Timber Demand in the Southern Applachians

Results of the Southern Appalachian Assessment indicate that markets are strong

for both the highest and the lowest quality timber in the region. Rising demand for wood products is attributed to an expanding population with increasing disposable income. Evidence of these strong markets can be seen in several trends (SAMAB 1996d):

1. Pulpwood production has expanded over the last 10 to 15 years, with hardwood market share increasing.
2. The prices of softwood sawlogs recently climbed to unprecedented levels.
3. Production has been strong over the last 20 years, in spite of land-use pressures that have reduced the area of timberland in the region.
4. There has been steady growth in the prices for high-quality hardwood sawlogs; prices for medium-quality sawlogs have been stable, and those for low-quality logs have declined.
   

   Veneer Log Production II

As a result of these strong markets, pressures for substituting medium-grade timber material either up (e.g., more demand for grade 2 sawlogs in appearance applications) or down (e.g., more demand for grade 3 sawlogs as pulpwood) in quality applications is anticipated (SAMAB 1996d).

While the demand for softwood solid-wood products (lumber, panels, and sawlogs) can be traced to two or three dominant factors, such as housing markets, the demand for hardwood lumber and other solid-wood products is influenced by a broad range of factors. It is useful to split hardwood lumber consumption into two broad areas: 1) appearance applications, such as furniture, millwork, cabinets, and flooring, that depend on the aesthetic qualities of the material and 2) industrial applications, such as pallets and railroad ties, where strength and durability are the primary concerns. While the total production of hardwood sawlogs was essentially stable in the southern Appalachians between 1983 and 1992,

price patterns indicate that the strength of hardwood sawlog demand varies by species and grade. In general, the demand for the industrial applications of hardwood lumber has been declining. This trend may be supported by very recent increases in the recycling of pallets, the largest industrial use of hardwood lumber, and the introduction of substitute shipping platforms. In contrast, the demand for hardwood lumber for appearance applications appears to be strong (Table: U.S. Hardwood Lumber Consumption) (SAMAB 1996d).

Demand for the lowest grade materials, mainly pulpwood but also some composite board material, appears to be expanding across a larger part of the region. The demand for pulpwood in the region is from 12 pulpmills, all of which have been in operation since 1980. Growth in demand for composite board material is mainly concentrated in areas where pulpwood production has not been high. Strengthened markets for pulpwood-sized material may improve the economics of commercial thinnings, thereby improving the economics for eventually producing more high-quality timber in the southern Appalachians (SAMAB 1996d).