CA SAF State Mtg 2016_McIver
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The document summarizes research on sustaining California's forests from an industry perspective. It finds that in 2012, California's timber harvest was 1.4 billion board feet dominated by Douglas-fir. Sawmills make up the largest sector of the forest products industry, producing 1.9 billion board feet of lumber. The industry employs over 56,000 workers and has an annual economic impact of over $3.6 billion in labor income. Every 1 million cubic feet harvested and processed creates 15 jobs in sawmills, 18 jobs in forestry and logging, and has additional economic impacts.
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CA SAF State Mtg 2016_McIver
- 1. SUSTAINING CALIFORNIA FORESTS: AN INDUSTRY PERSPECTIVE Chelsea P. McIver Bureau of Business and Economic Research, University of Montana Presented at the NorCal/SoCal Winter SAF Meeting 2016
- 2. Who We Are & What We Do Research branch of the University of Montana’s School of Business Administration Regional Economic Analysis Survey Research Industry Analysis Forest Industry Research
- 3. Forest Industry Research Program 1. State-level industry analyses 2. Logging utilization studies 3. Resource Planning Act & Timber Products Output Database 4. Economic Impact Analyses – harvesting and processing of timber (direct response coefficients) Local benefits of restoration on public lands
- 4. Forest Industry Analyses Rocky Mountains & Pacific Coast Describe industry structure, capacity, condition, and changes over time Track wood fiber from forest to marketplace Associate key economic indicators
- 5. State Industry Censuses Mill type, capacity, equipment, employment Timber harvest volume, use, species, county, & ownership Mill residue & wood fiber use Product volume, sales, & geographic distribution
- 6. Species, products, ownership California’s Timber Harvest, 2012
- 7. Harvest by species 1.4 billion board feet, Scribner 28% 27% 18% 15% 6% 5% 1% Douglas-fir True firs Ponderosa pine Redwood Sugar Pine Cedars
- 9. Harvest by ownership 0 1 2 3 4 5 6 1972 1976 1982 1985 1988 1992 1994 2000 2006 2012 Billionboardfeet Industry NIPF Other Public USFS
- 10. Historical harvest by ownership - 1 2 3 4 5 6 1960 1964 1968 1972 1976 1980 1984 1988 1992 1996 2000 2004 2008 2012 BillionBoardFeetScribner Total Private & Tribal National Forests Other Public
- 11. California Timberland & Harvest by Ownership 53.4 61.2 14.3 2.9 2.8 2.0 43.7 36.0 83.7 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% Timberland Sawtimber tree* Harvested area volume volume Percent National forest Other public Private *Sawtimber is timber of “sufficient size and quality to be suitable for conversion into lumber"
- 12. Historical harvest by product Product type 1968 1972 1976 1982 1985 1988 1992 1994 2000 2006 2012 ---------------------------------------------Percent ------------------------------------------------------- Sawlogs 86 86 86 91.2 92 92.5 99.3 92.9 89.8 88.1 82.8 Veneer logs 10 12 11.5 6.1 5 4.7 b 5.2 7.4 8.0 8.4 Pulpwood 1 1.5 0.1 1.1 0.8 1.1 c c c c - Otherd 3 0.5 2.4 1.6 2.2 1.7 0.7 1.9 0.4 <0.3 0.6 Bioenergy e e e e e e e e 2.4 3.6 8.2 Total 100 100 100 100 100 100 100 100 100 100 100 Use of roundwood for bioenergy doubled as a proportion of the total harvest AND doubled in volume
- 13. Harvest by product and disposition Harvest by Product Final Disposition 60% 32% 8% Sawlogs Wood for energy Veneer & Other 31% 5% 52% 3% 8% 1% Lumber Veneer & Other Products Energy Paper/board Bark products Total = 407 MMCF (including bark)
- 14. Composition, size, capacity California’s Forest Products Industry
- 15. California Active Primary Processors 77 Total Active 30 sawmills 26 bioenergy 11 decorative bark 2 veneer 1 board 7 “other”
- 17. Composition of California’s Forest Products Industry 93 56 47 33 30 11 9 7 4 1 9 5 2 3 76 3 2 2 2 25 25 26 10 10 11 0 20 40 60 80 100 1988 1992 2000 2006 2012 Sawmills Pulp/board Other Veneer/plywood Bioenergy Bark
- 18. California’s Forest Products Industry Sawmills make up largest sector Timber harvested, sales value, employment Produced 1.9 billion board feet of lumber 7% of U.S. softwood lumber production 5% of U.S. softwood lumber consumption Sawmills generated 1.76 million BDTs of residue 99.8% was utilized (bioenergy, landscaping & mulch)
- 19. California Sawtimber-processing Capacity by Size Class Number of Facilities Share of Consumption 8 10 12 0 10 20 30 40 50 60 2012 Over 50 MMBF Annual Use Over 10 MMBF to 50 MMBF Annual Use Under 10 MMBF Annual Use 0% 20% 40% 60% 80% 100% 2012 Over 50 MMBF Annual Use Over 10 MMBF to 50 MMBF Annual Use Under 10 MMBF Annual Use Total Capacity = 1.78 Billion BF
- 20. California Capacity & Use 0 1,000 2,000 3,000 4,000 5,000 6,000 7,000 1988 1990 1992 1994 1996 1998 2000 2002 2004 2006 2008 2010 2012 2014 MillionBoardFeet,Scribner Total capacity Capacity used
- 21. Interstate and International Timber Flow
- 22. Timber Receipts & Timber Flow California facilities processed slightly under 1.4 BBF <1 percent of timber processed came from out-of-state Dropped from 126 MMBF to 4 MMBF 36 MMBF was shipped out-of-state to be processed California became net exporter (to other states) 49 percent processed in county of harvest
- 23. International Timber Flows California mills did not report using any foreign timber Softwood log exports = 49 MMBF (145% growth) Hardwood log exports = 28 MMBF Driven by Chinese and Japanese demand Softwood lumber exports = 194 MMBF (78% growth) Zhou 2013
- 24. Sales, Employment, and Wages Economic Impacts
- 25. Economic Impacts - sales 0 0.5 1 1.5 2 2.5 3 3.5 2000 2006 2012 Billions Veneer and other Residue-utilizing sector Energy/electric Lumber Total Sales $1.3
- 26. Economic Impacts - Employment 56,270 workers employed in forest industry in CA - 20 40 60 80 100 120 Numberofworkers(thousands) Year Total Wood product manufacturing Paper manufacturing Forestry and logging Forestry support activities
- 27. Economic Impacts - Wages Labor income in 2014 exceeded $3.6 billion 0 500 1,000 1,500 2,000 2,500 3,000 3,500 4,000 4,500 5,000 5,500 Millionsof2012U.S.dollars Year Total Wood product manufacturing Paper manufacturing Forestry and logging Forestry support activities
- 28. Economic Impacts – Direct Effects Every 1 MMCF harvested & processed in California: 15 jobs in sawmills + 3 jobs in residue-utilizing sector 18 jobs in forestry, logging, forestry support 2-10 jobs in bioenergy 31 jobs in veneer sector
- 29. Questions? Contacts: Chelsea P. McIver Todd A. Morgan chelsea.mciver@business.umt.edu todd.morgan@business.umt.edu (406) 243-5614 (406) 243-5113
Editor's Notes
- Through a long-term partnership with the Research Stations and FIA program of the USFS, we conduct state level industry analyses and logging utilization studies, data from which feeds into the RPA-TPO database Also conduct economic impact analyses quantifying the direct response coefficients (jobs and labor income) from the harvesting and processing of timber, and The local economic benefits of restoration on public lands (CFLRP)
- Our forest industry analyses take place across the western united states, with the exception of Washington.
- Industry analyses are conducted via a census of primary manufacturers. From each mill we collect information on:
- Our last census in California took place in 2013 collecting information on operations during calendar year 2012.
- Roughly the same overall proportions as 2006, however harvest of western hemlock increased from 4 to 24 MMBF, however it only accounted for a small proportion of the harvest.
- The northern Interior region provided the largest share of the harvest, with 40%. Followed by north coast and sacramento. For the first time since the 50s, the harvest in Shasta county was greater than Humboldt county with 229 MMBF in 2012, followed by Humboldt and Siskiyou counties.
- NIPF harvest was not broken out from industrial harvest until 2000. Private harvest has rebounded since 2009, but NIPF still lagging behind.
- 2009 marked the low point in the recession when timber harvest dropped below 1 bbf for the first time ever. Private lands have shown a strong recovery reaching over 1.6 bbf in 2013.
- Side by side comparison of the timberland in California by ownership, available sawtimber volume by ownership and the 2012 harvest by ownership. Private lands are associated with lesser shares of the timberland and sawtimber but the largest share (over ¾) of the timber harvest.
- Reported volume of Roundwood--that is material delivered from the forest as opposed to mill residues--increased from 62 MMBF to 116 MMBF The majority of this material was designated as chipped in-woods. Likely due to increased utilization of felled trees in the form of topwood, etc. Decrease in proportion of harvest in sawlogs: 83 vs. 88 percent Increase in proportion of harvest in bioenergy: 8 vs. 3.6 vs. 2.4 b=included in sawlogs c=included in other e=not reported previous to 2000
- Because of the inherent limitations of the Scribner scale, we also characterize the harvest and finished products in cubic volume. This allows us to track the total volume of fiber harvested and its final disposition in common units. Explain why proportion of harvest in MMBF and CF differs-bf/cf ratios and limitations of the scribner scale. 2006 harvest: bioenergy 16 percent/ sawlog 76 percent 2006 disposition: bioenergy 36 percent/ sawlog 38 percent
- We identified 77 active facilities processing roundwood or residues from primary manufacturers. Other includes: log home accents, fuel pellet, utility pole, log furniture, shaving/animal bedding, Increase in “other” is due to picking up some “new to us” facilities
- Decrease in sawmills, many of which were small. However, loss of some larger mills as well which is evident in changes in overall capacity. Increase in residue-utilizing sector.
- Not all mills are created equal As part of our census we calculate sawtimber processing capacity (aka Log (input) capacity = MMBF, Scribner) which allows us to express of total capacity of the industry to utilize sawtimber in a common unit. Sectors include: sawmills, veneer mills and (in other states) house log facilities as well as inactive facilities with capacity to re-start. Does not include bioenergy Includes inactive facilities
- 2012 mills were operating at 72 percent capacity. According to WWPA, recovery has been weak among CA sawmills with very little increase in production since 2012. However, we know that harvest increased by 15 percent between 2012 and 2013, which may indicate that California continues to be a net exporter sending timber to Oregon. However, given that employment and income in the sector are up, I think WWPA’s estimates may be too conservative. Looking ahead, we now know the state will be losing roughly 50 MMBF with he closure of the Arcata mill.
- The period from 2006 to 2012 marked a reversal in many timber flow trends. For the first time in years, California became a net exporter of timber, sending more timber out of state (to Oregon) than they imported. California experienced a drastic reduction in the volume of timber imported from other states, namely Oregon, going from 126 MMBF to 4 MMBF, which can be attributed to higher log prices resulting from competition with the export markets.
- Comparisons are 2009 over 2012 These data represent CA customs districts and CA shippers, but origin of timber is not known.
- All sectors experienced a decline in sales with the exception of bioenergy, which increased it’s sales by 31% 77% of wood products produced in the state are sold within the state, with remainder roughly equally distributed across regions of the U.S.
- Employment was down 31 percent in 2012 when compared to 2006, but has increased by 8 percent since 2012.
- Employment was down 31 percent and earnings were down 29 percent Average earnings per worker ~$46,000 Wages have increased 8 percent since 2012, from $3.3 billion to $3.6 billion
- Finally, I want to mention a study that will be published in the Journal of Forestry this spring, I believe, on the employment and wage impacts of timber harvesting and processing in the US. Briefly, this study found that in the state of California, for every MMCF harvested and processed here, that activity is associated with: