Forest Products – Log Uses

• Log Use Data largely from the Washington Mill Survey 2012 (published February 2014)

• Key Categories of Log Consumption– Lumber– Veneer & Plywood– Log Export– Pulp and Paper

Source:2012 DNRWashingtonMillSurvey

Source: 2012 DNR Washington Mill Survey

Source: 2010 DNR Washington Mill Survey

Source: 2012 DNR Washington Mill Survey

865

639821386

213

69

16<5

22

319

45

341

11

79

3

Excludes Log Exports

Manufacturing Location Principles

• Assume: Profit Maximization

• Profit = Revenues - Costs

• Which elements of revenues and costs are variable in space?

– Input factors, labor, land, energy, services, taxes, …. Other? – Transport costs on inputs and products

• Outcomes: (1) Resource Orientation, (2) Market Orientation, (3) Footloose industry

Forest Products: Historically a Quintessential Resource Oriented

IndustryOregon Data from 1955-57:

• 30% of a typical tree is left in the woods

• Of the balance:– Bark 16%– Sawdust 13%– Coarse Residue 17%– Shavings 8%– LUMBER - 46%

Historical Factors Mill Locations

• Transportation technologies - oxen & skids; steam donkeys & railroads; internal combustion engines; balloons & helicopters.

• Lumber mills

• Plywood mills

• Pulp Mills

Early Mills: Puget Sound & Willamette Valley

The Great Boom & Railroads 1883-1929

Northern Pacific Land Grant

Completion of Northern Pacific Railroad Connection, 1883

Northern Pacific Early Route

NP Arrives in Seattle in1884, 1 year after Tacoma

Great Northern Route – Seattle Terminus completed in 1893

Lots of smaller logging railroadsby the turn of the century.

Have not located a comprehensivemap of them.

Mill locations start to shift inlandto tap timber supplies awayfrom tidewater

Logging Railroad atBarlow Pass, Turn of the Century

Lumber Production 1850-1929

0

2000

4000

6000

8000

10000

12000

14000

16000

1850 1860 1870 1880 1890 1899 1910 1920 1929

Mil

lio

n B

d.

Ft. MT

ID

BC

WA

OR

Note the generaldecrease in thenumber of millsby county between1957 and 1964

Shifting Markets for Western Lumber Producers 1938-1954

0

10

20

30

40

50

N.E. South LakeStates

Central Plains

% o

f non

-Wes

tern

mar

kets

1938

1945

1954

Market Locations - Rail Lumber Shipments 1953-1955

0% 20% 40% 60% 80% 100%

Washington

Oregon

Idaho

California

11 Western States

Plains

Lake & Central

Northeast

South

Shifting Output and Markets for British Columbia Lumber 1947-

19580% 20% 40% 60% 80% 100%

1947 -Coast

1958 -Coast

1947 -Interior

1958 -Interior

Canada

U.S.

U.K.

Other

Output - mbf

2025

2587

544

2229

Changing Levels of Lumber Production 1947-1996

0

2000

4000

6000

8000

10000

12000

1940 1960 1980 2000

Mil

lio

ns

of

Bo

ard

Fe

et

Washington

Oregon

B.C. - Coastal

B.C. - Inland

Lumber Production 1850-2007

0

5000

10000

15000

20000

25000

30000

35000

1850

1860

1870

1880

1890

1899

1910

1920

1929

1939

1947

1962

1968

1979

1987

1995

2006

Mil

lio

n B

d.

Ft. MT

ID

BC

WA

OR

2011

Share of Lumber Production

0%

20%

40%

60%

80%

100%

1850

1860

1870

1880

1890

1899

1910

1920

1929

1939

1947

1962

1968

1979

1987

1995

2006

MT

ID

BC

WA

OR

0%

1 0%

2 0%

3 0%

4 0%

5 0%

6 0%

7 0%

8 0%

9 0%

1 00%

1

2011

B.C. Coastal vs. Interior Lumber Production

0

2000

4000

6000

8000

10000

12000

14000

16000

18000

20000

1947 1958 1965 1970 1975 1980 1985 1990 1995 2000 2006

Mil

lio

n B

d.

Ft.

Interior

Coast

0

2 000

4 000

6 000

8 000

1 0000

1 2 000

1 4 000

1

2011

Share of Lumber Production by Region 1947 - 2003

0% 50% 100%

1947

1958

1986

1996

Washington

Oregon

B.C. - Coastal

B.C. - Inland

Total Output - mbf

13376

15816

25616

23136

2012 - %’s similar to 1996; output down to 20730

Plywood & Paper Mills

• Plywood invented in early 20th Century; historic dependence on old-growth “peeler” logs

• Pulp and Paper – locations determined by wood supply, pulping technology, wood supplies

• Technological change has allowed smaller trees to be peeled into veneer, and has shifted wood supplies to pulp mills to be primarily residuals from lumber and plywood manufacture

Source: 2012 DNR Washington Mill Survey

Source: 2012 DNR Washington Mill Survey

Source: 2012 DNR Washington Mill Survey

Source: 2012 DNR Washington Mill Survey

Source: 2008 DNR Washington Mill Survey

Source: 2008 DNR Washington Mill Survey

Source: 2012 DNR Washington Mill Survey

Source: 2012 DNR Washington Mill Survey

Source: 2010 DNR Washington Mill Survey

Source: 2008 DNR Washington Mill Survey

Source: DNR 2010 Washington Mill Survey

Source: 2008 & 2010DNR WashingtonMill Survey

Log Export Bidding Markets

Mill 1Mill 2

National Forest

Mill 1Mill2

NationalForest

Owned byMill 2

Source: 2008 DNR Washington Mill Survey

Source: 2010 DNR Washington Mill Survey

Forest Products Industrial Complex

Forestry Logging

Log Exports

Sawmills, Truss Mfg.,Engineered Wood Members

Lumber Exports

Domestic Markets

Veneer mills

Plywood Mills

Wood Residue Reconstituted Wood Products

Chip Exports Pulp Mills Paper & Paperboard Mills

Hog Fuel Energy Used in Manufacturing

Co-generation

Chips &

Source: WA State Dept. of Natural Resources

Source: DNR 2012 Mill Survey

Legend coversthe pulp millat Wallula

Recent Trends in Timber Harvest and Lumber Production

0

1000

2000

3000

4000

5000

6000

7000

8000

1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008

Mil

lio

n B

oar

d F

eet

WA Harvest

OR harvest

WA Lumber

OR Lumber