Issue link: http://palletcentral.uberflip.com/i/1511664
28 PalletCentral • November-December 2023 palletcentral.com T he wooden pallet industry in North America uses a lot of wood – over 9 billion board feet (BBF) annually for the construction of 600+ million new pallets and the rebuilding of the 1.5+ billion recycled pallets. So, what should the pallet industry expect from the sawmill industry to meet their needs in 2024 and beyond? Low-grade hardwood lumber has historically been the primary material for pallets, so we will begin by reviewing some signifi cant trends with the hardwood lumber industry. Pallet producers are aware that most of the cants and lumber they are using comes from a log that has been seen to produce other higher-grade products. It is rare for a log to be used for just pallets, so an understanding of the demand for all products aff ects our segment since strong markets mean more overall production. e Hardwood Market Report based out of Memphis, TN, has been tracking consumption of hardwood for years and recently shared their report (see chart). e most startling statistic is that total hardwood production in 2023 is projected to be nearly half of what it was 25 years ago when it peaked out at slightly over 12 BBF. Pallets still are the number one consumer utilizing 2.5 BBF of the 6 BBF of hardwood lumber production – but note that in 1999 that fi gure was 4.5 BBF. e pallet industry has maintained a market share of about 40% of the total hardwood production. is downward trend shows no signs of reversing in the near future as substitutes have taken over many of the traditional hardwood markets. e hardwood industry is currently struggling due to lower demand from all of their traditional markets. To regain some of that market share, they have begun an extensive promotion campaign with the tagline Real American Hardwoods, but that change will take time. Overseas hardwood lumber promotion through the American Hardwood Export Council had great success but world economies are struggling, and other lumber producing countries are expanding into North American markets. e pallet industry can anticipate further hardwood supply disruptions in 2024 as sawmills contend with their other markets. Demand for hardwood pallets remains strong for heavy equipment markets that require the added strength and capacity, and in certain regions such as the Midwest or Appalachian area where hardwood species are prevalent in the forest. A healthy hardwood industry remains imperative to our overall success. Over the years, the pallet industry has gradually adapted to utilizing more softwood lumber. Coming out of the great recession 10 years ago, demand for all products soared and lower grade hardwood products Hardwood & Softwood: Lumber Outlook The future of the lumber industry in general is influenced by various factors, including economic, environmental, technological, and societal changes. Here is our outlook for wood in 2024. By Mark Barford Vying for Attention