US: Newsprint at highest historical price

On October 1, the price of one ton of newsprint rocketed $35 to $625, reports the Washington Post. Prices have risen steadily since 2002, when a ton cost $435. Prices increased about 11% in August and September "as a host of commodity prices were pushed up by rising energy costs", reports Smart Money. Newsprint is produced mainly in Canada and the southern US. Consolidation in the industry has lead large news print manufacturers to reduce manufacturing capacity. John Morton, newspaper industry analyst, said in the Washington Post, "The era of cheap newsprint for the newspaper business is over. And we can count on fairly regular price increases. At $625 per ton, [manufacturers] are just edging on profitability."

The rise in newsprint prices is yet another challenge for newspapers. Or as Smart Money puts it, "It's now more expensive to buy the paper on which to print the words that fewer people are reading."

And the papers' answer to the high costs of newsprint? Some are shrinking their format. Just this week the Wall Street Journal announced that it will reduce its format to save newsprint and therefore money (see former posting). Other papers, such as the New York Times, are considering using a lighter weight of newsprint.

Source: Washington Post, Smart Money