Wisconsin Logging Sector: Status & Future Direction (new pub)

newpub

Loggers play an essential role in forestry and local economies. They are also important forest stewards that shape the forest for today and tomorrow. This extension reports on the status of Wisconsin’s logging sector based on data collected in 2004 and 2011. It covers production capacity, profitability, workers, and considerations for the future.

Citation: Rickenbach, M., M. Vokoun, & S. Saunders. 2015. Wisconsin’s Logging Sector: Status and Future Direction. UWEX Cooperative Extension G4073. Madison, WI. 24 pp. http://learningstore.uwex.edu/Wisconsin-Logging-Sector-Status-and-Future-Direction-P1765.aspx [link to FREE pdf on that page]

Executive Summary: Wisconsin logging businesses play key roles in sustainable forest management by implementing ecologically sound practices. At the same time, they supply wood-using industries with needed raw materials. Yet little is known about the structure of these businesses. Relying on survey data of the 2003 and 2010 production years, we present findings describing production, profitability, and demographics of the logging industry in Wisconsin. Together, these important factors shape the logging industry and affect all who depend on Wisconsin’s forests.

Factors of production

  • Nearly half of all logging businesses (49%) used the cut-to-length harvest system in 2010, while nearly a third (32%) cut trees with chainsaws. Cut-to-length systems primarily cut pulpwood, while chainsaws are used to cut high-value products like sawtimber and veneer.
  • Production varies by harvest system. In both 2003 and 2010 more than 6,000 cords were cut by the cut-to-length system while 1,500 cords were harvested by businesses that cut timber only with the chainsaws.
  • A small number of logging businesses are increasing production and accounting for a greater share of the total amount harvested.
    Self-reported profitability was relatively stable between 2003 and 2010, as were the main factors affecting it: fuel prices, mill prices, stumpage prices, equipment maintenance, and stumpage availability.

Profitability

  • Most capital was invested in harvest equipment (≥ 80% in 2010), with the largest businesses having median total investments of $2 million.
  • Between 2003 and 2010, 20% of logging businesses left the sector. Looking forward, 19% predict they won’t be in business five years.

Sector demographics

  • Business owners have aged “in place,” with the median age increasing from 46 to 52 between 2003 and 2010. There were few “young” business owners in 2010.
  • Consistent with the increasing production mentioned above, between 2003 and 2010 the mean number of permanent workers increased and a growing number of logging businesses had more workers.

Implications

  1. The logging sector has lost businesses but continues to be able to provide wood to mills because businesses have gotten bigger. This trend is likely to continue, but barriers exist. Further analysis and policy changes will likely be needed to ensure adequate logging capacity in the future.
  2. Who will log? This often-asked question needs answers. Opportunities to gain technical skills are available can be difficult to access or pay for. Moreover, the capital required to enter the business provides a barrier to entry and a challenge to existing businesses looking to expand.

Related: blogging logging seriesharvester_small

About the authors: Mark Rickenbach writes this blog. Melinda Vokoun is an associate professor in the UW-Stevens Point College of Natural Resources at the University of Wisconsin-Stevens Point. Sarah Saunders is a former graduate research assistant in the UW-Madison Department of Forest & Wildlife Ecology.

Funding and project support: The Wisconsin Bioenergy Initiative, which is now part of the Wisconsin Energy Institute, provided initial funding for the 2010 logging sector survey. Additional support came from the Renewable Resources Extension Act and the McIntire-Stennis Cooperative Forestry Research Program, both of the USDA National Institute of Food and Agriculture. The 2003 survey was funded by the USDA Forest Service Northern Research Station.

 

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