State forests boost U.P. timber industry

Michigan State Roundup

Published January 1, 1994  | January 1994 issue

In a move that will help stabilize the state's timber industry, the Michigan Legislature allotted an additional $900,000 to the state's timber sale budget for fiscal 1993-94.

The funds make possible the hiring of additional state forestry workers to prepare trees for cutting and offer loggers about 100,000 cords more timber, bringing state harvests to a total of about 900,000 cords. "This new funding is unprecedented in a tight budget year," says Peter Grieves, executive director of the Michigan Association of Timbermen. Grieves adds that the legislation is a recognition of the importance of the state's timber industry.

Based on a study prepared for the Timbermen Association, the trickle-down impact of the additional timber will be about $391 of new economic activity for every cord of wood harvested. In addition, the harvest is expected to create a total of nearly 1,400 new jobs and bring an additional $1 million in state tax revenue. The state's move also "provides security for the jobs that are there now," Grieves says.

In an aggressive market climate, Grieves says, the extra timber will command high stumpage fees. With timber supplies in the Upper Peninsula (U.P.) impacted by a timber shortage in the West, stumpage fees, the price paid for the right to harvest timber, have increased by over 20 percent, Grieves says.

In addition to the vote of confidence from the state Legislature, another program that will contribute to the viability of the U.P.'s timber industry is the Michigan Forest Development Fund. The fund is a prototype for a national program that allows the state to sell $20 million in revenue bonds. The proceeds from the bond sales go toward making an investment in the best-yielding forest practices. The bondholder would be repaid with revenues from results of the program. "These programs realize the potential that exists in the forest lands," Grieves says.

Forestry adds about $5 billion to the state economy annually and employs one of every 15 manufacturing workers.

Kathy Cobb