Yale professor says future of wood industry bleak

Yale professor says future of wood industry bleak

By: Karen Warnick, The Independent
08/14/2009

SPRINGERVILLE - Living in the middle of a forest as most of us do, we tend to understand the wood products economy a little more than those who live in cities.

We know where wood comes from and we know about fire destruction, drought and bark beetles and how they have an effect on our forests.
The outlook for the forest industries is bleak at the moment, but there is hope, says Lloyd C. Irland, the "Forest Economist" professor from Yale's School of Forestry and Economic Studies.
Irland spent some time in our area recently and on July 31 he held a conference at the U.S. Forest Service Headquarters in Springerville.
Members of the Forest Service, Arizona Game and Fish and area wood products industry members were in attendance for his PowerPoint presentation: "Lumber & Wood Market Situation." The Lakeside Ranger District was present via a live video hookup.
The news is not good for the wood industry. United States production is down 55 percent from 2005. Prices for ponderosa pine have been in a steady decline since 2007.
"This is a crisis like the Great Depression for the construction sector," Irland said.
He predicts that 2009-2010 could be worse.
One of the main reasons is the economic crisis and the downward trend in new home construction. But there are other reasons that include shrinking supplies, competition, changing tastes of American consumers, declining quality in resources, cost of transportation and cheaper wood imports.
The outlook for the next five years doesn't appear to be rosy. Irland predicts that the economy will very slowly rebound and housing starts could be even slower. Supply will be tight due to mill closures, the end of the bark beetle salvage surge, cutbacks in supply from Canada, the distance to markets and the new Russian export levy.
Small producers can't support market development for new products, Irland said. He also believes that the logging infrastructure is at risk for the future and that supplies will be unreliable and dependent on federal funds. He estimates that it could take a decade or more to rebuild the wood industry.
Despite the gloomy outlook, Irland remains optimistic that the wood industry will survive. He suggests that prices could snap back faster than expected. New ways of using wood products will have to emerge from the ashes with more emphasis on regional customers.
Irland's sustainable forests partnership model shows emerging market opportunities for selling wood "in the round."
Leaving the bark on, doweling the wood, making round trusses, small wood bridges, gazebos and armadas and quality vigas are all ways to use small trees coming from the forests.
He believes new innovations for wood use will keep the market viable. Market research shows that end users want local wood for lumber and specialty products.
He thinks that concentrating on local and regional markets will be the key to keeping local wood industries going. The wood pellet industry has been a growth business for the last three years.
Worldwide demand for wood pellets for heating has increased since 2006 from about seven million tonnes to an estimated 18 million tonnes in 2010.
Other opportunities for the future include seasonal markets in bark mulch and related items, fuel and bedding pellets, decking, framing lumber, high end markets and supplying energy to the grid.

* Reach the reporter at kaykay85901@yahoo.com