The federal government is placing a $115.2 million bet on timber production as the solution to two converging crises: a shortage of domestic sawmill capacity and a surge in catastrophic wildfires on national forest lands. On March 23, 2026, the USDA announced guaranteed loans to sawmills and wood processing facilities across eight states, deploying the Timber Production Expansion Guaranteed Loan Program to reopen shuttered mills, build new ones, and upgrade existing facilities that process forest restoration material.
The announcement, made at the Advanced Bioeconomy Leadership Conference, covers projects in California, Idaho, Kansas, Louisiana, Maine, Oklahoma, Virginia, and Wisconsin — and is designed to help the Trump Administration meet a stated goal of expanding American timber production by 25 percent.
How the TPEP Loan Program Works
The Timber Production Expansion Guaranteed Loan Program, administered by USDA Rural Development in partnership with the U.S. Forest Service, is not a grant program. It operates by providing federal guarantees to qualified commercial lenders whose borrowers want to establish, reopen, expand, or improve a sawmill or other wood processing facility. The key eligibility condition: the facility must process ecosystem restoration byproducts from USDA Forest Service National Forest System lands.
That condition is the load-bearing link between the program’s two goals. National forests accumulate enormous volumes of excess timber, dead trees, and dense brush that serve as wildfire fuel. Historically, the absence of nearby mills — particularly in remote western states — meant that material had little commercial value and was left to accumulate. The TPEP is structured to change that by making it financially viable to build and operate the processing capacity needed to move that wood.
“We cannot allow wildfires to devastate and destroy our rural communities. That’s why the USDA is taking bold action to stop the destruction of our forestlands by investing in sawmills and wood processing facilities that support sustainable timber harvesting.” — J.R. Claeys, USDA Rural Business Cooperative Service Administrator
Source: USDA Rural Development press release
California: The Biggest Beneficiary
California captured $61.25 million of the total — the largest allocation of any state in the program — distributed across three separate recipients. Each project reflects a different approach to the same underlying challenge: how to process a growing volume of fire-damaged and restoration-grade timber coming off National Forest System lands.
Blue Mountain Electric Company, LLC, based in Wilseyville in Calaveras County, received a $25 million USDA loan toward a total project cost of $42.2 million. Rather than a conventional sawmill, the company is building a 3-megawatt gasification plant that will convert forestry biomass waste — slash, small-diameter material, and other wood fiber that cannot be sawn — into synthetic natural gas through thermochemical conversion. It is the most unconventional project in the portfolio and an indication that the TPEP’s definition of “wood processing” extends well beyond lumber production.
Alpenglow Timber LLC received $18.5 million to establish a new sawmill, with funds covering facility construction and equipment. The company holds U.S. Forest Service contracts to remove wildfire-damaged timber, and its project is specifically located in areas designated as high-priority for forest restoration. The surrounding community carries a 4.7 percent unemployment rate, meaning mill jobs will land in a labour market where they matter.
Sierra Forest Products Holdings, Inc. received $17.75 million for the expansion and modernization of its existing timber processing capacity. Like Alpenglow, the company supports U.S. Forest Service contracts focused on wildfire-damaged timber removal.
“After years of severe wildfire impacts across the golden state, California is grateful to receive the largest TPEP investment in the nation.” — Bryan Anguiano, California State Director, USDA Rural Development
Projects Across the Other States
California’s scale dominates the headline number, but the investments in other states are equally significant to their local timber economies.
In Oklahoma, Beachcombers LLC received a $12.3 million loan to acquire two former Teal-Jones yellow southern pine sawmills — one in Antlers, Oklahoma, and a second in Liberty, Mississippi. The project is structured in phases: phase one restores the Antlers facility to full operation, projecting annualized production of 80 million board feet; phase two brings the Liberty mill back online. Combined, the two facilities are expected to reach a capacity of 155 million board feet. The acquisition of former Teal-Jones infrastructure points to a broader pattern of idled southern pine capacity being repositioned under new ownership with federal support.
In Wisconsin, Timber Professionals Cooperative Enterprises received $800,000 to reopen a sawmill in Shawano County. The loan will fund the purchase of over 49 acres of real estate and equipment, and the facility is expected to create six initial jobs with planned expansion. The smaller dollar figure reflects a targeted intervention in a rural cooperative model rather than a large industrial operation.
In Virginia, Twain Capital received a $7.568 million guarantee to restart the Pine Products Sawmill in Martinsville, in Virginia’s Ninth Congressional District. According to local reporting, Rep. Morgan Griffith (R-VA) confirmed the loan and noted its importance to the regional timber industry.
Idaho, Kansas, Louisiana, and Maine were also confirmed as recipient states in the USDA announcement, though project-level detail for those states was not included in publicly available press materials at time of publication.
Sawmills as Wildfire Management Tools
The dual framing of this investment — economic development and wildfire risk reduction — is deliberate and reflects a sustained policy argument that has gained traction in recent years: that active forest management, supported by commercial timber infrastructure, is more effective at reducing catastrophic fire risk than passive approaches alone.
“The American forest products industry is critical to maintaining the health of the nation’s forests. The Timber Production and Expansion Guaranteed Loan Program is one of many ways the Forest Service partners with the timber industry to maintain rural jobs, processing facilities, and an outlet for wood that needs to be removed from national forests.” — Tom Schultz, U.S. Forest Service Chief
Source: USDA Rural Development press release
The economic and community toll of mill closures has been well-documented across the western United States. The TPEP is designed to arrest that contraction — or reverse it — in communities where proximity to national forest restoration work creates a viable commercial case for investment.
The scale of the wildfire challenge provides context for the program’s ambitions. How megafires are remaking American forests has become a central policy question, and the TPEP represents a market-based answer: if mills can earn revenue processing restoration material, the fuel that would otherwise feed the next fire gets removed while rural jobs are sustained. Louisiana, meanwhile, has its own history of sawmill investment that illustrates the pattern; Canfor’s recent mill commitment there reflects similar dynamics in the southern pine belt — and Louisiana’s inclusion in the TPEP further signals growing federal attention to the region’s timber sector.
Collectively, the 13 confirmed projects support 485 jobs across eight states. At $115.2 million in guaranteed loans — not grants — the program leverages private capital rather than displacing it, a model that may prove easier to sustain and scale than direct subsidy approaches.