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Wood Energy and Timber Markets in Kentucky and Tennessee

Wood Energy and Timber Markets in Kentucky and Tennessee. Karen Abt Consuelo Brandeis Robert Abt. OUTLINE. What are the factors that would draw a wood energy market to TN/KY? What do we know about current timber products markets in KY/TN?. :.

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Wood Energy and Timber Markets in Kentucky and Tennessee

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  1. Wood Energy and Timber Markets in Kentucky and Tennessee Karen Abt Consuelo Brandeis Robert Abt SRS Stateline Meeting KY/TN October 11, 2016

  2. OUTLINE • What are the factors that would draw a wood energy market to TN/KY? • What do we know about current timber products markets in KY/TN? SRS Stateline Meeting KY/TN October 11, 2016

  3. : What are the factors that would draw a wood energy market to TN/KY? SRS Stateline Meeting KY/TN October 11, 2016

  4. Need both supply and demand An adequate and sustainable and consistent feedstock supply And A local demand source (egcofiring or district heat) OR Low cost transportation for domestic or international export SRS Stateline Meeting KY/TN October 11, 2016

  5. A sustainable supply of energy feedstock requires… • A thriving large tree market • So timber stand improvements will have an eventual payoff • And so the final harvests can yield enough cull (or come along volume or logging residues) to support a small tree market • A small-tree-only market could work • If you could induce landowners to sell their wood cheap (stop laughing) SRS Stateline Meeting KY/TN October 11, 2016

  6. Demand for wood energy could come from… • Potential for Clean Power Plan to incentivize the use of wood for energy • Cofiring with coal or direct firing for electricity • New district heat and power projects • But, wood is not a cheap energy source • International pellet demand • Increasing, but • Transportation costs • Some buyers don’t think burning hw is better than coal SRS Stateline Meeting KY/TN October 11, 2016

  7. What do we know about current timber products markets? SRS Stateline Meeting KY/TN October 11, 2016

  8. Southwide Timber-Mart South Prices Hardwood markets stronger than pine markets Pulpwood markets stronger than sawtimber markets SRS Stateline Meeting KY/TN October 11, 2016

  9. Appalachian Mountain Region Stumpage Prices (Forest2Market)Your Mileage Will Vary HW sawtimber linked to housing and exports HW pulpwood linked to P&W paper and ‘bleed in’ from east Silvicultural improvement cuts require a market for low quality wood, BUT also a market worth leaving trees to grow into.

  10. Area and Volume by Harvest Type for the Appalachian Mountain region SRS Stateline Meeting KY/TN October 11, 2016

  11. Inventory and Removals by Age Class Similar inventory levels, but TN has higher removals. Almost all of inventory and removals are in 55+ age class SRS Stateline Meeting KY/TN October 11, 2016

  12. TN and KY Mill Consumption Trends KY industry consumed less sawtimberand pulpwood. Sawtimber increasing from 2011 to 2013, however. Sawlog consumption improving in both states SRS Stateline Meeting KY/TN October 11, 2016

  13. Summary • Southwide—hardwood and pulpwood markets stronger. Little impact on TN/KY • Increased hw pulpwood harvest on eastern borders due to increased wood energy demand in coastal VA and NC • Need a market for HW sawtimber to make growing wood for energy feasible • Thinning also needs optimism about future sawtimber markets • Increase in value of low quality wood can get a logger on site SRS Stateline Meeting KY/TN October 11, 2016

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