Rising newsprint prices causing concerns

By Bob Steenson, bsteenson@charlescitypress.com 

Repeated price increases for newsprint have caused concern for U.S. newspapers, and that includes the Charles City Press.

A trade dispute with Canada has resulted in the Department of Commerce requiring duties on imported newsprint. That’s on top of an already tight domestic newsprint supply because of production closures, transportation problems and weather woes, according to paper trade publications.

According to the News Media Alliance, a trade association for the news media industry, one paper mill, the North Pacific Paper Co. in Washington state, has filed a complaint that Canadian paper mills are sending their products to the United States at below cost.

As a result, the Department of Commerce has announced countervailing and anti-dumping duties on Canadian newsprint as high as 32 percent, which began to take effect in March.

They have resulted in newsprint price increases in some cases of 20 to 30 percent over the past month, and those increases are on top of already rising newsprint costs because of a tight market.

“Newsprint is the second-highest expense for newspapers,” said Press owner and Publisher Christopher Hall. “After payroll, it’s the biggest factor in our operation.”

Newsprint prices have been increasing regularly since November, Hall said, rising from about $549 per ton last fall to $657 in the last order the Press placed.

Newspapers and even other paper mills in the United States are saying that the Washington paper mill — which is owned by a New York-based hedge fund — is the single company benefiting from the tariffs and duties.

Other mills and the American Forest and Paper Industry have expressed their opposition to the duties, saying that Canadian paper does not threaten U.S. jobs or U.S. companies’ profits.

“The buying and selling of newsprint has always been regional without regard for the border,” said David Chavern, president of the News Media Alliance.

Consumers of newsprint — from newspaper and book publishers to telephone directory manufacturers — tend to buy newsprint in their region, close to their printing operations, he said.

“The printers who typically utilize Canadian newsprint are those in the northeast and Midwest, where there are currently no U.S. mills operating,” Chavern said.

But the reason there are no newsprint mills in those areas isn’t because of Canadian competition, but because they shut down due to decreased newsprint demand or because they converted to other, more profitable paper products, he said.

“Affordable Canadian paper has helped keep the printed news alive and flourishing well into the 21st century,” Chavern said.

Some newspapers, especially smaller ones, have announced steps to deal with dramatically higher newsprint prices, including reducing the number of pages printed each day, or reducing the number of days their papers are published each week.

Some have taken more dramatic cost-savings steps, including cutting popular features and laying off staff.

Hall said the Press isn’t planning on any of those steps at this time, but he is keeping a close eye on the bottom line and trying to operate as efficiently as possible.

“We know the importance of the five-day-a-week Press to the community, to our readers and advertisers, and we don’t want to do anything to impact that,” Hall said.

Chavern said that instead of protecting U.S. jobs, these tariffs are costing U.S. jobs as demand for newsprint falls and U.S. Mills and U.S. newspapers lay off staff.

Whether the tariffs continue will be up to the Department of Commerce and the International Trade Commission.

“If the tariffs on Canadian newsprint are allowed to stand, we’re not only risking a centuries-old relationship with our neighbors to the north, but we’re putting our own U.S. news industry in jeopardy,” Chavern said.

He urged people to call, mail, email or tweet their local congresspersons and ask them to support repeal of the tariffs.