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Forest Production, Industry and Forest Retention Assessment Steven W. Koehn Director / State Forester September 21, 2005 From a Report for the Maryland.

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Presentation on theme: "Forest Production, Industry and Forest Retention Assessment Steven W. Koehn Director / State Forester September 21, 2005 From a Report for the Maryland."— Presentation transcript:

1 Forest Production, Industry and Forest Retention Assessment Steven W. Koehn Director / State Forester September 21, 2005 From a Report for the Maryland Center for Agro-Ecology Center by The Irland Group

2 In 2002, the Maryland Center for Agro- Ecology commissioned a study to assess forest production, industry and forest retention The Question: What is the critical mass of forest land needed to support the wood-based manufacturing industry in Maryland? Background

3 Why the Question? Changes in forest ownership and management New forms of conservation valuation Uncertain fiber supply Sprawl Business Challenges Assorted public policy initiatives

4 To Answer the Question Assess Marylands wood dependence Estimate wood flows Assess trends in Maryland wood-using industries Explain impact of land use change Identify significant issues and competitiveness challenges

5 Marylands Forests Growth/Drain Softwood1.25 Hardwood1.31 Approximately 2.4 Million Acres of Forestland 43% Forested Over 130,600 Forest Landowners Average Woodlot is 17 Acres

6 Maryland Land Use Trends Since 1950, 12% forest land loss -- 4% since 1982 From 1982 to 1997, developed acres in Maryland increased by 35% - projected to increase by 14,000 acres per year 7% Decrease in rural acres 4% Loss in forest acres since 1982 Ownerships are getting smaller, parcels more fragmented Nationally, at least 25 million acres has dropped out of forest industry ownership since the 1980s In 2003 alone, 4.5 million acres of major US timber holdings changed hands

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8 Factors Affecting Industry Expansion and Fiber Availability Challenging economic situation Globalization of forest production and markets Industry consolidations Imports Loss of secondary manufacturing Weak markets for lower quality hardwoods

9 Ind. wood use rose 40% since 1960: ~ 1.6 BM3 but flat over last 20 Fuel wood use > industrial wood use: ~ 1.8 BM3 and growing Ind. wood use could increase < 33% by 2050: from BM3 – 75% of global wood and fiber will come from planted forests by mid century or earlier (Sedjo and others) – 31% of global solid wood consumption crosses an international boundary from tree to product; most likely to increase US imports 30% of solid wood products consumed; exports associated jobs & impacts (81% growth since 1991) US uses 30% of worlds solid wood products; largest per capita US forest and wood choices drive global wood market UN FAO 2005: 2002 data + Perez-Garcia on future demand Global & U.S. Wood Use

10 US in Global Context UN FAO 2005: 2000, 2003 data Percent of World Share

11 Some Global Leaders UN FAO 2005: 2000, 2002 data Percent of World Share

12 Global Plantation Forests Percent of World Share UN FAO 2005: 2000, 2002 data

13 U.S. Imports from China Wood Household Furniture 41% and growing!

14 Furniture Imports $ Billion Chinas Share

15 U.S. Imports From Low Wage Countries

16 Softwood Lumber Competition from Southern Hemisphere Imports (Million BF) from Chile Brazil, Mexico, NZ, Australia Plantation Pine Timber Harvest From Southern Hemisphere Million M3 Source: R. Taylor, WMM

17 Ways of Looking at Marylands Wood Dependence Consume 5 million cords of wood per year Rely on 2.2 million acres in-state, and 7.4 million acres outside the state to build homes, use paper, etc. Are 20% self- sufficient As Consumers of Forest Products, Marylanders:

18 Ways of Looking at Marylands Wood Dependence About 35% of Marylands fiber is transferred out-of-state for processing At the same time, Marylands industry relies on out-of-state fiber for 52% of its needs Net Import Dependence is 38% As Producers of Timber and Forest Products:

19 Maryland Wood Fiber Flow Wood Fiber Harvested in Maryland and Processed In and Out of State (All units in Green Tons) Industrial Roundwood Harvest Softwood 657,548 Hardwood 1,595,087 Pulp Industry Roundwood 323,000 Rdwood Chips 244,000 Residues 244,300 TOTAL 811,300 Residues 244,300 Other 27,645 Pulp 566,989 Sawnwood 1,537,371 1 Includes Bark Fuel 1 129,254 Mulch 1 518,459 Farm 1 137,705 Exports 120,619 3/3/2014 5:06:24 PM Recovered Wood Fiber Const. Demolition Debris 32,858 Land Clearing Debris 15,430 Total 48,287 Lumber 691,817

20 Wood Fiber Processing in Maryland Wood Fiber From All Sources (In and Out-of-State) Processed in Maryland (All units in Green Tons) Softwood Total Rdwd Prod 670,603 Fuelwood 1 13,055 Industrial Rdwd 657,548 Hardwood Total Rdwd Prod 1,790,647 Fuelwood 1 195,560 Industrial Rdwd 1,595,087 Sawnwood 396,375 Pulp 241,150 Other 15,605 Pulp Industry Softwood Hardwood Roundwood 97, ,850 Rdwood Chips 144, ,000 Residues 148,450 95,850 TOTAL 389, ,700 Residues 148,450 Residues 95,850 Other 12,040 Pulp 325,859 Sawnwood 1,140,996 1 Fuelwood From Growing Stock Only 2 Includes Bark Fuel 2 105,273 Mulch 2 479,218 Farm 2 82,722 Fuel 2 23,981 Mulch 2 39,241 Farm 2 54,983 Exports 4,418 Exports 116,201 3/3/2014 5:06:24 PM Recovered Wood Fiber Const. Demolition Debris 32,858 Land Clearing Debris 15,430 Total 48,287 Lumber 178,369 Lumber 513,448 Out of State 215,448 Out of State 451,276

21 Use of Maryland Timber* Softwood Sawnwood 18% Hardwood Pulp & Other 15% Softwood Pulp & Other 15.0% Hardwood Sawnwood 52% Maryland Ind. Roundwood (Million Green Tons) Hardwood % Softwood % *In and Out of State

22 Wood Fiber Processed in Maryland* Softwood Sawnwood 16% Hardwood Pulp & Other 32% Softwood Pulp & Other 13.0% Hardwood Sawnwood 38% Wood Fiber Processed (Million Green Tons) Hardwood % Softwood % *Including Fiber From Other States

23 Trends in Marylands Forest Industry Manufacturing is not big part of Maryland economy – and has been declining Manufacturing accounts for 6% of total employment But wood-using industries important in some of Marylands most rural areas Wood-using manufacturing accounts for 9% of manufacturing employment

24 Manufacturing as % of Total Employment Source: Maryland DLLR USA – Right Scale MD – Left Scale

25 Marylands Wood-Using Industry In general, Marylands wood-using industry has fared about the same as the nation as a whole, but better than MD manufacturing in general About 5,000 jobs depend directly on Maryland wood Aboout 14,000 jobs rely on the forestry, wood and paper sector Several mills have closed, but production has remained stable

26 MD Employment Trends Mfg. as % of Total Employment Forest Products as % of Total Mfg. Source: Maryland DLLR

27 MD Counties Where Forest Products are Basic Employment 37.7%

28 Factors Affecting Industry Expansion and Fiber Availability –parcel fragmentation –increasingly passive management on state lands –changing owner preferences (non- timber objectives) –regulatory burdens –Lack of public awareness Major trends affecting timber availability:

29 Factors Affecting Industry Expansion and Fiber Availability Smaller tracts make logging more expensive, reduces returns to loggers, drives down stumpage prices, and reduces incentives for management Major trends affecting timber availability:

30 Back to the Question What is the critical mass of forest land needed to support the wood-based manufacturing industry in Maryland? Wood-based primary industry consumes about 3.3 million green tons of wood fiber, while producing 2.2 million tons To support Marylands wood based manufacturing would require the use of annual growth from 2.2 million acres Only 1.7 million acres of available land (probably less), but not all growth being harvested, thus forests are advancing in age and stocking To meet Marylands consumer needs requires 9.6 million acres each year But self-sufficiency is not necessary

31 Back to the Question What is the critical mass of forest land needed to support the wood-based manufacturing industry in Maryland? Answer: no threshold to define critical mass. As parcel sizes decline, owner interest in management declines, management costs increase, revenue possibilities decline and commercial resource leaches away acre by acre Wood fiber flow from other states likely to increase Base for the remaining wood-based manufacturing economy is slipping away

32 Possible Strategies to Retain Working Forests and Viable Industry Articulate goal of no net loss of commercial forestland Undertake review of entire family of forest policies –Conservation Easements –Local Zoning Regulations –Further Property Tax Abatements (i.e. zero property tax) Ensure working forest easements Assess ownership fragmentation issue Shortage of intellectual capital – more technical and educational assistance Deeper subsidies Improve outreach Develop markets for low value wood (i.e. energy generation)


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