U.S. packaging-paper demand strengthened again in August, but one grade clearly stood out.

AF&PA reported that total packaging papers and specialty packaging shipments increased 4% year over year in August 2026 and were up 5% through the first eight months of the year.

Within that broader growth, shipments of unbleached bag and sack paper reached nearly 119,000 short tons—a new record.

Year-to-date shipments for the grade are now up 8.4%.

That makes the more interesting question:

Why is unbleached kraft packaging outperforming the broader packaging-paper market?

Bag and sack paper is becoming one of the stronger pockets of demand

Unbleached bag and sack papers serve applications including:

paper bags,

industrial sacks,

food-service packaging,

retail packaging,

and other converting applications where strength and relatively low basis weight are important.

The August record is not an isolated monthly jump.

In June, AF&PA reported unbleached bag and sack shipments were already almost 15% above June 2025, while year-to-date growth stood at 7.7%.

By August, cumulative growth had increased to 8.4%.

That suggests the grade is benefiting from a more persistent demand trend rather than one unusually strong shipment month.

Part of the longer-term opportunity comes from brands and retailers exploring more fibre-based packaging formats.

But the AF&PA data alone do not tell us how much growth is coming from plastic-to-paper substitution versus conventional bag, sack and food-service demand.

That distinction should not be guessed.

Overall packaging-paper growth has remained positive

The wider market has also performed relatively well during 2026.

AF&PA reported year-over-year packaging-paper shipment growth of:

5.5% in April, 2% in June, 1% in July and 4% in August.

Monthly growth has therefore fluctuated, but cumulative shipments remain 5% ahead of the first eight months of 2025.

That contrasts sharply with U.S. printing-writing papers, where August shipments fell 7% from a year earlier.

The comparison reinforces an important structural shift inside the paper industry.

Traditional communication papers continue facing pressure from digitization.

Packaging papers are being supported by a different set of demand drivers, including food, retail, industrial packaging and changing material preferences.

Bleached packaging papers are running relatively hard

AF&PA also reported a 91.1% operating rate for bleached packaging papers in August.

It was the third month this year that the rate exceeded 90%.

Operating rate matters because shipment growth alone does not reveal how heavily mills are being utilized.

A rate above 90% indicates relatively strong utilization of available capacity.

But this should not automatically be interpreted as evidence of a severe supply shortage.

The inventory data tell a more complicated story.

Inventories reached a 13-month high

Total packaging-paper inventories in August were 1% higher than a year earlier and at their highest level in 13 months.

That is noteworthy because July inventories had already risen to their highest level since February, even though they remained 4.9% below July 2025.

So production and shipments are growing, but producers are also carrying more stock.

That could reflect several factors:

production running ahead of near-term orders,

normal inventory rebuilding,

grade-specific differences,

or mills preparing for future demand.

AF&PA’s public release does not provide enough detailed tonnage to determine which explanation dominates.

What it does show is that this is not simply a story of demand outrunning available supply.

The most important signal is the mix

The August figures show why treating “packaging paper” as one market can be misleading.

Unbleached bag and sack papers are setting records.

Bleached packaging machines are operating above 90%.

Overall shipments are growing.

Yet inventories have also reached a 13-month high.

Different grades are clearly experiencing different supply-demand conditions.

For producers and converters, that means the headline 4% shipment increase is less useful than understanding where the growth is occurring.

Right now, one of the clearest growth areas is unbleached kraft bag and sack paper.

If its 8.4% year-to-date growth continues through the remainder of 2026, the grade could become one of the stronger examples of how packaging is offsetting weakness elsewhere in the U.S. paper industry.

But August also provides a useful warning against equating stronger shipments with market tightness.

Demand is growing. Production is being utilized. But inventory is growing too.

That balance will be worth watching through the fourth quarter.

Last Updated on 21/09/2026 by Jota Machinery