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SUSTAINING CALIFORNIA FORESTS: AN INDUSTRY PERSPECTIVE Chelsea P. McIver Bureau of Business and Economic Research, University of Montana Presented at the NorCal/SoCal Winter SAF Meeting 2016

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Page 1: CA SAF State Mtg 2016_McIver

SUSTAINING CALIFORNIA FORESTS: AN INDUSTRY PERSPECTIVE

Chelsea P. McIverBureau of Business and Economic Research, University of Montana

Presented at the NorCal/SoCal Winter SAF Meeting 2016

Page 2: CA SAF State Mtg 2016_McIver

Who We Are & What We DoResearch branch of the University of Montana’s School of Business Administration

Regional Economic Analysis Survey Research Industry Analysis

Forest Industry Research

Page 3: CA SAF State Mtg 2016_McIver

Forest Industry Research Program

1. State-level industry analyses2. Logging utilization studies3. Resource Planning Act & Timber

Products Output Database4. Economic Impact Analyses –

harvesting and processing of timber (direct response coefficients)

Local benefits of restoration on public lands

Page 4: CA SAF State Mtg 2016_McIver

Forest Industry Analyses Rocky Mountains & Pacific Coast Describe industry structure, capacity,

condition, and changes over time Track wood fiber from forest to

marketplace Associate key economic indicators

Page 5: CA SAF State Mtg 2016_McIver

State Industry Censuses Mill type, capacity, equipment,

employment Timber harvest volume, use, species,

county, & ownership Mill residue & wood fiber use Product volume, sales, & geographic

distribution

Page 6: CA SAF State Mtg 2016_McIver

Species, products, ownership

California’s Timber Harvest, 2012

Page 7: CA SAF State Mtg 2016_McIver

Harvest by species

1.4 billion board feet, Scribner

28%

27%18%

15%

6% 5%2%

Douglas-firTrue firsPonderosa pineRedwoodSugar PineCedarsOther spp.

Page 8: CA SAF State Mtg 2016_McIver
Page 9: CA SAF State Mtg 2016_McIver

Harvest by ownership19

72

1976

1982

1985

1988

1992

1994

2000

2006

2012

0

1,000

2,000

3,000

4,000

5,000

6,000 IndustryNIPFOther Pub-licUSFS

Billi

on b

oard

feet

Page 10: CA SAF State Mtg 2016_McIver

Historical harvest by ownership

1 3 5 7 9 11 13 15 17 19 21 23 25 27 29 31 33 35 37 39 41 43 45 47 49 51 53 55 -

1,000

2,000

3,000

4,000

5,000

6,000 TotalPrivate & TribalNational ForestsOther Public

Page 11: CA SAF State Mtg 2016_McIver

California Timberland & Harvest by Ownership

Timberland Sawtimber tree* Harvestedarea volume volume

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

53.461.2

14.3

2.9

2.8

2.0

43.736.0

83.7

National forest Other public Private

Perc

ent

*Sawtimber is timber of “sufficient size and quality to be suitable for conversion into lumber"

Page 12: CA SAF State Mtg 2016_McIver

Historical harvest by product

Product type 1968 1972 1976 1982 1985 1988 1992 1994 2000 2006 2012

---------------------------------------------Percent -------------------------------------------------------

Sawlogs 86 86 86 91.2 92 92.5 99.3 92.9 89.8 88.1 82.8

Veneer logs 10 12 11.5 6.1 5 4.7 b 5.2 7.4 8.0 8.4

Pulpwood 1 1.5 0.1 1.1 0.8 1.1 c c c c -

Otherd 3 0.5 2.4 1.6 2.2 1.7 0.7 1.9 0.4 <0.3 0.6

Bioenergy e e e e e e e e 2.4 3.6 8.2

Total 100 100 100 100 100 100 100 100 100 100 100

Use of roundwood for bioenergy doubled as a proportion of the total harvest AND doubled in volume

Page 13: CA SAF State Mtg 2016_McIver

Harvest by product and disposition

Harvest by Product Final Disposition

60%

32%

7%

Sawlogs

Wood for energy

Veneer & Other

31%

5%52%

3%8% 1% Lumber

Veneer & Other ProductsEnergyPaper/boardBark productsOther

Total = 407 MMCF

(including bark)

Page 14: CA SAF State Mtg 2016_McIver

Composition, size, capacity

California’s Forest Products Industry

Page 15: CA SAF State Mtg 2016_McIver

California Active Primary Processors

77 Total Active

30 sawmills 26 bioenergy 11 decorative bark 2 veneer 1 board 7 “other”

Page 16: CA SAF State Mtg 2016_McIver
Page 17: CA SAF State Mtg 2016_McIver

Composition of California’s Forest Products Industry

1988 1992 2000 2006 20120

20

40

60

80

100 93

5647

33 30

119 7 4 1

95 2 3 76 3 2 2 2

25 25 26

10 10 11

Sawmills Pulp/board OtherVeneer/plywood Bioenergy Bark

Page 18: CA SAF State Mtg 2016_McIver

California’s Forest Products Industry

Sawmills make up largest sector Timber harvested, sales value, employment Produced 1.9 billion board feet of lumber 7% of U.S. softwood lumber production 5% of U.S. softwood lumber consumption

Sawmills generated 1.76 million BDTs of residue 99.8% was utilized (bioenergy, landscaping

& mulch)

Page 19: CA SAF State Mtg 2016_McIver

California Sawtimber-processing Capacity by Size Class

Number of Facilities Share of Consumption

20120

10

20

30

40

50

60

810

12

Over 50 MMBF Annual Use

Over 10 MMBF to 50 MMBF Annual Use

Under 10 MMBF Annual Use

20120%

20%

40%

60%

80%

100%

Over 50 MMBF Annual Use

Over 10 MMBF to 50 MMBF Annual Use

Under 10 MMBF Annual Use

Total Capacity = 1.78 Billion BF

Page 20: CA SAF State Mtg 2016_McIver

California Capacity & Use

19881989

19901991

1992199

31994

19951996

19971998

19992000

20012002

20032004

20052006

20072008

20092010

20112012

20132014

0

1,000,000

2,000,000

3,000,000

4,000,000

5,000,000

6,000,000

7,000,000

Total capac-ity

Page 21: CA SAF State Mtg 2016_McIver

Interstate and International

Timber Flow

Page 22: CA SAF State Mtg 2016_McIver

Timber Receipts & Timber Flow California facilities processed slightly under 1.4

BBF <1 percent of timber processed came from out-

of-state Dropped from 126 MMBF to 4 MMBF

36 MMBF was shipped out-of-state to be processed

California became net exporter (to other states) 49 percent processed in county of harvest 87 percent processed in resource area of harvest

Page 23: CA SAF State Mtg 2016_McIver

International Timber Flows California mills did not report using any

foreign timber Softwood log exports = 49 MMBF (145%

growth) Hardwood log exports = 28 MMBF Driven by Chinese and Japanese demand

Softwood lumber exports = 194 MMBF (78% growth)

Zhou 2013

Page 24: CA SAF State Mtg 2016_McIver

Sales, Employment, and Wages

Economic Impacts

Page 25: CA SAF State Mtg 2016_McIver

Economic Impacts - sales

2000 2006 20120

500000

1000000

1500000

2000000

2500000

3000000

3500000

Veneer and otherResidue-utilizing sectorEnergy/electricLumber

Total Sales $1.3 Billion

Page 26: CA SAF State Mtg 2016_McIver

Economic Impacts - Employment 56,270 workers employed in forest

industry in CA

1990

1992

1994

1996

1998

2000

2002

2004

2006

2008

2010

2012

2014

-

20,000

40,000

60,000

80,000

100,000

120,000

TotalWood product manufacturingPaper manufac-turingForestry and loggingForestry support activities

Year

Num

ber

of w

orke

rs (

thou

sand

s)

Page 27: CA SAF State Mtg 2016_McIver

Economic Impacts - Wages Labor income in 2014 exceeded $3.6 billion

1990

1992

1994

1996

1998

2000

2002

2004

2006

2008

2010

2012

2014

0

500,000

1,000,000

1,500,000

2,000,000

2,500,000

3,000,000

3,500,000

4,000,000

4,500,000

5,000,000

5,500,000

Total Wood product manufacturingPaper manufactur-ingForestry and loggingForestry support activities

Year

Mill

ions

of

2012

U.S

. dol

lars

Page 28: CA SAF State Mtg 2016_McIver

Economic Impacts – Direct Effects Every 1 MMCF harvested & processed in

California: 15 jobs in sawmills + 3 jobs in residue-utilizing sector 18 jobs in forestry, logging, forestry support 2-10 jobs in bioenergy 31 jobs in veneer sector

Page 29: CA SAF State Mtg 2016_McIver

Questions?Contacts:

Chelsea P. McIver Todd A. [email protected]@business.umt.edu (406) 243-5614 (406) 243-5113