Hardwood Lumber Production to Increase 10%
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Conventional wisdom a decade ago was that low-grade, industrial lumber items were merely byproducts from grade lumber production. Few hardwood sawmills paid serious attention to marketing railroad ties, pallet cants, board road or crane mats. During the last several years, however, solid demand for these products has helped keep the hardwood industry afloat.Hardwood Lumber Production to Increase 10%

According to our estimates, pallet, crating and railroad tie markets will consume 4.09 billion board feet of hardwood lumber in 2012, or 47.9% of U.S. production. Add “miscellaneous” items such as industrial timbers, board road and crane mats, and total low-grade usage amounts to 4.84 BBF, or 56.7% of production. Lumber volumes used in each of these markets have shown steady growth since the start of the recession.

In recent years, buyers of low-grade lumber products have consistently faced supply concerns. Even though sawmills have focused more attention on manufacturing and marketing low-grade lumber, the number of sawmills has fallen sharply. Not surprisingly, price levels for low-grade lumber have been steadier than for grade lumber since the start of the economic downturn, when production began to severely decline.

We estimate that U.S. hardwood lumber production will increase by about 10% in 2012 over 2011. It’s too early to tell whether the hardwood lumber industry can break from tradition and avoid overproducing its modestly improving markets. Whatever happens, low-grade markets should remain healthy and of vital importance to sawmills.

Hardwood Lumber Production to Increase 10%

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