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| Year |
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| 1948 |
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| 1966 |
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| 1973 |
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| 1983 |
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| 1997 |
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Timberland ownership in 1997 was divided into categories: nonindustrial private, industrial private, and public. Public land is owned by Federal, state, and local governments. Land owned by nonprofit organizations is not categorized as timberland by the USFS. Table 8 shows the proportions of timberland owned within each category by year. Since 1948, public ownership shows the greatest change (148.5 percent) from 297,500 acres in 1948 to 739,300 acres in 1997.
Since 1945 Vermont has reported the volume of wood harvested from the forest on an annual basis2. The information is obtained by asking wood buyers the volume of forest products purchased from Vermont. Since 1976 those buyers have been asked to attribute their purchases by county of origin. Prior to that time volumes were reported as if the county of the reporting mill or buyer was the county of origin of the wood. By the early 1970s it was apparent that the forest products economy had grown beyond the Vermont boundary to a regional level. There is no statutory requirement that any mill or buyer report any information. These reporters do so voluntarily and reliably, every year.
Vermont is in the unique position of having 50 years of both statewide inventory and harvest data. The inventory trends were discussed previously. The harvest since 1945 is shown in Figure 19. Harvest declined from 1961 to 1971 with no prior or coincidental decrease in inventory. Harvest began to increase again in 1972 and that trend has continued to the present. The ups and downs from year to year are characteristic of forest product markets. If data could be graphed on a quarterly basis, greater variability could be seen, showing the volatility that forest product markets can experience in a 1-year time frame.
In 1948, the ratio of lower-quality to higher-quality forest products harvested was 27 percent to 73 percent2. Lower-quality includes pulpwood and industrial fuelwood. Higher-quality includes sawlogs and veneer logs. This ratio held through the mid-1970s. In 1976 whole tree chipping was begun in Vermont which added lower-quality volume to the harvest mix. At that point the ratio shifted from 32 percent to 68 percent, lower to higher quality. The ratio increased to as high as 52 percent to 48 percent, lower to higher quality, in 1993, after which time it has declined to 47 percent to 53 percent in 1996. The reasons for the increase in the proportion of lower-quality wood in harvest are the increase in the demand for pulpwood from Vermont, the increase in the demand for hardwood pulp in the region, and the introduction of whole tree chipping for pulpwood and industrial fuelwood.
The periodic forest inventory does not provide published data on the commercial quality in the inventory in terms that make comparison with harvest data meaningful. Finding markets for lower-quality wood has been a long-time problem faced by landowners, loggers, and foresters. The ability of landowners to sell lower-quality wood is important to their ability to have a quality thinning job done in their forest.
On average, 70 percent of the total forest harvest in Vermont comes from the northern part of the state. This large proportional difference over the south is due to much better access to markets for pulpwood and industrial fuelwood. While harvest has been increasing, the volume cut has not been equally distributed among all species of trees. The majority of sawlog and pulpwood harvest is concentrated in spruce and fir, white pine, and sugar maple.
The tracking of log exports and imports as part of the harvest report was begun prior to 1970. Exports are defined as the total volume that leaves the state, whether it goes to another state or it leaves the country. Log export volume has gone from 35,196 thousand board feet (Mbf) in 1970 to 76,055 Mbf in 19972. As a percent of harvest, log exports increased from 25 percent in 1970 to 26 percent in 1997, during which time the proportion has wandered upward by fits and starts (Figure 20). Beginning in 1989, all pulpwood harvested in the state has been exported. Prior to that time pulpwood exports went from 77 percent of pulpwood harvest in 1970 to 92 percent in 19882.
According to the latest Use Value Appraisal Program calculation of the value of trees harvested (money paid to landowners for the harvested trees), the stumpage value for the harvest in 1997 was $30 million3. This calculation is used by the Use Value Board to assist them in setting the use value of forest land; it is not necessarily an exact measure of the value of stumpage but rather an indication. The comparable figure for 1991 was $17 million. Even though stumpage values have increased, many landowners still cannot obtain adequate compensation from harvest to cover the costs of timberland ownership.
Over the past 10 years, forest harvest has increased 23 percent. While log and pulpwood exports have had an influence on that increase, Vermont has also seen an increase in logging output and primary processing capacity. As demand for forest products has increased, Vermont businesses have managed to remain competitive in an increasingly regional and, to some extent, global market. Logging and primary wood processing constitute the front line in providing markets for the forest products of private land-owners.
Vermont no longer collects and reports data on the logging or wood product manufacturing sector. The Vermont Annual Harvest Report does provide reliable data on the number of mills and their production, but not on the number of workers. The Census of Manufacturing does provide information to fill these gaps. The census is conducted every 5 years by the U.S. Census Bureau. The data reported are for number of firms, number of workers, payroll, and value of shipments (output). The data released for Vermont is known to underestimate the population; however, these figures are at least instructive in showing trends.
The census shows distinct trends for the three sectors of the forest products economy: logging, primary wood processing (sawmilling and veneer production), and wood product manufacturing (including paper manufacturing). For employment, payroll, and value of shipments the overall trend has been one of growth from 1987 through 19974. Employment growth has averaged 3.3 percent per year, average wage has grown by 5.5 percent per year, and value of shipments has increased by an average of 3.7 percent per year. These growth rates are all above average inflation rate for the period.
The general pattern in the industry has been that those sectors within which more value is added have experienced the greater growth (Table 9). In that context, the logging sector has shown the least growth in all measures, primary wood processing has grown a moderate amount, and wood product manufacturing has grown the most. The department will continue to collect and report industry structure and performance information and to monitor trends.
There were 220 primary processing mills of all sizes in Vermont in 1997, including idle ones. Of these, 15 process 75 percent of all the log volume converted in the state2. In 1983 there were over 300 primary mills of which 20 processed 50 percent of the total. There has been a clear trend of fewer mills in the state and a concentration of processing capacity in even fewer mills. This trend reflects the competitive pressures mills have faced to acquire more efficient, sophisticated, and expensive processing equipment, often times geared toward processing smaller logs. There was also likely a measure of increased competition for logs influencing this trend.
Volume processed in Vermont since 1983 has increased 46 percent with most of that increase coming since 19912. In terms of volume processed, the change has been from 203,251 thousand board feet (Mbf) in 1983 to 296,723 Mbf in 1997. That volume included logs imported from other states and provinces.
Since 1983, the percentage of log volume harvested in Vermont that was bought by Vermont mills has been declining2. The percentage has gone from 79 percent in 1983 to 65 percent in 1997. During the same period, log imports to Vermont mills have gone up 97 percent, from 40,249 Mbf to 79,298 Mbf. The percentage of import volume making up Vermont mills' volume processed went from 20 percent in 1983 to 27 percent in 1997.
Logging and primary wood processing products have been enjoying increasing demand during the past 10 years. This increase in demand has been enjoyed by producers nationwide. Logs and lumber must meet price, quantity, and quality requirements to qualify for sale, but these are commodity products, nonetheless. A commodity is not distinguishable except according to price and common quality measures, or grades. Commodities are not distinguishable according to where they originated or who produced them.
The products of secondary wood processing, or wood product manufacturing, are not entirely commodities, or are not commodities at all. Wooden parts and components are to some extent commodities, but also are distinguishable in part by source or producer. Finished wood products, like furniture, are fully distinguishable by producer as well as other attributes, such as design, appearance, name brand, and style.
Vermont wood product manufacturers have been experiencing increasing demand in a marketplace that distinguishes products beyond species, grade, and price. This demand is more fickle than that communicated to primary wood product (lumber) suppliers. The growth in demand for Vermont-manufactured wood products cannot be connected to a simple increase in demand for wood. Rather, this increase is the result of general increase in demand for wood furniture and accessories as well as the success of Vermont firms in capturing market share. While sawmills and veneer mills are successfully facing increasing competitive pressures in commodity markets, wood product manufacturing firms are likewise succeeding in growing into their markets.
The connection between primary wood processing output and the growth in wood product manufacturing is tenuous, at best. Little is known about the volume of wood processed in the primary sector that is consumed in the manufacturing sector. This lack of knowledge is a result of manufacturers' buying practices, which make it very difficult to trace primary wood products purchased by manufacturers back to a geographic source. We do know that many Vermont manufacturers obtain raw material from Vermont suppliers/brokers as well as mills. We do know that there is a link between local production of raw materials and the health and vigor of an existing wood product manufacturing sector.
During the past 10 years, employment in manufacturing has gone up an average of 3.3 percent per year in Vermont4. Total payroll has increased 2.3 percent per year. Value of shipments has risen by 7.8 percent per year. This growth has been over an extended period of time, including a recession in the late 1980s and early 1990s. While this growth has generally been in keeping with the overall economic expansion of the U.S. economy, it is especially noteworthy that Vermont is not recognized regionally, nationally, or internationally as a wood product manufacturing location. The state Department of Economic Development estimates that the wood product manufacturing sector in Vermont has the capacity to double in both employment and value of shipments.
Wood product manufacturing firms are spread throughout the state5. The larger plants are in Randolph, Beecher Falls, Orleans, Brandon, East Thetford, Newport, Fairfax, the St. Johnsbury area, Hancock, Dorset, Pittsfield, Rutland, Manchester, and South Londonderry. It is a critical feature of this sector in relation to the state's economy that these manufacturing businesses are so well dispersed outside Chittenden County.
The range of wood products manufactured in the state is very wide. There is a great variety of wood parts and components made for other manufacturers around the world. There is also a variety of finished product shipped from Vermont to places local and far. At last count (1992), at least 26 percent of wood product manufacturers were exporting out of the United States, primarily to Canada and Europe5.
Vermont is home to a competitive, growing, and adaptive forest products industry. This industry is an important part of the forest landscape. The sector is well scaled to the natural resource it depends upon. The economic benefits the industry provides to the state, particularly in rural areas, is greater than any other single industry or segment of the economy. Perhaps the greatest problem faced is the lack of recognition by state residents and officials as well as the rest of the world that Vermont is a forest products industry state. One challenge is to better link primary wood processing to manufacturing and, therefore, back to timber growing and management, in order to support the growth of more manufacturing in the state. In the end, the goal is to capture as much value from timber grown locally in the local economy. The department will continue to provide technical and market information and assistance to businesses and others that will support the growth of the forest products sector and the value that is added locally. The department will continue to report on harvest annually, work with the USDA Forest Service on forest inventory, and monitor and report on the various facets of the industry. Finally, the department will continue to work with researchers and industry on developing and commercializing technologies and processes which will contribute to the profitability and competitiveness offorest products businesses in Vermont.
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