Page 10 - Georgia Forestry - Issue 1 - Winter 2022

“We have already seen remarkable growth in the South’s forest product sector, and given the region’s supply
of well-managed softwood timber, it remains well- positioned to take advantage of increasing demand in both domestic and international markets.”
– Rocky Goodnow, VP, Timber, Forest Economic Advisors
What trends are impacting
the shift to the South?
In addition to the difficulties being faced by BC production, the West Coast (California, Oregon, Washington as well as BC) has troubles of a completely different nature. From drought conditions to environmental regulations that result in poor forest management practices to the seemingly annual wildfire season, lumber supply is diminishing.
Wildfires
CalFire reports that in 2021 (as of Nov. 8), 8,367 fires have burned 3,083,507 acres of land. That is on top of the 8,258 fires in 2020 that burned 4,332,960 acres. (This is combined CalFire and U.S. Forest Service data. www.fire.ca.gov/stats-events) The fires not only diminished supply, they impacted the ability to move lumber as widespread fires caused transportation backlogs.
Housing
Fueling the current high demand for lumber, of course, is the shortage of housing across the U.S. Home sales may have dipped slightly this fall, but new home construction continues to be strong. People want new houses, which
STEPHEN B. MORTON
requires lumber. And for those who can’t afford to build, there is an unprecedented number of remodeling projects taking place, which also requires lumber. There is such a shortage of housing across the country that the supply of lumber is unlikely to catch up to the demand.
Global Markets
Historically, the West Coast exported logs to Japan and China. But with the diminishing supplies from the West Coast, there has been an increase of logs, specifically Southern Yellow Pine (SYP) being exported from the South. A short dip in 2020 was the result of trade tariffs, but those numbers are once again increasing.
The South is primed for growth for several reasons. It has the resources across the board:
Inventory – the South has the capacity for demand
Investment – there is global interest in building mills here due to prices
Policies – forest management policies are better than in the West thanks to private land ownership rather than public lands
Weather – steady rainfall, for example, helps boost yields and produces healthier seedlings
Efficient mills – lumber prices are low, making for higher margins
8 | GEORGIA FORESTRY