March-April 2019

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34 PalletCentral • March-April 2019 s global consumer trends and demands continue to shift at an escalating pace, a recent Forest2Market report shows that both structural and temporal market shifts in recent decades have impacted the markets for wood fiber residuals. The report, Changes in the Residual Wood Fiber Market 2004 to 2017, analyzes data from the U.S. Forest Service, Forest2Market's proprietary database of timber transactions and other scientific research to understand the relationship between the supply and demand of wood residual materials over a 14-year period. The report was commissioned by the National Wooden Pallet & Container Association (NWPCA), the U.S. Endowment for Forestry & Communities, and Resources for the Future (RFF). The geographic scope for the study was divided into two broad regions of the United States: the U.S. South and the Pacific Northwest (PNW). Study objectives included: • Uncovering the underlying market forces that impact the residuals market • Assessing the nature and implications of these impacts • Determining whether the changes occurring in the market are: > Fundamental, structural changes that necessitate a systematic problem-solving approach, or > Temporary, short-term, cyclical changes that require a corporate-level response The study found that there are four underlying market forces that most impacted the residual market. 1. The structural decline in printing and writing papers and other end products derived from hardwood fiber. 2. Buoyant demand for softwood fiber driven by strong pulp markets and bioenergy in the form of pellets. 3. Renewed softwood lumber demand and announced capacity in the U.S. South present challenges, though more for landowners than producers of residuals. 4. Fiber constraints in the Pacific NW that have hindered growth and led to stagnant, but stable markets. Strong markets for products like wood chips, biofuels and sawdust, allow the wood packaging sector to approach zero- waste," said NWPCA President & CEO Brent McClendon. "We were pleased to work with Forest2Market on this timely study as the current trends impacting hardwood and softwood residuals markets needed to be better understood." This article focuses on key finding #3: Renewed softwood lumber demand and announced capacity in the U.S. South. The full report may be downloaded at A Southern Pine Sawtimber vs. Residuals: A Tale of Two Markets By Forest2Market MARKETS

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