Logging

SIC 2411

NAICS 113310

The world's logging industry cuts timber to produce rough, round, or hewn wood for use as building materials, fuel, paper, and numerous other purposes. The logging industry is closely allied with forest management. For more extensive treatment of this topic, see Forestry.

INDUSTRY SNAPSHOT

In the early twenty-first century, industrial logging was taking place in virtually every major forested region in the world, including both temperate and tropical regions. Logging includes the harvesting of both coniferous trees, such as pine and spruce—called softwood—and deciduous trees, such as eucalyptus, maple and oak—called hardwood. The United States leads the world in total removals of industrial roundwood from forestland, with annual harvests of hardwood and softwood timber reaching 467 million cubic meters in 2003. This amount, however, showed a decrease from the 500 million cubic meters harvested in 2000. According to the U.S. Department of Agriculture Forest Service, approximately 88 million cubic meters of lumber and 25 million cubic meters of structural panel product were produced in 2002.

Industrial wood in the rough consists of four elements: sawlogs, used to make lumber; veneer logs; pulpwood, used to make pulp for papermaking and wood-based panels; and other industrial wood. Removals of industrial wood in the rough from Western Europe, Eastern Europe, and the Nordic countries combined reached 434.5 million cubic meters in 2000. Removals of industrial roundwood totaled 399.1 million cubic meters in 2001, rising to 413.6 million cubic meters in 2002 and 488.3 million cubic meters in 2003. The Asia-Pacific region showed removals of 110 million cubic meters in 1999, a one percent drop from the previous year. Production dropped again in 2000, with removals of 107.1 million cubic meters, due primarily to production declines in Asia. In 2003, developing nations in Asia harvested some 206 million cubic meters of industrial roundwood. Removals from the former Soviet Union rose steadily in the late 1990s and 2000s. About 95 million cubic meters were harvested in 1998, and some 143.6 million in 1999, an increase of more than 50 percent. Removals rose 10 percent in 2000, to 158.1 million cubic meters. Removals in 2001 were 164.7 million cubic meters, and in 2002 were 174.2 million cubic meters.

Some experts predict a global shortage of wood production in the twenty-first century, particularly in softwoods. Total global production of industrial roundwood (industrial wood in the rough plus fuelwood, which is burned for heat and cooking) from softwoods was 935 million cubic meters in 1992. By 2010, softwood demand was expected to reach 1.14 billion cubic meters, a net increase of 10 percent over the period.

Most projections for softwood roundwood supply do not come close to matching anticipated demand. For example, annual softwood roundwood supply from the U.S. Pacific Northwest was expected to drop by 60 million cubic meters between 1992 and 2010, with an additional 10 million cubic meter decline from British Columbia. Government-imposed harvesting restrictions on public land in these regions are causing the declines. Over the same period, supply increases were expected from Eastern Europe (85 million cubic meters); fast-growing plantations in several countries (65 million cubic meters); Scandinavia and Western Europe (20 million cubic meters); and the U.S. South and the rest of Canada (10 million cubic meters). After factoring in the declines from other regions, these production increases should produce a net increase in softwood supply of 110 million cubic meters by 2010, leaving softwood-derived roundwood supply 95 million cubic meters short of the anticipated demand.

However, worldwide economy, and particularly the North American economy, experienced a slowdown in the early years of the 2000s. Forest products markets reached record highs in 2000, but declined in 2001. Further, roundwood was in oversupply in Europe throughout 2000, following severe windstorms, which felled some 200 million cubic meters of timber. Wind-throw damages in Estonia in July 2001 drew attention to the fact that storm damage poses a permanent risk for roundwood markets and that practices may need to be modified to mitigate future storm damage, according to a United Nations Economic Commission 2001 report.

The hardwood situation is not as critical as softwood, but hardwood supply was likewise expected to lag demand. World production of industrial hardwood roundwood was 440 million cubic meters in 1992. North America produced and consumed 36.6 and 38.3 million cubic meters respectively of sawn hardwood in 2000. By 2010, hardwood demand was expected to reach 550 million cubic meters, an increase of 110 million cubic meters. Under a realistic market forecast, several regions might produce hardwood roundwood increases totaling 55 million cubic meters annually by 2010. Fast-growing hardwood plantations were likely to contribute another 50 million cubic meters. However, hardwood production in Malaysia and Indonesia was expected to drop 45 million cubic meters by 2010, producing a net hardwood roundwood supply gain for the global market of just 60 million cubic meters, which would theoretically create a supply deficit of 50 million cubic meters by 2010.

The economic performance of the Asia-Pacific region was considered a critical factor in the industry's supply/demand outlook. The region is a net importer of fiber, and as the pulp and paper industry develops in countries such as Indonesia and Malaysia, such imports may grow. Japan alone, which imported 22.4 million cubic meters of industrial wood in the rough in 1996, accounted for two-thirds of the world's total imports of woodchips by 2003.

China was a rapidly expanding market in the early twenty-first century, with retail lumber sales up by more than 10 percent in 2001. Total imports of roundwood in 2002 reached 16 million cubic meters, eleven times the amount imported in 1997. China imported 5.4 million cubic meters of sawnwood in 2002, up 33.5 percent from the previous year, and also imported 22 million cubic meters of roundwood. Fueled by rising incomes and substantial investments in the housing sector, China's market for wood products is expected to continue growing at comparable levels through the early 2000s. By 2010, China's demand for timber was expected to rise to 200 million cubic meters, of which half probably would be imported.

In the 1990s, one of the major issues in world logging was the continuing depression of the Russian forest products industry. Harvesting of logs dropped dramatically in the 1990s as a result of the economic contraction in the Russian Federation and other former Soviet states. Environmental problems, organizational problems, lack of funds for infrastructure investments, and social and management problems all contributed to disappointing results. In Russia, total removals of wood in the rough were just 66.5 million cubic meters in 1996, far below levels in the 1980s. Despite these difficulties, Russia remained a major exporter of raw logs through the 1990s and early 2000s. Exports were 20.9 million cubic meters in 1998 and rose to 28.2 million the following year. Industrial wood exports reached 32 million cubic meters in 2000, 32.8 million in 2001, and 37.4 million in 2002. Though analysts predicted a gloomy future for the Russian logging industry into the early 2000s, Russian removal rates exploded in 1999, growing by 50 percent in one year. Harvests in Ukraine and Belarus also increased, bringing the total removals for the Commonwealth of Independent States (including Russia) from 109.7 million cubic meters in 1998 to more than 191.9 million cubic meters in 2002. During this period, Russia began to expand its exports to Pacific Rim nations. By 2005, its timber exports to China had increased about 31 times in volume, from 0.53 million cubic meters in 1996 to 17.02 million cubic meters in 2004. The average increase was more than 50 percent annually. By 2005, according to the U.N. Economic Commission for Europe, the Russian forest products market expected a full recovery. In 2004, Russia exported 10.16 million cubic meters of sawn softwood, 10.2 million cubic meters of softwood logs, and 25.5 million metric tons of pulpwood; exports for 2005 were projected at 11.60 million cubic meters of sawn softwood, 8.1 million cubic meters of softwood logs, and 25.6 million metric tons of pulpwood.

Several major controversies have engulfed the world logging industry. Disputes were truly global, including protests over the cutting of tropical timber in the Pacific Rim; federal court bans on harvesting from government-owned timberland in the northwest United States; boycotts of wood, pulp, and paper products from British Columbia; and protests over the cutting of forests in Chile. Throughout the 1990s, controversy continued, as did ongoing litigation in the courts of individual countries.

Problems surfaced in the relatively new logging areas of the Pacific Rim and Latin America. Most of the growing stock in tropical hardwood forests either has low...

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