Softwood Competition in the Global
Al Schuler , USDA Forest Service
1. What are some key trends facing the softwood
- Environmental issues here are two
- CCA ban - 40% of SYP lumber goes to treated market
- Spotted Owl impact OSB vs plywood; 2x10s vs EWP;
- Globalization more intense competition
in export markets particularly, plus more imports
- Demographics affecting key customers,
e.g. housing industry looking for ways to reduce labor costs using more
factory built components like trusses, wall panels, etc. increase demand for
- World Fiber glut?? stumpage rates to
keep trending down?
- Too much lumber (commodity lumber that is)
low lumber prices despite best housing markets in history (in terms of
square feet floor area)
2. Is our industry still competitive? Impact on fiber
markets and land values?
- Fiber cost is key if youre in the commodity business,
and NA is not the low cost producer in lumber, pulp, paper, plywood,
- Timber glut?? fiber is getting even cheaper and more
- Plantation acreage increasing!!! - Lots of fiber in
- Stumpage prices falling land values correlated to
stumpage values so land values falling!!!
- Shifting timberland ownership some large forestry
corporations getting rid of some or all of their forest land (LP,
Weyerhaeuser, GP, etc.) holding forest land not as strategically important
to some companies raising money to pay down debt and focus on core markets??
- Losing export markets in Japan, Europe and elsewhere to
Brazil, Chile, Europe, Scandinavia, NZ, Australia, Russia,
- Healthy forests need healthy forest products industry
and vice versa!
3. Survival strategies
- Some key products are becoming mature need new ones
to better compete in key markets e.g. lumber, plywood,
- Lumber markets oversupplied need to develop new
products for new markets add value less commodity lumber e.g. EWPs like
OSB, LVL, I-Joists, OSL, Parralam, Timtek,
- Key customer , the residential construction industry,
is home to 75% of structural lumber and panel products they are dealing with
serious and structural/long term skilled labor shortages. So, they are
starting to build houses differently more factory built components like
trusses, wall panels, installed sales,
., modular and panelized housing
versus stick built:.
- Impact increased demand for EWPs more components
fewer commodities: they want better quality lumber products from the sawmills
more cut to size, better drying; etc. Wood products industry must work more
closely with the homebuilders to provide them with products and services
needed to deal with labor shortages, etc.
- Example Japan homebuilding industry due to severe
labor shortages, they adopting more factory made, pre - cut housing techniques
in the highly labor intensive post and beam house construction (most of the
wood housing in Japan is post and beam). Impact is fewer log and lumber
imports (from NA and elsewhere), plus using more EWPs like glulams and
- Furniture example - losing domestic markets to cheap
imports almost 50% of wood HH furniture consumed in USA is imports, most
recently from China. Big impact on entire supply chain less demand for
hardwood lumber, PB, MDF, etc. Impact on pallet industry too which uses 40% of
hardwood lumber, mostly low grade material. If furniture industry keeps
shrinking, less demand for hardwood lumber lower stumpage prices lower
land values impact on pallet industry too
- Furniture industry needs to reinvent itself? More
components, lean manufacturing, JIT, supply chain management, etc. Require
closer working relationship between supply chain and the furniture industry
opportunities for wood products industry more value added/components,
etc. more partnering!!!!!
4. What does this mean for timber and fiber markets?
- As demand for EWPs increases, this offers opportunities
for thinnings and other smaller diameter material; more usable species too
less dense hardwoods for OSB; shorter rotations?
- We (the industry and its stakeholders) need to find
solutions to current problems help customers (homebuilders and furniture
industry for example) to deal with issues (labor shortages, imports), or else
demand for timber will continue to fall land values will fall, etc.
- The industry needs to develop new products to insure
the housing industry continues to build houses from wood!!!