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Forest Industry Presentation

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on 12 September 2016

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Transcript of Forest Industry Presentation

Maryland's Forest Resources in a Dynamic Environment:
Assessing the Future Confidence and Sustainability of Maryland's Forest Industry

Results
Introduction
Research Objectives
1) To identify and better understand the future opportunities and threats for retaining a prosperous forest industry.

2) Initiate the development of a confidence index so as to gauge overall confidence of the forest industry over time.

3) Post recession study - forward looking!

4) Assist State Forester in developing policy recommendations.
*Survey: Primary & Seconday Industry, Loggers, and Forest Landowners
Methods
Maryland contains 2.4 million acres of forestland
75% (1.8 million acres) family owned.
Forest products industry very important financially to State.
5th largest manufacturing industry (2009)
Tax revenues $26 million (2009)
Employing 10,000 (2009)
Based on pre-recession studies!
Forest products industry experienced significant impacts from recession.
Mills closed or downsized, loggers out of business, markets weak, little incentive for forest landowners to sell timber.
Altered the dynamics of the industry statewide!
No studies on the impact.

Assess the current status to determine:
Confidence in future success and profitability of

forest industry.
Current status of business.
Current and future markets.
Future opportunities and what is needed to get us there.
Barriers to industry.
Educational and research needs.
Policy & resource needs to stimulate entrepreneurial activities.

Forest Industries
Primary + Secondary


Assess the logging industry to determine:
Confidence in future success and profitability of forest industry.
Demographics to include ownership, structure, and workforce.
Production, profitability, equipment and capital information.
Current and future perspectives, challenges and opinions of industry and profession.
Educational and training needs.
Success of the MD/DE Master Logger program.
Long term business strategy: sell business or pass on to children.
Policy & resource needs to stimulate capital investment in their business.

Loggers

Assess forest landowners to determine:
Confidence in future success and profitability of forest industry.
Demographics to include age, ownership, and acres.
Barriers and/challenges to managing their forest.
Future market potential.
Future management needs.
Policy and resource needs to help them manage their forest.

Private Forest Landowners

Pre-tests took 10-15 minutes to complete
Primary/Secondary Industries: 30 questions
Loggers: 36 questions
Landowner: 27 questions
Survey questions:
Likert rating scales (1 – 5)
Multiple choices
Yes/no
Open ended fill in blanks

Primary/Secondary forest industries and loggers surveys: February – April 2013.
Surveys conducted in person, mail or online.
Brian Knox, Rachel Egolf & Elliott Campbell
Landowner surveys: October - December 2013.
Conducted mail or online: Mason-Dixon Polling Group

Response rates
Primary + Secondary Forest Industries
40%
(25/65)
Loggers
25%
(101/405)
Master Loggers
61%
(75/122)
Non-Master Loggers 5% (15/285)
Landowners
30%
(1093/3608)


Four Questions
How Confident: Likert Scale (1-5)
General Confidence: Y/N
Transition Plan
Capital Improvements
Hiring
"Yes" responses indicated confidence.

Confidence Index

Linear function: Percent * 0.04 + 1 = Index

General Confidence: 2.29
Capital Improvements: 42% * 0.04 + 1 = 2.68
Hiring: 13% * 0.04 + 1 = 1.52
Transition plan: 50% * 0.04 + 1 = 3.00

Average Confidence Index:
(Gen Confidence + Capital Improvements+
Hiring + Transition plan)/ 4
(2.29 + 2.68 + 1.52 + 3) / 4 = 2.3725 = 2.37

Ethnicity

Purchased Wood From:

Products
Produced by Volume

Sold Products To:

Harvesting Locations

60% of respondents indicated they currently have a forest management plan.
Demonstrates the current efforts to educate forest landowners about forest management planning have been somewhat successful.
However, there is a need to increase educational efforts to develop forest management plans.
Encourage membership in forestry related organizations and participation in educational programs and events.
Increases confidence & management activities.
Only 29% indicated "participation" in cost share programs.
Educate landowners of existing state and federal cost share programs.




Only 8% of loggers entered into the biomass/biofuels market.
Develop statewide markets
Encourage the State to explore potential markets
Develop state tax incentives to establish new markets
Incentives and low interest loans for new equipment such as chippers
Continue to develop the Master Logger Program.
Solicit more loggers into the Program
Provide additional training programs in:
Forest management
Silviculture
Safety, first aid and CPR
Only 44% of Master Loggers indicated the MLP helped create respect for Master Loggers statewide.
Share benefits and value of the MLP to forest landowners.
Explore federal programs for military veterans and their employers that could enhance their business environment and educational opportunities.


Recommendations

Only 13% involved in bio-energy
Provide state tax incentives for purchase of biomass energy systems, biofuel installation and usage.
Thus: Lowering fuel costs
Provide low interest loans for purchases of equipment.
Could stimulate the hiring of more employees.
Explore DOE energy efficiency incentives similar to those available to the poultry industry to decrease energy consumption and costs.
Ensure access and availability of raw materials by:
Maintaining a steady and stable amount of state land available for harvests.
Increasing forest landowners’ awareness of forest management options.
Increasing tree planting to provide raw materials for the future.
Develop educational programs dealing with:
Safety regulations,
Regulations by USEPA and MDE
Product pricing/distribution
Identifying new markets
New product development

Conclusions and Recommendations
Bob Tjaden
University of Maryland, Department of Environmental Science & Technology

Dan Rider
Maryland Department of Natural Resources, Forest Service

Elliott Campbell
University of Maryland, Department of Environmental Science & Technology

Amy Hudson
University of Maryland, Department of Environmental Science & Technology

Maryland's
Forest Products Industry

Justification

* Requested by Maryland Forest Service*

Past Studies
Harry R. Hughes Center for Agro-Ecology Report (2009)
Policy recommendations
Sustainable Forestry Act
MD Forest Service + USDA Forest Service:
2004 Timber Consumption, Procurement Behavior, and Investment Issues for MD Sawmills
Indirectly addresses confidence in industry
2005 MD Forested Land Base Survey: Logger Survey
2008 MD Timber Industry: An Assessment of Timber Product Output and Use
2010 MD Forest Assessment
2010 Regional Forest Inventory Analysis
2011 MD's Forest Industry: A Pillar of Our Economy & Quality of Life

The literature is "lacking" policy guiding studies that include:
Recent economic downturn
Landowners’ perspective
Forward looking perspective


65% have assets $250,000 - $2.5 million
Average # of employees: 15 Total: 360
Average age: 50
Total veterans employed: 11
13% involved in bio-energy.
Greatest potential barriers:
fuel costs
long-term concern of ability to obtain raw materials.
distance to markets
Policy Recommendations:
low cost loans for equipment
biofuels: more support from government
new markets/alternative forest products
state assisted planting to boost profitability
tax breaks
Industries
Primary + Secondary


Loggers

Forest Landowners

Survey Implementation

Survey Design and
Pretesting

Primary + Secondary
Forest Industries

Industries
Primary + Secondary

Loggers

Landowners

1US Bureau of Economic Analysis. Gross Domestic Product report (2009)
2Annual Survey of Manufacturers, 2007. US Census Bureau

Average age: 46
Military veterans: 6
Average assets: less then $500,000
74% jobs with private landowners
61% Master Loggers: positive opinion of MLP.
Average employees: 6 Total # employed: 517
Crews of 5+ more confident
80% more likely to be in business in 5 years.
38% of harvested timber bought by loggers directly.
41% would add a chipper to their operation
if biomass markets were available.
Greatest barriers: Fuel costs & health insurance.
Policy: biomass programs
better equipment financing
promote forest management.

Familiarity with Terms
56% between the ages of 60-79.
58% no plan to harvest within 5 yrs.
30% harvested in past 10 yrs.
Foresters involved in 79% of sales
Master Loggers involves in 48% of sales
34% own 10-24ac 23% own 25-49ac
60% have FMP
65% never participated in cost-share programs
55% B.S. + degree
29% did not identify with any organizations and reported a lower confidence than those who did identify with organizations.
Greatest barriers:
Taxes
Regulations
Percent of Landowners that Rely on
Revenue Generated from Forest Land


Importance of Potential Barriers
to Planned Forest Management Activities

Confidence in the Future Success
and Profitability of Forest Product
Markets in Maryland

Reasons for Owning
Forestland

Perform similar surveys on a 5 year cycle
Confidence Index:
Average (2.87)
Somewhat Confident
Primary + Secondary Forest Industries (2.37)
Loggers (3.26)
Private Forest Landowners (2.99)

Emphasis on Educational Program opportunities
Master Logger Program enhancements
Expand biomass, biofuels markets
Provide low interest loans for equipment
Confidence Index

Activity Planned
(within 5 yrs.)
Linear function: Percent * 0.04 + 1 = Index

General Confidence: 2.6
Capital Improvements: 62% * 0.04 + 1 = 3.48
Expect to be logging in 5 years: 71% * 0.04 + 1 = 3.84
Transition plan: 53% * 0.04 + 1 = 3.12

Average Confidence Index:
(2.6 + 3.48 + 3.84 + 3.12) / 4 = 3.26

Loggers

Linear function: Percent * 0.04 + 1 = Index

General Confidence: 2.71
Plan to Harvest: 20% * 0.04 + 1 = 1.8
Forest Management plan: 53% * 0.04 + 1 = 3.12
Transition plan: 83% * 0.04 + 1 = 4.32

Average Confidence Index:
(2.71 + 1.8 + 3.12 + 4.32) / 4 = 2.99

Private Landowners

UME Forestry Correspondence Course Participants
UME Woodland Stewards/Coverts Cooperators
MD Tree Farmers
Forest Conservation and Management (FCMA)
CBP - Forestry for the Bay members
Mailing List: 2,577 filtered to 1,803
MD Department of Planning Property Tax Database
Mailing List(10+ ac.): 34,357 filtered to 2,000
**Total Survey Mailing List: 3,803
Full transcript