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Logging industry axes production with government shutdown

The U.S. Capitol building is seen on Tuesday morning after the federal government was shutdown when the House and Senate failed to pass a bu
The U.S. Capitol building is seen on Tuesday morning after the federal government was shutdown when the House and Senate failed to pass a bu

By Laura Zuckerman

SALMON, Idaho (Reuters) - Brad Jensen has fought for decades to keep his Idaho sawmill afloat, buying and cutting logs from federal lands to sell in the boom-and-bust U.S. construction industry.

But the government shutdown in Washington has forced his family-owned business to grind to a halt, as forests have been closed to loggers amid the ongoing Congressional impasse.

If the land isn't re-opened to logging soon, the Jensen Lumber Company may lose any hope of a successful year, and could face laying off as many as 70 workers, Jensen said.

"If we don't get our logs, we'll be out of business," said Jensen, who relies on federal lands for 95 percent of his lumber supply.

On Friday, President Barack Obama and congressional Republican leaders inched toward resolving their fiscal impasse, but struggled to agree on the length and terms of a short-term deal to increase the U.S. debt limit and reopen the government.

Large portions of the U.S. government shut on October 1 after Obama and Democratic lawmakers rejected House Republicans' demands for delays to Obama's healthcare reforms in exchange for temporary government funding. The fight has since shifted to the debt limit and spending on other programs.

Thousands of federal workers were furloughed, and the shutdown has also been devastating for many private businesses, whether cafes that serve government workers or logging and sawmill firms like Jensen's, which need access to government land to harvest timber.

Last week, the U.S. Forest Service notified Jensen and other log purchasers across the nation to halt tree cutting on federal lands because of funding lapses.

Although Forest Service officials in different states are interpreting the order differently, more than a dozen projects have been shut down with little notice and other operations are limited to hauling out trees already felled, said Tom Partin, head of the American Forest Resource Council, which represents the wood products industry.

Partin said the impact is greatest in the U.S. West, from which 65 percent of federal timber sales originate.

If the shutdown continues into next week, thousands of workers will join the dozens already laid off, said Partin. Forest Service officials, furloughed because of the shutdown, could not be immediately reached for comment.

Angelica Pineda, co-owner of Pineda Logging, said nine workers with the Idaho contractor will be out of work this weekend because of the suspension. The company faces a $60,000 payment in February on a loan for its costly equipment.

"We're freaking out. Where is that money going to come from?" said Pineda.

RUNNING OUT OF TIME

Even if the government reopens in coming days, time is running out for logging projects in high-elevation forests where coming snowfall will hamper operations already restricted by contractual deadlines, environmental safeguards and competing uses of forest lands.

Some mills are looking at a dwindling supply of logs at a time when they would stockpile them to make it through the winter when there is little cutting.

"We've got six weeks of logging weather coming left here," said Jensen. "When winter comes, you can't log."

Scott Kuehn, procurement forester for Tricon Timber in Montana, said pressure is building for an operation in which a dozen federal logging projects, equal to a third of the mill's supply, are on hold.

"We're scrambling like everyone else to keep our heads above water," Kuehn said.

The postponement is hurting an industry already hard hit from reduced logging in federal forests to preserve habitat for such imperiled animals as the spotted owl in the Pacific Northwest and by fluctuations in the demand for lumber for the housing market, said Ed Regan, resource manager for a Montana sawmill operator, R-Y Timber Inc.

"We survived that," Regan said. "We were looking at a little pickup in the market when the shutdown came. The problems just keep mounting."

(Editing by Sharon Bernstein and Ken Wills)

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