SBCA & SFPA Exchange Ideas of Support

Originally published by: SBCAApril 2, 2012

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On March 25, 2012, SBCA sent the following email to the Southern Forest Products Association’s Mr. Adrian Blocker, President and Ms. Cathy Kaake, Senior Director, Engineered & Framing Markets:

Adrian and Cathy,

Thanks for attending our Board and Committee meetings and getting a feel for:

1.     The state of your members' customers' perspective on the lumber design value crisis and lumber supply.

2.     The state of your members' customers' association (SBCA) and how much money we have spent protecting component manufacturers' viability through this lumber crisis and as such sales of lumber given that viability means that CMs will continue to buy lumber and hopefully soon in increasing amounts.

3.     The need that SBCA has to shore up its finances so that we can continue to serve the best interests of our structural building component industry, particularly given the money expended ensuring that we all did not succumb to economic calamity and would no longer be able to buy a significant portion of the lumber that pays for all the lumber industry grading (SPIB, TP, etc.), code and standards work (AWC), association work (SFPA, SLMA, WWPA, CWC, APA, etc.) and now the soon to be implemented USDA check-off program.

As you probably know we had a collaborative agreement with TPI where TPI was jointly funding industry testing through SBCRI. This joint funding program was initiated by our truss plate suppliers with the sole intent to be supportive of the companies that are buying truss plates/truss design software. When we put this program together the funding that TPI committed to providing SBCA/SBCRI was $850,000 over 5 years which was intended to fund fundamental truss industry research that would benefit both TPI and SBCA members. While TPI had to drop this funding commitment shortly after we started the work due to their funding situation being compromised by the economy, they set a great benchmark for a supplier association providing support to their customers' association. Given that plates are merely 5% of the cost of a truss the TPI membership has always been extremely supportive of SBCA.

Given this background it appears, per the following USDA activity, that SFPA has a golden opportunity to be very supportive of SBCA through a collaborative program that is advocated by SFPA where the project is focused on work that SBCA can do with its unique skill set supported by SFPA with is its unique skill set. Any work that SBCA can do to help grow SBCA members'  revenues in collaboration with SFPA will help grow lumber use which then grows that 45% lumber portion of the cost of a truss.

 

Lumber Check-off Invoices Mailed; Program Startups Set

Invoices from the Soft wood Lumber Board were mailed March 20 to manufacturers and importers to fund the industry’s new, promotional check-off program. Called a “Shipment/Import Quarterly Report,” the invoice is a self-reporting document. Companies will enter volumes shipped, deduct the 15 million board foot exemption, and deduct exports before calculating their assessment at 35 cents per thousand board feet on softwood lumber shipped domestically or imported into the U.S. First-quarter 2012 reports and assessment checks are due April 30. Overriding goals of the Soft wood Lumber Board are funding projects that maintain and expand markets for soft wood lumber, as well as develop new uses. Chief Executive Officer Steve Lovett expects about 300 firms to participate, and that the board will have $6-8 million available for projects in 2012. The board anticipates that it will allocate:

1.       Half of its funds for the non-residential sector, including market development initiatives and codes and standards.

2.       Another 15% will be used to support research and innovation for mass timber building systems.

3.       15% more will be spent on efforts to protect solid wood’s market share in residential construction;

4.       15% will be spent on merchandising and promotion of decking and other outdoor living products; and

5.       5% will be allocated for benchmarking and performance metrics.

The board’s request for proposals is scheduled to close March 30. “We’re looking for big ideas that can make a major impact on lumber demand across large geographies,” Lovett said. Proposals that are submitted will be reviewed during April and May. Programs are likely to get under way around July 1.

 

Working with SBCA certainly meets one criterion stated as follows; “can make a major impact on lumber demand across large geographies” given that SBCA is represents CMs across North America.

While it appears that SFPA would have a short time frame to prepare one or more proposals, we assume that you already have several in the works where having SBCA/SBCRI involved would provide a valuable contribution to the work effort and provide some needed support of SBCA programs. Beyond this we’d certainly be willing to consult with you both on a few ideas that SFPA could propose to the group on behalf of the SBCA membership for funding for SFPA/SBCA/SBCRI that we would expect SFPA could put in the form that the Softwood Lumber Board (SLB) desires. For instance we may want to work on:

1.     A testing and engineering program that shows that even with reduced design values SP trusses still make the most efficient trusses, or

2.     Developing software that robustly defines what grades would be the best to create through machine grading for the best wood fiber utilization for roof trusses, floor trusses and wall panels.

3.     A testing program that compares SP trusses to cold formed steel trusses from an ease of installation to a final performance comparison.

4.     A few other thoughts that could be very valuable for SFPA and our CMs.

Obviously SFPA is a lumber industry insider that everyone within SBCA expects to have an inside track on SLB funding as we expect that several of your lumber company members are members of the SLB board. SBCA has put in proposals and solicited funding in the past with the forerunner to this group called the Bi-national Softwood Lumber Council (BSLC). We were effectively told that the BSLC was only going to fund lumber associations and would not fund lumber customer associations without lumber association advocacy. As you will recall SFPA solicited NFBA and then worked closely with NFBA to advocate funding for an NFBA oriented program and NFBA funding was obtained. Given this experience, it is clear to us that the only chance for SLB funding success from SBCA’s perspective is for SFPA to:

1.     Work with SBCA staff early this week on a couple ideas along with any SFPA proposals already in the works and get a few really cool funding concepts defined.

a.     SFPA then takes that information and puts it into the SLB process.

2.     Fortunately we know that SFPA is far more proficient and professional with respect to knowing how to prepare a successful SLB proposal.

3.     SFPA then undertakes that background politicking, advocacy and publically advocates on behalf of our SFPA/SBCA collaborative program(s) before the SLB.

As you both so accurately stated at the meeting “SFPA is on our side.” We sure hope so, and SBCA will do its best to be supportive of SFPA’s leadership in acting on this on our side assertion. It would be particularly cool if supportive actions would lead to funding that would create the closer collaboration that SFPA desires and also provides a much healthier economic environment for both associations.

Thanks and probably the best additional thing that we can say is “Carpe Diem.”

SBCA received the following positive response from Mr. Blocker, which SBCA will be implementing in collaboration with its Executive and Lumber Committees:

Kirk,

Cathy and I very much appreciated being part of your meeting and we too have been discussing ways that we can continue to strengthen our relationship going forward.  There is no question that both of our memberships can benefit from a closer working relationship at a senior level.  On the immediate front is the call for proposals from the Softwood Lumber Board.  

As you mentioned SFPA has been successful in receiving grants from the Bi-national Softwood Lumber Council in the past and we are working to position ourselves for success with the new commodity check-off board although our resources have been strained lately by the design value changes.  Nonetheless we will be submitting a small proposal this week to begin the process.  

This is an area where we can clearly work together and across other disciplines /partners to improve the overall utilization of lumber in the building industry.  Although it is too late for the March 30th deadline, which is geared toward grants for the remainder of 2011, it is certainly not too late to begin brainstorming ideas and formulating plans to submit something later this summer for funding beginning in January of 2013.  

I suggest we have a conference call to discuss projects that will meet the SLB's criteria as well as the political priorities and realities relative to other proposals.  Generally the most impactful in the short term across the broadest market will win the day.  SFPA can act as the sponsoring organization with SBCA and other partners providing the research, engineering and analysis.  I will contact you in the next couple of days about beginning that process.  

Many thanks for your continued leadership and support of our industry. 

Best regards,

Adrian Blocker

This is an exciting time for SBCA. Gaining lumber-focused support to advance SBCA member interests based on all the lumber the structural components industry buys has been a long time in coming and is a very welcome approach – lumber suppliers serving and supporting the best interests of lumber buyers is a very significant development.

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