Impact of newsprint tariffs hits us all

Published 12:08 am Sunday, June 24, 2018

Mississippi’s old-line newspaper publishers most definitely would be distraught of today’s media world as pointed out in Mac Gordon’s recent guest column (Sunday, June 17) in the Clarion Ledger. They would be further distraught about proposed tariffs on Canadian newsprint that may be disastrous for newspapers across Mississippi — especially the local community ones located in small towns across the state. The ones your friends and neighbors edit and publish. The ones many communities have depended on for generations and will be especially hit hard. Frankly, some newspapers could fold! Others will be forced into further cutbacks.

For sake of clarity this tariff is not as a result of the President’s recently imposed Canadian aluminum and steel tariffs but instead the result of a complaint filed by a New York hedge fund-owned newsprint mill in Washington state last year. And while Trump may have not have initiated this tariff, any effort by his administration to intercede is highly unlikely.

For a little background on the newsprint industry, 11 years ago there were 17 newsprint mills in the United States with seven in the South — most Canadian owned. Today there are only five newsprint mills in the United States with only two in the South — one of which is located here in Mississippi. The remaining Mississippi mill has its headquarters in Canada. The other mills have either closed or been converted to other types of paper.

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The Grenada mill is especially important in that its economic impact footprint extends across north Mississippi and includes not only mill workers but landowners, timber producers, and loggers, as well as the companies that support the jobs underneath.

Will the Canadian tariff close the Grenada Mill? Unlikely, but the tariff will reduce the demand on the newsprint they produce. Closing is an option but so too is cost cutting or conversion to producing a different type of paper.

So does the tariff not make Grenada-produced newsprint cheaper than Canadian paper? Nope! You see, newsprint is sold on a world market. Increased prices in Canada means price increases everywhere else including that produced here in Mississippi. But increased prices means less is produced because less is used.  Simple supply and demand economics means the tighter the supply the higher the price!

Some Mississippi community newspaper publishers over the past few weeks are reporting 30 percent price increase notices for printing costs. And printing costs are usually the second largest cost for a newspaper publisher. In the past a publisher might raise a subscription price by a few cents or raise advertising rates by a percent or two to cover such cost increases.  However, with today’s digital/social media world, publishers can no longer pass those costs along, so they just have to absorb those costs.

Very few if any community publishers can afford to do so these days.

There is pending legislation in Washington to further review the Canadian tariff situation with U. S. Senator Roger Wicker being a co-sponsor. Similar legislation is being introduced in the House, but so far none of our congressional delegation has signed on.

The Mississippi Economic Council has voiced concerns in Washington, DC.

On July 17 the Department of Commerce will hold hearings to determine the fate of the Canadian newsprint tariffs. We are grateful to Sen. Wicker for his commitment to testify at those hearings.

The outcome of the hearings will impact each and every community in Mississippi, and it may not be positive. Those old-line newspaper publishers would be distraught as are their successors today. Hopefully readers will now also be distraught.

 Newspapers regardless of their size are not only watchdogs and historians for the local communities they serve, they too are economic engines that help communities thrive and prosper through the commerce they create via adverting of local good and services.


Bill Jacobs is the former owner, editor and publisher of the Brookhaven Daily Leader and the Prentiss Headlight. He serves on the board of directors of the National Newspaper Association Foundation where he is the Treasurer. He is a past president of the Mississippi Press Association.