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Weekly News 12.12.11

Posted By John Dorka, Tuesday, December 13, 2011

Weekly News 12.12.11

  • OFA Loses Member Larry Kruger. It is with sadness that I report that Larry Kruger, owner of ROK Logging from McArthur, Ohio and an OFA Master Logger, died last Friday December 6, 2011 in Lexington, KY following an illness. Details on arrangements are not completely known at the moment, but it is reported there will be memorial services for Larry on Friday, December 16, 2011 at the Garrett-Cardaras Funeral Home in McArthur. Time of the service and other details will be forwarded as soon as they become available.
  • Notes from the December Issue of the Hardwood Leader (from Hardwood Publishing):
    • It is expected that Chinese imports of American hardwoods will slowly increase into 2012, surpassing 2011 totals
    • Low-grade market opportunities remain very positive
    • Hardwood lumber exports for the first nine months of 2011 totaled 899 million BF, an increase of 10.8% from the same period in 2010
    • The US ITC has determined that Chinese-made engineered flooring was subsidized and dumped and injured US manufacturers. As a result, countervailing duties are now in place for the next 5 years. However, it is expected to have little impact on the amount of engineered flooring imported to the US, as the Chinese are expected to broaden import sourcing to a wider array of countries
    • Although we are experiencing recent declines in fuel prices, gas may be up to $4/gal by early next year according to some analysts. However, the Energy Information Administration forecasts a 2.25% average decline in 2012 pump prices
    • Residential furniture factory shipments were up in August 2011 3.4% from August 2010; contrarily, furniture imports for the first nine months of 2011 were down 2.7% from the same period in 2010.
    • Housing:
      • Single family housing starts edged up 1.7% in September but permit authorizations were off slightly from August.
      • MMedian home sales prices fell 14.9% from June to September 2011.
      • Builder confidence for newly built, single family homes has moderately increased in October, with most builders rating their assessment of market conditions as "fair.”
      • The inventory of existing single family homes for sale is at an 8.5 month supply, but sales for the third quarter of 2011 were 18.5% stronger than the same period in 2010.
      • With declining home prices and mortgage rates, the National Association of Realtors Housing Affordability Index for September 2011 was the third highest on record (starting in 1971).
    • A Survey of Professional Forecasters for the Federal Reserve Bank of Philadelphia lowered expectations for GDP growth to 2.4% in 2012 and 2.7% in 2013, but raised expectations for unemployment, expecting an average unemployment of 8.8% in 2012, 8.4% in 2013, and 7.8% in 2014.
    • Durable wood manufacturing lost 14,700 jobs from February through July 2011 but has since gained 2,600 jobs.
    • Businesses:
      • National Industrial Lumber Co. (NILCO) of Heath, Ohio purchased Canfield Manufacturing Inc., a secondary manufacturer of industrial hardwood and softwood lumber in Canfield, OH.
      • Kraftmaid (Cleveland, OH), a division of Masco Corporation, is eliminating 175 jobs at their Orwell and Middlefield, OH plants. Kraftmaid has lost almost 75% of its workforce since 2007, going from 4,000 employees to less than 1,200 with the latest reductions.
  • Moody's Downgrades Outlook for Paper and Forest Products Industry. Last week, Moody's Investors Services, Inc. downgraded the sector to "negative” from "stable” based on expectations of 1-2 years of weaker demand and prices resulting from weak US and European economies, increased supply from China, and the shift to electronic communications from paper. You can read more about this on
  • PUCO to Vote on AEP Rate Plan. Previously we mentioned that the proposed AEP rate plan may seriously affect OFA business members who operate in the GS2/GS3 usage categories, and this was highlighted in a Columbus Dispatch article. This week PUCO will vote to on the proposed plan, as they have been weighing this issue among several others. It is unclear at the moment how PUCO will vote on the plan. Those opposed to the plan will still have 30 days to request a rehearing.

  • National Trucking Groups Agree on Legislative Proposals. This fall two national trucking groups, the American Trucking Association (ATA) and the Truckload Carriers Association (TCA) agreed in principle on an approach to raise truck weight limits. The groups agreed to support both an 88,000# limit for 5-axle tractor trailers as well as a 97,000 pound limit for 6-axle configurations (supported by the AgHaul and CTP coalitions). This is an outstanding development as some national trucking groups have not necessarily been supportive of the GVW reform proposals put forward. ATA agreed to support the 88,000# limit with the caveat that trucks would be required to have increased breaking power, insuring that they meet current federal brake rules. The set maximum braking distances of 250 feet at 60 mph. To meet the heavier truck load standards, truck would have to have enhanced brake pads. As reported earlier, the trucking coalitions are supporting SETA (HR 763) and working to get the provisions of this bill included in the Highway Reauthorization Bill, which appears headed for Congressional action sometime after the first of the year.

  • Boiler MACT Legislative Summary Paper. Here is a brief summary of the status of current legislation (HR 2250 / S 1392) "The EPA Regulatory Relief Act of 2011. HR 2250 was included in the House jobs package, which many in the industry consider critical in addressing issues relating to development of Clean Air Act rules for industrial and institutional boilers. The statement summarizes what the legislation does and mentions some of the challenges that still remain. One of the more troublesome challenges is that the legislation still does not consider many wood fiber sources as biomass fuels, but instead considers them "wastes”, thus making them regulated under incinerator standards which are extremely onerous. They are so strict that in many cases, businesses choose to landfill such things as paper recycling residuals, pulp sludge, wood construction debris, and railroad ties rather than burn them for fuel.

  • Maine Executive Order Puts Forest Certification on Equal Footing. Here is a link to an article from the Wall Street Journal on recent action in Maine to require Green Building standards on new state construction. But more importantly, the Green Building standards must give certification credits equally to forest products grown under all third-party verified certification systems including the Sustainable Forestry Initiative (SFI), Forest Stewardship Council (FSC), American Tree Farm System ATFS), and Programme for the Endorsement of Forest Certification systems (PEFC). Currently the LEED standards give credits only to FSC certified wood, so it will be interesting to see if the USGBC elects to expand the standards and allow wood certified under other systems. In other actions, the National Association of State Foresters along with several other national wood industry and forestry organizations sent this letter to the federal General Services Administration urging them to consider wood a green building product and explaining current shortfalls in the LEED standards concerning certified wood.

  • SFI December Newsletter. Here is a link to the December Newsletter for the Sustainable Forestry Initiative. The newsletter discusses a number of issues including, among others, USDA support for wood products in construction, LEED considering opening the door for other certified wood products, and PEFC endorsement of SFI standards.

  • Smokey Bear Avoids Going Up in Smoke. The US Forest Service Smokey Bear fire prevention program was recently on the chopping block as a program that could be cut in budget reduction actions. Both the Smokey Bear and Woodsy Owl conservation icons were proposed as programs to be cut through the "YouCut” contest developed by House Majority Leader Eric Cantor, in which he invites the public to vote each week on federal spending programs that should be eliminated. However, it appears that the "axe” will be spared for Smokey Bear, according to this news paper article. Instead, voters elected to eliminate payments to states that increase the number of food stamp beneficiaries. It appears that Smokey will be around to continue fighting wildfires.

Ohio Forestry Association is managed by Offinger Management Company, a member of the International Association of Exhibitions and Events (IAEE), "Charter-Accredited" Association Management Company member of the American Society of Association Executives (ASAE) and a member of the Association Management Company Institute (AMC Institute).

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