Minnesota Forest Products Industry: Economic Impact, Jobs, and Sustainable Management

1. MnDOTDesign Engineers Group Workshop May 24, 2018 Ray Higgins

4. Minnesota Forest Industries

5. Minnesota Timber Producers Association • Loggers • Truckers • Sawmills • Allied Businesses

6. Counties with MFI/TPA Members

7. Economic Importance of the Forest Products Industry

8. Economic Impact of the Forest Products Industry 2014 • Value of Outputs (value of production) • Primary Forest Product Manufacturing $2.2 Billion • Secondary Forest Products Manufacturing $6.0 Billion • Total value $8.2 Billion • Minnesota’s $8.2 Billion Economy • $1.5 Billion in Wages Employ more than 28,000 people Source: UMD Labovitz School of Business. The Economic Impact of Minnesota's Forestry –Related Industries on the State of Minnesota, 2014

9. Minnesota Forest Products Industry Jobs Source: US Census of Manufacturers

10. Forest Product Industry Employment by Economic Region (2012) 5,547 6,173 4,720 11,172 2,223 1,461 Source: UMD Labovitz School of Business., DEED, MLEP

11. State Revenues Collected from Forest Products Industry

12. State Revenues Collected from Forest Products Industry • From 2005-2016 the state timber sale revenues have averaged more than $20.7 million, annually. • For every FTE the state invests in the timber program more than $250 thousand are generated in timber sale revenue. • Every dollar spent to purchase timber generates more than $41 of economic activity. Public Revenue Avg. $47.4 Million Source: MN-DNR, MFI

13. Minnesota DNR – School Trust Lands • Established by U.S. Congress when new states joined the Union. MN entered the Union in 1858. • Income earned from the School Trust Principal is distributed to schools. In FY2015, $25.6 million was distributed to public schools. • MN has nearly 2.5 million acres of School Trust Land throughout the majority of MN counties. • Sixty percent of the School Trust Land is considered commercial forest land. • Revenue generated by timber harvest from these lands exceeds $10 million annually, a portion of this revenue is returned to the “trust” account. • Opportunities to increase revenues from School Trust Lands is possible through improved forest management. Source: MN-DNR

14. Promoting the Forest Products Industry Business

15. Forest Resources Council About the Forest Resources Council In 1995, the Minnesota Legislature enacted the Sustainable Forest Resources Act (SFRA) to promote the sustained use and enjoyment of Minnesota’s forest resources.  The SFRA establishes a number of innovative policies, programs, and administrative mechanisms that focus on both site and landscape-level forest resource management.  As a principal administrative mechanism, the SFRA created and Minnesota Forest Resources Council (MFRC) to facilitate the development of many initiatives and to serve as a forum to discuss and advise the Governor as well as federal, state, county, and local governments on sustainable forest resource policies and practices. The Council facilitates the development and implementation of various programs, and advises the Governor and federal, state, county, and local governments on sustainable forest resource policies and practices.  Our Annual Report to the Governor and Legislature on the Implementation of the Sustainable Forest Resources Act provides an overview of our activities within the state.

16. Forest Management Guidelines Minnesota’s Voluntary Site-Level Forest Management Guidelines are a menu of valuable decision-making tools The guidelines balance social, economic, and environmental objectives for forest resources

17. Forest Management Guidelines The guidelines are based on seven main tenets: Broad - address a wide variety of forest resource issues Science-based - grounded in the best available scientific information Voluntary - applied by all forest landowners according to their management objectives Integrated - compile all guidelines protecting various forest functions and values in one cohesive package Flexible - accommodate a range of site-level conditions and management objectives Stakeholder endorsed - involve the full spectrum of interests in guideline development, education and monitoring Implementable - recommended practices can be widely applied.

18. Forest Management Guidelines Forest Soils Riparian Areas Visual Quality GUIDELINES Water Quality Cultural Resources Wildlife Habitat

19. Forest Management Guidelines Timber harvesting Mechanical site preparation Pesticide use Reforestation Timber stand improvement Fire management Forest recreation management Forest road construction and maintenance Biomass harvesting There are general guidelines - which apply to many forest management activities - and activity specific guidelines that cover:

20. Forest Conservation Practices and Programs

21. Forest Certification Forest Certification promotes sustainable forest management practices through the implementation of standards and guidelines. To be certified forest operations must be third-party audited against the forest certification program requirements.

22. Forest Certification • Minnesota is a leader in forest certification • Most certified acres in United States (8.4 million acres) • 1999 St. Louis County first certified county under the Sustainable Forestry Initiative (SFI). • 2005 MN DNR resources became the largest public agency certified by the Forest Stewardship Council and SFI program. • 2009 Five additional counties became certified by the FSC and SFI program. • Company Certification • Most MFI member companies are enrolled in one or more certification programs. • Certified lands help companies capture market share. • MN SFI Implementation committee. • Received four national awards recognizing promotion of forest certification (1999, 2004, 2008, 2014).

23. Forest Certification (2013) • Nearly 55% of Minnesota’s Forestland acreage is certified • 77% of the ALL timber volume sold in MN is managed to the standards of one or more forest certification programs. • Nearly 80% of public timber sold is from a certified source Source: MN-DNR, MFI

24. Minnesota Logger Education Program Provides continuing education and professional assistance. Training is focused in the areas of sustainable forest management, business management, transportation & safety Defines “qualified logging professional” in MN and continuing education requirements 475 logging business members log approximately 95% of the state’s annual timber harvest In 2010, more than 1,900 participants attended a logger education workshop. MLEP distributes an electronic training record quarterly to the state, counties and mills

25. Logger Certification Addresses the challenge of certifying timber from family forestlands – recognizes professional operations Provides a third-party audit of a logging company’s business and harvesting practices 45 logging businesses are Minnesota Certified Master Loggers

26. Interagency Information Cooperative The Interagency Information Cooperative was created from the Sustainable Forest Resources Act of 1995 (M.S. Chapter 89A.09).  The overall mission of the IIC is to enhance the access and use of forest resources data in Minnesota. The IIC is a partnership between the Minnesota Forest Resources Council, MN Association of County Land Commissioners, MN Department of Natural Resources, MN Land Management In formation Center, University of MN, and US Forest Service.

27. Forest Land Ownership and Harvest

28. Minnesota’s Timberland Ownership – 15.7 Million Acres (2013) 52% Public 42% Family forests 6% Industry, REIT, TIMO Source: U.S. Department of Agriculture, Forest Service, Northern Research Station

29. Who Supplies the Timber—2005 and 2013 2013 2005 Public timber supply is playing a larger role in the market place Source: MFI, MN-DNR

30. Minnesota Timberland Acreage Timberland acreage has increased 2 million acres since 1977 Source: NCES-FIA (survey methods changed in 2000. This may account for a portion of increased acreage).

31. Minnesota Timberland—Trees Greater than 19 inches in Diameter Source: U.S. Department of Agriculture, Forest Service, Northern Research Station

32. Minnesota Timber Volume Harvested Compared with Annual Growth (2013) Source: U.S. Department of Agriculture, Forest Service, Northern Research Station

33. Average Annual Growth compared with Harvest Source: U.S. Department of Agriculture, Forest Service, Northern Research Station

34. Forest Management In Minnesota, we grow 3 times as much wood as we harvest each year

35. Forest Management In Minnesota, we have more trees, more “big trees,” and more forestland than we did 50 years ago

36. Forest Management WeTake Care of The Forest

37. Historical Timber Supply by Source Source: MN-DNR, MFI

38. Acres of Timberland > 100 Years

39. Increase in Old Forests > 100 Years at 2.6 MM Cord Harvest Level

40. Minnesota DNR – Timber Volume Offered State FY 1990-2015 (Cords) Source: Public Stumpage Review

41. Chippewa National Forest – Timber Volume Sold (Cords) Source: USFS

42. Superior National Forest – Timber Volume Sold (Cords) Source: USFS

43. MN County Timber Programs – Timber Volume Sold (Cords) Source: Public Stumpage Review

44. Minnesota’s Forest Products Industry Current Market/Economic Conditions and Factors

45. US Mill Closures and Curtailments Source: PPRC

46. Housing Starts

47. Selected Transportation Issues • Increased truck weights w/ 6th axle—including Interstates • Bridge Postings • Timing of Winter Load Increases/Spring Load Restrictions • Hauling on Township Roads • Enforcement Issues • Input on Highway re-design projects • Highway Maintenance • Biodiesel

48. MFI Communication Activities • State Fair • TV Advertising • School Materials

49. MFI Communication Activities

50. MFI Communication Activities