Post on 27-Mar-2015
Forest Production, Industry and Forest Retention Assessment
Steven W. KoehnDirector / State Forester
September 21, 2005
From a Report for the Maryland Center for Agro-Ecology Center by The Irland Group
• In 2002, the Maryland Center for Agro-Ecology commissioned a study to assess forest production, industry and forest retention
• The Question:
What is the critical mass of forest land needed to support the wood-based manufacturing industry in Maryland?
Background
Why the Question?
• Changes in forest ownership and management
• New forms of conservation valuation
• Uncertain fiber supply• Sprawl• Business Challenges• Assorted public policy
initiatives
To Answer the Question
• Assess Maryland’s wood dependence
• Estimate wood flows• Assess trends in
Maryland wood-using industries
• Explain impact of land use change
• Identify significant issues and competitiveness challenges
Maryland’s Forests
Growth/Drain
Softwood 1.25
Hardwood 1.31
• Approximately 2.4 Million Acres of Forestland
• 43% Forested• Over 130,600 Forest
Landowners• Average Woodlot is 17
Acres
Maryland Land Use Trends
• Since 1950, 12% forest land loss -- 4% since 1982• From 1982 to 1997, “developed” acres in Maryland
increased by 35% - projected to increase by 14,000 acres per year
• 7% Decrease in “rural” acres• 4% Loss in forest acres since 1982• Ownerships are getting smaller, parcels more
fragmented• Nationally, at least 25 million acres has dropped out
of forest industry ownership since the 1980s• In 2003 alone, 4.5 million acres of major US timber
holdings changed hands
Factors Affecting Industry Expansion and Fiber Availability
• Challenging economic situation
• Globalization of forest production and markets
• Industry consolidations• Imports• Loss of secondary
manufacturing• Weak markets for lower
quality hardwoods
• Ind. wood use rose 40% since 1960: ~ 1.6 BM3 but flat over last 20
• Fuel wood use > industrial wood use: ~ 1.8 BM3 and growing
• Ind. wood use could increase < 33% by 2050: from 1.6 - 2.1 BM3– 75% of global wood and fiber will come from planted forests by
mid century or earlier (Sedjo and others)– 31% of global solid wood consumption crosses an international
boundary from tree to product; most likely to increase
• US imports 30% of solid wood products consumed; exports associated jobs & impacts (81% growth since 1991)
• US uses 30% of world’s solid wood products; largest per capita
• US forest and wood choices drive global wood market
UN FAO 2005: 2002 data + Perez-Garcia on future demand
Global & U.S. Wood Use
US in Global Context
30
30
8
8.6
9
5.8
7
4.7
0 5 10 15 20 25 30 35
Solid Wood Imported
Solid Wood Used
Wood Volume in Forests
Plantion Forests
Reserve Forest
Forest Land
Land
People
UN FAO 2005: 2000, 2003 dataUN FAO 2005: 2000, 2003 data
Percent of World SharePercent of World Share
Some Global Leaders
32
30
30
22
24
27
23
22
0 5 10 15 20 25 30 35
Solid Wood Exports = Canada
Solid Wood Imports = US
Solid Wood Used = US
Solid Wood Produced = US
Plantation Forests = China
Wood Biomass = Brazil
Wood Volume = Russia
Forest Area = Russia
UN FAO 2005: 2000, 2002UN FAO 2005: 2000, 2002 datadata
Percent of World SharePercent of World Share
Global Plantation Forests
42
24
5.6
4.7
0 10 20 30 40 50
India + China
Russia + US + Japan
Brazil + Chile + NZ + SA + Australia
EU
Percent of World SharePercent of World Share
UN FAO 2005: 2000, 2002UN FAO 2005: 2000, 2002 datadata
U.S. Imports from China
Wood Household Furniture
41% and growing!
Furniture Imports
$0
$2
$4
$6
$8
$10
$12
$14
$16
1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 20020%
5%
10%
15%
20%
25%
30%
35%
40%
45%
Imports China Share
$ Billion China’s Share
U.S. Imports From Low Wage Countries
0% 20% 40% 60% 80% 100%
Leather Goods
Apparel
Toys
Furniture
Plastic/rubber
Stone/Concrete
Textiles
Fabricated Metals
All Manuifacturing
2001 2011
Softwood Lumber Competition from Southern Hemisphere
0
100
200
300
400
500
600
700
800
900
1000
0
20
40
60
80
100
120
140
1990
1992
1994
1996
1998
2000
2002
2004
2006
2008
Imports (Million BF) from Chile Brazil, Mexico, NZ, Australia
Plantation Pine Timber HarvestFrom Southern Hemisphere
Million M3
Source: R. Taylor, WMM
Source: R. Taylor, WMM
Ways of Looking at Maryland’s Wood Dependence
• Consume 5 million cords of wood per year
• Rely on 2.2 million acres in-state, and 7.4 million acres outside the state to build homes, use paper, etc.
• Are 20% self-sufficient
As Consumers of Forest Products, Marylanders:
Ways of Looking at Maryland’s Wood Dependence
• About 35% of Maryland’s fiber is transferred out-of-state for processing
• At the same time, Maryland’s industry relies on out-of-state fiber for 52% of its needs
• Net Import Dependence is 38%
As Producers of Timber and Forest Products:
Maryland Wood Fiber Flow -- 2001 Wood Fiber Harvested in Maryland and Processed In and
Out of State (All units in Green Tons)
Industrial Roundwood HarvestSoftwood 657,548Hardwood 1,595,087
Pulp IndustryRoundwood 323,000Rdwood Chips 244,000Residues 244,300TOTAL 811,300
Residues244,300
Other27,645
Pulp566,989
Sawnwood1,537,371
1 Includes Bark
Fuel1
129,254Mulch1
518,459Farm1
137,705
Exports120,619
04/10/23 09:37 PM
Recovered Wood FiberConst. Demolition Debris 32,858Land Clearing Debris 15,430 Total 48,287
Lumber691,817
Wood Fiber Processing in Maryland -- 2001 Wood Fiber From All Sources (In and Out-of-State)
Processed in Maryland (All units in Green Tons)
SoftwoodTotal Rdwd Prod 670,603Fuelwood1 13,055Industrial Rdwd 657,548
HardwoodTotal Rdwd Prod 1,790,647Fuelwood1 195,560Industrial Rdwd 1,595,087
Sawnwood396,375
Pulp241,150
Other15,605
Pulp Industry
Softwood HardwoodRoundwood 97,150 225,850Rdwood Chips 144,000 100,000Residues 148,450 95,850TOTAL 389,600 421,700
Residues148,450
Residues95,850
Other12,040
Pulp325,859
Sawnwood1,140,996
1 Fuelwood From Growing Stock Only2 Includes Bark
Fuel2
105,273Mulch2
479,218Farm2
82,722Fuel2
23,981Mulch2
39,241Farm2
54,983
Exports4,418
Exports116,201
04/10/23 09:37 PM
Recovered Wood FiberConst. Demolition Debris 32,858Land Clearing Debris 15,430 Total 48,287
Lumber178,369
Lumber513,448
Out of State215,448
Out of State451,276
Use of Maryland Timber*
Softwood Sawnwood
18%
Hardwood Pulp & Other
15%
Softwood Pulp & Other 15.0%
Hardwood Sawnwood
52%
Maryland Ind. Roundwood(Million Green Tons)
Hardwood 1.5 67%Softwood 0.7 33%
*In and Out of State
Wood Fiber Processed in Maryland*
Softwood Sawnwood
16%
Hardwood Pulp & Other
32%
Softwood Pulp & Other 13.0%
Hardwood Sawnwood
38%
Wood Fiber Processed(Million Green Tons)
Hardwood 2.3 68%Softwood 1.1 32%
*Including Fiber From Other States
Trends in Maryland’s Forest Industry
• Manufacturing is not big part of Maryland economy – and has been declining
• Manufacturing accounts for 6% of total employment
• But wood-using industries important in some of Maryland’s most rural areas
• Wood-using manufacturing accounts for 9% of manufacturing employment
Manufacturing as % of Total Employment
5.0%
5.5%
6.0%
6.5%
7.0%
7.5%
8.0%
8.5%
9.0%
9.5%
1990
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
0.0%
2.0%
4.0%
6.0%
8.0%
10.0%
12.0%
14.0%
16.0%
18.0%
Source: Maryland DLLR
USA – Right Scale
MD – Left Scale
Maryland’s Wood-Using Industry
• In general, Maryland’s wood-using industry has fared about the same as the nation as a whole, but better than MD manufacturing in general
• About 5,000 jobs depend directly on Maryland wood
• Aboout 14,000 jobs rely on the forestry, wood and paper sector
• Several mills have closed, but production has remained stable
MD Employment Trends
6.80%
7.30%
7.80%
8.30%
8.80%
9.30%
9.80%
10.30%
1988 1990 1992 1994 1996 1998 2000
Mfg. as % of Total Employment
Forest Products as % of Total Mfg.
Source: Maryland DLLR
MD Counties Where Forest Products are “Basic” Employment
20.4%
7.7%
17.7%
1.6%
1.1%
9.0%
Allegany
Caroline
Carroll
Garrett
Queen Anne's
Somerset
Wicomico
37.7%
Factors Affecting Industry Expansion and Fiber Availability
– parcel fragmentation– increasingly passive
management on state lands
– changing owner preferences (non-timber objectives)
– regulatory burdens– Lack of public
awareness
•Major trends affecting timber availability:
Factors Affecting Industry Expansion and Fiber Availability
• Smaller tracts make logging more expensive, reduces returns to loggers, drives down stumpage prices, and reduces incentives for management
•Major trends affecting timber availability:
Back to the Question
• What is the critical mass of forest land needed to support the wood-based manufacturing industry in Maryland?
• Wood-based primary industry consumes about 3.3 million green tons of wood fiber, while producing 2.2 million tons
• To support Maryland’s wood based manufacturing would require the use of annual growth from 2.2 million acres
• Only 1.7 million acres of available land (probably less), but not all growth being harvested, thus forests are advancing in age and stocking
• To meet Maryland’s consumer needs requires 9.6 million acres each year
• But self-sufficiency is not necessary
Back to the Question
• What is the critical mass of forest land needed to support the wood-based manufacturing industry in Maryland?
• Answer: no “threshold” to define critical mass. As parcel sizes decline, owner interest in management declines, management costs increase, revenue possibilities decline and commercial resource leaches away acre by acre
• Wood fiber flow from other states likely to increase• Base for the remaining wood-based manufacturing
economy is slipping away
Possible Strategies to Retain Working Forests and Viable Industry
• Articulate goal of no net loss of commercial forestland • Undertake review of entire family of forest policies
– Conservation Easements– Local Zoning Regulations– Further Property Tax Abatements (i.e. zero property tax)
• Ensure working forest easements• Assess ownership fragmentation issue• Shortage of “intellectual capital” – more technical and
educational assistance• Deeper subsidies • Improve outreach• Develop markets for low value wood (i.e. energy generation)