California’s Timber Harvest
& Forest Products Industry
Todd A. Morgan, CF
Bureau of Business & Economic Research
PNW-FIA User Group Meeting
May 13, 2008
Who we are & what we do
Research branch of The University
of Montana School of Business
Administration
• Regional economic analysis
• Survey research
• Industry analysis
¾ Forest industry research
Forest Industry Research
1. State-level industry analysis
2. Logging utilization studies
3. Resource Planning Act Assessment
& Timber Products Output
4. Quarterly Montana reporting
5. Other “special” projects
Forest Industry Censuses
• Mill type, capacity, equipment,
employment
• Timber harvest volume, use,
species, county, & ownership
• Mill residue & wood fiber use
• Product volume, sales, &
geographic distribution
Industry Analysis
• Rocky Mountains & Pacific Coast
• Describe industry structure,
capacity, condition, and changes
• Track wood fiber from forest to
marketplace
• Associate key economic indicators
California Timber Harvest, 2006
6%
6%
True firs
5%
28%
Douglas-fir
Ponderosa
pine
Redwood
14%
Other spp.
17%
24%
Sugar pine
Cedars
1.8 Billion BF Scribner
California Timber Harvest
Industry
NIPF
Other Pub
USFS
5
4
3
32%
1988
1976
1972
0
1985
37%
28%
15%
13%
2006
40%
45%
2000
45%
1994
1
40%
1992
43%
1982
2
1968
Billion board feet
6
California Annual Timber Harvest
1952-2007
Total
Federal
State
Private & Tribal
6
4
3
2
1
2007
2002
1997
1992
1987
1982
1977
1972
1967
1962
1957
0
1952
Billion Board Feet Scribner
5
California’s Timber Resource
Non-reserved Timberlands
2001-2005
Growing stock volume
Annual growth
Annual mortality
Annual removals (2000)
Removals estimate 2006
67,372 MMCF
1,915 MMCF
367 MMCF
469 MMCF
375 MMCF
Source: 2007 RPA review tables http://fia.fs.fed.us/program-features/rpa/default.asp
California’s Timber Resource
Non-reserved Timberlands
2001-2005
Net Growth
(MMCF/yr)
Removals
(MMCF)
Ratio
Public
Private
890
660
77
393
11.6 : 1
1.7 : 1
Source: 2007 RPA review tables http://fia.fs.fed.us/program-features/rpa/default.asp
California’s Forest
Products Industry
California’s Forest Products Industry
• Over $2 billion annual sales
• 75,000+ employees, 25% in primary
industry
Composition of California’s
Forest Products Industry
Pulp/board
Veneer/plywood
Bark
Sawmills
Other
Bioenergy
100
93
80
56
60
47
40
33
27
25
20
11
9 6
9
5 3
7
10
2 2
5 2 2
0
1988
1992
2000
2006
10
California’s Timber-Processing
Facilities by Size Class
60
Over 50 MMBF
Annual Use
51
50
40
20
30
20
37
16
18
9
10
13
12
2000
2006
0
Over 10 MMBF
to 50 MMBF
Annual Use
Under 10 MMBF
Annual Use
California’s TimberProcessing Capacity & Use
(excluding pulpwood)
Timber Processing Capacity
Capacity Utilized
7
5
4
3
2
2006
2004
2002
2000
1998
1996
1994
1992
0
1990
1
1988
Billion Board Feet Scribner
6
California’s Timber-Processing Capacity &
U.S. Lumber Prices, 1980-2007
Capacity
Lumber price
$450
$350
5
$300
4
$250
3
$200
$150
2
$100
1
$50
2008
2003
1998
$0
1993
0
Lumber Price ($ per MBF)
$400
6
1988
Capacity (Billion bf Scribner)
7
U.S. Housing Starts, 1995-2009
Source: National Association of Home Builders & Western Wood Products Association
Housing Starts (thousands)
2,500
2,000
1,500
1,000
500
0
1995
2000
2005
2008
2011
Current Situation
z The
Perfect Storm!
– Sub-prime mess having broad effects
– Low private and public harvest levels
– Proposed USFS budget cuts
– Injunction on Categorical Exclusions
– Serious issues with over-stocked stands and coming
fire season
– Election year
Current Situation
z Good
News!
– California still has an integrated industry
– Growing interest in carbon sequestration
and biofuels
– NEED for forest restoration, fire hazard
reduction, and timber management
– Weak U.S. dollar
The Future of California’s
Forest Products Industry
z ??????
– Ample and growing wood supply but
decreasing timber availability
– Very high wood consumption and greater
competition for existing harvest
– Disconnect from land & NIMBY attitude
– Ability to capitalize on carbon and meet
societal demands?
Internet:
www.BBER.umt.edu
Email:
Todd.Morgan@business.umt.edu
Phone:
(406) 243-5113