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Updated report on demand and forest productivity in the US South

Updated report on demand and forest productivity in the US South
Pellet removals as a percentage of forest inventory – While pellet mills’ market share of harvest removals has increased from 1% to 4% in the forest products industry, the growth in forest inventory and the change in non-pellet mill removals from 2008 to 2009 has offset the increase in pellet mill removals. Before pellet mills entered the market, harvest removals were at a rate of 2.78% of forest inventory. By 2022, harvest removals were at a rate of 2.13%. Pellet mills have increased from 0.02% of the inventory to 0.08%, a relatively small percentage across the US forest landscape when compared to the remaining industry but providing an additional demand and revenue source for landowners, helping to encourage forest growth (graphic courtesy ResourceWise/USIPA).

Forest owners across the US South have demonstrated their ability to not only use and maintain their forests but also to replenish and expand them. Forestland and timberland acres in the region remain at historically high levels, and the total forest inventory in the region is the greatest it has been in the last 70 years according to a new report from ResourceWise.

In 2017, on behalf of Drax Group, Plc, the National Alliance of Forest Owners (NAFO), and the US Endowment for Forestry & Communities, Inc., ResourceWise (formerly Forest2Market) published a study entitled “Historical Perspective on the Relationship between Demand and Forest Productivity in the US South“.

The study was an in-depth analysis of the demand for forest products and the change in the US South’s forest landscape, namely tree inventories between 1953 and 2017 in the states of Alabama, Arkansas, Florida, Georgia, Louisiana, Mississippi, North Carolina, Oklahoma, South Carolina, Tennessee, Texas, and Virginia.

Strong correlation between demand, forest productivity, and inventory

The original report shed light on several key findings. Historical analysis revealed a strong correlation between demand, forest productivity, and inventory.

Offcuts being discarded at a landing of forest harvesting operation in a pine plantation in the state of Georgia (GA), United States (US).

Over the past 75 years, rapid inventory growth aligned with consistent increases in forest products’ demand through the mid-2000’s.

The statistical analysis clearly linked removals and growth, removals and inventory, and removals and acres, suggesting that these factors positively influence changes in forest inventories.

The report concluded that since the 1950s, the South’s forests have shown remarkable adaptability to fluctuating demand without experiencing declines in acres and inventory.

Forest owners, who are mainly private individuals, families, corporations, and investors, have demonstrated their ability not only to use and maintain the forests but also to replenish and expand them.

Updated report

A new report, commissioned by the US Industrial Pellet Association (USIPA) and conducted by ResourceWise, sheds light on forest dynamics and trends across the US South since the emergence and rapid growth of the wood pellet industry in the region.

Entitled “Demand and Forest Productivity in the US South: An Update Report“, the report helps quantify how the region’s forests continue to thrive in response to strong markets and sustainable management practices.

A Loblolly pine seedling.
A mechanically planted Loblolly pine seedling in a forest plantation regeneration site in southeast Georgia (GA).

Using forest products’ production data from the Food and Agriculture Organization of the United Nations (FAO) and the most recent forest inventory survey data from the United States Forest Service (USFS), an agency of the US Department of Agriculture (USDA), the report further illustrates how the wood pellet industry remains a small and integrated part of the larger forestry sector helping to drive these positive trends.

Solid data source

The principal source of timber inventory information in the United States is the Forest Inventory and Analysis (FIA) database managed by the USFS.

Discussing Loblolly pine regeneration and sustainable forest management practices at a forest site in Georgia (GA).

The USFS is a Federal agency within the US Department of Agriculture that manages 193 million acres of public lands in national forests and grasslands.

It provides technical and financial assistance to state and tribal governments in developing natural resource management and protection plans, primarily for forested areas.

The USFS is mandated to conduct periodic assessments of timber inventories across the US. The latest assessment for most states in the US South occurred in 2022.

The data used is the same as that used for US accounting under the Paris Agreement.

Pellets help make working forests work

This report unveils several critical key findings and underlines the adaptability of Southern forests to demand fluctuations and forest owners’ successful efforts to nurture and expand these forests.

Overall, today’s forest inventory is the greatest it has been for the last 70 years (Figure 1).

Updated data identified a surge in industrial pellet production, triggered by the pivot towards renewable energy.

However, since its foundation, the US pellet export industry has had less than 0.1 percent impact on the proportion of wood removed compared to inventory.

A large wood pellet production facility in the US South that exports its production to Europe.
A large wood pellet production facility in the US South that exports its production to Europe.

Additionally, the rate of harvested wood per inventory has declined, notably during the period when pellet mills entered the US South market.

And while the COVID-19 pandemic had a negative impact on the economy, forest inventory grew regardless, as indicated by the inventory increase from 342 to 353 billion cubic feet.

The report underscores the relevance of sustainable forest management (SFM) and the robustness of Southern forests in accommodating the demand for forest products.

The most recent assessment period continues to reflect the uninterrupted 70-year trend of forests in the US South increasing in every assessment period.

Key findings of the report include:

  • Forest owners across the US South have demonstrated their ability to not only use and maintain their forests but also to replenish and expand them.
  • Forestland and timberland acres in the region remain at historically high levels.
  • Since the first pellet mill started operations in 2007, forestland acreage has increased by 4.5 percent.
  • The total forest inventory in the region is the greatest it has been in the last 70 years.
  • Annual forest growth consistently outpaces removals, with the region experiencing an average annual growth rate of 1.3 percent since the 1950’s.
  • In 2022, wood pellets accounted for 4 percent of total harvest removals and 0.08 percent of total forest inventory – an increase from 1 percent and 0.02 percent respectively in 2012.
  • Since its foundation, the US pellet export industry has had less than 0.1 percent impact on the proportion of wood removed compared to forest inventory.

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