Hardwood Checkoff Proposal Moves Forward, with Controversy
January 14, 2015 | 4:30 pm CST
Hardwood Checkoff Proposal Moves Forward, with Controversy

Hardwood Checkoff Proposal Moves Forward, with ControversyWASHINGTON, DC - Despite an opposition group's claim to the contrary, a "green light" has been given to the proposed Hardwood Checkoff program for further review by the U.S. Department of Agriculture, says the committee sponsoring the initiative.

The Hardwood Checkoff Committee said news of USDA's decision came via a request to the group to commit to funding the agency's work on the program for another year. The proposed Hardwood Checkoff program was published in the Federal Register in November 2013. Revisions limiting the scope of eligible products while including export sales and yellow poplar were submitted to the USDA Agriculture Marketing Service (AMS) in the spring of 2014. 

Hardwood Checkoff Committee Co-chairman Jim Howard, CEO of Atlanta Hardwood, said in a Jan. 8 statement that the group anticipates a revised proposal will be published shortly.

"It is hard to imagine an idea which has been given as much deliberation, discussion and analysis in the hardwood industry," added Jamey French, CEO of Northland Forest Products and Outreach co-chairman for the Hardwood Checkoff Committee. "While none of us who joined this Committee ever dreamed the process would take this long, we are pleased that so many have been given a say and brought improvements along the way. USDA has listened, and we are pleased that they remain committed to continuing the pursuit of a Hardwood Checkoff."

That information contrasts with a Jan. 12 statement by the US Hardwood Industry Coalition, which claims the checkoff proposal had stalled. According to the group, the AMS "has elected not to proceed further on the proposal [due to] the lack of industry support and overwhelming substantive concerns with the proposal."

“The recent statement from the Checkoff proponents suggests we are about to embark on a third round of discussion and debate,” said Jeff Edwards, Edwards Wood Products and co-chair of the US Hardwood Lumber Industry Coalition. “The Hardwood Checkoff concept has been so divisive that most major trade associations in the industry have avoided taking a position because of the contentious nature of the debate.” 

The coalition requested that AMS "officially terminate" the proposal in a Dec. 18 letter to the agency. “Quite frankly, the proponents have not made a convincing case of the benefits of a Checkoff for the industry,” said Jeff Hanks of Bill Hanks Lumber and also co-chairman of the coalition. “It’s almost like we’re being asked to buy an insurance policy where we know what the premium is, but aren’t being told what the coverage will be.”

The group claims a Coalition-commissioned study last May of 257 companies —18 percent of the 1,434 companies eligible to vote on USDA’s proposed check-off — found 83 percent of respondents indicated they would vote against the check off program as it is currently written.

Checkoff programs are collective marketing efforts funded by the product producers and run by an industry-governed board; coordinated through the USDA. Under the Hardwood Checkoff proposal, as posted in the Federal Register, funding for the program would come from sawmills producers and kiln operating facilities with annual sales in excess of $2 million. These companies would be required to pay $1 per $1,000 on sales on the raw product. Value-added – though still considered unfinished – products, such as unfinished strip flooring, mouldings, dimensioned components, S4S, etc., will also be subject to a checkoff fee, but at a reduced rate of $0.75 per $1,000 in sales. Hardwood plywood mills with annual sales in excess of $10 million would pay $3 per 1,000 square feet of production; companies would be given a “credit” for lumber purchases, which is deducted from their fee.

There were 956 comments submitted during the allotted period last year.

"We will continue to reach out to those who have suggestions for changes in the details of the proposal and believe we can find common ground," said Hardwood Checkoff Committee Co-chairman Howard. "Certainly we all agree that promotion, research and education programs need to be at the forefront if our industry is to grow and thrive."

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