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Blog

The Relationship between Demand and Forest Productivity in the US South: Part II

August 01, 2017

This is the second in a series of posts covering the recently-published report compiled by Forest2Market titled “Historical Perspective on the Relationship between Demand and Forest Productivity in the US South.” Our analysis uncovered seven key findings related to the relationship between demand and forest productivity, which will be explored in this series. This independent report was commissioned by Drax Group, plc, the National Alliance of Forest Owners and the US Endowment for Forestry & Communities, Inc.

Since the middle of the twentieth century, the amount of timberland—unreserved, productive forest land—in the US South has remained stable, increasing by about 3 percent between 1953 and 2015. During this period, economic growth and increased construction spurred consumer demand for forest products, which led timber harvests—or removals—to increase 57 percent. Yet over this same period, the amount of wood fiber—or inventory—stored in Southern forests increased 108 percent. 

Forest2Market’s in-depth analysis of historical data over the past six decades documents the link between increased demand and increased inventory. Further, it explains that the dramatic increase in forest inventory was made possible by even more remarkable increases in productivity, especially on privately-owned timberlands. Encouraged by strong demand from the forest products industry, landowners made the long-term investments that were necessary to significantly improve forest productivity and increase inventory on a stable land base.

 

 

Key Finding #3

  • Removals increased as consumer demand for wood products grew. Increased demand for wood products is the result of population growth, higher real Gross Domestic Product and greater utilization of wood for housing construction during periods of economic expansion. Increased removals since the 1950s were driven by increased demand for wood products, including sawnwood (i.e., lumber), panels (i.e., plywood, particle board), pulp and paper products.

In the latter half of the twentieth century, the production of various forest products increased steadily (Figure 2-A). Pulp production peaked in 1994 at 58.4 million metric tonnes, 189 percent above 1961 production. Paper product production increased 237 percent to its peak of 127.6 million metric tonnes in 2007. Sawnwood production increased 67 percent through its peak of 97.0 cubic meters in 2005. Plywood and particle board production increased 321 percent to its peak of 38.5 cubic meters in 1999. 

From 1953 to 2015, US population more than doubled from 159.0 to 321.4 million people, and real GDP increased over six-fold from $2.6 to $16.4 trillion dollars (Figure 2‑B). These shifts increased the utilization of forest products, including paper, lumber and wood panels. 

While periods of economic expansion and recession caused annual housing starts to fluctuate in the United States, an average of 1.5 million private housing units were started annually between 1959 and 2006 (Figure 2‑C), a steep increase over the meager 360,000 started annually in the 1930s and 1940s. Homes also became larger: The average size of a single-family home increased from 1,498 square feet in 1965 to 2,687 square feet in 2015 (Figure 2‑D). Together, these changes increased demand for lumber, plywood and particle board, the staples of American home construction.

 

 

The Great Recession had a severe negative impact on the forest products industry, especially sawnwood and panel production, which decreased 44 and 35 percent, respectively, between 2005 and 2009 (Figure 2-A, Figure 3). Production is gradually improving but has not yet attained pre-Recession levels.

 

 

While industrial wood pellet production in the United States has increased dramatically since 2009, its rate of growth has moderated and remains dwarfed by pulp and paper production (Figure 4).

 

 

For more detailed information and further reading:

South_Report_Cover2.jpg

Full Report

Executive Summary

At a Glance (report highlights)

 

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