Newsprint
Newsprint shipments are expected to approximate 775,000 tonnes in 2001, down by 4% from last year. This decline is due to weaker markets (resulting in some production downtime), and a two-month mechanical breakdown (April and May) of the No. 7 machine at Grand Falls-Windsor. In an historical context, however, production in 2001 will be the second strongest year on record. Total employment, including mill and logging operations, is about 3,000.

Newsprint prices were strong during the first six months of 2001, peaking at US$625/tonne. Weaker markets, however, in the second half resulted in price declines. Currently, newsprint is trading at US$540/tonne, and is expected to remain in this range through the first three quarters of 2002. The value of newsprint shipments this year is expected to increase marginally to about $690 million. 

In addition, Corner Brook Pulp and Paper Ltd. and Abitibi-Consolidated have signed agreements with Newfoundland and Labrador Hydro to increase their power generation capacities and sell their output to the utility.

Lumber
Lumber production in 2001 is expected to be on par with 2000 at about 125 million board feet. Production gains this year were limited by weakness in key export markets and uncertainty about export tariffs into the US following the expiration of the Canada-US Softwood Lumber Agreement in March 2001. Producers in Atlantic Canada are subject to a 12.6% tariff compared to 32% for other provinces.

Newsprint shipments trend
 upward over time

Source: Department of Forestry and Agrifoods; Economics and Statistics Branch, Department of Finance

Agrifoods
Farm cash receipts for the first six months of 2001 totalled $36.2 million. This is relatively stable with the same period last year. The Department of Forestry and Agrifoods expects the value of production from agriculture and related industries to approach $500 million.

The dairy industry, in particular, is expected to grow significantly over the next several years. Local producers recently obtained a quota to produce industrial milk for use in yogurt, cheese and related products. This new quota could allow, over time, total production to more than double and 500 new jobs to be created.