelligence. com/industry-reports/kitchen-cabinets-market

Floor Focus, https://floorfocus.mydigitalpublication.com/ publication/?m=62450&i=821768&p=1&ver=html5

Andreucci, Maria Beatrice, et al. “Exploring challenges and opportunities of biophilic urban design: Evidence from research and experimentation.” Sustainability, vol. 13, no. 8, 13 Apr. 2021, p. 4323, https://doi.org/10.3390/su13084323.

Sterling, https://www.sterlingsolutions.com/blog/timesup-for-timber/

Global Market Insights, https://www.gminsights.com/ industry-analysis/crane-mats-market

Inside Climate News, https://insideclimatenews.org/ news/20042024/michigan-tech-cross-laminated-timber/

Li, P., Yu, T. E., Trejo-Pech, C., Larson, J. A., English, B. C., & Lanning, D. N. (2024). “Assessing the Impact of Preprocessing and Conversion Technologies on the Sustainable Aviation Fuel Supply from Forest Residues in the Southeast U.S.A.” Transportation Research Record, 0(0). https://doi.org/10.1177/03611981241230508

The Veil of Stain: Sap, Fungal, Log and Blue

By DANA SPESSERT, Chief Inspector

This month let’s discuss stain. Spring is the time for rain and staining for hardwood logs and lumber. Stain comes in various forms and causes, making it very difficult for lumber inspectors to identify whether it is a defect!

LET’S DISCUSS THE MOST COMMON TYPES OF STAINS AND SOME OF THEIR CAUSES.

Sap, fungal, log, and blue stain all share a common culprit-fungus. This pervasive fungal stain is triggered by fungus spores that release chemicals, inducing a color change in the wood. It’s important to note that this type of stain is unlikely to be present in the heartwood and may only manifest as black or gray streaks. While numerous treatments are available to curb or slow the growth of these fungal stains, it’s crucial to remember that the damage cannot be reversed once done.

Chemical or enzymatic stains happen when chemicals in the wood react to air to form a new chemical that is darker in color. This type of stain is primarily due to slow drying conditions and worsened by improper log storage and poorly maintained dip tanks. An illustration of this type of reaction is the effect of taking a bite out of an apple. When exposed to air, the flesh of the apple typically turns brownish.

LET’S NOW DISCUSS HOW STAIN IS TREATED WHEN GRADING HARDWOOD LUMBER.

Three defects are allowed in a clear face cutting if they can be removed by surfacing to a standard surface thickness: stains, checks, and warp. Unfortunately, Hardwood Inspectors typically do not have a planer handy to run the lumber through, so they must use experience and good judgment to determine if the stain will surface off.

Over the years, Inspectors have employed numerous methods to remove or attempt to remove outer layers of wood to help make the decision. One method is to sharpen an edge of the lumber rule and scratch the surface of the stained area to see if it will come out. Another method is to use a power hand planer, preferably a battery-powered version, for convenience.

In the end, it’s best to stop or eliminate the staining problem before it reaches the logs and lumber, but when it does, give the Inspectors the tools they need to make the correct call and ensure that it does not create a bigger problem with your customers.

Send your lumber grading rules questions to d.spessert@nhla.com or call me at 901-399-7551.

DOWNLOAD THE NHLA LUMBER GRADING APP

Iron staining happens by a chemical reaction between extractives in the wood and iron in steel products, such as nails, screws, and other fasteners. Eliminating or reducing any contact with bare metals while handling green lumber is an excellent way to reduce the impact of iron staining. Also, many dip tanks for fungal staining can set the pH balance of the dip chemicals to remove the iron stain from the surface. Usually, you can remove the stain by surfacing the lumber a small amount. However, many foreign buyers do not understand the process of converting lumber into products, so it is best to keep the stain off the lumber altogether if possible.

EDUCATIONAL OPPORTUNITIES

JUNE

June 18-21

JULY

July 15-18

New New New

Kiln Drying

A 3-day course focused on Kiln Drying. You will develop an understanding to dry wood for value and defect reduction. Speakers include Dr. Adam Taylor, University of Tennessee Extension, Mr. Dana Spessert, NHLA Chief Inspector; as well other industry experts. Yard personnel, kiln operators and supervisors should attend.

Sponsored by: SII Dry Kilns

Venue: NHLA Headquarters Location: Memphis, TN

JULY

New

July 8-11

Effective Safety Management & Leadership Strategies

A 3-day safety leadership course focusing on safety and creating a culture of safety at your site. The seminar will be taught by EHS Support LLC, a new NHLA member company. EHS Support is a US company that originated in 2005 and has expanded globally. The trainers have over 25 years of experience in environmental, health and safety training.

Venue: NHLA Headquarters Location: Memphis, TN

Construction Grades and Grading

A 3-day course on Construction Grades and Grading. This course will cover NHLA Construction Grades (Car Stock, Select Car Stock, etc.) as well as the concepts and definitions used in construction grading.

This is a MEMBERS ONLY event. Graders and Inspectors from NHLA member companies are invited to attend and learn the "how-to" of Construction Grading.

Venue: NHLA Headquarters Location: Memphis, TN

July 23-25

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.

Host: Ron Jones Hardwood Sales

Venue: Franklin Industrial Commercial Development Authority - Emerging Technology Center Location: Franklin, PA

Instructor: Tom Byers, National Inspector

AUG

August 6-8

3-Day Walnut Lumber Grading

A 3-day course focused on Walnut, a high value species with several Grading Rules exceptions. Attend and learn how to get the most value out of your walnut production.

The course is designed for experienced Hardwood Lumber Inspectors who need to have a more in-depth knowledge of Walnut lumber grading.

Venue: NHLA Headquarters Location: Memphis, TN

Instructor: Benji Richards, NHLA Industry Services Sales Manager

August 12-23

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, NHLA ITS Instructor

AUG

August 27-29

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.

Host: Forcey Lumber & Veneer

Venue: YMCA Bigler

Location: Bigler, PA

Instructor: Tom Byers, National Inspector

August 28-30

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: NHLA Headquarters Location: Memphis, TN

Instructor: Roman Matyushchenko, NHLA ITS Instructor

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.

www.hardwoodreview.com

A decade ago, imports from Canada and Mexico made up 23% of all of kitchen cabinets shipped to the U.S (by value), with China responsible for most of the rest. However, imported cabinets from Canada have shown fairly steady growth since, with shipments increasing in value for a third straight year in 2023, reaching a 10-year high. Imports from Mexico, which were a minor contributor to the overall U.S. cabinet market back in 2014, started growing in 2017. That growth exploded in 2020, with values more than doubling that year and again in 2021. While receipts from Mexico did slow significantly in 2023, they were still more than five times larger by value than in 2019. And, the combined share of total U.S. cabinet imports from these closest neighbors had risen to 28% by 2023.

With nearshoring trends continuing to bring manufacturing closer to the U.S., ongoing anti-dumping investigations into Chinese-made cabinets being transshipped through other Asian nations, and a positive long-term outlook for cabinet demand, we expect continued supply growth from Canada and Mexico. MasterBrand cabinets operates four manufacturing plants in Mexico, and American

U.S. Imports of Cabinets from Canada and Mexico Canada Mexico

Data: USITC

Woodmark just opened its fourth Mexican facility. Along with strong growth in Mexican furniture manufacturing, there has been a much stronger pull for U.S. hardwood lumber. 2021, 2022 and 2023 were the three strongest years on record for U.S. hardwood lumber exports to Mexico. While first-quarter lumber exports to Mexico were down 9% year-over-year, that reflected slowing U.S. demand for finished wood products, not a shift in Mexican lumber sourcing. And, even after that slower start, 2024 is still projected to be the fourth strongest year ever for lumber exports to Mexico. The direct impact of rising U.S. receipts of Canadian cabinets on Canadian demand for U.S. lumber is less clear, but the weak Canadian dollar should keep cabinets flowing into the U.S. this year.

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.

Index for April, which is published the first week of May.

HMR Demand Index (HDI)

Wood

Board Road

Pallets

Railroad Ties

www.rta.org

5 Key Follow-Up Actions for Effective Legislative Engagement

By Nate Irby, Ph.D., Executive Director Railway Tie Association

Spring/early summer marks the Washington, D.C., fly-in season, a time when industry representatives come together to unify and distribute trade association/group messaging to elected officials.

This activity is not only beneficial, but it is also empowering, because it allows industry trade groups to organize visits, prepare messaging, and lead members through the halls of the Senate and Congress for brief meetings with legislators and/or their staff to share their positions.

While the content of these meetings is important for providing substance, the delivery and presence are equally significant. Capturing attention and conveying meaningful and impactful information in such settings can lead to profound momentum. Therefore, messaging should be clear, concise, and free of static, while the delivery should be welcoming, sincere, and brief.

However, one critical aspect often overlooked is the follow-up and fulfillment of action items. At the end of each meeting, the group should prepare a summary articulating the topics covered to ensure the receiving entity has understood the key points. Additionally, a clear follow-up plan should be established to set a tone of accountability and continuation of engagement.

CONSIDER THESE FIVE FOLLOW-UP

ACTIONS:

Meeting Summaries: Prepare detailed summaries of each meeting, highlighting key topics and agreements made. Share these summaries with all participants and stakeholders.

Action Item Assignments: Assign action items to specific individuals or groups responsible for follow-up tasks. Clearly define deadlines and expectations for completion.

Follow-up Communications: Send thank you emails or handwritten notes to legislators and their staff, reiterating the key points discussed and any commitments made during the meeting.

2.9

Continued Engagement: Maintain regular communication with the legislators and their staff to provide updates on relevant issues and continue building relationships. Offer to host legislators at site visits, with participating members, especially during recess periods.

Evaluation and Feedback: Conduct a post-fly-in evaluation to assess the effectiveness of the meetings and gather feedback from participants for future improvement.

By implementing a thorough followup plan, our industry can ensure our fly-in efforts result in a meaningful and lasting impact on legislative outcomes.

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: A lot of rain lately and likely to continue over the near term. Log supplies and logger availability is decreasing and some mills will be left out on getting any logs.

ATLANTIC

West Virginia: A lot of mills had downtime because of log inventories.

Virginia: Weather has been wet and poor conditions for logging. All hardwood markets are slow in demand and price for the most part. Tie receipts have been cut.

NEW ENGLAND

New England 1: Log prices are forcing mills to keep low log inventories. Wet weather is keeping loggers out of the woods as well. Tie production slowed

this month due to market conditions and wet weather. Most mills trying to get their upper grade white woods sawn before warm weather.

Pennsylvania: Current log inventories are terrible due to record rainfall amounts. Overall no change in hardwood markets from last month.

MIDSOUTH

E Texas, NW Louisiana: Log piles are getting smaller and smaller with all the rain.

SOUTHEAST

Kentucky, Tennessee: Soft lumber demand continues to push production toward industrials. This is causing a surplus for pallet and ties.

Mississippi: Tie demand remains strong.

www.nwfa.org

EXPECTED DEMAND BY COLOR:

According to Hardwood Floors magazine’s 2024 Industry Outlook, NWFA members expect increased demand for cleaner, more natural wood colors with matte sheens. Survey respondents said that consumers have been avoiding darker colors such as red and orange along with high-gloss finishes.

www.ahec.org

VIETNAM & UK GROWING, CHINA & EUROPE STILL SLOW IN Q1 2024

By Tripp Pryor, AHEC International Program Manager

The latest US hardwood lumber export statistics show a drop of 6% in the first quarter of 2024 compared to Q1 2023, with decreases of 19% in the China market and 18% less lumber going to the European Union. However, exports to other top markets are preforming a bit better. The United Kingdom has imported 34% more lumber so far this year, and Vietnam is up 22% to 44 million board feet.

Vietnam imported 28% more yellow poplar lumber (15.6 million board feet in Q1 2024 compared to 12 million in Q1 2023), 16% more white oak (10.5 million board feet in Q1 2024), and 17% more red oak (5 million bf in Q1 2024). This is the largest volume to Vietnam in the first quarter of the year since 2021.

Broadly, demand has been slow in European markets due to economic instability. A February 2024 study from McKinsey & Company asked Europeans if they planned to spend more,

about the same, or less money across a variety of categories over the next three months. 52% of polled Europeans said they would spend less money than usual on furniture – only “Jewelry” polled worse, with 56% of Europeans planning to spend less. Furniture, and especially hardwood furniture, is a luxury good, and one of the first places middle income households cut back when budgets get tight.

The UK, however, saw a 34% increase in trade of US hardwood lumber this year, led by a 99% increase in white oak lumber imports (7.3 million board feet in Q1 2024). With next year’s European Union Deforestation Regulation (EUDR) looming over our customers in the EU, the UK does not have any geolocation requirement and will likely continue to be our largest market in Europe.

For more information on international markets and upcoming AHEC events, please visit www. ahec.org

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

GREEN HARDWOOD LUMBER GRADER

DOVER, TN

Primary duties and responsibilities include consistent and accurate grading of green hardwood lumber to meet NHLA rules and regulations. The candidate must be NHLA certified or equivalent experience in order to apply.

HOW TO APPLY

Send all resumes and applications to swiftsawmill@gmail.com.

Swift Sawmill

1779 US-79 | Dover, TN 37058 931-232-8871

DRY KILN YARD MANAGER

SELECT HARDWOODS, NC

Select Hardwoods is a concentration yard with 6 kilns processing up to 12 million feet of hardwood lumber per year. Select Hardwoods is the dry kiln division of Church & Church Lumber Company. We are looking for a yard manager to join our growing team. We provide a very competitive salary and benefit package including paid vacation, SIMPLE IRA match and health insurance.

HOW TO APPLY

Please send all applications and resumes to Wilma Shell at wilma@churchandchurchlumber.com.

Select Hardwoods

A Division of Church & Church Lumber Company 5056 Boone Trail Road | Millers Creek, NC 28651 336-838-1256

HARDWOOD LUMBER INSPECTOR

SOUTH MILFORD, INDIANA

Primary duties and responsibilities include consistent and accurate grading of kiln dried hardwood lumber to meet NHLA rules and regulations. The candidate must be NHLA certified or equivalent experience in order to apply.

HOW TO APPLY

Please send all applications and resumes for this position to Dane Ruse at dane@wiblelumber.com.

Wible Lumber 7155 IN-3 | South Milford, IN 46786 260-351-2441

DRY KILN OPERATOR BURNSIDE, KENTUCKY

We are looking for an experienced Dry Kiln Operator for our plant in Burnside, Ky. Hardwood Dry kiln experience needed. Competitive wages and benefits.

HOW TO APPLY

Send resumes to at gcrawford@merrickgroup.com. Text or call with questions to 606-219-0451.

Merrick Hardwoods 138 E Antioch Ave. | Burnside, KY 42519 606-561-4146

DO MORE WITH LESS

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Ease the pain of staffing shortages with inventory management solutions made for hardwoods. DMSi is your one software partner from timber to consumer.

FRANK MILLER

LUMBER CO