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Newsprint supply is tightening

The paper (newsprint) used to print the Austin Daily Herald you hold in your hands cost 10 percent more than it did just a few weeks ago — and is likely to cost as much as 40 percent more in coming months, newspaper industry experts predict.

In what sounds like a farfetched scenario, tightening American newsprint supplies could threaten newspapers’ ability to print at all, the same experts say.

Forces beyond the control of the Austin Daily Herald — and thousands of community newspapers like us across America — are to blame, but our response will be noticeable to you, our readers:

Fewer pages. For the past several years, our smallest weekday edition has been 8 – 10 pages.

Possible higher subscription prices. For the past decade, we’ve charged $13.00 a month for home delivery of our newspaper in town. We may have to charge more.

Less non-local content. We will work harder than ever to provide news from Austin, Mower County and the surrounding area that you cannot find elsewhere. As we further maximize local news content, Associated Press news and features from outside this community will be reduced in length but stay close in story count via use as news briefs.

More online news. Our news staff routinely produces more local news and photographs than will fit in our print edition. Increasingly, we will rely on our website, where we have unlimited space, to publish excess news.

Why is newsprint becoming more expensive and scarcer? Two reasons: one long in the making, the other recent.

Because of the struggles of big-city newspapers, newsprint consumption in America has decreased 75 percent over the past two decades. As demand dropped, many American newsprint mills closed or converted to making other paper products.

Newsprint mills in neighboring Canada filled supply gaps as domestic production capacity dwindled. The result was market equilibrium and stable newsprint prices for much of the past decade — until last summer, when a small, hedge fund-owned newsprint mill in faraway Washington State caused a market jolt that no one saw coming.

North Pacific Paper Co., or NORPAC, complained to the U.S. Department of Commerce and the International Trade Commission that Canadian producers were violating trade laws by receiving government loan assistance and harvesting trees on government land — advantages that allowed them to sell paper in the United States cheaper than American mills could. No other paper manufacturers have complained.

Pending results of an investigation that is ongoing, preliminary duties against Canadian producers of 7 percent to 10 percent began in January, followed by an additional 22 percent in March. Major newsprint makers, most of whom have mills in both countries, have announced major price increases in response.

For the record, the Austin Daily Herald is printed almost entirely on paper made in Canada. Community newspapers like ours represent a sliver of newspaper demand. Despite still-healthy print readership, we alone cannot create enough demand to stimulate the U.S. newsprint market and bring shuttered mills back to life. Yet our need for newsprint to fulfill our obligation to readers is as enduring as that of the Washington Post or New York Times.

How can you help? If you are so inclined, call Amy Klobuchar, Tina Smith, Tim Waltz, Dan Sparks and Jeanne Poppe and ask them to take a stand for community newspapers. You or I cannot express an opinion to the Department of Commerce or International Trade Commission, but senators and representatives can.

Also, give our e-edition a try if you’re not already using it. An e-edition is a digital replica of our daily print edition that can be read on a desktop computer, laptop, tablet or smartphone.

If you are an Austin Daily Herald subscriber, you get access to the e-edition for $1.00 per month. We even email a link to every subscriber when the edition is ready each day at 7 a.m. Simply click and read. It’s available several hours before the printed newspaper arrives in your mailbox.

Q&A: What are the details behind it all

Temporary tariffs on newsprint from Canadian paper mills have led to a shortage of newsprint in the United States and potential problems for both large and small newspapers alike.

The following is a question and answer about the issue, including information about how it could affect the Herald.

•Why is newsprint (the paper your newspaper is printed on) in short supply?

More than a dozen mills in the United States have stopped making newsprint in the last decade because demand for paper has declined 75 percent as large newspapers have lost readership.

•If newsprint production capacity has declined over the course of 10 years, why are newsprint prices just now increasing?

Newsprint is a commodity, and its pricing fluctuated regularly in past years.  Recently, one small paper mill in Washington State is trying to use federal trade and tariff laws to improve its profits. North Pacific Paper Co., or NORPAC, complained to the U.S. Department of Commerce and International Trade Commission that Canadian newsprint mills, which produce much of the newsprint consumed in America, are engaging in unfair trade practices, including government loan subsidies and harvesting of trees on government land. Temporary tariffs of more than 20 percent have been applied while authorities investigate. If the tariffs are made permanent, the price of newspaper printing will skyrocket.

•Shouldn’t the tariffs on Canadian imports boost domestic production of newsprint?

Even if Canadian paper disappeared because of high tariffs, U.S. paper mills, which industry observers estimate are running at 97 percent capacity, could not supply newspapers with the paper they need. Mills cost hundreds of millions of dollars to build or reopen and can take many years to comply with environmental rules. With demand falling, it is unlikely paper manufacturers will invest in a massive expansion of U.S. newsprint production. The industry organization for U.S. paper producers, the American Forest and Paper Association, does not support NORPAC’s case.

•What has been the impact on newspapers to date?

Preliminary duties against Canadian producers began in January in the range of 6.5 percent to nearly 10 percent for the alleged trade violations. Another set of duties began this month with an assessment of 22 percent for alleged underpricing or “dumping.” The preliminary findings are not unusual and do not mean that the final determinations will end with such major assessments. U.S. trade laws are engineered to give the benefit of the doubt to domestic producers, even at the cost of higher prices to consumers. Preliminary findings can be intended to provide some interim relief even before final facts are in. These tariffs are being collected now at the U.S.-Canadian border, however, and are in escrow until final findings are complete. Newsprint producers are already escalating their prices to U.S. newspapers. The harm to newspapers has already begun.

•What do the Canadian producers say about the allegations?

Canadian companies say that U.S. publishers’ demands have fallen as large daily newspapers have cut back, merged, closed or dropped publication days as digital commerce and competition have driven reductions in advertising and print readership. Market forces, not trade practice, are responsible for the harm to U.S. paper producers, they say.

•Why do you still publish a printed newspaper instead of going all digital?

Digital publication has become common for most newspapers, including this one. However, there continues to be strong demand for and use of the printed newspaper. Further, community newspaper publishers cannot support online versions of their newspapers without a printed newspaper. Hard-copy advertising and readership provides 90 percent or more of a community media company’s revenue and enables the digital newspaper to exist. In other words, without print, there would be no online news from your local newspaper. These revenue streams support the newspaper’s mission of providing Austin and Mower County with journalism and marketing professionals who work every day on behalf of readers and advertisers.

•What will happen if the tariffs are made permanent?

Publishers will not be able to absorb the significantly higher cost of newsprint, which is a newspaper’s second-largest expense behind payroll. Newspapers will likely have to raise prices for readers and advertisers, reduce distribution by eliminating publication days, and reduce our workforce. Not only will newspapers suffer, but so will our workers, readers and advertisers.

•Can newspaper readers do anything to stop the tariffs?

Yes, you can contact your U.S. senators and representative and ask them to submit written comments to the International Trade Commission. Visit https://www.stopnewsprinttariffs.org/contact-congress/ for sample language and contact information. If you prefer to send a letter by mail or contact by phone, information is below. Consider the following language when contacting lawmakers:

We urge you to get involved with an important issue that has dramatically impacted not only our community, but our nation’s entire economy. The Department of Commerce recently announced countervailing and anti-dumping duties on Canadian imports of newsprint that ranges as high 32 percent. These duties cannot be absorbed by newspapers and printers and most likely, will lead to higher prices for readers and businesses, incurring a loss of jobs in printing and publishing at the local level.

This issue started when one newsprint mill in the State of Washington, who is owned by a New York hedge fund, filed petitions for tariffs. The rest of the paper industry opposes the petitions because they know that these tariffs will cause damage to newspapers and printers, and will ultimately reduce the demand for newsprint.

We understand that the trade case is at a critical phase at the International Trade Commission, and members of Congress can express submit comments to the ITC on the impact of these tariffs on constituents. We respectfully request that you let the ITC know that this newsprint trade case will cause unintended consequences to our economy and local community, and should be rejected.

Thank you for your consideration of our views.

Reach out to your legislators

Representative Jeanne Poppe (DFL) District: 27B

291 State Office Building

100 Rev. Dr. Martin Luther King Jr. Blvd.

Saint Paul, Minnesota 55155

651-296-8216

Email: rep.jeanne.poppe@house.mn

Senator Dan Sparks (DFL) District 27

Capitol Office

95 University Avenue W.

Minnesota Senate Bldg., Room 2201

St. Paul, MN 55155

(651) 296-9248

sen.dan.sparks@senate.mn

Tim Waltz (DFL) U.S. House Representative, District 1

Mankato District Office

527 ½ South Front Street

Mankato, MN 56001

507-388-2149

https://walzforms.house.gov/contact/

Amy Klobuchar (DFL) U.S. Senate, Minnesota

Metro Office

1200 Washington Avenue South, Room 250

Minneapolis, MN 55415

612-727-5220

Toll Free: 1-888-224-9043

https://www.klobuchar.senate.gov/public/index.cfm/email-amy

Tina Smith (DFL) U.S. Senate, Minnesota

State Offices

60 Plato Blvd. East

Suite 220

Saint Paul, MN 55107

Phone (651) 221-1016

https://www.smith.senate.gov/content/contact-senator