Soaring diesel prices are pushing Vermont loggers to the brink

This commentary is by Dana Doran, executive director of the Professional Logging Contractors of the Northeast, a regional nonprofit supporting independent logging and forest trucking contractors.

A logger in Vermont recently summed up the industry’s mood to our organization in a single sentence: “I would not encourage my son to get into logging.” 

That sentiment is becoming increasingly common in the state as diesel costs soar, mills close and operating expenses continue to climb. 

In late September, diesel fuel surged past $6.50 a gallon nationally, with prices in the Northeast averaging higher in many areas. That increase represents roughly a $3-per-gallon hike compared with January.

Multiply that $3 increase by the thousands of gallons of diesel used every month by most logging and forest trucking companies, and it quickly becomes clear why rising diesel costs are unsustainable for an industry that — unlike many others — cannot simply pass those costs on to consumers. Wood prices are not set by loggers, but by those they work for or sell wood to.

Every logging operation is different, but when talking to its members, the Professional Logging Contractors of the Northeast has found that it takes about 2.1 gallons of diesel to harvest a ton of wood, or 63 gallons for a 30-ton truckload. Trucking that wood to a mill is an average 100-mile round trip and uses another 24 gallons of diesel, bringing the total to approximately 87 gallons per delivered truckload.

Using those numbers, the cost of diesel to move a load of wood from the stump to the mill has increased from about $306 per load in January to about $567 per load at September’s peak, an increase of $261 per load. Put another way, the cost of diesel for a logger to cut and deliver wood has climbed from just over $10 a ton to nearly $19 per ton — an 85% increase.

For a company harvesting 30,000 tons of wood annually, the increase raises operating costs by more than $260,000 a year on fuel alone. Diesel powers so much of the economy that its price eventually affects the cost of almost everything. For loggers, rising diesel prices are increasing daily expenses while driving up the cost of nearly every other aspect of the business, including lubricants, parts and machines.

The mood in the Northeast’s logging industry right now is grim, including in Vermont. I talk to loggers every week, and none say they are doing better than they were a year ago. Logging has faced a mounting list of challenges for years now, and diesel costs could be the final nail in the coffin for many companies already on the brink of shutting down.

One first-generation logging company owner in Rutland County, who has logged for more than a decade and seen costs for everything rise, told us that fuel is “the big one” right now, with tariffs adding to the price of certain manufacturers’ parts.

The spike in diesel costs on top of mounting expenses to run a logging business comes as major mills, including the Finch Paper pulp mill in Glens Falls, New York, have recently announced closures. The loss of Finch has hit many loggers in Vermont hard and, combined with generally stagnant pricing for wood at remaining mills and rising operational costs to cut and truck it, is putting the future of the industry in jeopardy.

“In general, no mills are paying good money for anything right now,” a first-generation logger in western Vermont told us. 

So far, little is happening to ease the diesel crisis for loggers. Wood buyers have offered some increases on certain wood types and species to help offset higher fuel costs, with the most generous increases around $3 to $4 per ton. 

While appreciated, those offsets cover less than half of the additional diesel cost loggers are facing. Before the recent spike in fuel costs, many logging businesses operated on profit margins of just 1% to 2%. Today, most operate at break-even or at a loss. State or federal tax exemptions are being discussed, but there is debate on whether they will actually provide relief. 

Focusing only on diesel risks overlooking the underlying issues that have made the logging industry vulnerable to high fuel costs in the first place. Loggers could handle higher fuel prices if they had strong markets, affordable equipment and parts, more business-friendly policies and the ability to compete for a reliable supply of skilled labor.

Sadly, they don’t. Years without these advantages have forced many to exhaust the resources and reserves they had once relied on to survive on thin, or even nonexistent, profit margins.

Loggers need relief from high diesel prices soon, because too many in this vital but overlooked industry are running on fumes.

Read the story on VTDigger here: Soaring diesel prices are pushing Vermont loggers to the brink.