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 8,500 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

                                Recent Developments

                                Nov 25, 2022 - Firewood in Demand
                                • Demand for firewood is rising amid soaring prices for home heating oil this winter. Firewood suppliers are struggling to keep up with demand as more Vermonters turn to wood for heat, online news source VTDigger reported in October. Vermont’s P&L Loggers increased its price for a tractor-trailer load of firewood by about $700 since last year — up to $2,200 based on delivery distance, according to the company. Likewise, Sam Desrochers from Crosscut Firewood, a seller based in Danville, said the company has had to increase the price of a cord of kiln-dried wood from $420 to $495. Rising fuel prices and worker shortages in the logging industry have driven the price increase, Desrochers told VTDigger. Firewood suppliers are also competing with paper mills for wood, further driving up the price of wood for home heating.
                                • The price of diesel fuel used to power timber harvesting equipment and the logging trucks that transport timber is at a record premium versus gasoline and crude oil. While the price of gasoline is up about 14% so far in 2022, the price for diesel has risen by about 50%, to $5.35 a gallon, according to price data from AAA/OPIS. The gains widened the gap between the two fuels to an all-time high of $1.61, versus 23 cents a year ago. Dwindling stocks, the war in Ukraine, severe weather, and other energy market disruptions are behind the growing gap, The Wall Street Journal reported in November. Wholesale diesel, delivered into New York harbor, traded at a record premium to crude oil in October, according to the Energy Information Administration, which also reported the country had only 25 days of diesel in reserve.
                                • Citing a jump in input costs, US Christmas tree growers said tree prices are likely to rise this holiday season. A survey of wholesale growers conducted in August 2022 by The Real Christmas Tree Board found more than a quarter (27%) of those surveyed estimated that their input costs jumped 16% to 20% compared to 2021, and another 25% said input prices have gone up as much as 10% year-over-year. As a result, the majority of tree growers (71%) cited a likely wholesale price increase of 5% to 15% compared to 2021, while 11% of growers anticipated a more modest price increase of no more than 5%. Another 11% anticipated a price increase of 16% to 20% over 2021. Only 5% said they expect their increase to hit 21% or more. While growers expect an adequate supply of trees, they said their primary concern leading up to the holidays was supply chain slowdowns (44%).
                                • The Oregon Mass Timber Coalition (OMTC) will receive more than $41 million from the Biden administration to expand the use of mass timber in housing – including affordable housing that could help ease the state’s housing crisis, Oregon Public Broadcasting reported in September 2022. Mass timber – an umbrella term for a new class of engineered wood products made by binding layers of wood together to form solid timber panels or beams – are a strong, low-carbon alternative to concrete and steel, according to the industry. The federal grant, which could help create a pipeline of affordable mass timber homes, was awarded through the Build Back Better Regional Challenge, part of the president’s American Rescue Plan. The funds awarded to OMTC will be used to convert a terminal building in the Port of Portland into a manufacturing hub for mass timber.
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