U.S. Hardwood Sawmill Log Procurement Practices

Abstract

U.S. hardwood sawmill log procurement practices are evolving because of the recent economic recession, market and supply chain shifts, and changing landowner objectives, among other factors. The objective of this study was to characterize the log procurement practices of hardwood sawmills and to characterize the role that log brokers play in supplying the sawmill industry with raw material. To meet this objective, a mail survey on hardwood log procurement practices in the U.S. hardwood sawmill industry was conducted. Survey respondents highlighted several factors that had major effects on their businesses, including "Increasing fuel and trucking cost," "High logging cost," "Unpredictable log supply," "Log shortages," "Logger shortages," and "Low log quality," among others. Results showed that large sawmills tend to rely more on gatewood from loggers and stumpage harvested by company contract loggers than do small-and medium-sized sawmills. This study failed to find an increase in the role of log brokers as an intermediary between landowners and hardwood sawmills during the last decade. Moreover, sawmills indicated only a limited demand for log broker services, with log delivery and the procurement of specialty logs identified as being the most highly demanded broker services.

The impact of rapid fuel costs inflation on Arkansas’ logging sector

“…Although this could be true for some firms, anecdotal reports suggest that the vast majority of logging businesses in Arkansas operate as at-will loggers who maintain free agreements with the mills. Relatedly, Andersch et al (2015) also found that sawmills in the southern states procure more wood from gatewood loggers than in any other states, meaning that logs are hauled to sawmills primarily by independent loggers and are not preordered or ordered under a contract. Lastly, it is possible that there were fewer mill quotas given that 50% of the loggers decreased supply, allowing the other 31.6% of loggers to increase their production to fill the gap in the mills' demand.…”