Wood Supply Research Institute Update
“Will Logging Capacity Meet Mill Demand?”
Doesn’t time fly? Since 2004, economic conditions nationwide have inspired a number of WSRI supply chain studies—see www.wsri.org. For instance:
• 2004-2005—WSRI’s Original Logging Capacity Study
• 2004-2007—Updated Logging Capacity Project
• 2011-2012—Supplier / Consumer Relations Study
• 2011-2012—Logging Cost Index Updated Process
• 2012-2013—Supply Chain Analysis (see below)
This nine-year span of WSRI research on logging capacity, logging cost trends, and logging recovery methodology corresponds to the most volatile economic period our forest products industry has ever been through. Many businesses—consumers and loggers alike—did not survive, and the survivors are now looking at means to recover from their losses as demand returns.
The current Supply Chain Analysis Project, now wrapping up, addresses a key question: “Does the wood supply system have sufficient capacity to meet the wood demand required for the projected economic recovery?”
To approach this question, WSRI contracted with Sustainable Resource Systems and RISI to develop projections of production capacity for both manufacturers and wood suppliers and to compare increased projected demand for raw wood over the next five years to the projected capabilities of the U.S. wood supply system to meet that demand.
U.S. wood supply chain metrics are a challenge, because of the many variables: haul distances and conditions; independent loggers’ business strategies; seasonality in Northern and Mountain areas; different harvesting systems and conditions; variance in products and size; and the number of times individual logs are handled within the supply system. With all of these variables, it becomes necessary to break down logging and trucking investment on a theoretical basis, linking the predominant logging configurations in each region to inherent levels of production capacity. This methodology has produced a model indicating the “capital stock” necessary to produce one ton of wood annually. From that model, we may extrapolate the total investment needed to meet the demand of individual businesses.
This project’s inquiry reaches deep, projecting various forms of wood demand, scenarios for housing recovery, mill competitiveness, and other forecasting. By the time you read this column, the full Report will be complete and available to WSRI members. I believe it will be a valuable resource for all who are developing long-term recovery strategies.
If you are not a member of WSRI and want to be a part of the solution first-hand rather than depending on second-hand knowledge, please contact me about joining WSRI, supporting this research, and obtaining accelerated access to research results.
Jim Fendig
Executive Director, WSRI
[email protected]
912-598-8023
