Forest products and timber harvesting businesses were severely affected by the COVID-19 pandemic. This article describes how forest products companies used Paycheck Protection Program (PPP) loans to keep over 487,000 workers in the forest industry on payroll through the pandemic. This article also summarizes the Pandemic Assistance for Timber Harvesters and Haulers (PATHH) program, payments provided to timber harvesting and hauling businesses that experienced losses in revenue in 2020. Timber harvesting and hauling companies that received a PATHH payment reported US$1.27 trillion in total revenue lost between 2019 and 2020 because of the COVID-19 pandemic.

The COVID-19 pandemic led to drastic and immediate impacts to economies across the globe. The pandemic reduced global economic growth in 2020 by an annual rate of 3.2 percent (Congressional Research Service 2021), reduced employment, and brought challenges to supply chains. In response, governments implemented fiscal and monetary policies to address the economic impacts of the pandemic. One such example is the Paycheck Protection Program (PPP) administered through the US Small Business Administration (SBA; US SBA 2022a). Beginning in April 2020, this loan program was created in response to the COVID-19 pandemic by providing loans to businesses to keep their workers on payroll, with many borrowers eligible for loan forgiveness. In total, nearly US$800 billion dollars were allocated to US companies as a part of the PPP and as of July 2022, 94 percent of all PPP loans have been fully or partially forgiven (US SBA 2022c). Funds for the PPP loan program were exhausted in May 2021.

The Pandemic Assistance for Timber Harvesters and Haulers (PATHH) program provided relief to timber harvesting and timber hauling businesses that experienced a gross revenue loss of more than 10 percent in 2020 compared with 2019 levels (USDA 2022). Administered through the Farm Service Agency in partnership with the US Department of Agriculture-Forest Service, applications for the PAATH program were received between July 2021 and October 2021, providing up to $200 million to these businesses in the form of direct payments. Payments to all businesses were set at a maximum of $75,000.

The last major downturn to the US forest products sector was likely the Great Recession, which led to a loss of 1.1 million jobs across six forestry sectors (Woodall et al. 2011). Understanding the effects of COVID-19 and the details of pandemic relief payments can lead to a better understanding of the economic impacts of this global health pandemic on US forest products companies and their subsequent recovery. This article summarizes data on PPP loans and PATHH payments provided to US forest products and timber harvesting businesses.

PPP data

Data on PPP loans were acquired from the US SBA website (US SBA 2022a; last updated January 2, 2022). In total, nearly 12 million loans were approved across all sectors through the PPP (US SBA 2022b). To identify forest products companies, the North American Industry Classification System (NAICS) codes were obtained as a subset of the Agriculture, Forestry, Fishing, and Hunting, and Manufacturing industry titles. These represented 28 different industries including forest nurseries and gathering of forest products; logging; converted paper product manufacturing; pulp, paper, and paperboard mills; veneer, plywood, and engineered wood product manufacturing, other wood product manufacturing; and support activities for forestry. Key variables analyzed from the PPP data included company location (e.g., state), NAICS industry classification, total loan value, and number of jobs supported by the loan.

PATHH data

Data were acquired from a Freedom of Information Act request to the US Department of Agriculture, with data delivered to the author on August 22, 2022. Key variables analyzed from the PATHH data included company location (e.g., state), business type (i.e., timber harvester, timber hauler, or both), application status (i.e., approved or not approved), total amount paid, and gross revenue lost in 2020 compared with 2019.

Descriptive statistics were summarized for the PPP and PATHH data independently and analyzed using R Program software (R Core Team 2022). Total and mean values were summarized for each program by US state. A map was produced for each program, which showed continuous values for total loan amounts acquired in each state using the plot_usmap package (Di Lorenzo 2022). For the PPP data, correlations were performed between loan amounts and number of jobs supported.

PPP

Forest products companies received 35,474 loans for a total of $4.7 billion through the PPP program from April 2020 to May 2021. The SBA provided PPP loans through three rounds between April 3, 2020 and April 16, 2020 (Round 1), April 27 and August 8, 2020 (Round 2), and December 27, 2020 and May 5, 2021 (Round 3). The majority of PPP loans (46%) were provided in the third round of funding. Elsewhere, 26 percent and 29 percent of loans were provided in the first and second rounds of funding, respectively. There were 8,245 second-draw loans from forest products companies that received a previous loan, or 30 percent of all loans. Logging and other wood product manufacturing companies received 68 percent of all PPP loans (n = 24,235) provided to all forest products companies. Corrugated and solid fiber box manufacturing, and paper bag and coated and treated paper manufacturing, received the largest loan amounts, exceeding $400,000 on average (Table 1).

Table 1.

Mean value and number of jobs supported by Paycheck Protection Program (PPP) loans provided to US forest products companies by North American Industry Classification System industry categories. USD is US currency, in dollars.

Mean value and number of jobs supported by Paycheck Protection Program (PPP) loans provided to US forest products companies by North American Industry Classification System industry categories. USD is US currency, in dollars.
Mean value and number of jobs supported by Paycheck Protection Program (PPP) loans provided to US forest products companies by North American Industry Classification System industry categories. USD is US currency, in dollars.

The number of forest industry jobs reported in PPP loan applications was positively related to loan amounts (P < 0.001, R2 = 0.800). Most applications reported that the PPP loan would support fewer than 20 jobs with loans amounts <$200,000. PPP loans provided to logging companies supported the greatest number of jobs (65,438) across all forest industries. Loan amounts to specific logging companies supported the smallest number of jobs on average; however, >12,000 loans were provided to this industry. Corrugated and solid fiber box manufacturers, paper bag, coated and treated paper manufacturers, and truss manufacturers reported the greatest number of jobs on average supported through the PPP loan program (Table 1).

The majority of PPP loans (61%) were provided to forest product companies at an amount <$50,000. Loans >$350,000 represented 61 percent of the total approved value of loans to all forest products companies. California forest products companies received the greatest number of loans (2,019) and the largest amount ($358 million) across all US states. Seven other states received in excess of $200 million each in PPP loans to forest products companies: Oregon, Pennsylvania, Ohio, Texas, New York, Wisconsin, and Michigan (Fig. 1). New Jersey saw the greatest average loan value at $249,013 (n = 468).

Figure 1.

Total value of Paycheck Protection Program (PPP) loans and Pandemic Assistance for Timber Harvesters and Haulers (PATHH) payments provided to forest products and timber harvesting companies by US state.

Figure 1.

Total value of Paycheck Protection Program (PPP) loans and Pandemic Assistance for Timber Harvesters and Haulers (PATHH) payments provided to forest products and timber harvesting companies by US state.

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PATHH program

Timber harvesting and hauling companies received 5,093 payments for a total of $197.4 million through the PATHH program between July 2021 and October 2021. The overall approval rate was 90.8 percent. Timber harvesters received most payments (45.2%) while timber haulers received the fewest (22.3%) and least total amount of payments. Companies that identified as both timber harvesters and haulers received the greatest average payment values ($45,359; Table 2).

Table 2.

Mean value of approved Pandemic Assistance for Timber Harvesters and Haulers (PATHH) payments provided to US timber harvester and hauler businesses. USD is US currency, in dollars.

Mean value of approved Pandemic Assistance for Timber Harvesters and Haulers (PATHH) payments provided to US timber harvester and hauler businesses. USD is US currency, in dollars.
Mean value of approved Pandemic Assistance for Timber Harvesters and Haulers (PATHH) payments provided to US timber harvester and hauler businesses. USD is US currency, in dollars.

Timber harvesting and hauling companies that received a PATHH payment reported $1.27 trillion in total revenue lost between 2019 and 2020 as a result of the COVID-19 pandemic. Across the three business types, companies that identified as operating as both timber harvesters and haulers reported the greatest total and average revenue lost in their business between 2019 and 2020. These companies reported an average gross revenue loss of $350,920 across the 1,654 companies (Table 2).

Mississippi companies received the greatest number of payments (393) and the largest amount ($15.7 million) across all US states. Six other states received in excess of $10 million each in PATHH payment to timber harvesting and hauling companies: Alabama, Maine, Arkansas, Wisconsin, North Carolina, and Georgia. Washington saw the greatest average payment at $65,831 and also reported a high average revenue lost in their business ($419,403; n = 82; Table 3; Fig. 1).

Table 3.

Mean and total value of approved Paycheck Protection Program (PPP) loans and Pandemic Assistance for Timber Harvesters and Haulers (PATHH) payments provided to forest products and timber harvesting and hauling businesses in each US state. USD is US currency, in dollars.

Mean and total value of approved Paycheck Protection Program (PPP) loans and Pandemic Assistance for Timber Harvesters and Haulers (PATHH) payments provided to forest products and timber harvesting and hauling businesses in each US state. USD is US currency, in dollars.
Mean and total value of approved Paycheck Protection Program (PPP) loans and Pandemic Assistance for Timber Harvesters and Haulers (PATHH) payments provided to forest products and timber harvesting and hauling businesses in each US state. USD is US currency, in dollars.

The large number of applications for pandemic assistance programs indicates the tremendous impact that COVID-19 had on forest products and timber harvesting businesses. Foresters, timber harvesters and haulers, and wood products manufacturers were considered essential workers under the food and agriculture workforce category during the early phase of the pandemic in 2020 (Centers for Disease Control and Prevention 2020), but few sectors within the forest products industry were completely shut down.

The amounts provided by PPP loans were generally higher compared with PATHH payments, likely a reflection of greater funding available through the PPP, the $75,000 maximum payment provided in the PATHH program, and larger companies that applied to the PPP program. Several forest products industries reported an average PPP loan value in excess of $400,000 and supported an average of nearly 40 jobs within a company. Examples of these companies include ones that were essential throughout the pandemic as consumers relied heavily on shipping and e-commerce during the pandemic (e.g., corrugated and solid fiber box manufacturing, and paper bag and coated and treated paper manufacturing; Table 1). Logging businesses received the largest number of PPP loans and their average value ($50,793) was slightly less than those provided to timber harvesters and haulers through the PATHH program (range from $30,233 to $45,359).

The distribution of PPP loans and PATHH payments to each US state generally agreed with the amount of gross domestic production (GDP) within the forestry sector in that state. Western states with a large amount of forest generally received large amounts of PPP loans (e.g., California, Oregon), while states in the southern United States received large amounts of PATHH payments (e.g., Mississippi, Alabama). Compared with Pelkki and Sherman's (2020) prepandemic report on each state's economic contribution from the forest industry, 2 states that ranked in the top 10 for total contribution of forestry to a state's GDP in 2016 also ranked in the top 10 for total PPP loans and PATHH payments (Wisconsin and Georgia). Western states (e.g., California, Oregon, and Washington) obtained a large portion of PPP loans relative to other states. Three states in the south (Mississippi, Alabama, and Arkansas) and two in the north (Maine and Wisconsin) received approximately one-third (33.6%) of all payments in the PATHH program.

Forest products and timber harvesting and hauling businesses secured nearly $5 billion of federal funds available through the PPP and PATHH programs to combat economic challenges presented by the COVID-19 pandemic. Over 35,000 PPP loans were acquired by forest products companies in the United States from April 2020 through May 2021 that helped keep 487,000 workers on payroll. As a result of the pandemic, timber harvesting and hauling companies reported $1.27 trillion in total revenue lost alone. While the $200 million in payments provided by the PATHH program represented a small portion of revenue lost, economic assistance programs may have helped companies remain viable to address the economic challenges brought by the COVID-19 pandemic.

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Author notes

The author is President/CEO, Arbor Custom Analytics LLC, Bangor, Maine (matt@arbor-analytics.com). This paper was received for publication in August 2022. Article no. 2-00051.