What is the checkoff?
What is it?
Checkoff programs are industry-funded research and promotions programs tailored to a specific commodity. Commonly recognized checkoff programs include the US dairy industry’s “Got Milk” and cotton industry’s “Cotton, the Fabric of our Lives” ad campaigns. In 2010 a group of US hardwood industry leaders (Blue Ribbon Committee or “BRC”)came together to develop a Commodity Checkoff program for the hardwood industry. Since that time three other forest products sectors have developed and implemented checkoff programs including paper, softwood lumber, and Christmas trees. A biomass pellet checkoff is currently under consideration.
Where does it stand?
The U.S. Department of Agriculture is writing the specifics of the program and has held two public comment periods to hear the industry’s views on a proposed hardwood checkoff. Before the program can be implemented a majority of the companies paying into the program must vote in favor of moving forward. USDA is expected to announce the details of a revised checkoff and the date for a referendum vote by early 2016.
Who would be covered?
USDA’s current proposal includes hardwood lumber mills above $2M in production (both green mills and yards), plywood, and unfinished flooring. Those mills would pay $1 per $1,000 in hardwood sales; plywood would pay $3 per $1,000 and flooring would pay $.75 per $1,000.
However – the BRC supporters of the program after hearing from many in the industry have asked USDA to scale the program back to remove green mills, plywood and flooring. Under the revised program only sales of kiln-dried lumber would be assessed and at a reduced rate of $.50 per $1,000. This is approximately $10 per truckload of kiln-dried lumber.
The Hardwood Checkoff is an initiative led by a group of US hardwood industry leaders who have come together to develop a Commodity Checkoff program for the hardwood industry.
- Hardwood Leaders Forum of 2010 sponsored by Hardwood Review and USFS identified promotion as the key to growing the industry. Checkoff was highlighted as a primary means of reaching the goal and Blue Ribbon Committee (BRC) of supporters was formed.
- The BRC has asked for the program to cover only mills kiln-drying or contracting to kiln-dry lumber. Assessment is $.50 per $1,000 of sales of kd lumber. Plywood, green mills and flooring would be REMOVED from the program. Two west coast species would be removed: Alder and Pacific Coast Maple. 10% or more of funds would be earmarked for state associations.
- The Hardwood industry would fund--and manage--the Checkoff. USDA enforces when Board identifies a problem.
- Hardwood companies will vote again after five years to continue or to sunset a Checkoff program
- Referendum will be both one-company-one-vote AND one-dollar(of assessment)-one-vote. A simple majority of both would need to vote in favor for the checkoff to pass.
- USDA could call for referendum vote by 1Q16.
- Hardwood companies will vote again after five years to continue or to sunset a Checkoff program.
- Checkoff funds may be used for promotion, research and education.
- Checkoffs have demonstrated return on investments for 50 years.
The Checkoff is run by a 28-member Board geographically dispersed as follows:
Hardwood Checkoff Blue Ribbon Committee
- Jim Howard (Co-Chairman), Atlanta Hardwood Corporation
- Ted Rossi (Co-Chairman), Rossi Lumber
- Victor Barringer, CLC Hardwoods
- Chris Bingaman, Bingaman & Son Lumber, Inc.
- Bill Buchanan, Buchanan Hardwoods
- John Crites, Allegheny Wood Products
- Don Finkell, American OEM
- Jamey French, Northland Forest Products, Inc.
- Pem Jenkins, Turn Bull Lumber
- Jeff Meyer, Baillie Lumber Co., Inc.
- Brad Thompson, Columbia Forest Products
- Chris Zinkhan, The Forestland Group LLC