Transportation Characteristics and Needs of Forest Products Industries Using Eastern Washington Highways Economic Structure of the Industry

EWITS Research Report Number 13 January 1997

by

Lynn C. Alderson, Economic Research Assistant and Eric Jessup, Research Associate

Washington State University Department of Agricultural Economics

in cooperation with

Kenneth L. Casavant, EWITS Project Director

Washington State University Department of Agricultural Economics

101 Hulbert Hall Pullman, WA 99164-6210

(509) 335-1608

EWITS Research Report: Background and Purpose

This is the thirteenth of a series of reports prepared from the Eastern Washington Intermodal Transportation Study (EWITS). The reports prepared as a part of this study provide information to help shape the multimodal network necessary for the efficient movement of both freight and people into the next century. EWITS is a six year study funded jointly by the Federal government and the Washington State Department of Transportation as a part of the Intermodal Surface Transportation Efficiency Act of 1991. Dr. Ken Casavant of Washington State University is Director of the study. A state-level Steering Committee provides overall direction pertaining to the design and implementation of the project. The Steering Committee includes Jerry Lenzi, Chairperson and Regional Administrator (WSDOT, Eastern Region); Richard Larson, Regional Administrator (WSDOT, South Central Region); Don Senn, Regional Administrator (WSDOT, North Central Region); Charles Howard (WSDOT, Planning Manager), and Eric Berger, Executive Director, County Road Administration Board. Pat Patterson represents the Washington State Transportation Commission on the Steering Committee. An Advisory Committee with representation from a broad range of transportation interest groups also provides guidance to the study. The following are key goals and objectives for the Eastern Washington Intermodal Transportation Study:

• Facilitate existing regional and state-wide transportation planning efforts.

• Forecast future freight and passenger transportation service needs for eastern Washington.

• Identify gaps in eastern Washington’s current transportation infrastructure.

• Pinpoint transportation system improvement options critical to economic

competitiveness and mobility within eastern Washington. For additional information about the Eastern Washington Intermodal Transportation Study or this report, please contact Ken Casavant at the following address:

Ken Casavant, Project Director Department of Agricultural Economics

Washington State University Pullman, WA 99164-6210

(509) 335-1608

ACKNOWLEDGMENT: Sincere appreciation is given to the many people who either participated in the survey or took the time to explain pertinent information regarding the industry. Their efforts have helped to increase this project’s usefulness.

DISCLAIMER

The contents of this report reflect the views of the author, who are responsible for the facts and accuracy of data presented herein. The contents do not necessarily reflect the official views or policies of the Washington State Department Transportation or the Federal Highway Administration. This report does not constitute a standard, specification or regulation.

EWITS PREVIOUS REPORTS NOW AVAILABLE

1. Gillis, William R. and Kenneth L. Casavant. “Linking Transportation System Improvements to New Business Development in Eastern Washington.” EWITS Research Report Number 1. February 1994.

2. Gillis, William R. and Kenneth L. Casavant. “Lessons from Eastern Washington:

State Route Mainstreets, Bypass Routes and Economic Development in Small Towns.” EWITS Research Report Number 2. February 1994.

3. Gillis, William R. and Kenneth L. Casavant. “Washington State Freight Truck

Origin and Destination Study: Methods, Procedures, and Data Dictionary.” EWITS Research Report Number 3. December 1994.

4. Gillis, William R. and Kenneth L. Casavant. “Major Generators of Traffic on US

395 North of Spokane: Including Freight Trucks and Passenger Vehicles Crossing the International Border.” EWITS Research Report Number 4. January 1995.

5. Newkirk, Jonathan, Ken Eriksen, and Kenneth L. Casavant. “Transportation

Characteristics of Wheat and Barley Shipments on Haul Roads To and From Elevators in Eastern Washington.” EWITS Research Report Number 5. March 1995.

6. Jessup, Eric and Kenneth L. Casavant. “A Quantitative Estimate of Eastern

Washington Annual Haul Road Needs for Wheat and Barley Movement.” EWITS Research Report Number 6. March 1995.

7. Gillis, William R., Emily Gruss Gillis, and Kenneth L. Casavant. “Transportation

Needs of Eastern Washington Fruit, Vegetable and Hay Industries.” EWITS Research Report Number 7. March 1995.

8. Casavant, Kenneth L. and William R. Gillis. “Importance of US 395 Corridor For

Local and Regional Commerce in South Central Washington.” EWITS Research Report Number 8. April 1995.

9. Gillis, William R., Eric L. Jessup, and Kenneth L. Casavant. “Movement of Freight on Washington’s Highways: A the Statewide Origin and Destination Study.” EWITS Report Number 9, November 1995.

10. Chase, Robert A. and Kenneth L. Casavant. “Eastern Washington Transport-

Oriented Input-Output Study: Technical Report.” EWITS Report Number 10. March 1996.

11. Chase, Robert A. and Kenneth L. Casavant. “The Economic Contribution of

Transport Industries to Eastern Washington.” EWITS Report Number 11. April 1996.

12. Lee, Nancy S. And Kenneth L. Casavant. “Waterborne Commerce on the

Columbia-Snake.” EWITS Report Number 12. October 1996.

EWITS PREVIOUS WORKING PAPER SERIES NOW AVAILABLE

1. Lee, Nancy and Kenneth L. Casavant. “Grain Receipts at Columbia River Grain Terminals.” EWITS Working Paper #1. March 1996.

2. Lenzi, Jerry, Eric Jessup, and Kenneth L. Casavant. “Prospective Estimates for

Road Impacts in Eastern Washington from a Drawdown of the Lower Snake River.” EWITS Working Paper #2. March 1996.

3. Ellis, John, Eric Jessup and Kenneth L. Casavant. “A GIS and Transportation

Optimization Model Approach to Determining Highway and Rural Road Commodity Flows.” EWITS Working Paper #3. March 1996.

4. Painter, Kate and Kenneth L. Casavant. “A Comparison of Canadian Versus All

Truck Movements in Washington State with a Special Emphasis on Grain Truck Movements.” EWITS Working Paper #4. March 1996.

5. Jessup, Eric, John Ellis, and Kenneth L. Casavant. “Estimating the Value of Rail

Car Accessibility for Grain Shipments: A GIS Approach.” EWITS Working Paper #5. April 1996.

6. Painter, Kate and Kenneth L. Casavant. “Truck Movement Characteristics on

Selected Truck Routes in Washington State.” EWITS Working Paper #6. August 1996.

Table of Contents Executive Summary ...................................................................................................... 1 Introduction ................................................................................................................... 2 Forest Products Background ....................................................................................... 3 Pacific Northwest Forest Industries Description ....................................................... 5 Eastern Washington Profile ......................................................................................... 7 Log Consumption and Usage..................................................................................... 14 Sawmill Profile............................................................................................................. 17 Lumber Imports/Exports ..................................................................................... 18 Industry Concentration ....................................................................................... 18 Plywood Mill Profile .................................................................................................... 19

Industry Concentration ....................................................................................... 20 Log Export Operations ............................................................................................... 21 References ................................................................................................................... 22

List of Tables Table 1 Total Land and Timberland Area in the Northwest and United States, 1987 . 4 Table 2 Net Volume of Timber in the Northwest and United States, 1987.................. 4 Table 3 Percentage of Public and Private Ownership of Timberland by State, 1987.. 6 Table 4 Percentage of Public and Private Ownership of Net Softwood Volume by

State. ............................................................................................................. 6 Table 5 Percentage of Public and Private Ownership of Timber Harvest by State ..... 6 Table 6 Areas Outside National Forests, by County and Land Class, Eastern

Washington, January 1, 1992 ........................................................................ 9 Table 7 Area of Timberland Outside National Forest, by County and Owner, Eastern

Washington, January 1, 1992 ...................................................................... 10 Table 8 Eastern Washington Timber Harvest by Ownership, 1970-1994 ................. 12 Table 9 Timber Harvest Summary by County 1994 .................................................. 13 Table 10 Proportion of Log Consumption by Industry................................................. 14 Table 11 Percent of Sawmill Timber Source from Different Ownership (1994)........... 17 Table 12 Percentage of Sawmill Products Within Each State Distributed to Different

Markets (1994)............................................................................................. 17 Table 13 Percentage of Sawmill Products Within Each State Distributed Using the Different Modes of Transportation (1994) .................................................... 18 Table 14 Percentage of Plywood Products Within Each Region Distributed to Different

Markets ........................................................................................................ 19 Table 15 Percentage of Plywood Products Within Each Region Distributed Using the

Different Modes of Transportation ............................................................... 20 Table 16 Number of Mills Operated by the Top Ten Ranked Plywood Production

Companies, 1993......................................................................................... 20

List of Figures Figure 1 Forest Regions in the Pacific Northwest ........................................................ 5 Figure 2 Land Ownership by County in Eastern Washington....................................... 8 Figure 3 Sawmill Locations in the Pacific Northwest.................................................. 15 Figure 4 Plywood Mills in the Pacific Northwest......................................................... 16

Executive Summary • Transportation of forest products is intrinsically connected to the market it serves.

The purpose of this report is to identify the various characteristics that link all forest product commodities to those respective markets. From what areas or counties does timber harvesting originate? What is the ratio in private versus public supply? What modes of transportation are used for movements of wood products?

• Data presented in this report are derived from private, state and federal agency

reports commonly used and accepted by the wood product industry firms. • Washington State is the second highest producer of wood products, after Oregon in

the Western United States Region. Of that, Eastern Washington accounted for 20% of the total state timber harvest between 1985 and 1994, with the last five years showing a modest increase of 2.7% over the previous five years.

• Transportation services and mills that utilize wood resources are located in rural

areas of Eastern Washington near their source of supply. These mills are often a large and/or significant employer to the area and stimulate many indirect jobs, with some communities being dependent on the timber industry.

• Ferry, Pend Oreille and Stevens counties have the highest ratio of forest land to

non-forest land in Eastern Washington: 81.7%, 75.9% and 71.9%, respectively. • In 1994, sawmills in Washington state received 81% of their raw product from private

timber sources. Availability of public forest sources has diminished greatly due to environmental and endangered species concerns. The products leaving Washington sawmills remain in the west 62.5% of the time, with 10.6% being exported and the remaining 26.9% being transported to more eastern destinations.

• In the state of Washington three transportation modes are utilized for products

leaving sawmills: truck, rail and water, with market shares of 59%, 32% and 9%, respectively. Truck transportation generally occurs close to the origin while rail is used to traverse longer distances at lower rates. Most waterborne transportation is headed for ocean ports for export.

• Plywood mills within the Inland region ship 45% of their products to western markets,

with 55% going to more eastern destinations. Truck and rail are used exclusively, 35.7% and 64.3%, respectively.

1

Introduction

Transportation issues involving forest product industries embody a wide, often complex and varied number of enterprises. Several natural divisions were apparent throughout the course of this study of the industry and its needs, thus making each segment unique in its characteristics and needs. For that reason, this study is being reported in a series of four written reports, as follows: Part 1: Economic Structure of the Industry The first publication gives a broad background on the economic structure of the wood product industry. General location, proportion of timberland, and Washington State’s role in the Western Region of the United States are discussed in detail as a prelude to examining how and where products move to market.

Part 2: Movement of Raw Logs Raw log transportation issues are set apart from the remainder of the industry. This report deals exclusively on a survey of the shipment of raw logs, from the woods, to their designated markets. Inherent characteristics of raw log movements, such as truck configurations, roads utilized, seasonal use and problem areas are some of the items discussed.

Part 3: Shipments from Mills Transportation characteristics of wood products leaving the mill are identified in this report. Mode of transportation, origin, destination, problems encountered, rate structure, types of commodity shipped and inside/outside shipping sources receive attention.

Part 4: Commercial Movements Shipment by sources outside of the forest industry processing firms occurs by commercial truckers. These firms tailor their equipment to meet the demand of this type of transportation need. Market characteristics, origin, destination, rate structure, roads used and timing of shipments are a few of the items discussed. Part 5: Road Usage and Characteristics The location and characteristics of road usage determined in the three industry surveys will be summarized in this final report. Implications for road investments are offered.

2

Forest Products Background

The wealth of any country is largely determined by the abundance of natural resources within its domain. Economic activity from production and consumption of desired commodities arises from the availability and accessibility of plentiful natural resources. One resource that encounters widespread use and applicability is forest products. A significant proportion of the United States’ land area is designated to forest production. Roughly 30% of the 2.25 billion acres of total land area in the United States is classified as forest land (USDA Forest Statistics, 1987). Of this total forest land acreage, approximately 483 million acres is classified as timberland, which is land capable of producing wood products. Approximately 70%, or 347 million acres, of the total timberland acreage is privately owned while the remaining 136 million acres, or 30%, is controlled by government agencies. One region of the United States which has a heavy concentration of forestry production, especially softwood production, is the Pacific Northwest. Comparison of total land and timberland areas for the United States and the four northwestern states of Washington, Oregon, Idaho and Montana is provided in Table 1. The total land area of these four states occupies nearly 11% of the total land area in the U.S., while the total timberland area of these same states accounts for about 14% of the total timberland area in the U.S. The net volume of timber on timberland in the northwest also accounts for a very significant proportion of the total net volume of timber in the U.S., as displayed in Table 2. Twenty-four percent of the net timber volume in the U.S. is located in the four northwestern states. Softwood production is especially notable in the Pacific Northwest, since almost 40% of the U.S. net softwood timber volume is located within the four state region. The high concentration of natural forest production in the Pacific Northwest has generated a vast array of forest product industries involved in the harvesting, manufacturing and distribution of wood products. The growth and success of these industries has been promoted by a highly efficient transportation network comprised of competitive modal alternatives in the form of truck, rail and barge transport.

3

Table 1--Total Land and Timberland Area in the Northwest and United States, 1987

Total Land Area (thousand acres)

Total Timberland Area (thousand acres)

Total Timberland Area by percent

Washington 42,483 16,848 39.7% Idaho 52,692 14,533 27.6% Oregon 61,546 22,084 35.9% Montana 92,765 14,736 15.9%

Total 249,486 68,201 United States 2,257,618 483,311 Source: United States Department of Agricultural, Forest Service “Forest Statistics of the United States”, 1987. Table 2--Net Volume of Timber in the Northwest and United States, 1987

Softwood Hardwoods (million cubic feet) All Timber

Washington 56,710 6,961 63,671 Idaho 34,891 618 35,509 Oregon 63,308 5,410 68,718 Montana 31,555 458 32,013

Total 186,464 13,447 199,911 United States 476,271 355,042 831,313 Source: United States Department of Agricultural, Forest Service “Forest Statistics of the United States”, 1987.

4

Pacific Northwest Forest Industries Description

The forest of the Pacific Northwest is comprised of two different types, separated by the northern Cascade mountains, as illustrated in Figure 1. The West coast forest is the dark shaded region west of the Cascade mountains consisting of mostly Douglas fir, coast redwood, Western hemlock, Western red cedar, sitka spruce, sugar pine and lodgepole pine. These varieties are aptly suited to the milder climate and heavier rainfall conditions of the coastal region. The inland forest is the lighter shaded region east of the Cascades, encompassing most of Eastern Washington and Oregon, Northern Idaho and Western Montana. This region also consists of mostly conifers, including Ponderosa pine, Idaho white pine, sugar pine, Douglas fir, Engelmann spruce, Western larch, white fir and incensed cedar (Miller Freeman, Inc.). There are various different types of ownership for forest land but all can be categorized as either public or private. Public forest includes all national forest and federal or state owned forest.

Figure 1: Forest Regions in the Pacific Northwest

Private ownership refers to any forest owned by companies or individuals in the wood industry, in addition to forest owned by farmers. The majority of timberland acreage in the Pacific Northwest is publicly owned, as shown in Table 3. Over 60% of the timberland acreage in Idaho, Oregon and Montana is publicly owned while only 51% of timberland in Washington is publicly owned (USDA, 1987). Similarly, the net volume of softwood timber is predominately owned by public agencies, as illustrated in Table 4, where less than 26% of the net volume of softwood timber is privately owned in Idaho, Oregon and Montana.

5

Table 3--Percentage of Public and Private Ownership of Timberland by State, 1987 % Ownership of Timberland

State Public Private Washington 51 49 Idaho 78 22 Oregon 62 38 Montana 67 33 Source: United States Department of Agricultural, Forest Service “Forest Statistics of the United States”, 1987. Timber harvests, however, are more equitably divided between private and public forests as shown in Table 5. The proportion of timber harvest from public and private forest is provided for the years 1983, 1987 and 1992. The majority (over 60%) of Washington’s timber harvest each year is supplied by timber from private forest. The other states relied for a larger proportion of timber harvest on public forest for 1983 to 1987. However, timber harvests for 1992 predominately originated from private forest for each state except Idaho. Thus, while the majority of timberland in the Northwest is publicly owned, the majority of timber harvest originates from private sources indicating that privately owned timberland are more intensively harvested and, due to “spotted owl” and other restrictions, are becoming more important. Table 4--Percentage of Public and Private Ownership of Net Softwood Volume by State, 1987

% Ownership of Net Softwood Volume State Public Private

Washington 58 42 Idaho 84 16 Oregon 74 26 Montana 76 24 Source: United States Department of Agricultural, Forest Service “Forest Statistics of the United States”, 1987. Table 5--Percentage of Public and Private Ownership of Timber Harvest by State, 1983-1992

Percent of Timber Harvest 1983 1987 1992

State Public Private Public Private Public Private Washington 34 66 38 62 23 77 Idaho 58 42 58 42 56 44 Oregon 55 45 60 40 38 62 Montana 53 47 51 49 45 56 Source: United States Department of Agricultural, Forest Service “Forest Statistics of the United States”, 1987.

6

Eastern Washington Profile

The crest of the Cascade mountain range divides all counties in Washington between east and west. Twenty counties are located in Eastern Washington, of which 16 counties report timber harvest: Adams, Benton, Franklin and Grant are excluded (WA Timber Harvest). This portion of Washington belongs to a larger part known as the U.S. Western Inland Region. Eastern Washington counties have varied sources of land ownership: National forest, National park and recreation areas, Native American, State, and other federal and private, and are displayed in Figure 2. State land falls under the stewardship of Washington’s Department of Natural Resources. Examples of the “other federal” category would be the Hanford Reservation and wildlife refugees. All other category headings are self explanatory. Timberland and non-timberland ownership outside of the National Forests is further detailed in Table 6. Excluding National Forest, Stevens, Ferry and Okanogan counties possess the greatest total timberland acreage; 975, 764, and 754 thousand acres, respectively, for Eastern Washington. Timberland versus non-timberland acreage per county is highest in Ferry, Pend Oreille and Stevens, with 81.7%, 75.9%, and 71.9%. Although Okanogan has a lower percentage, 40.1% of timberland, it is of significant importance as it contains 754,000 acres within its borders. These four counties parallel one another and are all bordered by Canada to the North. Adjacent to Pend Oreille county is Northern Idaho. North Idaho consist of 5 counties which are commonly know as the “timber basket”. Understandably these areas are of great economic importance and efficient highway systems are an inherent necessity to the two regions. Timberland ownership can be examined further, as shown in Table 7. Here the first column from Table 6 is divided into public and private ownership sources. Public consist of three types of ownership: miscellaneous federal, State, and county and municipal. Private encompasses four types of ownership: forest industries, farmers, Native American, and miscellaneous. The majority of acreage is from private sources. Native American and forest industries comprise 26.8% and 21.9% of total timberland acreage in all Eastern Washington counties. Native American acreage is located in Ferry, Yakima, Okanogan, Stevens and Klickitat county. Native American acres included in this study are in Ferry, Okanogan and Stevens county, for a combined total of 709,000 acres or 17.7%. Forest industries acreage in the study area are in Columbia, Ferry, Okanogan, Pend Oreille, Spokane, and Stevens, together totaling 438,000 acres or 10.9% of the total ownership. Private ownership dominates public by 80.9% (324,400 acres) when viewing timberland apart from the National Forest acreage. The largest public holder then is the state, comprising 16.1% (647,000 acres) of total timberland.

7

Figure 2: Land Ownership by County in Eastern Washington

Sources: Timber Resource Statistics for Eastern Washington, PNW-RB-201, 1995

8

Table 6--Areas Outside National Forests, by County and Land Class, Eastern Washington, January 1, 1992

Forest Land

County Timberland Reserved Timberland

Other Forest

Reserved Other Forest

Total Nonforest Land

All Land

Timberland Percentage

Thousand Acres Adams 0 1,230 1,230 0% Asotin 26 26 327 353 7.4% Benton 0 1,097 1,097 0.0% Chelan 102 30 81 213 351 564 37.8% Columbia 49 2 51 343 394 12.9% Douglas 0 1,163 1,163 0% Ferry 582 14 168 764 171 935 81.7% Franklin 0 795 795 0% Garfield 9 9 348 357 2.5% Grant 0 1,702 1,702 0% Kittitas 315 43 358 707 1,065 33.6% Klickitat 353 14 127 1 495 699 1,194 41.5% Lincoln 37 2 28 67 1,411 1,478 4.5% Okanogan 554 10 190 754 1,126 1,880 40.1% Pend Oreille 279 1 9 289 92 381 75.9% Spokane 281 22 67 370 759 1,129 32.8% Stevens 926 5 44 975 381 1,356 71.9% Walla Walla 18 18 787 805 2.2%% Whitman 9 5 14 1,362 1,376 1.0% Yakima 469 94 41 8 612 1,628 2,240 27.3% All Counties 4,009 192 805 9 5,015 16,479 21,494 23.3% Sources: Timber Resource Statistics for Eastern Washington, PNW-RB-201, 1995

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Table 7--Area of Timberland Outside National Forest, by County and Owner, Eastern Washington, January 1, 1992 Private Other Public Other Private

County Misc. Federal State County and

Municipal Total

Public Forest

Industry Farmer Native American Misc. Total

Private All

Owners

Private Percentage by County

Thousand Acres

Asotin 26 26 26 100.0%Chelan 13 13 30 33 26 89 102 87.3%Columbia 9 9 16 24 40 49 81.6%Douglas** 0Ferry 4 21 25 54 50 407 46 557 582 95.7%Garfield 9 9 9 100.0%Kittitas 82 82 193 39 232 314 73.9%Klickitat 13 64 7 85 169 55 24 21 269 354 76.0%Lincoln 22 15 37 37 100.0%Okanogan 10 163 174 39 72 224 46 381 555 68.6%Pend Oreille 34 34 97 15 133 245 279 87.8% Spokane 13 19 32 26 38 185 249 281 88.6%Stevens 69 162 231 206 171 78 240 695 926 75.1%Walla Walla 18 18 18 100.0% Whitman 9 9 9 100.0%Yakima 81 81 46 342 388 469 82.7%All Counties 109 648 7 766 876 581 1075 712 3244 4010 80.9%

Sources: Timber Resource Statistics for Eastern Washington, PNW-RB-201, 1995

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Eastern Washington’s timber harvest for a twenty-four year period in illustrated in Table 8, developed by Washington’s’ Department of Natural Resources. Note that private and public are listed differently than in previous Tables. For instance, Native American acreage is now public in Table 8, but is previously listed as private. BIA can easily be transposed as private if the reader should so choose. In the 5 year period between 1990-1994, forest industries decrease timber harvest on their land and other private sources increased. Thus, the two private sources have switched positions with one another. The average total private harvest for the 5 year period is 621,569 thousand board feet (mbf) per year. State, other non-federal and National Forest display a decreased timber harvest, reflecting the same trend as that of the Pacific Northwest, probably due to environmental issues and reduced public sales. Native American timber harvest shows a modest increase of 14.9% from 1990 to 1994, the only increase in public lands. Total timber harvest in Eastern Washington experienced a 21.6% decrease from 1990 to 1994. Fluctuations in timber harvest are fairly common, as can be seen in Table 8. These fluctuations and some of their influences are discussed in further detail in the Mill Survey report. A more detailed breakdown by county for the year 1994 is shown in Table 9, noting that 921,925 mbf is the total timber harvest of Eastern Washington in both Tables 8 and 9. Total private harvest in Eastern Washington amounted to 621,429 mbf (67.4%), with 300,486 mbf (32.6%) coming from non-private sources. Small private sources and forest industries accounted for 33.7% and 25.8% of the total harvest production in Eastern Washington. American Indian acreages are located in 5 counties, producing 18% of the total harvest. Ferry, Okanogan, and Stevens counties comprise 46.7% (77,778 mbf) of the total east side BIA harvest. Interestingly, these 3 counties exceed Western Washington’s total BIA timber harvest by 2.4 times, as their total harvest is only 32,343 mbf. Washington’s timber harvest amounted to 4,155,930 mbf in 1994; of that total, Eastern Washington accounts for 22.2%. Also discernible from Table 9 is where the timber harvest originates from and which counties are the most prominent in Eastern Washington. Stevens county is the leader of the east side, accounting for 22.3% of the total. Yakima, Pend Oreille and Okanogan follow with 12.5%, 11.7% and 10.8%, respectively.

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Table 8--Eastern Washington Timber Harvest by Ownership 1970-1994 (Thousand board fee, Scribner log scale)

Year Forest Industry

Other Private

Total Private State

Other Non

Federal National Forest B.I.A. Other

Federal Total

1970 146,877 133,991 280,868 52,820 7,990 332,863 209,939 6,204 890,684

1971 183,300 97,358 280,658 96,557 5,630 385,967 293,053 8,247 1,070,112

1972 117,178 168,534 285,712 80,434 7,118 481,759 329,946 4,347 1,189,316

1973 153,608 231,569 385,177 109,581 1,340 439,170 281,22

1 2,379 1,218,868

1974 226,768 156,211 382,979 70,084 4,376 382,870 300,077 2,239 1,142,625

1975 213,017 125,277 338,294 58,782 5,086 339,847 268,169 2,715 1,012,893

1976 238,725 176,857 415,582 61,053 12,955 363,896 273,606 4,851 1,131,943

1977 209,266 222,824 432,090 78,721 31,097 321,884 298,491 6,940 1,169,223

1978 244,256 215,605 459,861 87,861 16,463 339,443 311,292 4,669 1,219,589

1979 214,991 231,034 445,025 65,026 24,109 291,369 301,176 51 1,127,756

1980 228,251 180,548 408,799 42,587 11,303 316,864 277,827 1,595 1,058,975

1981 239,091 127,763 366,854 51,194 292 297,105 218,276 0 933,721

1982 303,209 100,882 404,091 18,260 3,133 178,788 121,382 1,938 727,592

1983 332,916 138,742 417,658 84,470 14 399,356 162,426 8,241 1,126,165

1984 325,490 148,728 474,218 121,409 0 327,596 122,93

5 1,601 1,047,759

1985 380,248 154,758 535,006 93,545 227 324,138 148,384 2,744 1,104,044

1986 377,200 173,196 550,396 104,438 2,997 396,551 168,24

1 1,539 1,224,162

1987 349,716 190,781 540,497 138,753 2,338 462,312 189,43

1 4,931 1,338,262

1988 364,363 173,790 538,153 115,984 5,573 426,280 210,56

8 0 1,296,558

1989 393,467 224,045 617,512 117,867 1,448 433,511 188,15

9 614 1,359,111

1990 406,466 208,727 615,193 84,245 13,940 313,259 144,712 4,443 1,175,792

1991 386,904 196,227 583,131 67,675 175 284,304 154,302 823 1,090,410

1992 342,462 308,172 650,634 53,990 3,967 205,206 148,960 218 1,062,975

1993 263,383 374,066 637,449 63,078 321 160,975 156,205 4,613 1,022,641

1994 237,635 383,804 621,439 48,561 0 85,664 166,26 0 921,925

12

1 Source: Washington Timber Harvest, DNR, 1994

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Table 9--Timber Harvest Summary by County, 1994 Owner Class

Thousand board feet, Scribner log scale

County Forest Industry

Private Large

Private Small

Total Private State

Other Non

Federal Forest Service BIA Other

Federal Total

OwnershipHarvest Percent

Asotin 1,454 533 5,448 7,435 0 0 1,145 0 0 8,580 0.9%Chelan 7,900 3,500 12,059 23,459 4,133 0 6,457 0 0 34,049 3.7%Columbia 6,040 3,367 8,750 18,157 0 0 3,193 0 0 21,350 2.3%Douglas 0 0 0105 0 1,442 1,547 0 0 1,547 0.2%Ferry 8,545 967 18,942 28,454 0 0 14,014 37,726 0 80,194 8.7%Garfield 0 0 902 902 0 0 1,457 0 0 2,359 0.3%Kittitas 44,000 7,500 21,585 73,085 1,108 0 9,097 0 0 83,290 9.0%Klickitat 38,006 8,000 31,786 77,792 1,031 0 0 9,905 0 88,728 9.6%Lincoln 0 0 00 0 6,921 6,921 280 0 7,201 0.8%Okanogan 10,313 122,419 17,372 40,104 6,167 0 22,155 31,308 0 99,734 10.8%Pend Oreille 42,267 9,000 41,613 92,880 3,468 0 11,346 0 0 107,694 11.7%Spokane 0 0 011,204 6,293 39,654 57,151 140 0 57,291 6.0%Stevens 57,000 15,000 91,332 163,332 23,749 0 9,758 8,744 0 205,583 22.3%Walla Walla 1,801 0 7,099 8,900 0 0 0 0 0 8,900 1.0%Whitman 0 0 00 0 424 424 0 0 424 0.0%Yakima 9,000 6,500 5,396 20,896 8,485 0 7,042 78,578 0 115,001 12.5%

Eastside Totals 237,635 73,079 310,725 621,439 48,561 0 85,664 166,261 0 921,925 100.0%

Source: Washington Timber Harvest, DNR, 1994

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Log Consumption and Usage

Once timber is harvested in the Pacific Northwest, there are four separate destinations or uses for the harvested logs. The most common practice is to transport the logs to a sawmill where they are further processed into lumber for distribution and sale elsewhere in the U.S. and abroad. Veneer and plywood mills also constitute a sizable portion of log consumption, mostly in the production of plywood. A much smaller proportion of harvested timber is processed at pulpmills, where paper products are the primary manufactured products. Timber that is destined for export in raw log form is collected and sorted at mills favorably situated for the log export market. Other less common timber uses include shake and shingle mills, and post, pole and piling mills. The proportion of log consumption by each industry for the northwestern states is provided in Table 10. Sawmills clearly consume the largest proportion of harvested logs in Idaho, Oregon and Montana, ranging from 67% to 83% of log consumption. The second largest use for harvested logs for these states is plywood production, consuming between 10% and 25% of the log harvest. The state of Washington, however, is fairly evenly distributed between the proportion of harvested logs processed by sawmills and destined for log export with 46% and 43% of log consumption, respectively. Washington is the predominate producer of logs for export, probably due to its location and available port facilities. Table 10--Proportion of Log Consumption by Industry

% of log consumption by industry State Year Sawmill Plywood Mill Pulpmill Log export & other Washington 1990 46 6 5 43 Idaho 1990 83 10 3 4 Oregon 1992 67 25 5 3 Montana 1994 80 15 3 2 Source: Washington Mill Survey 1990; and Idaho, Montana and Oregon’s Forest Products Industry: 1990, 1992 and 1994.

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Figure 3: Sawmill Locations in the Pacific Northwest

Source: Wood Technology Mill Map, from Miller Freeman Books, 1995 In addition to consuming the largest proportion of harvested logs, sawmills outnumber any other mill type in the Pacific northwest by a considerable margin. The location of sawmills is generally concentrated fairly close to the timber production region, as illustrated in Figure 3. The heaviest concentration of sawmills in the northwest is located in two regions; 1) Eastern Washington, Northern Idaho and Western Montana and 2) Western Washington and Oregon. sawmills, illustrated in Figure 4. Trucks are the primary modal choice for transporting timber from the harvest area to the mill, mainly due to their flexibility and reliability in accessing remote forest areas (discussed in detail in other reports from this study). Since most mills are located within fairly close proximity of the timber source, the distance traveled is generally less than 100 miles. The destination and modal choice for manufactured products leaving the mill, however, will depend on the mill type and the type of wood product it generates. The two most common mill types in the Pacific Northwest consuming the largest proportion of the log harvest are, by far, sawmills and plywood mills. Likewise, the largest volume of timber is transported from the harvest region to these mills as raw logs and from these mills to markets as lumber or manufactured wood products. Therefore, the movements to and from sawmills and plywood mills will constitute the largest proportion of wood movements, and the primary user of the transportation network and infrastructure. The following section briefly characterizes the nature of wood movements for sawmills and plywood mills in each state by developing a profile of the modal usage and destination of products from each mill type. Data for the sawmill and plywood mill profile were obtained from the Western Wood Products Association and the American Plywood Association.

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Figure 4: Plywood Mill Locations in the Pacific Northwest

Source: Wood Technology Mill Map from Miller Freeman Books, 1995

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Sawmill Profile

The primary source of timber for sawmill operations in Washington, Oregon and Montana is privately owned timber, from either the forest industry or other private sources as illustrated in Table 11. Between 61% and 81% of the timber utilized at sawmills in these states originates from private sources, with the remainder supplied by public sources. In 1992, 62% of sawmill timber was supplied from public timber sources, whereas in 1994, that same source only supplied 39%, a dramatic change of 23% in only two years for Idaho. The majority of timber destined for sawmills in the northwest is private timber since Washington, Oregon and Montana combined produce a much larger proportion of sawmill lumber when compared to Idaho’s production. Table 11--Percent of Sawmill Timber Source from Different Ownership (1994)

% of sawmill timber source Public Private

State National Forest Other Public Forest Industry Other Private Washington 6.5 12.5 42.7 38.3 Idaho 26.6 11.6 23.5 37.7 Oregon 16.0 8.5 47.8 27.5 Montana 25.6 3.6 28.8 41.7 Source: Western Wood Products Association 1994 Statistical Yearbook of the Western Lumber Industry Sawmill products from the Pacific Northwest, mostly in the form of lumber, are distributed to all regions of the United States and exported abroad. However, the primary markets for sawmill products in Washington, Idaho, Montana and Oregon are located in the west, as represented in Table 12. Between 37% and 68% of all sawmill products from these states are transported to western markets. Montana is almost evenly divided, with 37% to the west and 35.6% to the Midwest. Sawmill products from Washington (10.6%) and Oregon (7.4%) are exported but only a very small percentage of products from Idaho and Montana are destined for export markets. This is likely due to the accessibility and close proximity of Washington and Oregon sawmills to ocean ports and the relatively long distances that products from Idaho and Montana must travel to reach these ports. Table 12--Percentage of Sawmill Products Within Each State Distributed to Different Markets (1994)

% to each Market State West Midwest Northeast Southcentral Southeast Export

Washington 62.5 14.4 5.5 3.7 3.3 10.6 Idaho 57.1 23.1 8.3 3.5 6.9 1.1 Oregon 68.1 11.6 6.4 4.0 2.5 7.4 Montana 37.0 35.6 3.2 9.0 13.5 1.7 Source: Western Wood Products Association 1994 Statistical Yearbook of the Western Lumber Industry It is also useful to recognize the different modes of transportation utilized for distribution of sawmill products in each state and compare the modal choice with the market destinations. The percentage of sawmill products from each state transported on each mode (truck, rail, water) is presented in Table 13. Washington and Oregon, two northwestern states which

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transport the majority of their sawmill products to western markets, rely heavily on truck transport. Idaho and Montana, however, have a much greater reliance on rail transport to reach the longer distant markets of the Midwest, Northeast and Southern regions of the U.S. This illustrates the cost savings per unit transported for longer distances on rail. While truck transport is relatively economical and flexible for short and medium distance hauls, the cost per unit transported increases dramatically for extremely long distances. Rail, however, is quite costly and inflexible for short distance hauls, but becomes more economically feasible for longer distances. Hence, while Washington and Oregon utilize a fair amount of rail transport (possibly to transport sawmill products to the distant southwest markets) the majority of their markets are within reach on truck. Washington and Oregon also utilize a considerable amount of water transport (8.7% and 4.4% respectively), thus reflecting the significant portion of sawmill products within these states, which are exported. Table 13--Percentage of Sawmill Products Within Each State Distributed Using the Different Modes of Transportation (1994)

% for each transport mode State Truck Rail Water

Washington 59.1 32.2 8.7 Idaho 53.1 46.9 0 Oregon 58.9 36.7 4.4 Montana 40.1 59.9 0 Source: Western Wood Products Association 1994 Statistical Yearbook of the Western Lumber Industry Lumber Imports/Exports The total lumber production in the U.S. for 1994 was 47,119 million board feet (mmbf). Approximately 27%, or 12,583 mmbf, was produced in the four northwestern states in 1993. During 1994 3,334 mmbf of U.S. lumber was exported, mostly to China and Japan, while 16,792 mmbf was imported, 97% of which was from Canada. Thus, a large amount of lumber from Canada does cross the border for markets in the U.S. Industry Concentration Historically, the sawmill industry in the Pacific Northwest was comprised of a large number of small-scale mills generating the majority of lumber production. However, over the last several decades the type and number of sawmills has changed dramatically, following a similar pattern as production agriculture in the U.S. The smaller sawmills have become fewer in number (and thus volume of production) while larger sawmills (or companies owning several sawmills) have become larger, accounting for the largest percentage of sawmill production. Montana has 86 sawmills, 12 of which are classified as producing 50 mmbf of lumber or more. These 12 sawmills account for 68% of the sawmill production in the state with the remaining 74 smaller mills producing 32% (Montana’s Forest Products Industry, 1994). Idaho sawmills are quite similar with 80 total sawmills, 18 of which are classified as capable of producing 50 mmbf of lumber or more. These 18 mills account for 70.4% of the lumber production in the state with the remaining 62 smaller mills producing the other 29.6% (Idaho’s Forest Products Industry, 1990). Washington and Oregon have 106 and 115 sawmills with 41 and 56 designated as class A mills, respectively. A class A mill produces 120,000 board feet or more per 8-hour shift (1990 Washington Mill Survey and 1992 Oregon’s Forest Products Industry).

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Plywood Mill Profile

Plywood mill information was obtained from the American Plywood Association which reports that approximately 50% of all plywood operations are members of their association and participate in the surveys used to develop the information reported below. Thus, the information provided below is based upon half the industry, unlike the information for the Western Wood Products Association which states the information reported is based on 70% of the sawmill industry. Also, the American Plywood Association reports compile information slightly different than the Western Wood Products Association, dividing the U.S. into three regions. The Western region includes all areas west of the Cascade mountains, including a few mills in northern California. The Inland region includes all areas east of the Cascade mountains, except for the Southern pine region in the southeast U.S. However, the Western and Inland regions are largely made up of the four state Pacific Northwest region, where the largest concentration of plywood mills are located. Thus the majority of information from the Western region predominately comes from the western forest region of Washington and Oregon. Information from the Inland region is mostly from Eastern Washington and Oregon, Northern Idaho and Western Montana, since very few plywood mills exist elsewhere in the U.S. Plywood products from these regions are distributed to all regions of the U.S., with a very small amount exported abroad. The percentage of plywood products distributed to different markets is provided in Table 14. As with sawmill products from Washington and Oregon, plywood products from the Western region are predominately destined for Western markets. The Western region consists of twelve states: Washington, Idaho, Oregon, Montana, Wyoming, California, Nevada, Utah, Arizona, Colorado, New Mexico and a small portion of South Dakota. Fifty-two percent of plywood products from the Western region are distributed to Western markets. The next largest markets for Western region plywood are the Midwest and northeast with 18% and 14%, respectively. Only 2% of plywood from the Western region is exported. Table 14--Percentage of Plywood Products Within Each Region Distributed to Different Markets

% to each Market Region West Midwest Northeast Southcentral Southeast Export

Western 52 18 14 5 9 2 Inland 45 13 41 .1 1 0 Source: American Plywood Association 1994 Report The Inland region, however, distributes a larger proportion of plywood to the northeast (41%). A significant portion of the Inland plywood is also distributed to western markets (45%), but slightly less than the amount shipped from the Western region. No plywood from the Inland region is exported.

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The dominant modal usage for plywood transport from each of these two regions is truck and rail (Table 15). Plywood from the Western region is evenly divided between truck and rail use with about 50% of the product from this region utilizing each transportation mode. However, the majority of plywood from the Inland region utilizes rail transport (64%), possibly indicating the longer distant markets accessed in the Northeast and Midwest. Water transport from these two regions is quite small. Table 15--Percentage of Plywood Products Within Each Region Distributed Using the Different Modes of Transportation

% for each transport mode Region Truck Rail Water

Western 49.9 49.26 .76 Inland 35.7 64.3 0 Source: American Plywood Association 1994 Report Industry Concentration The degree of concentration in the plywood industry is quite similar to the sawmill industry. There are a few large companies which produce the largest percentage of plywood production in the industry. The number of plywood mills owned by the top ten ranked companies for volume of plywood production are presented in Table 16. The company names are omitted for confidentiality purposes. These top ten companies represent the majority of industry production. Table 16--Number of Mills Operated by the Top Ten Ranked Plywood Production Companies, 1993

Company Number of Mills 1993 Rank

Company 1 22 1 Company 2 22 2 Company 3 11 3 Company 4 8 4 Company 5 9 5 Company 6 5 6 Company 7 5 7 Company 8 3 8 Company 9 3 9

Company 10 2 10 Source: American Plywood Association, 1993

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Log Export Operations

Log export operations are typically sites designated for the collection, sorting and grading of logs for export. Often these operations coincide with sawmill operations where the price for each wood use determines whether the logs will be exported or processed into lumber. Log export operations in the Pacific Northwest are generally concentrated in Washington with 73 log export sites. The only other state in the four state northwest region to have log export operations is Oregon, with 13 sites. One reason for the heavy concentration of log export operations in Washington is due to the past restrictions on state owned timber for export for Idaho and Montana. Also, Washington and Oregon are located close to ocean port facilities, unlike Idaho and Montana. Practically all logs destined for export travel on trucks to either an ocean port for ship loading, or to the Snake or Columbia river for barge transport out to ocean ports. Timber in Eastern Washington commonly utilizes barge transport for shipping logs to west coast ocean ports, taking advantage of the cheap water transportation. Thus, a funneling effect occurs where logs for export from all portions of Eastern Washington are transported south on trucks to the river ports in Southeast Washington. Some logs may be shipped on truck across the state, especially when export prices are high or time of delivery is crucial. Generally, however, logs for export from Eastern Washington will move down the river due to the economic incentive. The majority of log export movements on the west side of the Cascades will utilize truck transport due to the closer proximity to ocean ports.

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REFERENCES

American Plywood Association Report. Tacoma 1993. American Plywood Association Report. Tacoma 1994. Larsen, David N. Washington Timber Harvest 1994. Washington State Dept. of Natural

Resources. 1996. United States Department of Agriculture. Forest Statistics of the United States, 1987.

Oregon: Portland. United States Forest Service, Pacific Northwest Research Station, Resource Bulletin, PNW-RB-168. 1989.

United States Department of Agriculture. Oregon’s Forest Products Industry: 1992. Oregon: Portland. United States Forest Service, Pacific Northwest Research Station, Resource Bulletin, PNW-RB 207. March 1995. United States Department of Agriculture. Timber resource Statistics for Eastern

Washington. Oregon: Portland. United States Forest Service, Pacific Northwest Research Station, Resource Bulletin, PNW-RB-201. Feb. 1995.

University of Montana. Idaho’s Forest Products Industry: 1990. Montana: Missoula.

Bureau of Business and Economic Research. December 1992. University of Montana. Montana’s Forest Products Industry: 1969-1994. Montana: Missoula. Bureau of Business and Economic Research. December 1995. Washington State Department of Natural Resources. Washington Mill Survey.

Washington: Olympia. Report #12. May 1994. Western Wood Products Association. Statistical Yearbook of the Western Lumber

Industry. Oregon, Portland: Western Wood Products Assoc. 1995. Wood Technology Mill Map. San Francisco. Freeman Miller Books 1995.