Southern Timber Market Trends       Emerging Markets  Arkansas Forestry Association           Little Rock       September ...
TimberMart-South      Center for Forest BusinessD.B. Warnell School of Forest Resources      The University of Georgia  Th...
Objectives•   Review Recent Timber Market Trends•   Examine New Market Opportunities•   Strategies for the New Market•   F...
Forestry Market Trends        Structural Change•   Globalization of Forestry Commerce•   Industry Disintegration•   Timber...
Forested Regions of the World         TimberMart-South       5
Where Does the Wood Go?          Total Roundwood Use for US South                          Total 6.7 billion cubic feet   ...
Where Does the Wood Go?                        Softwood Use in US South                             Total 4.96 billion cub...
Where Does the Wood Go?                       Hardwood Use in US South                          Total 1.78 billion cubic f...
U.S. Timberland Inventory                net volume of growing stock by countySource: US Forest Service                   ...
U.S. Timberland Production               roundwood volume harvested by countySource: US Forest Service                    ...
South’s Timber Industry                        Primary wood-using millsSource: US Forest Service                          ...
South’s Timber Industry        Legend     Primary wood-using mills       TimberMart-South         12
TimberMart-South   13
U. S. South Annual Average Pine &       Hardwood Sawtimber Stumpage                    Prices       Pine sawtimber $23.97 ...
South-wide Average Pine Stumpage   Annual Average Real Prices in 1982 US$/TonSources: Timber Mart-South,U.S. Forest Servic...
U. S. South Annual Average           Pulpwood Stumpage PricesSource: U.S. Forest Service& Timber Mart-South         Timber...
U. S. South Lumber ProductionSource: U.S. Forest Service, U.S.Census, and Random Lengths                            Timber...
U. S. Wood Pulp ProductionSources: Pulp & PaperInternational and American Pulp &                             TimberMart-So...
U. S. South Total Pulpwood                    ProductionSource: US Forest Service , Forisk & CFB                          ...
Annual Housing Starts:                      1980 through 2011, est. 2012Sources: U.S. Census Bureau (SingleFamily + Multif...
Monthly Housing Starts:                           January 2006 through June 2012                                US Total &...
US South Housing Starts               vs. Pine Sawtimber Stumpage                             1976 to 2011, 2012 ytdSource...
Paper & Paperboard Production                January 2006 through June 2012Source: AF&PA                   TimberMart-Sout...
NBSK Pulp Prices                    Monthly January 2006 through July 2012Sources: FOEX Ltd                           Timb...
Remodeling Expenditures                       (LIRA)1996 through present                             (3Q 12 through1Q 13 p...
Southern Pine Lumber Production                         Annual 1950 through 2011, 2012 est.Sources: Southern Forest Produc...
Southern Saw Mill Capacity &         Number of MillsSource: USDA & TMS estimates,                                TimberMar...
Southern Pulp Mill Capacity &        Number of MillsSource: USDA & TMS estimates,                                TimberMar...
US South Fuel Wood Pellet Mills         TimberMart-South         29
US South Fuel Wood Pellet Mills• 29 Operating wood fuel pellet  manufacturing facilities.• At least one in each state• Cap...
Top Pellet Producers• Top 3 mills have about half the total  capacity – 1.6 million tons per year  – Georgia Biomass, Wayc...
Proposed Wood Fuel Pellet Projects• 15 new facilities proposed in last 12  months  – 5 in 3rd Quarter  – All in Georgia or...
Proposed Wood Fuel Pellet Projects• 6 proposed for 2012 startup, largest  – Enviva, Northampton NC - 440,000 tpy  – Wester...
Operating & Proposed Pellet Mills          TimberMart-South      34
Proposed Pellet Mills    TimberMart-South    35
US South Wood Biomass to Electric         Power Facilities          TimberMart-South          36
US South Wood Biomass to Electric          Power Facilities• 15 Operating wood biomass to electric  power facilities.• At ...
Proposed Wood Biomass to Electric          Power Facilities• 17 Active projects announced in the last 12  months for 2012-...
Operating & Proposed Wood Biomass    to Electric Power Facilities          TimberMart-South      39
Proposed Wood Biomass to Electric         Power Facilities          TimberMart-South          40
The South’s Pulp Mills as Potential   Biomass to Power Facilities          TimberMart-South            41
The South’s Pulp Mills as PotentialBiomass to Electric Power Facilities           TimberMart-South            42
Wood Fuel Pellet & Pine         Pulpwood PricesTMS & RISI
Proposed Biomass to Liquid Fuel           Facilities         TimberMart-South         44
Proposed Biomass to Liquid Fuel           Facilities         TimberMart-South         45
Wood Energy Market          Future• ?????• Negatives  – Policy Driven  – Weak economics• Positives  – Renewable  – “Green”...
Southern Pine Planting                                  by ownership typeSource: Georgia Forestry Commission &            ...
Management Strategies• Emphasis Markets and Timing• New Sales Approaches  – Landowner & Logger coordination  – Longer term...
Southern Timber Trends               Final             Questions      TimberMart-South   49
Southern Timber Trends            Sources•   FRA 2000 www.FAO.com•   SFRA www.srs.fs.fed.us/sustain/•   Wood Markets 2002•...
Southern Timber Trends        Sources (cont.)•   Forest Resources Association•   APA Engineered Wood Association•   Random...
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Timber Mart-South Emerging Markets

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  • The Market: Earth Lights http://earthobservatory.nasa.gov/IOTD/view.php?id=896 This image of Earth ’s city lights was created with data from the Defense Meteorological Satellite Program (DMSP) Operational Linescan System (OLS). Originally designed to view clouds by moonlight, the OLS is also used to map the locations of permanent lights on the Earth’s surface.
  • Updated 19 Jan 2012 The South’s Timber Industry-An Assesement of Timber Product Output and Use, 2009 *excludes KY and OK
  • Updated 19 Jan 2012 The South’s Timber Industry-An Assesement of Timber Product Output and Use, 2009 *excludes OK and KY
  • Updated 19 Jan 2012 The South’s Timber Industry-An Assesement of Timber Product Output and Use, 2009 *excludes OK and KY **deleted poles and post because it was 0%
  • http://www.nrs.fs.fed.us/pubs/gtr/gtr_wo78.pdf page 125 The 2007 RPA Timber Assessment
  • http://www.nrs.fs.fed.us/pubs/gtr/gtr_wo78.pdf page 125 The 2007 RPA Timber Assessment
  • http://www.srs.fs.usda.gov/pubs/rb/rb_srs164.pdf Figure 6 The South’s Timber Industry – An Assessment of Timber Product Output and Use, 2007
  • http://www.srs.fs.usda.gov/pubs/rb/rb_srs164.pdf Figure 6 The South’s Timber Industry – An Assessment of Timber Product Output and Use, 2007
  • http://www.srs.fs.usda.gov/pubs/rb/rb_srs164.pdf Figure 6 The South’s Timber Industry – An Assessment of Timber Product Output and Use, 2007
  • Updated 12 Jan 2012 with TMS journal data 2011 average Updated Feb 2011 with TMS journal data 2010 average South’s 4 th Forest and TMS annual average prices, not 5-year averages. Updated for 2004 on Feb 04 2005 Updated for 2005 on Aug 31 06 Updated for 2006 on Aug 31 06
  • Updated Mar 2012 (through 2011) Updated May 2009 (through 2008) 2005 and 2007 numbers based on 4q 2005 and 4q 2007 from Timber Mart-South journal Earlier numbers taken from South ’s Fourth Forest by the US Forest Service Inflation numbers taken from the Bureau of Labor Statistics using the PPI for all commodities http://www.bls.gov/data/
  • Updated 12 Jan 2012 (through 2011) Updated Feb 2011 (through 2010) South’s 4 th Forest and TMS annual average prices, not 5-year averages. Updated for 2004 on Feb 4 2005 Updated for 2005 on Aug 31 06 Updated for 2006 on Aug 31 06
  • Updated 15 March 2012 with 2011 softwood lumber production Updated 23 March 2011 with 2010 softwood lumber production, 2009 hardwood est based on South’s percent of 2008 Updated 16 April 2010 with 2008 and 2009 production, 2009 hardwood production expected to be available in August 2010 Updated Nov 09 with 2009 est. softwood lumber production based on SFPA Updated 9 Sept 08 w US Census Hardwood lumber Updated 24 April 2007 w/ RL Yardstick Updated 31 August 2006 Historic data comes from South’s 4 th Forest More recent hardwood lumber numbers (1993-present) come from the US Census More recent softwood lumber numbers (1987-present) come from the Random Lengths Yardstick
  • Updated March 2012 TMS est for 2011 (98% of 2010) Updated March 2011 per AF&PA 1973 through 1995 from PPI
  • Updated May 2012 with 2010 and Forisk for 2011 and 2012 USFS Southern Pulpwood Production series rb srs 03 1953-1993 1994 through 2008 annually.
  • Updated 16 May 2012 Updated 17 January 2012 Updated 23 August 2011 Updated 29 January 2010 2009 Total values
  • Updated 10 Aug 2012 Updated 7 May 2012 Updated 16 Mar 2012 Updated 17 Jan 2012 Updated 17 October 2011 Uses data from http://www.census.gov/const/newresconst.pdf Updated 23 March 2011 Updated 11 Feb 2010 Updated 19 Aug 2009 Updated 20 January 2009 Updated 2 December 2008 Updated from RL May 3 2007, includes 1Q 07 numbers 2007 estimates are based NAHB 20% percent drop US and South 2006 levels as of April.
  • Updated 16 May 2012 Updated 17 Jan 2012 Updated 23 August 2011 Updated 2/11/2010 Updated Nov 9 2009 using projected housing starts based on http://www.census.gov/const/newresconst.pdf And average of TMS quarterly prices SE Master.xls Updated Aug 19 2009
  • Updated Aug 2012 PPB1 reports
  • Updated 7 aug 2012 Updated 15 Mar 2012 Updated October 2011 data from FOEX Ltd
  • Updated 16 May 2012 Updated 17 Jan 2012 Updated 17 Oct 2011 Updated 23 March 2011 Harvard Leading Indicators of Remodeling Activity http://www.jchs.harvard.edu/media/lira/index.html LIRA Four-Quarter Moving Totals Billions USD Focuses on home improvement, excluding maintenance and repair. The second quarter 2008 release introduces a re-benchmarked LIRA, which was necessitated by the recent discontinuation of the U.S. Census Bureau’s Residential Improvements and Repairs Statistics, also known as the C-50 series.
  • Updated 16 March 2012 Updated 23 August 2011 Updated 9 Nov 2009 through August 2009 Estimated 24 July 2007 Updated 24 April 2007 with SFPA journal Updated 7 Nov. 2006 Data through 2005 and estimates for 2006 come from SFPA Total from NA Fact Book (estimates.) and SFPA/U.S. Census I estimated South using USFS as a starting point and then subtracting FRA and TMS shuts. Updated 25 Jan. 2007
  • Updated 29 Mar 2012 Through 2009 From Forest Landowners article May/June 2010 issue
  • Updated 22 March 2012 Mills closed 2009-2011 Alabama Pine Pulp Perdue Hill AL IP Pineville LA IP Franklin VA Through 2009 from Forest Landowners article May/June 2010 issue
  • Updated to include 3Q 2012 projects (Sandersville and Hazelhurst GA plus 3 undetermined, all about 500,000 tpy
  • Not including the five mills on slide 8
  • Not including the five mills on slide 8
  • Does not include startup of Oak Ridge TN in 2 nd Quarter or Southern Co in Nacogdoches TX in 3 rd Quarter
  • Includes startup of Oak Ridge TN in 2 nd Quarter or Southern Co in Nacogdoches TX in 3 rd Quarter
  • Subtract two startups, add Cemex Brooksvillle FL 80 MW and Greenville Biomass Greensville VA CHP plant
  • Does not include Cemex in FL or Greensville Biomass in VA
  • Does not include Cemex in FL or Greensville Biomass in VA
  • TMS South-wide delivered pulpwood, FOB First Point of Delivery RISI Bagged US pellets (Wood Biomass Markets)
  • KioR due to start up Columbus MS “Soon”
  • Based on file sent by Ann Duff (aduff@smurfit.com) Smurfit-Stone Container 2008-09-24 (Mike Branch ’s office) West Point VA 804.843.5890
  • Was this meant to be exhaustive? Leave some out? Add Random Lengths?
  • Timber Mart-South Emerging Markets

    1. 1. Southern Timber Market Trends Emerging Markets Arkansas Forestry Association Little Rock September 26, 2012Thomas G. Harris, Jr., Sara Baldwin, Jonathan Smith & Robert Simmons TimberMart-South 1
    2. 2. TimberMart-South Center for Forest BusinessD.B. Warnell School of Forest Resources The University of Georgia Thomas G. Harris, Jr. , Sara Baldwin, Jonathan Smith & Robert Simmons TimberMart-South 2
    3. 3. Objectives• Review Recent Timber Market Trends• Examine New Market Opportunities• Strategies for the New Market• Finish on Time
    4. 4. Forestry Market Trends Structural Change• Globalization of Forestry Commerce• Industry Disintegration• Timberland Ownership Change• TIMOS, REITS and other new owners• Declining Paper Markets• Solid wood products Capacity increases• Bioenergy TimberMart-South 4
    5. 5. Forested Regions of the World TimberMart-South 5
    6. 6. Where Does the Wood Go? Total Roundwood Use for US South Total 6.7 billion cubic feet * Total fuelwood is any roundwood product, with or with out bark, used to generate heat at a manufacturing facility or to produce heat for residential settings.The South’s Timber Industry-An Assesement of Timber Product Output and Use, 2009
    7. 7. Where Does the Wood Go? Softwood Use in US South Total 4.96 billion cubic feetThe South’s Timber Industry-An Assesement of Timber Product Output and Use,
    8. 8. Where Does the Wood Go? Hardwood Use in US South Total 1.78 billion cubic feetThe South’s Timber Industry-An Assesement of Timber Product Output and Use,
    9. 9. U.S. Timberland Inventory net volume of growing stock by countySource: US Forest Service TimberMart-South 9
    10. 10. U.S. Timberland Production roundwood volume harvested by countySource: US Forest Service TimberMart-South 10
    11. 11. South’s Timber Industry Primary wood-using millsSource: US Forest Service TimberMart-South 11
    12. 12. South’s Timber Industry Legend Primary wood-using mills TimberMart-South 12
    13. 13. TimberMart-South 13
    14. 14. U. S. South Annual Average Pine & Hardwood Sawtimber Stumpage Prices Pine sawtimber $23.97 (2011) from a low of $4.10 per ton 1960 to a peak of $40.46 per ton in 1998Source: U.S. Forest Service & TimberMart-South 14Timber Mart-South
    15. 15. South-wide Average Pine Stumpage Annual Average Real Prices in 1982 US$/TonSources: Timber Mart-South,U.S. Forest Service & U.S.Bureau of Labor Statistics TimberMart-South 15
    16. 16. U. S. South Annual Average Pulpwood Stumpage PricesSource: U.S. Forest Service& Timber Mart-South TimberMart-South 16
    17. 17. U. S. South Lumber ProductionSource: U.S. Forest Service, U.S.Census, and Random Lengths TimberMart-South 17Yardstick
    18. 18. U. S. Wood Pulp ProductionSources: Pulp & PaperInternational and American Pulp & TimberMart-South 18Paper Association (AF&PA)
    19. 19. U. S. South Total Pulpwood ProductionSource: US Forest Service , Forisk & CFB TimberMart-South 19
    20. 20. Annual Housing Starts: 1980 through 2011, est. 2012Sources: U.S. Census Bureau (SingleFamily + Multifamily Starts) TimberMart-South 20
    21. 21. Monthly Housing Starts: January 2006 through June 2012 US Total & US SouthSources: U.S. Census Bureau (SingleFamily + Multifamily Starts) TimberMart-South 21
    22. 22. US South Housing Starts vs. Pine Sawtimber Stumpage 1976 to 2011, 2012 ytdSources: U.S. Census Bureau (SingleFamily + Multifamily Starts) TimberMart-South 22
    23. 23. Paper & Paperboard Production January 2006 through June 2012Source: AF&PA TimberMart-South 23
    24. 24. NBSK Pulp Prices Monthly January 2006 through July 2012Sources: FOEX Ltd TimberMart-South 24
    25. 25. Remodeling Expenditures (LIRA)1996 through present (3Q 12 through1Q 13 predicted)Source: Harvard University TimberMart-South 25
    26. 26. Southern Pine Lumber Production Annual 1950 through 2011, 2012 est.Sources: Southern Forest Products Association TimberMart-South 26
    27. 27. Southern Saw Mill Capacity & Number of MillsSource: USDA & TMS estimates, TimberMart-South 27
    28. 28. Southern Pulp Mill Capacity & Number of MillsSource: USDA & TMS estimates, TimberMart-South 28
    29. 29. US South Fuel Wood Pellet Mills TimberMart-South 29
    30. 30. US South Fuel Wood Pellet Mills• 29 Operating wood fuel pellet manufacturing facilities.• At least one in each state• Capacity is about 3.2 million tons of pellets• Conversion is about 2 tons of green wood per ton of pellets. TimberMart-South 30
    31. 31. Top Pellet Producers• Top 3 mills have about half the total capacity – 1.6 million tons per year – Georgia Biomass, Waycross GA – Green Circle Bio, Cottondale FL – Enviva, Ahoskie NC• 5 Mills at 120,000 - 150,000 tpy• 21 Mills at 6,000 - 90,000 tpy
    32. 32. Proposed Wood Fuel Pellet Projects• 15 new facilities proposed in last 12 months – 5 in 3rd Quarter – All in Georgia or South Carolina• 6.0 million tpy announced capacity• 12 million tpy increased wood demand
    33. 33. Proposed Wood Fuel Pellet Projects• 6 proposed for 2012 startup, largest – Enviva, Northampton NC - 440,000 tpy – Westervelt, Aliceville AL - 310,000 tpy – Fram, Lumber City GA - 138,000 tpy• 5 proposed for 2013 startup – German Pellets, Woodville TX - 550,000 tpy – Franklin Pellets, Franklin VA - 500,000 tpy – Enviva, Courtland VA - 500,000 tpy – Point Bioenergy, Baton Rouge LA - 440,000 tpy – Zilkha Biomass, Selma AL 440,000 tpy (former Dixie Pellets)
    34. 34. Operating & Proposed Pellet Mills TimberMart-South 34
    35. 35. Proposed Pellet Mills TimberMart-South 35
    36. 36. US South Wood Biomass to Electric Power Facilities TimberMart-South 36
    37. 37. US South Wood Biomass to Electric Power Facilities• 15 Operating wood biomass to electric power facilities.• At least one in 9 of 11 states in the South• Capacity is about 600 Megawatts of power• Average output 40 Megawatts• Conversion is about 10,000 tons of green wood per Megawatt. TimberMart-South 37
    38. 38. Proposed Wood Biomass to Electric Power Facilities• 17 Active projects announced in the last 12 months for 2012-2013 startup• 780 Megawatts of power output• 3 Proposed for 2012 startup – Piedmont Green Power, Barnesville GA - 50 MW – Green Power Solutions, Dublin GA 50 MW – WGS Energy, Twiggs County GA 35 MW TimberMart-South 38
    39. 39. Operating & Proposed Wood Biomass to Electric Power Facilities TimberMart-South 39
    40. 40. Proposed Wood Biomass to Electric Power Facilities TimberMart-South 40
    41. 41. The South’s Pulp Mills as Potential Biomass to Power Facilities TimberMart-South 41
    42. 42. The South’s Pulp Mills as PotentialBiomass to Electric Power Facilities TimberMart-South 42
    43. 43. Wood Fuel Pellet & Pine Pulpwood PricesTMS & RISI
    44. 44. Proposed Biomass to Liquid Fuel Facilities TimberMart-South 44
    45. 45. Proposed Biomass to Liquid Fuel Facilities TimberMart-South 45
    46. 46. Wood Energy Market Future• ?????• Negatives – Policy Driven – Weak economics• Positives – Renewable – “Green” – Wood is Good
    47. 47. Southern Pine Planting by ownership typeSource: Georgia Forestry Commission & 11 southeastern states plus OK & KYSmurfit-Stone Container * Est. some states 2005-2008 TimberMart-South 47
    48. 48. Management Strategies• Emphasis Markets and Timing• New Sales Approaches – Landowner & Logger coordination – Longer term arrangements?• Keep growth rates up
    49. 49. Southern Timber Trends Final Questions TimberMart-South 49
    50. 50. Southern Timber Trends Sources• FRA 2000 www.FAO.com• SFRA www.srs.fs.fed.us/sustain/• Wood Markets 2002• North American Pulp and Paper Factbook• Pulp and Paper International• USDA Forest Service• Wood Resources International TimberMart-South 50
    51. 51. Southern Timber Trends Sources (cont.)• Forest Resources Association• APA Engineered Wood Association• Random Lengths• US Department of Commerce• US Census Bureau• US Federal Reserve• AF & PA• SFPA TimberMart-South 51

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