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Wood Products

Primary Question (chapter 13): What are the history, status, and projected future demands for and supplies of wood products in the South?

Related Questions (chapter 14): What are the status and trends of forest management practices in the South? (chapter 15): How might existing and new technologies influence forest operations and the resultant conditions of forests?

Timber harvesting and wood products manufacture yield the largest direct revenue from forests in the South. Timber produces a large share of land-based revenues in rural areas and influences forest conditions. Timber harvesting changes the structure of forests, but strong timber markets have also encouraged landowners to keep land in forest cover, to convert agricultural land to forest uses, and to otherwise invest in silvicultural activities.

Since the 1960s, the consumption of wood products has steadily expanded in the United States, and timber production from western U.S. regions has declined. As a result, the South now produces nearly 60 percent of the Nation’s wood output since the 1990s. The South produces a highly diverse complement of forest products. Both hardwoods and softwoods are used for lumber, plywood, composite boards, poles, paper, and other products (chapter 13).

Timber harvesting and management for timber production are prevalent in all parts of the region, but especially on the Atlantic Coastal Plain from South Carolina to northern Florida and the Gulf of Mexico Coastal Plain from northern Florida to eastern Texas. Recent developments in the wood products industries have resulted in a shift outward from the Coastal Plain to more western and northern parts of the region. These shifts are explained by overall increases in wood products demand but also by changes in wood products technologies, which allow for the utilization of lower quality and smaller sized timber, particularly hardwood timber (see “Timber Markets” following).

Across the South, wood products industries have provided large shares of employment and income. In 1997, the most recent year for which complete data are available, timber harvests led to more than 700,000 jobs in the wood products sector and yielded more than $118 billion in total industry output. The total impacts of activities in the wood products sector were about 2.2 million jobs and $251 billion of total industry output in 1997 (this includes indirect and induced jobs and income). These totals represent 5.5 percent of jobs and 7.5 percent of total industry output in the South (chapter 10). In addition:

• Forests are important in the local and regional economies of the South. The overall southern economy has grown since 1969, with total jobs increasing consistent with increases in population in the national economy. This new economy is less dominated by manufacturing and agriculture. Timber and agriculture, the two major uses of rural southern land still contribute over 6 percent to the southern economy.

• The U.S. wood products industry continues to concentrate in the South, which had 39.3 percent of U.S. wood products jobs in 1997. The percentage of State-level jobs and income in wood products declined between 1969 and 1997, yet actual numbers have remained fairly constant.

Forecasts indicate continued expansion in timber harvests between 1995 and 2040. Increased demands for southern wood products will influence not only the amount of timber harvested but also the location of harvesting. We examined forecasts of timber harvesting and found (chapter 13):

• Softwood and hardwood harvests are forecast to increase by 56 and 47 percent, respectively, between 1995 and 2040.

• Production of softwoods is currently concentrated on the Coastal Plain and, to a somewhat lesser extent, in the Piedmont. Softwood production in this core area is forecast to increase somewhat over the next 50 years. Softwood production is also forecast to increase to the north and west of this core area, in central and western Tennessee, Oklahoma, northern Arkansas, Kentucky, and western Virginia. In these areas, softwood harvests are forecasted to increase by more than 25 percent (fig. 23).

• Declines in softwood harvests are forecast for northern Georgia and for an area that includes portions of Louisiana, eastern Texas, and northern Mississippi.

• While regional softwood harvests are forecast to increase substantially, the volume of softwood inventory would also increase over the next 50 years (fig. 24). Strong and relatively stable markets for wood products would encourage landowners to continue to invest in growing timber. As a result, the area of pine plantations in the South is forecast to increase by more than 60 percent between 1995 and 2040 to 54 million acres. These pine plantations are forecast to be managed with a range of intensities, practices, and rotation lengths in response to differing owner objectives.

• Four States—Georgia, Alabama, Florida, and Mississippi—currently contain and are forecast to contain more than 50 percent of the area of pine plantations (fig. 25).

• Forecast changes in softwood inventories vary by State. Alabama, Arkansas, Florida, and North Carolina are forecast to experience large increases in softwood inventories (fig. 26). Louisiana is forecast to be the only State with a decline in softwood inventory (decline of 6 percent between 1995 and 2040). All other Southern States are forecast to experience at least a small increase in softwood inventories, indicating that net growth exceeds removals throughout the forecast period.

Figure 26—Softwood inventory by State, 1995 to 2040.

• Hardwood harvests are forecast to increase the most in regions with large hardwood inventories. Expanding hardwood harvests would be concentrated in a large contiguous area stretching from northern Alabama and Georgia to the northern boundary of the Assessment area. This area includes all of Kentucky, the central and western portions of Tennessee, western North Carolina, and northern and western Virginia. Harvests are also forecast to expand in northern Arkansas (fig. 27).

• With hardwoods, the rate of removals is forecast to gradually approach the rate of growth between 2020 and 2025. As a result, hardwood inventory is forecast to peak in 2025 and then to decline between 2025 and 2040. Inventory in 2040 is still forecast to be somewhat higher than current inventory (fig. 28). Forecasts of hardwood inventories vary by State. Kentucky, Oklahoma, and Tennessee show increases throughout the forecast period, indicating that net growth exceeds removals throughout the period. Mississippi and South Carolina show inventories declining for nearly the entire forecast period, indicating that removals exceed net growth from the late 1990s forward. Georgia, Texas, and North Carolina have hardwood inventories peaking between 2007 and 2018, and then begin to decline. The remaining States are forecast to accumulate volume until sometime between 2021 and 2031, at which point removals begin to exceed net growth and hardwood inventories begin to decline (fig. 29).

Figure 29--Hardwood inventory by State, 1995 to 2040. Source: TIMBR-1, various figures.

• Real prices for hardwood and softwood products (i.e., after accounting for inflation) are forecast to increase between 2000 and 2040. While investment in softwood forests has been a demonstrated response to increasing softwood prices, major investments in hardwood production have not yet occurred in the South. However, the feasibility of short-rotation hardwood management has been demonstrated and could conceivably reduce these price increases and reverse inventory declines.