Loggers Adapting To Changing Industry

Fiber market issues hit contractors hard.

Results from the 2024 Timber Harvesting Logger Survey show an industry undergoing wrenching change around the country. In addition to the challenges of operating highly capitalized businesses in mostly rural areas, many with relatively shallow labor pools, and in an environment of rising costs for all business inputs, loggers are also grappling with a major shift in pulp-paper markets that are throwing the standard contractor’s business dynamics seriously out of whack.

Timber Harvesting has tried to follow the story as it’s developed but among pandemic issues and market swings and inflation, beginning in 2020 there have been more than 22 announcements of pulp and paper mill and paper machine closure announcements that have taken at least 30 million green tons a year in pulpwood and chip consumption off the market.

Those contractors who have been servicing those mills now either have no work through the mill’s procurement department or no markets if they were buying their own timber. (For example, G-P’s Foley paper mill that closed last fall in Perry, Fla. took in 1,100 loads a week.)

These are high-volume markets, and unfortunately that’s what loggers are told to do to overcome low cut and haul rates: make it up on volume. Well, for many loggers the volume just isn’t there any more.

And the hits just keep on coming: In its most recent issue the North American Woodfiber & Biomass Markets newsletter notes recent news from the American Forest & Paper Assn. that pulpwood consumption fell 9% in 2023 and is expected to fall again this year.

The reasons? Long-term demand reduction in certain paper grades and also a shift away from green fiber and roundwood in general in favor of more recycled raw material.

And it’s a problem that feeds on itself: With more producers scrambling to unload pulp and fiber wood it drags prices lower for all in markets across the country. And this is just a fairly educated guess by the TH brain trust, but looking at the numbers and results of this year’s survey, almost every logger has been affected by the fiber wood downturn, but somewhere around a third of loggers have been heavily and adversely impacted by reduced pulpwood markets.