Newsprint price increases expected

Tony Smithson

Sep 1, 2021

At the beginning of the pandemic, one of the curious responses people had was to hoard toilet paper. Media coverage showed people fighting in store aisles over the last little white rolls. My thought, of course, was that they looked like tiny little rolls of newsprint. At the time I thought it seemed silly and at the very least undignified, but now as I look at the newsprint markets, it seems much more reasonable. I totally get it.

Several factors that have been brewing for years, along with the continuing impacts of the global pandemic, have combined to produce a historically tight newsprint market. This is despite continually falling demand by North American publishers.

E-Commerce: Trends toward more online purchasing spiked early in the pandemic and have only slightly tapered off over the past six months. Consumers got used to their online buying habits and saw little reason to go back to old habits, even as the economy worked back toward normal. The growth in e-commerce drove demand — and prices — for packaging paper up, providing an incentive for newsprint mills to covert from printing paper to packaging paper.

Supply Chain Challenges: Just as car dealers are looking at empty lots despite robust demand for their products, supply chain challenges hit newsprint producers. Availability of parts for newsprint machines and ancillary equipment became scarce, and many producers experienced extended down time for maintenance. In some cases, unplanned downtime at newsprint mills resulted in missed deliveries, with delays of more than a month in some cases.

One producer in the western U.S. has shifted their production to only one grade of newsprint in the hopes that eliminating downtime from changing grades will allow them to catch up to their schedule by the end of 2021.

Once newsprint was produced, producers faced logistical challenges in getting loads of paper delivered to printers. Stories of trucks sitting, loaded up, for a week or two waiting for a driver were not uncommon.

Labor Shortages: Just as every store, restaurant and factory in your hometown has a “Now Hiring” sign out front, newsprint producers are strapped for help, too. This often resulted in lower than projected productivity, meaning newsprint orders took longer to produce than planned.

International Demand: Although North American publishers’ demand for newsprint continues to steadily fall, the impact of newsprint mill shutdowns worldwide is being felt here. Export prices, which have been less attractive than domestic sales due to the additional shipping cost, have risen to the point where producers find themselves able to sell more newsprint than they can produce.

So what does all of this mean to a community publisher?

Simply put, all of these factors cost money, so newsprint prices have risen steadily this year. Producers have announced an October price increase, even though fourth-quarter price increases are relatively rare.

As a result, if you as a publisher have not received a price increase from your printer, you will shortly. And while printers have historically hesitated to pass along price increases out of the fear that their customers would go shopping for a better rate, the recent series of printing plant closures gives publishers fewer, if any options in this regard.

To answer a quick question on this topic, no, printers are not taking this opportunity to gouge their customers. Yes, they realize that it will be extremely difficult to pass these increases on to advertisers and subscribers, but a price increase is still unavoidable. Logically, it’s not in printers’ best interest to put their customers out of business.

So what should a publisher do?

The best advice is to form a good relationship with your printer and work together. While it’s not in the printer’s best interest for their customers to go out of business, it’s also not in the publisher’s best interest for their printer to go out of business, either. If you haven’t already, consider entering into a contract with your printer or updating the contract you have. Some analysts predict steadily rising prices through 2026, so a contract with pre-set price increases could be protection against unexpected financial shocks.

The second best advice for a publisher is to be flexible. Your printer will likely experience supply or labor issues, so be willing to work with them regarding what kind of paper they have available or even deadline changes that might be required. Better to be in print than on the waiting list.

That said, I will cut this short and roll up my sleeves. The plant up the road just received a load of newsprint, and I might just have to wrestle them for it.

(As I write this, I raise my glass to fellow Publishers’ Auxiliary columnist Max Heath. A true gentleman if there ever was one. Cheers, Max.)

Tony Smithson is the regional director of printing operations for Adams Publishing Group’s APG Printing Solutions.