Mill-Logger Relationships and Timber Procurement Practices In The Us South

Thousands of independent logging businesses are the critical link in the wood supply chain that harvests timber from public and private forests and delivers it to forest products mills. Logging businesses in the region have been struggling with losses of businesses and workers, low profitability, aging business owners and equipment operators, and insufficient recruitment of new owners and equipment operators. Timber procurement practices by forest products mills can have a major impact on the profitability of logging businesses, yet timber procurement practices are seldom studied. We conducted a mail survey of 654 forest products mills in six states in the US South to document timber procurement practices and assess the relationship between logging businesses and forest products mills. Ninety-five mills responded, yielding an adjusted response rate of 16%, which is similar to other surveys of this population. Pulp mills relied on an average of 85 logging businesses to supply their facility with timber compared to 30 for softwood sawmills. Pulp mills and softwood sawmills purchased the largest percentage of their raw material from wood dealers with whom they held a contract, followed by gatewood purchases, and purchases directly from logging businesses. Wood dealers serve as “middlemen” and purchase timber from landowners and market it to mills but may not own timber harvesting equipment. Gatewood refers to timber purchased “at the mill gate” that was not under a supply contract prior to its delivery. Eighty-nine percent of mills reported that the number of logging businesses in their area declined in the past five years and 76% expected further declines in the next five years. The majority of mills were satisfied with the operational efficiency and reliability of logging businesses but fewer than half were satisfied with the innovativeness and financial stability of logging businesses. Fewer than 40% of mills perceived that new logging businesses understood logging costs and conducted market research before investing in their business. This and other research suggest that improved communication and coordination between mills and logging businesses would improve the viability of logging businesses in the region.