U.S. program could drive up board prices

Aim is to divert wood fiber to uses like bio-fuels

Heath Combs -- Furniture Today, January 20, 2010

WASHINGTON — A program that offers to subsidize wood fiber for renewable bio-fuels or other products could divert the U.S. fiber supply from composite wood products, according to Business and Institutional Furniture Manufacturers Assn.

For domestic furniture manufacturers, the result could be dramatic price increases to board which would not affect imported board prices.

The provision, called the Biomass Crop Assistance Program, provides financial assistance to suppliers of biomass material to conversion facilities for use in producing heat, power, bio-based products or bio-fuels, according to the U.S. Department of Agriculture Web site.

BIFMA is asking its members to request that Congress suspend the subsidies and amend the list of materials eligible for the subsidy.

The organization is arguing that the use of wood fiber products is contrary to the subsidy program's intent — to divert materials for renewable biomass that aren't otherwise used for higher-value products.

The subsidy program has about $514 million in funds to distribute.

The program could mean price increases for domestically produced board, according to Kevin Sauder, president and CEO of Sauder Woodworking.

"Our particleboard suppliers warn us that if this is not changed, the domestic furniture manufacturers could be dramatically affected since it would boost the price of North American board without affecting the importers," Sauder said. "It's a case of unintended consequences of a government proposal."

 

 

To read more about the program, click here.