KIRBY – As the region’s wood industry evolves, a Northeast Kingdom logger is using a $130,000 state Working Lands Program grant to develop new outlets for low-grade wood products.
Heath Bunnell started a business this summer that takes in wood waste and creates products such as mulch, compost and kiln-dried firewood.
Bunnell bought a farm in Kirby last year and spent the early part of the summer overseeing the deconstruction of a large barn on the property, which once held a brick factory and later a scrap car business. Bunnell wants to provide a market for the low-grade wood that has flooded the market since Northeast mill capacity diminished sharply in 2015 and 2016.
The forest products industry has undergone big changes lately in the Northeast. While economists say there generally seems to be a healthy demand for higher-grade lumber used in construction, there’s an oversupply of the low-grade wood that used to go to paper mills and heating plants.
Bunnell plans to charge a tipping fee to take this wood, including stumps, brush, yard trimmings, pallets, and carpentry wood waste, and process it for sale as mulch and compost. Much of it would typically otherwise go to a landfill or biomass plant. He also plans to kiln-dry firewood.
“Basically, we’re making a wood recycling center,” he said.
The reasons for changes in the biomass market are complex. Locally, there’s a political struggle going on in New Hampshire over whether to subsidize several biomass plants there that now provide a market for low-grade wood.
If they close, “that will affect Vermont and me and other landowners and other loggers,” Bunnell said, whose business now is clearing land. “We have a possibility of losing our biomass markets.”
A little over 70% of Vermont’s annual harvest from the forest is considered low-grade and suited for pulp or wood chips, and not high enough quality to be sawn into boards, said Sam Lincoln, deputy commissioner at the Vermont Department of Forests, Parks and Recreation.
Vermont loggers used to sell this pulp wood to paper mills in Maine, New Hampshire, New York and Quebec. But the market for that material contracted sharply starting in 2015. One reason was a drop in demand for catalogs, magazines and paper, though Lincoln noted that demand for cardboard is rising as people increasingly make purchases online.
Meanwhile, a strong U.S. dollar has made it cheaper to buy paper from overseas mills.
“So those two factors came together with the local high cost of doing business, or you could call it tax policy, and in rapid succession in 2015 and 2016 we saw the closure of major paper mills in Maine,” Lincoln said.
In some places, prices for low-grade wood dropped 80%.
“It was a shock wave that washed over the Northeast,” he said. “What had been historically a high volume consumption market for that low-value commodity (pulp), went away nearly overnight.”
There are no paper mills left in New Hampshire and just two in New York, Lincoln said. Many of the paper mills in Maine have closed, said Lincoln, although a Chinese company bought two Maine mills last year and has said it plans to invest in them.
That leaves Vermont loggers without a nearby place to take low-grade wood.
“This has given us a wake-up call on how dependent our forest management is on out-of-state markets and foreign trade policy and things like that,” Lincoln said.
The type of business that Bunnell is starting is a ray of hope for Lincoln, who is in the timber harvesting business himself and wants to see the industry thrive.
Bunnell said he’ll need an Act 250 land use permit before he can get started. He hopes to break ground this fall so that he can grind wood products this winter in time for next spring’s gardening season, when buyers will use bark for landscaping and gardens. He plans to sell products wholesale in southern New England and also serve as a retail center for people in New Hampshire and Vermont.
“We want to make it so people could come in and get their bark mulch or topsoil or small loads of gravel or stone for their patio,” he said.
The barn is being dismantled by a Norwich company called Keeper Barn that will use the timbers and siding for construction, said Bunnell, who lives in Kirby and knew the previous owner of the farm.
“I always liked the site,” he said.
The Working Lands grant to Bunnell, announced in June, was one of 18 grants worth more than $800,000 this year, according to Lynn Ellen Schimoler, who is with the Vermont Agency of Agriculture, Food, and Markets. The agency works with the Department of Forest, Parks and Recreation and the Agency of Commerce and Community Development to administer the grants.
The Legislature raised the budget for the 7-year-old Working Lands Program this year, and next year the program will allocate more than $1.5 million, including one-time funding for the dairy sector, Schimoler said in a prepared statement. She said the Working Lands Enterprise Board has invested more than $5.3 million in 184 projects, spread across every county.
In allocating its grants this year, the Working Lands Enterprise Board looked for projects that have an impact on the supply chain for low-grade wood and for dairy, “two industries determined by the WLEB in need of larger investments to achieve viability,” the statement said. Other businesses that received grants were K J Pratt Logging and Tree Service in Jericho, which received $15,000, and Rockledge Farm Woodworks in Reading, which received $25,000, and the Vermont Wood Works Council, which received $20,000.
“I think that there are people looking at lots of different opportunities because wherever there is an oversupply, entrepreneurs are going to pop up,” Lincoln said. “With Heath Bunnell turning away from historical markets, we’re not loading that wood up and trucking it to Maine. It can stop at a business in-state.”
