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USDA Proposes 17% Hike in Softwood Lumber Assessment

Posted August 24, 2020


The U.S. Department of Agriculture’s Marketing Service division is proposing to increase the nominal assessment on imported and domestic softwood lumber to 41 cents per thousand board feet, effective January 1, 2021. 
Change jar with U.S. coinage against wood boards
The current rate of $0.35 per mbf assessment rate has been in effect since the program’s inception in 2011. Income from the assessment has ranged from $12.55 million in 2014 to $13.74 million in 2018, approximately a third of which comes from importers. 

New Conversion Factor


Additionally, the proposal would add a conversion factor for square meters to board feet. The current provision only converts cubic meters of imported softwood lumber into the equivalent volume of thousands of board feet. However, as softwood lumber is also being imported in square meters, it has been determined that adding a conversion factor for square meters would better reflect current industry practices and will help facilitate the administration of the program.

Assessments


U.S. manufacturers pay assessments based on the volume of softwood lumber shipped domestically while importers pay assessments based on the volume of softwood lumber imported to the United States through the U.S. Customs and Border Protection. Assessments are collected per mbf of softwood lumber on the amount of softwood lumber exceeding 15 million board feet (mmbf) within the fiscal year.

Notes: If CBP does not collect an assessment from the importer, the importer is responsible for paying the assessment to the Board no later than 30 calendar days of the month following the end of the quarter in which the softwood lumber was imported.

As of July 1, 2020, CBP now collects softwood lumber assessments from ALL importers of record, including those that ship less than 15 mmbf annually to the U.S. Such importers can, however, receive a refund from the SLB on assessments collected by Customs on their first 15 mmbf shipped during the year.

Small importers of record may also apply to the SLB for a Certificate of Exemption. The SLB will review the applications and issue Certificates of Exemption as appropriate.

Background


First legislated by the 1996 Farm Bill, the Softwood Lumber Research, Promotion, Consumer Education and Industry Information Order is a commodity research and promotion program financed by U.S. importers, manufacturers, and other “first handlers” of specified softwood lumber products.

Administered by the Softwood Lumber Board, a subset of the USDA’s Agricultural Marketing Service, the program is intended to strengthen and expand the position of softwood lumber in the marketplace, while also striving to develop new uses for the product within the United States.

According to the Board, additional funds from the increased assessment will enable it to maintain existing programs, while supporting new initiatives that will help maintain and expand markets for U.S. softwood lumber. The cost to the nearly 900 importers of softwood lumber from the proposed increase is estimated to be roughly $5 million. 

Public Comments


Public comments are invited regarding the proposed increase before October 13, 2020. Canadian exporters should direct their ‌input to the following address:

Softwood Lumber Board
15300 Croydon Dr, Ste 300
Surrey, BC V3Z 0Z5

Need More Information?


If you have any questions or concerns about this proposed assessment increase, don’t hesitate to contact one of our trade experts today.

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