Forestry & Logging

Industry Profile Report

Dive Deep into the industry with a 25+ page industry report (pdf format) including the following chapters

Industry Overview Industry Structure, How Firms Opertate, Industry Trends, Credit Underwriting & Risks, and Industry Forecast.

Call Preparation Quarterly Insight, Call Prep Questions, Industry Terms, and Weblinks.

Financial Insights Working Capital, Capital Financing, Business Valuation, and Financial Benchmarks.

Industry Profile Excerpts

Industry Overview

The 8,500 companies in the US forestry and logging industry are involved in natural resource management and harvesting. Companies may own and manage the land and harvest the trees and plants, or provide contracted services to public and private landowners. Over 1 billion trees are planted in the US annually – the equivalent of three plantings for each tree harvested.

Worker Injuries And Fatalities

The logging industry has made efforts to reduce its injury rates.

Pest Infestations

The spread of invasive plants, diseases, and insects that target woodlands are growing and destroying stands of timber in the US.

Industry size & Structure

The average forestry and logging company operates out of a single location, employs 6 workers and generates $1-2 million in annual revenue.

    • The forestry and logging industry consists of about 8,500 companies that employ about 54,000 workers and generate about $12 billion in annual revenue.
    • The industry consists of foresters that maintain woodlands and loggers that harvest timber.
    • Over 1 billion trees are planted in the US annually – the equivalent of three plantings for each tree harvested. The US has recorded over 50 consecutive years of net forest growth that exceeds yearly harvest, according to the North American Forest Foundation.
    • About one-third of the US is covered in forest; 58% is classified as private land and 42% is public.
    • 94% of firms have fewer than 20 employees.
    • The industry's gross output is volatile and can change 20% from year to year.
    • Large companies include ALRT Corporation, C & C Logging, Huffman-Wright, and the timber operations of vertically integrated companies like Weyerhouser, Mid-South Lumber, Green Diamond Resources, and PotlatchDeltic.
                                Industry Forecast
                                Forestry & Logging Industry Growth
                                Source: Vertical IQ and Inforum

                                Coronavirus Update

                                Apr 22, 2022 - Study Supports Shift In Fire Prevention
                                • New research shows that fires are more likely to burn their way into national forests than out of them, contradicting the premise that destructive wildfires ignite on US Forest Service (USFS) land before spreading to threaten communities, according to Chris Dunn of the Oregon State University College of Forestry, which led the research. The study, which looked at more than 22,000 fires, found that fires crossing jurisdictional boundaries are primarily caused by people on private property. The finding upends the paradigm that public agencies bear primary responsibility for managing and mitigating cross-boundary fire risk and supports the position that states, local government, and homeowners are better positioned than the USFS to manage wildfire risk.
                                • Rising mortgage rates and inflation are likely behind the recent slip in lumber prices. The price of lumber dropped to $829 per thousand board feet in mid-April, the lowest mark year-to-date in 2022, and down 39% from March when lumber traded as high as $1,357, reports Market Insider. While higher rates on mortgages and rising inflation may discourage prospective homebuyers and remodelers, falling lumber prices are a welcome change for homebuilders who have faced supply and demand problems due to the pandemic and large price swings.
                                • Total construction starts, a driver of demand for timber, increased 9% year over year in the first quarter of 2022, according to Dodge Data & Analytics. Residential starts rose 3%, while nonresidential jumped 26%, and nonbuilding starts slipped 1%. “Nonresidential construction has benefited from the growing confidence that the worst of the pandemic is in the rear-view window. The pipeline of projects waiting to start continues to fill, suggesting this trend will continue. However, higher prices and a shortage of skilled labor will slow the progress of those projects through the design and bidding stages, resulting in moderate growth in starts activity.” stated Richard Branch, chief economist for Dodge Construction Network.
                                • Logging production increased 5.4% year over year in March 2022 but was down 3.3% from March 2020.
                                • Employment in the logging industry decreased 1.7% year over year in March 2022. The logging segment has an aging workforce and chronic labor shortages. Logging is dangerous and strenuous, and workers are exposed to the weather and terrain.
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