1 / 58

A Regional Overview Jan Wiedenbeck, NRS Al Schuler, NRS

What are the Market Trends Impacting the Sawmill Industry?. A Regional Overview Jan Wiedenbeck, NRS Al Schuler, NRS. U.S. Graded Hardwood Lumber Consumption Trends (BBF). Total consumption up 2 BBF (44%) between 1962 and 2005, but dramatic changes in where the lumber is consumed . 1962.

Audrey
Download Presentation

A Regional Overview Jan Wiedenbeck, NRS Al Schuler, NRS

An Image/Link below is provided (as is) to download presentation Download Policy: Content on the Website is provided to you AS IS for your information and personal use and may not be sold / licensed / shared on other websites without getting consent from its author. Content is provided to you AS IS for your information and personal use only. Download presentation by click this link. While downloading, if for some reason you are not able to download a presentation, the publisher may have deleted the file from their server. During download, if you can't get a presentation, the file might be deleted by the publisher.

E N D

Presentation Transcript

  1. What are the Market Trends Impacting the Sawmill Industry? A Regional Overview Jan Wiedenbeck, NRS Al Schuler, NRS

  2. U.S. Graded Hardwood Lumber Consumption Trends (BBF) Total consumption up 2 BBF (44%) between 1962 and 2005, but dramatic changes in where the lumber is consumed 1962 2005 Total: 6.6 BBF Total 1962=4.60 BBF, 2005=6.6 BBF Source: Bill Luppold, USDA Source: Bill Luppold, USDA

  3. Many Secondary Manufacturers are Very Dependent on Housing Markets Source: Buehlmann et al. 2008, Modern Woodworking

  4. U.S. Hardwood Flooring ImportsHousing’s Impact is Huge 2007 Imports $143 million Exports 92 million Deficit $ 51 million U.S. Housing Decline Customs value (million $) Source: USDA, FAS

  5. Components in building materialsinterior trim, moldings, stair parts, flooring blanks Source: WCMA

  6. Changing Hardwood Component Markets 19842008 Furniture 65%22% Cabinetry 16%27% Building Products* 10%42% Decorative/Specialty 4%7% Industrial Products 5%3% * residential and commercial, both new construction and remodeling Source: 2008 WCMA Market Study

  7. Exporters Importers World Trade In Temperate Hardwood Logs -- Share (Value-Basis) of Top Importers and Exporters in 2006 Source: Global Trade Atlas

  8. Structural Change in International Log Markets 1) Russia is world’s largest exporter (volume basis) of both hardwood and softwood logs 2) Softwood tax increases from 6.5% today to 80% by Jan 2009 3) Hardwood sawlogs (oak, beech, ash) tax increases from 20% today to 40% by Jan 2009

  9. U.S. Hardwood Lumber and Log Exports to China: A Comparison • Log exports increase 35% in 2007 • Lumber exports decrease 19% in 2007 Million $ Source: FAS

  10. With many of today’s wood products (e.g., EWPs and OSB), fiber requirements are less quality based and more quantity based – Plantations contribute between 25% to 40% of global industrial wood supply – in 20 years, could exceed 50%

  11. Plantations Contribution to Global Industrial* Wood Production Is approaching 50% according to FAO Source: FAO – State of Word’s Forests - 2007 * Excludes firewood

  12. Per Capita Wood Consumption • Lots of potential to export more wood products to China • Affluent population today ~13 million ~$40,000 income (PPP) • By 2025, upper middle class ~ 520 million people ~ $25,000 cubic meters per capita Source: China Timber Import Export Co/Hardwoodmarkets.com 2003

  13. China and US Consumption of Wood Products – What will China’s Share be in the Future and where will it come from? World Consumption Share Source: FAO

  14. International Exports, 2007 • Indiana is: • 9th most important state in terms of ashlumber exports • 12th in maple lumber exports (OH is #11) • 9th in cherry lumber exports (OH is #3) • 10th in oak lumber exports (OH is #7) • 17th in beechlumber exports • 13th in log exports (OH is #9, TN is #12) Source: Global Trade Atlas

  15. You Can Strengthen Your Competitive Position with Information that is at Hand

  16. Potential Profit Margins are Slim to Begin With Value Ratio (lumber value ÷ log cost) Sawmills Studied (35 total)

  17. Log Value Ratio for Different Log Grades Value Ratio (lumber value ÷ log cost) FS Log Grade

  18. Potential Profit Margins by Diameter Class for Grade 3, Red Oak Logs Value Ratio (lumber value ÷ log cost) Small-End Diameter (inches)

  19. Doyle Overrun by Diameter Class for Grade 3, Red Oak Logs Doyle Overrun (board feet) Small-End Diameter (inches)

  20. LRF by Diameter Class for Grade 3, Red Oak Logs LRF Small-End Diameter (inches)

  21. Operating Costs Have Dramatic Influence on Profitability of Sawing Individual Logs

  22. COST, a Cost Accounting Tool, Gives a Fresh Look at Your Cost Picture

  23. COST Cost of Sawing TimberA Manufacturing Cost Analysis Program for Sawmills Jeff Palmer & Jan Wiedenbeck USDA Forest Service Northern Research Station 241 Mercer Springs Road Princeton, West Virginia 24740 Bob Mayer Consulting Forester in Indiana

  24. What is COST? • It is a computer program that calculates a sawmill’s annual and per-minute operating cost • The per-minute cost figure is calculated based on information provided by the user that can be more or less specific • It is a companion to the SOLVE sawmill analysis application (a sawmill operations performance analyst)

  25. Simply stated… COST provides you with a good estimate of the total annual and per minute costs of operating YOUR sawmill.

  26. What are the required inputs? • Production information (annual log consumption and lumber / byproduct production) • Weekly work schedules, annual wages and salaries • Downtime, planned shutdown days and annual overhead costs

  27. What information does COST provide? • Work shift summaries • Annual wage and salary costs • Non-payroll operating costs • Annual procurement costs • Annual sawmill operating cost, cost per mbf of logs processed and cost per mbf of lumber produced

  28. What If… All wage employees given a 5% increase?

  29. What If… Offering a $2,000/employee wage incentive increased production by 5%?

  30. Cost per mbf increases $3 What If…1 more materialhandling employee is needed and 1% greater downtime occurs when processing small diameterlogs?

  31. Cost per mbf increases $3 What If…1 more materialhandling employee is needed and 1% greater downtime occurs when processing small diameterlogs?

  32. SOLVE The Performance Analyst for Hardwood Sawmills Jeff Palmer, Jan Wiedenbeck and Elizabeth Porterfield USDA Forest Service Northern Research Station 241 Mercer Springs Road Princeton, West Virginia 24740

  33. Additional Software Tools that You Should Find Useful • Hardwood Quality CD • Hardwood Log Defect CD • Hardwood Lumber Edging and Trimming • SAWFEAS and other Wisconsin Extension Programs • ROMI-3

  34. The Hardwood Edging and Trimming Trainer For Windows 95, 98, 2000 and XP Developed by the Southern Research Station, Blacksburg, VA Phil Araman

  35. The Hardwood Edging and Trimming Trainer is designed to help hardwood sawmill edger and trim saw operators improve their processing performance.

  36. Hardwood Edging & Trimming Trainer

  37. Hardwood Edging & Trimming Trainer Zoom screen

  38. Hardwood Edging & Trimming Trainer Lumber price editor

  39. Hardwood Edging & Trimming Trainer Graded board

More Related