PORTLAND, Maine — The U.S. Department of Agriculture has awarded the Maine Forest Service a $380,000 grant to develop programs to help a forest product industry hit by a sharp decline in demand for softwood species.
The USDA grant announced Monday will allow the Maine Forest Service to establish a Wood Energy Assistance Team focused on biomass heating and another program. Called the “Strengthening and Expanding Maine Wood Markets” project, it will create a new job for someone at the forest service to specialize in forest product markets issues.
“At a time of severe challenges for the pulp and paper industry, we must work across all levels of government to leverage resources and build opportunities for the entire forest products sector,” U.S. Sens. Susan Collins and Angus King said in a joint statement announcing the award Monday.
The funds are part of an $8.5 million allocation from the USDA to expand and accelerate wood-related technologies for commercial construction, power generation and other wood product innovations.
The grant comes as pricing declined for softwood species used by shuttered mills, including Verso’s Bucksport mill, Great Northern Paper’s East Millinocket mill and the Madison mill, which closed this month.
Eric Kingsley, a consultant who writes a blog for the pricing information company Forest2Market, wrote this month that Madison’s closure added to a reduction of about 2.1 million tons in the demand for softwood pulp in Maine since early 2014.
“To put this volume in perspective, 2.1 million tons equates to 192 truckloads of wood running 365 days per year — and that only represents the volume lost in the softwood markets,” Kingsley wrote.
With that drop in demand, Kingsley said prices have started to decline through the first quarter of 2016, by about 9 percent from one year ago, which he wrote has hit landowners in the Penobscot River Valley.
The drop in price has created some interest in others to find new uses for softwood species, he wrote, including wood pellet and biofuel manufacturing and wood chip exports.