Forestry & Logging
Industry Profile Report
Dive Deep into the industry with a 25+ page industry report (pdf format) including the following chapters
Industry Overview Current Conditions, Industry Structure, How Firms Operate, Industry Trends, Credit Underwriting & Risks, and Industry Forecast.
Call Preparation Call Prep Questions, Industry Terms, and Weblinks.
Financial Insights Working Capital, Capital Financing, Business Valuation, and Financial Benchmarks.
Industry Profile Excerpts
Industry Overview
The 8,100 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 8,100 companies that employ about 50,700 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
Recent Developments
Apr 27, 2023 - Loggers Face Rising Costs
- Inflation and business costs weigh most heavily on loggers' ability to maximize production, a new study from the University of Maine reports. The UM study, funded by the Professional Logging Contractors of Maine, found that one-third of responding logging companies said their ability to sell or harvest wood had decreased over the past five years, while 39% said nothing had changed and 28% felt their ability had increased. About two-thirds (67%) of responding logging firms said they saw their business costs rise between 21% and 40% in the two years following September 2020. Costs rose more than 50% for 16% of firms. Mill closures, market prices and access to qualified labor followed closely behind. Notably, 63% of firms reported engaging in activities in addition to logging services. The most frequently cited additional activity was road construction or maintenance.
- North American demand for lumber is expected to fall 7% this year, but lumber prices may hold up, according to Paul Jannke, a lumber analyst with Forest Economic Advisors. While lumber prices have declined from their 2020-2021 peaks, compared to historical averages they remain elevated. “In 2023, we’re looking at a 7% decline in lumber consumption in North America, which equates to about 4 billion board feet," Jannke said, adding “The bottom line is we do expect consumption to fall, but don’t expect it to be very sharp.” Factors working to support lumber prices include tight supplies held by prime producers, closings and capacity cuts by sawmills, and high mortgage rates and home prices depressing demand for housing – the primary end use of lumber. Moreover, home remodeling is expected to decline as much as 5% to 8% from elevated levels early in the pandemic, further dampening demand.
- Forests reduce risks to human health, a new report by the Global Forest Expert Panels Programme of the International Union of Forest Research Organizations (IUFRO) finds. The IURFRO report, titled "Forests and Trees for Human Health: Pathways, Impacts, Challenges and Response Options," cites existing evidence to strongly support a wide range of physical, mental, social and spiritual health benefits associated with forests and green spaces. The report states that forests have positive effects on the neurodevelopment in children, on diabetes, cancer, depression, stress-related disorders, cognitive aging and longevity, and are critical for enhancing social interactions, recreation and relaxation. It emphasizes the impact on forests on children’s health, in particular, citing evidence that no less than 24% of global deaths (and 28% of deaths among children under five) are due to negative environmental factors such as air pollution and extreme weather events.
- Mass timber – an engineered wood product made of layers of wood bonded with glue or nails – is gaining traction in the US as a low-carbon alternative to steel and concrete, The New York Times reported in March. Mass timber’s durability and sustainability benefits are behind its increasing prominence at US colleges and universities, where it’s included not only as an exciting concept in the building sciences curriculum but also as a material in campus buildings, according to NYT. Despite supply issues and higher upfront costs than steel and concrete, developers are finding that mass timber structures go up more quickly than buildings made from steel and concrete, helping to recover upfront costs faster. Cross-laminated timber (CLT) panels suitable for walls, roofs and flooring capture carbon, keeping it out of the atmosphere, and are more sustainable than other construction materials.
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