2. Promotion Education Research Hardwood Checkoff Growing Future Markets

3. What’s the goal? Generate ongoing funds Promote American Hardwoods To Architects, Specifiers and Consumers Hardwood Checkoff Growing Future Demand Fund Research On American Forests, Hardwood Lumber & Plywood Production DEMAND INCREASES FOR AMERICAN HARDWOOD

4. Industry approves fee on hardwood lumber, value added & plywood sales Industry nominates Board to direct Promotion and Research. USDA appoints Board and overseas the process Promotion & Research begins American Hardwood demand INCREASES Strategy Hardwood Checkoff Growing Future Demand

5. Checkoff Provides Fairness – captures fee on lumber & panel sales – clear fee structure Flexibility – allows adaptation to changing circumstances Experience – learn from other agricultural sectors Durability – longevity to make a difference Hardwood Checkoff Growing Future Demand

6. Process Hardwood Checkoff Committee works with USDA on plan Hardwood Checkoff Growing Future Markets

7. Jim Howard (Co-Chair), Atlanta Hardwood Corp. Ted Rossi (Co-Chair), Rossi Lumber Nancy Arend, Northwest Hardwoods Victor Barringer, Coastal Lumber Chris Bingaman, Bingaman & Son Lumber, Inc. Bill Buchanan, Buchanan Hardwoods John Crites, Allegheny Wood Products Don Finkell, Anderson Hardwood Floors, Inc Jamey French, Northland Forest Products, Inc. Pem Jenkins, Turn Bull Lumber Jeff Meyer, Baillie Lumber Co., Inc. Jack Shannon, The Shannon Group Brad Thompson, Columbia Forest Products Chris Zinkhan, The Forestland Group LLC Hardwood Checkoff Growing Future Markets

8. Process Hardwood Checkoff Committee works with USDA on plan (“order”) 60-Day Public Comment period (published in Federal Register) USDA considers input / can amend order USDA Validates list of companies, conducts vote Companies who pay into program VOTE Majority vote by sales value approves Hardwood Checkoff Growing Future Markets

9. Hardwood Checkoff Board Industry nominates– USDA selects Representation includes: All segments paying into checkoff All hardwood regions of US Board is unpaid Board Governs the program USDA reviews decisions Hardwood Checkoff Growing Future Markets

10. Process Committee works with USDA,drafts order 60-Day Public Comment period (published in Federal Register) Companies who pay into program VOTE Majority vote by sales value approves Industry nominates board – USDA selects Board directs projects and work begins Other industry segments considered Checkoff revisited at least every 7 years Hardwood Checkoff Growing Future Markets

11. Timing: Now: Drafting the Order, Details Next:USDA reviews – may change Comment period – later this year Vote – likely 2012 (first/second quarter) Who will it include: Hardwood lumber and Plywood producers Including those who dry and process into strip flooring, moulding, etc. Hardwood Checkoff Growing Future Demand

12. Funding Plan Sawmills Facilities with over $2 million in sales $1 for every $1,000 in lumber sales Hardwood Checkoff Growing Future Demand

13. Sawmill example CompanySalesFee Joe’s Sawmill$1.75m$0 Carl’s Sawmill$8M$8,000 Bob’s Sawmill$15m$15,000 Hardwood Checkoff Growing Future Demand

14. Funding Plan Concentration Yard / Dry Kilns Facility Facilities with over $2 million in sales $1 for every $1,000 in lumber sales Deduct for green lumber purchased Hardwood Checkoff Growing Future Demand

15. Dry Kiln example CompanySalesFee Fred’s Kilns$1.9m$0 Gary’s Kilns$4m$4,000 Gary’s Kilns$2.5m (grn purch.) -$2,500 Gary’s Kilns$1,500 Sam’s Kilns$20m (sales) $20,000 Sam’s Kilns$16m (grn purch.) -$16,000 Sam’s Kilns$4,000 Hardwood Checkoff Growing Future Demand

16. Funding Plan Value Added Integrated facilities (sawmill or dry kilns) with over $2 million in sales No furniture, cabinet $.75 for every $1,000 value added sales Hardwood Checkoff Growing Future Demand

17. Value Added example CompanySales Fee Bill’s VA$16m (millwork) $12,000 Bill’s VA$4m (KD sales) $4,000 Bill’s VA$12m (grn. purch.) -$12,000 Bill’s VA $4,000 Hardwood Checkoff Growing Future Demand

18. Funding Plan Hardwood Plywood Producers over 10 million square feet $4 per 1,000 square feet Hardwood Checkoff Growing Future Demand

19. Projected Revenue Hardwood Checkoff Growing Future Demand Sawmills-Green$3.5 mil. Sawmills-KD$2.5 mil. Yards & value added$1.5 mil. Hardwood plywood$3.0 mil. TOTAL$10.5 mil.

20. Commodity Checkoffs Established Yearly revenue Cotton 1966 $66 million Potatoes1972$20 million Eggs 1976$21 million Pork1986$65 million Beef1986$80 million Honey1987$3.8 million Watermelons1990$1.6 million Soybeans1991$90 million Milk1993 $281 million Mushrooms1993$2.6 million Popcorn1997$1.5 million Peanuts1999$6 million Avocados2002$24 million Lamb2002$2.3 million

21. Hardwood Checkoff Growing Future Markets Allocation of funds Egg Board

22. Checkoff’s Potential For the Hardwood Industry? Hardwood Checkoff Growing Future Markets

23. Hardwood Checkoff Growing Future Demand

24. Cotton Inc. has estimated a return of $8 for every $1 of investment Hardwood Checkoff Growing Future Demand

25. Dairy Inc. reports the per capita consumption of all dairy products increased 16% from 1983 to 2008 Hardwood Checkoff Growing Future Markets

26. Potato Board estimates $4.74 return for every $1 invested Hardwood Checkoff Growing Future Markets

27. USDA reports: Very few agricultural commodity checkoff program have ever been rescinded

28. Hardwood Checkoff Growing Future Markets Why do WE Need Checkoff?

30. WV Sawmills by Size Class 20052010 >10 million2914 5 to 9.99 m24 19 1 to 4.99 m 2520 < 1 m24 Total 80 57 Hardwood Checkoff Growing Future Markets

31. Hardwood Lumber Consumption 1999 20052009 Total12.911.76.8 Pallets4.54.0 3.0 Furniture2.61.3 0.3 Exports 1.21.2 0.9 Millwork 1.31.2 0.4 Cabinets 1.21.5 0.5 Flooring 1.41.6 0.7 RR Ties 0.70.9 1.0 billion board feet

32. This is our once-in-a-generation opportunity for our FAMILIES Hardwood Checkoff Growing Future Demand

33. Jim Howard (Co-Chair), Atlanta Hardwood Corp. Ted Rossi (Co-Chair), Rossi Lumber Nancy Arend, Northwest Hardwoods Victor Barringer, Coastal Lumber Chris Bingaman, Bingaman & Son Lumber, Inc. Bill Buchanan, Buchanan Hardwoods John Crites, Allegheny Wood Products Don Finkell, Anderson Hardwood Floors, Inc Jamey French, Northland Forest Products, Inc. Pem Jenkins, Turn Bull Lumber Jeff Meyer, Baillie Lumber Co., Inc. Jack Shannon, The Shannon Group Brad Thompson, Columbia Forest Products Chris Zinkhan, The Forestland Group LLC Hardwood Checkoff Growing Future Markets

34. Increase Demand For American Hardwoods!

35. Hardwood Checkoff Growing Future Markets Questions?