Uncertain times for Montana's dynamic forest industry.

• Author: Marcille, Kate C.
• Position: Cover story

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Montana's forest industry is comprised of more than 80 active facilities that manufacture a variety of wood products. The industry receives its raw material--timber--from forests both inside and outside the state, relying on landowners, foresters, loggers, and truck drivers to provide that timber year after year. Montana mills sell their forest products into local, national, and international markets. Throughout this supply chain, from forest to mill to final consumer, there are numerous uncertainties and constant changes in both timber supply and wood products demand.

Planning for the economic uncertainties of tomorrow can be informed by turning to historic and recent trends across the state's forest products industry. Montana's timber markets are dynamic and influenced by many factors across global, national, and regional scales. Fluctuations in wood products demand, log prices, and timber harvest levels from various landowners have reshaped the structure of the forest products industry over the previous decade. Shifts in productivity and employment levels continue to challenge the long-term economic stability of forest-dependent communities across the state.

The potential for new policies and operations, along with the overall sentiment of industry personnel, influence the anticipated future conditions of doing business in Montana's forest industry. The changes in this industry over the last decade, coupled with evolving market conditions, make these uncertain times for our state's forest products sector.

Timber Harvest

Timber harvest is the beginning of the supply chain for the wood product industry and represents the intersection of forest economics with the environment. Over the past 15 years, annual timber harvest volumes have undergone noticeable fluctuations (Figure 1). In 2000, the volume of timber harvested from Montana forests exceeded 740 million board feet (MMBF). With about 4,000 board feet per truck, this is equivalent to more than 740 fully loaded trucks delivering logs to Montana mills each business day. The burst of the U.S. housing bubble in late 2006 injured all sectors of the national economy, none more so than the forest products industry. The dramatic decline in U.S. housing starts and stagnation of housing and wood product markets during the "Great Recession" drove Montana timber harvest levels to a historic low of 323 MMBF in 2009. Since 2010, annual state-wide timber harvest has remained relatively flat, averaging around 360 MMBF, roughly half of the 2000 to 2005 average.

Between 2000 and 2015, timber harvest levels in Montana varied across land ownership classes, revealing different drivers of forest management on public versus private lands. Private forestlands experienced very large decreases in timber harvest volumes, largely in response to lower demand for wood products and the logs used to produce them. National...