UNCOMPAHGRE VALLEY – The two largest sawmills in Colorado, both struggling in the weak economy and both in the Uncompahgre Valley, got some good news recently. Chief of the U.S. Forest Service Tom Tidwell announced that the agency had found a way to “mutually cancel” some timber sale contracts that were negotiated in fatter times, prior to 2008.
U.S. Senator Mark Udall visited Delta Timber in Delta on Tuesday, Aug. 9, to talk about the deal, which he had been working on for some time.
“We do appreciate the effort the Senator made,” said Delta Timber owner/manager Eric Sorenson. “He came in recognition that the USFS did have authority to give us relief on those timber sales. He also recognized the importance of the state’s remaining mills to help process all the dead trees in Colorado.”
The “mutually cancelled” contracts will let the mills out of contracts that would have forced them to cut trees at a financial loss.
Delta Timber is the state’s second biggest sawmill. The largest is Intermountain Resources in Montrose. Intermountain receiver Patrick Donovan told The Watch that his mill is proceeding with cautious optimism to “examine the peculiarities of each [pre-2008] contract to see what the ramifications of mutual cancellation would be.
“It could be good news,” Donovan said. Intermountain went into receivership this year following a state court action over a loan default. “The lender was seeking receivership as a remedy.”
The problem has been around since the economic slowdown, and parallel drop in housing, which started together, dramatically affected demand for wood products. The mills could not afford to harvest many of their public-land tracts because prices were negotiated before “the market for timber products plunged,” said USFS Media Representative Janelle Smith in Denver. The plan is “specific to just this area,” Smith said, because of the “unique situation” in the Rocky Mountain region with “millions of acres of dead trees.”
The offer to cancel qualifying contracts affects forests in Colorado, Wyoming and South Dakota.
“We’re trying to reach a mutually beneficial agreement,” Smith said, “one that will allow us to keep removing these dead trees and keep a forest-products industry healthy enough to help us.”
The double whammy of drought and beetle infestations has left some forests in Colorado and elsewhere devastated, with mile after mile of blighted trees. The Forest Service needs to “treat” these areas to help prevent fire and begin ecosystem recovery, but it needs functioning sawmills to partner in the effort.
Intermountain’s Donovan said his mill “is operating week to week, as long as we’ve got logs. Mills are an essential tool for forest health. And we’ve lost so much capacity in Colorado.”
Delta’s Sorenson currently employs “40 people at the mill and another 20-30 in the woods.
“Two of our contracts, one on the Uncompahgre Plateau and one on the White River, didn’t have a market-value mechanism in them. They would provide us with no relief.” Without the new deal with the Forest Service, Sorenson would have been required to harvest the trees at a significant, perhaps a devastating, loss.
“We really appreciated what Senator Udall was able to do, with all the million things on his plate, to help us.”