Hardwood Pulpwood Research Articles

Impacts of the European renewable energy policy on forest resource markets in the Southern United States: A case of the wood pellet industry

Exports of wood pellet from the southern United States (US) have surged significantly in the last decade to meet renewable energy requirements set by the Renewable Energy Directives in European Union nations. Several export-oriented industrial wood pellet production facilities have been established across the southern US, which utilize a significant amount of woody feedstock including roundwood stumpage. We employ quasi-experimental causal inference approaches to assess the impacts of the growing wood pellet production on pine and hardwood pulpwood feedstock markets in 39 wood basins across 11 southern states in the US. The findings suggest that the booming wood pellet industry has minimal impacts on the pulpwood feedstock markets in the micro-markets that host wood pellet mills. Findings shed light on how the expanding industrial wood pellet production has influenced the forest resource harvests and product prices in the largest wood basket region of the world.

Assessment of thermal characteristics of building materials made from non-commercial wood

Currently, the forest industry of the Russian Federation is experiencing difficulties with the sale of hardwood pulpwood, which necessitates the search for new technical and technological solutions for its use. The paper describes the design of wooden bricks made from hardwood. Wooden brick is made by gluing lamellas, oriented in a certain way, together into wood panels, followed by gluing the panels together through a layer of veneer. The slats and veneer are made from hardwood. The bricks have a trapezoidal shape with tenons and mortices for ease of connection when installing wall structures. The authors made an assessment of the thermal characteristics of wall structures assembled from these bricks. The calculation was performed using the example of four cities in the European part of Russia, which differ noticeably in climatic conditions. The calculation showed that for all considered climatic conditions this material is suitable for the construction of walls of buildings and structures of a lower importance class with limited service life and the presence of people in them, where there are premises with dry or normal operating mode, ensuring the level of resource saving required by construction regulations without additional insulation. In more difficult climatic operating conditions, additional insulation of facades will be required to ensure the required level of resource saving.

Wood pellets versus pulp and paper: Quantifying the impacts of wood pellets on the pulpwood markets in the southeastern United States

Since the early 2010s, the production of industrial wood pellet for overseas exports has grown considerably in the Southern United States (U.S.). In order to meet the increasing demand for woody biomass feedstock, the wood pellet mills in the U.S. South consume roundwood pulpwood along with low-valued logging residues and sawmill wood wastes. By estimating empirical roundwood pulpwood market models based on the bi-monthly time-series data, this study estimates the impacts of wood pellet production, precipitation, and the COVID-19 Pandemic on the hardwood and softwood pulpwood stumpage prices in 12 southeastern Atlantic coastal micro-markets. Results suggest that the wood pellet industry has led to an increase in pine pulpwood prices, but no statistically significant impact is found on the hardwood pulpwood prices. Rainfall is found to be a positive determinant of the roundwood pulpwood prices. Furthermore, since March 2020, the COVID-19 Pandemic is estimated to lead about 6% decline in both pine and hardwood pulpwood prices. This study provides empirical evidence and additional insights on the timber market dynamics and how small roundwood markets have reacted to the additional wood demand from a growing bioenergy industry in the U.S. South.

Input substitution and relative input price variability in timber markets

Timbers of multiple tree species and sizes are often traded in a single market. Some previous studies have empirically examined their price interdependences, but the drivers of such relationships remain unclear. I demonstrated with a rational expectations model that when timbers of two species (or sizes) were gross substitutes in production, the steady-state ratio between their prices was dependent on their relative quality and ease of substitution in production. The relative input price variability — the variance of the deviation of the relative price from its steady-state value — was a function of shocks in tree growth and demand for the output, negatively related to the ease of substitution. A case study illustrated that the relative price between pine (Pinus L.) pulpwood and hardwood pulpwood, as well as its variance, drastically decreased during the period of 2001–2016, as compared with 1986–2000, in the United States South, whereas the relative price between pine pulpwood and pine chip-n-saw was more stable. One possible explanation was that the emergence of novel forest products may have altered the relative quality and substitutability between pine pulpwood and hardwood pulpwood in the manufacturing process.

Economic and employment implications of a carbon market for industrial plantation forestry

Industrial plantation forestry has the potential to make a significant contribution to carbon sequestration, subject to eligibility in carbon markets and other accounting rules. We considered the sequestration potential and economic viability of industrial forestry in four case studies across Australia: softwood sawlog production in regions of high and low rainfall, and hardwood pulpwood production in regions of high and medium rainfall. We considered both the establishment of new plantations on cleared agricultural land and increases in rotation length of existing forests to increase carbon sequestration. Our study found that establishment of new plantations in cleared agricultural land is generally not economically viable with current costs of establishment (including land value) and returns for wood products. On average, for scenarios of hardwoods and softwoods, a payment for carbon sequestration of about $10 and $30 per tonne of CO2-e is required, respectively, for expansion of the estate to be economically viable (AU$2011). With the exception of softwoods grown in high rainfall, even higher payments for carbon sequestration are required to make increasing rotation lengths of existing forests economically viable, with a break even carbon price for hardwoods and softwoods of about $10 and $40 per tonne of CO2-e, respectively. Although crediting carbon stored in soil and wood products can significantly increase economic viability in some regions, more work is required to verify these predictions and to develop cost-effective measurement methodologies. In contrast, our analysis showed that there was little impact on economic viability of debiting emissions associated with forestry operations and harvesting, as these are a small proportion of the overall carbon balance. On an average annual basis, employment in industrial plantations was found to be comparable to alternative land uses, suggesting forestry does not result in a net loss of regional jobs. We conclude that there is considerable sequestration potential through industrial plantation management if the price on carbon is sufficiently high (e.g. $50 per tonne of CO2-e) and there are no limiting institutional factors (e.g. policies that restrict expansion of plantations onto agricultural land).

Can Timber Hedge against Inflation? An Analysis of Timber Prices in the US South

The US South is one of the world's leading timber producing regions. This article analyzes stumpage prices, the price a landowner receives for standing timber product, without the influence of growth or consideration of land price. Under the framework of Fisher's hypothesis and the real capital asset pricing model, we investigated stumpage prices' ability to hedge against inflation in 12 US southern timber regions using Timber Mart-South data. Prices for five major timber products, including pine sawtimber, hardwood sawtimber, pine pulpwood, hardwood pulpwood, and pine chip-n-saw, for each individual timber region and all regions combined were analyzed in a system by rolling regression and weighted least squares. Using instantaneous quarterly returns, no uniform conclusion could be drawn for either individual regions or the timber portfolio—the inflation hedging ability varied greatly by product and by time. Using 40-quarter average returns on the timber portfolio instead, it was found that pine pulpwood and chip-n-saw could hedge against both expected and unexpected inflation. Hence, stumpage prices alone should not be viewed as consistent or persistent hedges against inflation unless they are held for a long period.

Forest Biomass Supply for Bioenergy Production and Its Impacts on Roundwood Markets in Tennessee

Abstract The use of forest biomass as an alternative source for bioenergy production has become a significant issue in Tennessee. This study used the Sub-Regional Timber Supply model to analyze the regional aggregate forest biomass feedstock potential and the impacts of additional pulpwood demand on the regional roundwood market through 2030. Two scenarios examined the impacts of building a biorefinery facility of 20 and 50 million gallons annual capacity in the state in 2015. The third scenario investigated the impacts of an Energy Information administration (EIA) reference case. The projection results suggest that there is sufficient hardwood pulpwood supply for a 50 million gallon biorefinery facility in Tennessee. It is possible to meet the increased demand of the EIA reference case without affecting the hardwood pulpwood market in the short run, but not in the distant future. The additional demand for softwood pulpwood will affect the softwood market substantially, but the impacts on the hardwood market are comparatively small. Hence, it is more feasible to increase the use of hardwood pulpwood for renewable energy rather than softwood pulpwood. These results will be very helpful in sustainably supplying forest biomass for bioenergy production in Tennessee.

Harvest Choice and Timber Supply Models for Forest Forecasting

Abstract Timber supply has traditionally been modeled using aggregate data, whereas individual harvest choices have been shown to be sensitive to the vintage and condition of forest capital stocks. In this article, we build aggregate supply models for four roundwood products in a seven-state region of the US South directly from stand-level harvest choice models applied to detailed forest inventories. These models allow for a more precise accounting of the biological and economic underpinnings of supply and support forecasting of changes in forest inventories with a high degree of detail. Estimation results support use of the approach. The elasticities of softwood and hardwood sawtimber supply, 0.34 and 0.31, respectively, are consistent with the elasticities reported by previous studies. The elasticities of softwood and hardwood pulpwood supply (respectively, 0.062 and 0.025) are much lower than previous studies found for pulpwood supply, and cross-price elasticities indicate a dominant influence of sawtimber markets on pulpwood supply. Results generally indicate complementarity between sawtimber and pulpwood supply in the short run. This approach can provide a means of predicting the supply consequences of exogenous factors that could alter forest inventories, e.g., climate change and invasive species, and support regular updating of supply models as new inventory data are recorded.

Timber Harvesting Margins in the Southern United States: A Temporal and Spatial Analysis

Abstract This study focuses on the logging sector by analyzing timber harvesting margins in the southern United States between 1977 and 2001. The real growth rate of harvesting margins has been negative for pine pulpwood, while positive for pine sawtimber, hardwood pulpwood, and hardwood sawtimber. Harvesting margins for pulpwood are more stable over time and more integrated spatially when compared with those for sawtimber. There is no perfect integration in the logging sector by timber product and no individual state is found to lead the logging service market. The revealed patterns are explained in terms of changing demand for forest products and forest industry structure.

The Sustainable Forestry Initiative’s impact on stumpage markets in the US South

Using survey data and an equilibrium displacement model, we estimate the market and economic impacts of the American Forest and Paper Association's Sustainable Forestry Initiative (SFI) on stumpage markets in the US South. We examine four timber product markets: softwood pulpwood, softwood sawtimber, hardwood pulpwood, and hardwood sawtimber. In each market we calculate changes in producer and consumer welfare using the equilibrium displacement model that accounts for reductions in timber inventories caused by SFI compliance. We find that SFI compliance costs the US South's economy about $36 million annually. SFI-compliant stumpage producers lose more than $33 million each year in producer surplus as a result of SFI compliance, and consumers lose about $12 million annually in consumer surplus due to higher product prices. These costs are offset partially by benefits to nonindustrial private forest producers, non-SFI-compliant industry producers, and public forest producers, who collectively gain about $10 million in producer surplus annually as a result of higher stumpage prices.

Analysis of the Interaction Between Timber Markets and the Forest Resources of Maine

Abstract The abundant timber resources of Maine are critical to the State's timber economy; thus, when the 1995 forest inventory indicated a 20% decline in softwood growing stock, there was great concern by industry and government. Furthermore, declining near-term softwood growing stock levels were forecast. To better understand what was occurring in Maine's forest, we examined changes in composition and evaluated the relative impacts of harvesting versus growth and mortality. Much of the decline in spruce-fir inventory can be attributed to the budworm infestation of the 1970s and 1980s, although continued high utilization contributed to the decline. The high rate of softwood utilization was facilitated by low softwood timber prices due to increased supply from salvage cutting and high prices for softwood dimension lumber. The high price of dimension lumber also allowed the adoption of sawmill technology in Canada and Maine that used small-diameter logs, formerly consumed by the pulp industry, for lumber production. The increased demand for spruce-fir roundwood occurred during a period when changes in paper demand and pulping technology increased the demand for hardwood pulpwood. Unlike spruce-fir and hemlock, hardwood growing-stock volumes have increased steadily due to low utilization, high growth, and low mortality. Ample inventories of hardwoods have allowed increased volumes of these species to be used in the manufacture of pulp and engineered wood products. A recent partial forest survey of Maine indicated that spruce-fir growing stock inventory has stabilized as a result of regeneration of these species that began after the last spruce budworm infestation. North. J. Appl. For. 21(3):135–143.

International market prospects and the changing structure of the Australian plantation industry

Summary Australia is located in a region experiencing substantial change in the production and consumption of forest products. Australia's own plantation sector is modern and dynamic. It has expanded rapidly (in both hardwood and softwood) in recent decades and has witnessed substantial investment by international forest corporations. With the exception of woodchips, Australia does not export a large volume of forest products. Australia is a major supplier of hardwood and softwood woodchips to Japan. The volume of hardwood pulpwood which is due to come on-line towards the end of the decade means that Australia has the potential to double current exports of woodchips. Given that an increasing volume of hardwood pulpwood from other countries is also due to come on-line around the same time, there will be increased competition to sell hardwood pulpwood in the Asia-Pacific region. China's need for fibre to meet rapidly growing demand for pulp and paper is commonly suggested as a possible new market for Australian woodchips. URS Forestry believes, however, that China's capacity to import woodchips will be limited by the need for domestic pulp mills to compete in open competitive markets with imported pulp. China's growing imports of pulp, and the potential surplus of hardwood pulpwood in Australia, provide an opportunity to develop a bleached hardwood kraft pulp (BHKP) mill in Australia. If Australia does establish a large new pulp processing capacity, its major competitor will be Brazil, which is already home to the most competitive pulp mills in the world. Softwood sawlogs are the other major plantation product of which available volumes will increase substantially in Australia over the next ten years. Australia has traditionally used a large proportion of its plantation pine domestically and, as such, has had little reason to pursue export markets. However, the threat of competition, particularly from New Zealand, and the possible pursuit of export markets, also ensure that cost reduction is an imperative for Australian softwood sawmills. The potential markets for Australia's softwood include China (growing consumption of sawn timber and logs), Japan (change to importing processed softwood products) and USA (growing demand for imported softwood sawn timber). The outlook for the Australian plantation industry is therefore strong, with opportunity to build on the large new investments that have been made in recent years.

The potential availability of plantation roundwood

Summary The history of plantation establishment in Australia is briefly reviewed, highlighting the rapid increase in establishment of hardwood plantations by the private sector over the past decade and the privatisation of some publicly owned softwood plantations. Data collected regionally for the National Plantation Inventory were used to prepare forecasts of future availability for two species groups (hardwood and softwood) and two product groups (pulpwood and sawlog), both groups being broadly defined. The paper draws on these detailed forecasts. The forecasts represent an amalgam of grower-supplied forecasts of availability and estimates based on average yield tables applied to the annual areas planted for the remaining growers. Two alternative scenarios were used to model future planting. ‘No New Planting’ assumed no additional area was planted after 2001. ‘New Planting’ assumed that additional areas were planted on cleared agricultural land until 2019, but not thereafter. The latter forecasts were based on Bureau of Rural Sciences medium projections of future planting rates. An irregular pattern of availability resulted, due to the fluctuations in past planting rates, and required smoothing to achieve a practicable pattern over time. The forecasts of availability represent approximations of future supply, assuming that all costs and technologies remain unchanged and that all volumes available will be sold at that time. Hardwood pulpwood availability will increase from 2.4 to 15.8 million m3 y−1 by 2015. The ‘New Planting’ scenario will provide even larger impacts after 2015. Australian exports of pulpwood products are likely to increase substantially. Most of the hardwoods are fast-growing eucalypts established for pulpwood production under short rotations (12–15 y). There is increasing interest in their potential to produce sawlogs and other high value products, but considerable uncertainty as to the outcomes and economics. While progressive modest increases in softwood sawlog availability will assist domestic industry to replace imports of sawn timber and ease the demands on native forests, they will not replace all imported and native appearance and specialty timbers, nor will they supplant entirely those native timbers with geographic advantages relative to local and regional markets. Hence exports of softwood sawlogs and/or timber are expected to increase. Softwood pulpwood availability changes little, but domestic processing is likely to utilise some present exports.

A Technique for Merging Areas in Timber Mart-South Data

Abstract For over 20 yr, Timber Mart-South (TMS) has been distributing prices of various wood products from southern forests. In the beginning of 1988, the reporting frequency changed from monthly to quarterly, a change readily addressed through a variety of established statistical techniques. A more significant statistical challenge is Timber Mart-South's change in 1992 from (typically) three reporting regions per state to two. We developed a conversion technique to address this change in reporting areas, permitting longitudinal analyses of the current two regions per state but extending back to the beginning of Timber Mart-South's reports in 1976. We report conversion factors for every state's regions, verify the statistical nature of all time series created using them, and report tests of seamlessness. We find that our technique enables the creation of new, seamless series for pine sawtimber stumpage and delivered sawlogs, and pine and hardwood pulpwood stumpage and delivered logs. In only 30 out of 126 cases were we able to identify remaining regime shifts in the time-series of quarterly prices that corresponded with the 1992 boundary reconfigurations. However, these statistically significant shifts may not be related to the boundary reconfigurations. South. J. Appl. For. 24(4):219-229.

An intervention analysis of Hurricane Hugo's effect on South Carolina's stumpage prices

Using intervention analysis and Timber Mart-South price data, we test hypotheses concerning the impact of Hurricane Hugo on regional stumpage prices. In both the hardwood sawtimber and pine pulpwood markets, a gradual die-down price effect was detected, but a persistently higher or lower price was not found. In the hardwood pulpwood market, we could not even identify a significant price drop immediately followed the occurrence of Hugo. Only in the pine sawtimber market were we able to detect a higher price of $6.00 per thousand board feet in the long run. However, our examination of an average price series for pine sawtimber across the southern United States suggests that this effect could have come from structural shifts in the regional market, rather than from Hugo's impact. Our empirical evidence thus rejects the hypothesis of a persistently higher or lower price in favor of the alternative that Hugo caused only a gradual die-down price effect.

Wildlife linkages: volumes and values of residual timber in riparian zones in eastern Texas

In regenerating southern pine, maintenance of riparian zones (RZs) is a major land concession for soil and water protection and wildlife habitat enhancement. However, there are few data quantifying the volume and value of residual timber in such areas. We inventoried merchantable timber in nine RZs of three widths in sapling-class East Texas pine plantations. Present, discounted, and projected volumes and values of residual timber were determined. Average per-acre volumes of narrow, medium, and wide RZs were 337, 1438, and 2542 board feet (Doyle log rule) and 4.6, 8.2, and 7.2 cords, respectively. At US$ 154.00 and US$ 57.00 per thousand board feet for pine and hardwood saw timber, respectively, and US$ 15.00 and US$ 5.00 per cord for pine and hardwood pulpwood, respectively, average present per-acre values were US$ 46.41, US$ 209.93 and US$ 352.75 for narrow, medium, and wide RZs. Interest rates for the growth of trees from 1981 to 1989 ranged 3.7%–23.5% for pine and 2.2%–6.1% for hardwood. For the 1981–1989 discount period, average per-acre net annual equivalents of narrow, medium, and wide RZs were US$ 4.52, US$ 20.46, and US$ 34.38, respectively. Stumpage values at the time of harvest projected at 7% compound interest for 30 years ranged US$ 10.66–US$ 3547.54 per acre and for 80 years ranged US$ 313.93–US$ 104 499.95 per acre. The impact of these results on wildlife is discussed.

Kraft Pulping Properties ofAcacia mearnsiiandEucalyptus grandisGrown in Zimbabwe

SYNOPSIS Pulpwood samples from 8-year old Acacia mearnsii and Eucalyptus grandis plantations grown in Zimbabwe were evaluated for kraft pulping, bleaching and papermaking properties. The possibility of co-pulping the two species was also investigated. A. mearnsii had higher chip basic density than E. grandis, and required more active alkali to produce less pulp. At about the same Kappa number, the A. mearnsii pulp had lower strength properties but higher opacity. Pulps of both species could be bleached to an acceptable brightness. The results demonstrated that the conventional prejudice against the use of A. mearnsii as pulpwood in Zimbabwe may be undeserved. The species has superior pulpwood productivity and can be successfully co-pulped with E. grandis, the preferred hardwood pulpwood species in Zimbabwe.

An Economic Analysis of the Differences Between Bid Prices on Forest Service and Private Timber Sales

Abstract Data on 220 private and 99 Forest Service sealed bid timber sales in North Carolina indicate that per acre prices are about $675 higher on the private sales. Hedonic timber price equations for Forest Service and private sales are used to decompose this price difference into (1) differences due to characteristics of the sales and (2) differences due to the valuation of those characteristics. Both components of this decomposition are found to explain a portion of the price difference. The valuation of particular tract characteristics is found to be higher on private sales. In particular, our results suggest that pine sawtimber, pine pulpwood, and hardwood pulpwood have higher market valuations on private sales. For Sci. 41(4):823-840.

State and Federal Timber Stumpage Prices in Vermont

Abstract Timber sales data and stumpage prices were analyzed for the Green Mountain National Forest (federal) and the Vermont Department of Forests, Parks and Recreation (state). In all cases, state stumpage prices were higher on average, but significantly so only for the overall price (volume weighted average sale price per cunit), spruce sawtimber, and hardwood and softwood pulpwood. Differences between mean state and federal prices for sugar maple and yellow birch sawtimber were not significant. Regression analysis was used to examine the differences in overall stumpage price. The results suggest that the difference in sale prices can largely be explained by differences in sales characteristics, most notably timber quality. North. J. Appl. For. 9(3):97-101.