Wisconsin logger study results: comparing then and now

Loggers are the critical link between forests and wood markets. They are also key actors in implementing sustainable forestry. Their actions drive a multi-billion dollar industry that is the backbone of local communities across Wisconsin. The economic downturn has been tough on markets and mills. At the same time, costs continue to rise for equipment, stumpage, and just about everything else. Loggers across the state and nation have felt this trend. Wisconsin’s logging sector entered the recession under considerable strain. Our prior 2004 study found that 22% loggers did not expect to be in business in five years, along with concerns about an aging workforce and continuing high capital investment.

harvester_smallIn this article*, we compare the logging sector in 2003 to our latest 2010 data. We focus on several key measures that describe firm characteristics, harvest intensity, and financials. In reporting our results, we only state that numbers are different when statistical tests showed a difference. Data were collected by mail survey in early 2011. Results show that the industry is changing. Notably, logging businesses have become larger and timber harvesting more intense.

Firm Characteristics Unchanged

The harvest systems at work in Wisconsin’s forests have not changed since 2003 (Table 1). Cut-to-length systems are the most common (49%), followed by those using hand felling (32%). Other mechanized harvest systems make up the remainder, including those using feller-bunchers and those using multiple mechanized systems. Limited change likely reflects that timber and product types remain unchanged. We still cut pulpwood and sawlogs. Annual total production has not increased. On average, Wisconsin loggers produced 6,893 cords in 2010 (Table 2). All volume measures (e.g., board feet, tons) were converted to cords to simplify reporting.

Table 1. Percentage of logging businesses by harvest system in 2003 and 2010; column may not total 100% due to rounding.

Harvest system 2003 2010
Chainsaw-based 37% 32%
Cut-to-length 42% 49%
Feller-buncher 14% 10%
Multiple systems 8% 9%

Table 2. Average annual logging business production in cords by harvest system in 2003 and 2010.

Harvest system 2003 2010
Chainsaw-based 2,299 2,559
Cut-to-length 8,798 9,032
Feller-buncher 4,301 4,767
Multiple systems 9,016 12,926
All systems 5,849 6,893

Harvest Intensity is Up

While total annual production did not increase, harvest intensity did. The average volume harvested per acre increased from 12 cords in 2003 to 15 cords in 2010. In addition, the average volume harvested per timber sale increased from 617 cords in 2003 to 749 cords in 2010. Both suggest a growing need to maximize production on each timber sale.

According to loggers’ survey responses, harvesting was most likely to occur on private woodlands: the largest landownership category in Wisconsin (Table 3). County Forests also continued as a consistent source of fiber. Notable, though, was the twofold increase in harvesting from industrial and timber investment and management organization (TIMO) lands. Other public lands (state and federal) have changed slightly, while tribal forests were unchanged.

Table 3. Percentage of timber harvest by landownership category in 2003 and 2010; column may not total 100% due to rounding.

Landownership category 2003 2010
Private woodlands 65% 62%
County Forests 17% 17%
Industrial and TIMO forests 6% 12%
National Forests 2% 4%
State Forests 5% 3%
Tribal forests 2% 2%
Other 1% 0%

Profitability, Investment, and Retention

Self-reported level of profitability was unchanged. In both 2003 and 2010, profitability broke into thirds (Table 4). One-third reported “very poor” or “poor” profitability. The middle third reported breaking even. The last third indicated “good” or “excellent” profitability.

Table 4. Logging businesses’ self-reported profitability in 2003 and 2010; column may not total 100% due to rounding.

Response category 2003 2010
Very poor 10% 10%
Poor 18% 22%
Broke even 35% 38%
Good 36% 30%
Excellent 1% 1%

Capital investment, adjusting for inflation, was unchanged. Median (or middle most) investments (2010 dollars) were $202,000 in 2003 and $223,000 in 2010. In 2010, logging business that used only chainsaws for harvesting had a median investment of $60,000. Mechanized operations invested $480,000. In 2003, 10% reported investments of $1 million or more. In 2010, 15% topped that amount.

Between 2003 and 2010, we estimate that Wisconsin lost 20% of logging businesses. This loss is in line with what the 2003 data suggested: 22% of businesses predicted they would not be logging in five years. Seven percent of respondents to the 2011 survey were new logging businesses. In the 2011 survey, 21% of logging businesses do not expect to be in business in five years.  Of those, 32% report that economic difficulties will put them out of business, and 68% expect to retire.

Summary

Lastly, the purpose of this article was to summarize a few, key changes to Wisconsin’s logging sector since 2003. Both the 2004 and 2011 studies included many questions and we are writing a more comprehensive report. However, this initial analysis indicates that there are fewer logging business that are harvesting more intensely than in 2003. Our data further show that retaining and attracting new loggers remains a challenge. The current response appears to be that current firms are hiring more workers. The portion of logging businesses with employees increased from 32% in 2003 to 53% in 2010. In addition, the average number of employees rose from 1.7 to 2.8. It may be that larger logging businesses are the sector’s future.

Comprehensive finding are available.

About the authors and study funding: Sarah Traver is a recent MS Forestry graduate of the UW-Madison. Mark Rickenbach is professor and extension specialist in UW-Madison’s Department of Forest and Wildlife Ecology. Melinda Vokoun is assistant professor in UW-Stevens Point’s College of Natural Resources. The Wisconsin Bioenergy Initiative, USDA McIntire-Stennis Act Research Program (pdf), and the Renewable Resources Extension Act provided funding for this study.

Table 3. Percentage of timber harvest by landownership

I received a question as to what Table 3 actually means. It is NOT a measure of how different landownership categories contribute to the state’s timber supply. For example, Table 3 indicates that State Lands contributed 5% of supply to logging firms in 2003 and 3% in 2010. DNR harvest records indicate that the actual area harvested increased from 8,269 acres in 2003 to 18,346 acres in 2010.

These two different numbers might appear at odds, but they aren’t actually comparable at all. The data in Table 3 has no relationship to area or volume as it is not weighted by volume (which we hope to do in the fuller report).


*Slightly revised version of manuscript submitted to TPA Magazine

 

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