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
While the logging industry has made efforts to reduce injury rates it ranks as the most dangerous occupation in America.
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
Sep 27, 2023 - Timber Prices Fall
- Producer prices for logging companies declined in August compared to a year ago amid falling demand for lumber in North America. High mortgage rates and home prices are sapping homebuilder confidence – with housing being the main end use for lumber. Sales for the US forestry and logging operations industry are forecast to grow at a tepid 1.23% compounded annual rate from 2022 to 2027, slower than the growth of the overall economy. Despite lower prices for their products, lumber companies are hiring with both employment and average industry wages rising in August year over year.
- The American Forest Foundation (AFF) is urging lawmakers to support the Rural Forest Markets Act (RFMA) to assist private forest owners in investing in climate-friendly forestry practices. The bill, which was introduced in August and referred to the House Committee on Agriculture, would create a program at the USDA to guarantee loans, bonds, or other investment vehicles up to $150 million for projects that assist private forest owners in overcoming financial and technical barriers so they can create and sell carbon credits. Family-owned forests constitute 39% of all US forests – the largest portion of America’s woodlands, surpassing the federal government, according to AFF. The funding the RFMA would make available would enable landowners to activate the conservation potential of the 290 million acres of family-owned forestland, improving the biodiversity and value of America’s woodlands.
- US construction spending increased more than expected in May as an acute shortage of single-family houses for sale fueled expenditures on single-family homebuilding, Reuters reports. Spending on residential construction rose at a seasonally adjusted rate of 2.1% in May vs. the prior month, but was down 11.4% year over year, according to Census Bureau figures. By comparison, spending on nonresidential construction projects dipped 0.3% in May vs. April but was up 20.5% year over year. Total construction spending, an indicator of demand for lumber and other wood products, rose 0.9% in May after gaining 0.4% in April and was up 2.4% year over year. In addition to improved construction activity, wildfires in Canada and the Western US are putting upward pressure on lumber prices.
- Forests reduce risks to human health, a 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.
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