E R I C K I N G S L E Y, I N N OVAT I V E N AT U R A L R ESOUR C E S OL U T I ON S L L C
FOREST INDUSTRY
IN THE NORTHEAST After a few years of market turmoil, the Northeast’s forest industry is showing signs of stability and some real opportunities for growth. We’re not out of the dark days yet — and in all likelihood we’ll lose some mills that use low-grade wood in the next year — but the markets are providing returns for landowners and real efforts are underway to find the next generation of uses for our forest resource. The forest industry is, of course, comprised of dozens of individual markets, each with their own influences and dynamics. However, when you step back, products fall into three categories – sawlogs (used to make lumber), pulpwood (used for paper production) and biomass (used in energy production). Each harvest will have a different ratio of products based upon location, forest type, harvest prescription and past harvesting practices. Figure 1 shows data – both volume and value to the landowner – from all harvests in New Hampshire for the most recent tax year. Maine, New York
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or other parts of New England would show slight regional differences, but the differences would be small. Let’s start with sawlogs. By volume, this is the smallest category, representing just over a fifth of the total harvest. However, the stumpage landowners received from sawlogs amounted to 80 percent, or fourfifths, of the total income for landowners. That’s important. Sawlogs get turned into lumber. For spruce-fir, that’s structural lumber, used in construction as structural lumber. For white pine and hardwoods, a range of uses
include flooring, furniture and siding. Of course, there are applications that have nothing to do with construction – pallets, reels and boxes, for example – but much of the lumber industry grows and shrinks with construction. To understand how construction is doing, the easiest thing to do is look at housing starts, and those have seen a steady increase since the rapid crash that came in 2008. In the past year, we’ve seen over 14 million housing starts – more than double the same period in 2008-2009. What that has meant for landowners and mills in the Northeast is steadily growing demand. Data from Maine,
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