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Wood-to-energy expansion, forest ownership changes, and mill closure: Consequences for U.S. South's wood supply chain

Author

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  • Conrad IV, Joseph L.
  • Bolding, M. Chad
  • Aust, W. Michael
  • Smith, Robert L.

Abstract

The U.S. South's wood supply chain has undergone major changes over the past two decades in terms of forestland ownership and forest industry structure. Recent interest in producing energy from wood has raised questions about how a vibrant wood-energy market will impact the traditional southern wood supply chain. By using a survey of consulting foresters, this study examined how harvest tract size, forest ownership, and forest industry structure have changed within the U.S. South and how foresters expect the wood-energy market to impact the wood supply chain in the future. Results indicate that there are currently inadequate markets for timber as a result of expanded timber supply and reduced forest products industry capacity. Only 12% of respondents reported having sold timber to an energy facility, although 98% of respondents report their clients are willing to sell to an energy facility. In addition, 89% of respondents believe that a vibrant wood-energy market will provide an additional market for timber and will not displace forest products industry capacity. This study found excess logging capacity as evidenced by frequent mill quotas; however, an aging logging workforce and tight credit markets make logging capacity uncertain in the long term as the U.S. economy rebounds from recession and wood-energy demand increases. The percentage of respondents reporting an average harvest tract size over 16 ha (40 ac) decreased from 95% in 1999, to 70% in 2009, and only 47% predict an average harvest tract size over 16 ha (40 ac) in 2019. This study suggests that the southern wood supply chain is in position to take advantage of an expanded wood-energy market; however, decreasing harvest tract sizes, increasing urbanization, and a decline in the forest products industry are lingering issues for landowners, mills, foresters, and loggers in the South.

Suggested Citation

  • Conrad IV, Joseph L. & Bolding, M. Chad & Aust, W. Michael & Smith, Robert L., 2010. "Wood-to-energy expansion, forest ownership changes, and mill closure: Consequences for U.S. South's wood supply chain," Forest Policy and Economics, Elsevier, vol. 12(6), pages 399-406, July.
    • Handle: RePEc:eee:forpol:v:12:y:2010:i:6:p:399-406
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    References listed on IDEAS

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    1. Armstrong, J. Scott & Overton, Terry S., 1977. "Estimating Nonresponse Bias in Mail Surveys," MPRA Paper 81694, University Library of Munich, Germany.
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    1. Hakan Uslu & Larry Teeter, 2017. "Shutdown Decision of Firms Based on Variable Costs and Demand," The American Economist, Sage Publications, vol. 62(1), pages 43-65, March.
    2. Pokharel, Raju & Grala, Robert K. & Grebner, Donald L., 2017. "Woody residue utilization for bioenergy by primary forest products manufacturers: An exploratory analysis," Forest Policy and Economics, Elsevier, vol. 85(P1), pages 161-171.

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