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Reprint from Alabama's TREASURED Forest Magazine
Is The Forest Industry Really Important To Alabama?
Questions and Answers....
By Steve Nix, Forest Resource Analyst, Alabama Development Office
Q: I understand that forestry and the forest products industry is of major economic
importance to Alabama. How is this so?
A: According to the U.S. Department of Commerce's Survey of Manufacturers, forest
product manufacturers return 4.2 billion dollars back to Alabama's economy annually. This is
more value-added than from any other industrial sector they survey. The value of products
shipped out of Alabama is worth 9 billion dollars.
The latest data indicates that over $51 million in state, county and local taxes are paid by
the pulp and paper industry alone. In addition, some $60 million in payroll taxes and social
security withholding was paid to cover these forestry employees.
In a word, billions of dollars can be attributed to the manufacture and sale of tree products
in Alabama each year.
Q: Is forestry a major employer?
A: The most current manufacturing directory published by the Alabama Development Office
indicates that the State's forest products manufacturers employ over 65,000 people. They
provide lumber and solid wood products, paper, furniture and hundreds of other unique wood
products.
This work force makes up 14% of Alabama's 464,000 manufacturing jobs. Out of twenty
manufacturing classifications compared, forest products manufacturing is second only to textiles
in providing jobs to Alabamians. One out of seven manufacturing jobs in Alabama is forestry
related.
There are 282 primary roundwood using forest products operations and 781 secondary
remanufacturing operations. These firms manufacture over 400 products worth $9 billion.
Q: I have been told that the forest industry only consumes our timbered resource and
does not invest in Alabama. Is this true?
A: This is not true. Alabama's forest product industry has invested some $5 billion into
in-state operations over the last 5 years. The total investment made by the forest product industry
has overshadowed all other manufacturers in total dollars of new and expanding capital. Even the
highly publicized Mercedes Benz plant is expected to have a corporate investment impact of only
$520 million over the next six years.
Forestry also pays workers $1.7 billion in wages annually. This equates to an annual
salary of approximately $26,000. The average manufacturing wage in Alabama, as indicated by
the Bureau of Labor Statistics, is $25,344.
A large part of this payroll comes from the pulp and paper industry. It just so happens
that Alabama's pulp and paper manufacturing industry leads top manufacturing sectors in hourly
wages paying an average of nearly $18. Out of 22 manufacturing categories and sub-categories
reported by the Alabama Department of Industrial Relations, pulp and paper is second only to
coal mining (which is not a major Alabama employer) in wages paid.
Q: Does forestry pay adequately for the timber purchased and processed in Alabama?
A: Alabama forest owners received $660 million for 1.1 billion cubic feet of timber "stumpage"
they sold in Alabama last year. According to the Alabama Forestry Commission's Cash Receipt
Report on Forest Products Harvested in Alabama this timber value plus it's cost to harvest and
transport was $1.1 billion. This "delivered" price can be considered it's commodity value.
The value of forestry as a commodity, when compared to other agricultural commodities,
is excellent. Ranked alongside other traditional commodities, timber follows only the poultry
industry in the value of commodity production. However, timber leads all commodities when
ranked by production value by number of counties. Timber is the top commodity as determined by
production value in 34 counties.
And don't forget about the price paid for timber. Stumpage prices have skyrocketed
during the last three years. According to Timber Mart South, Inc.'s price reports since 1992,
payment for pine sawtimber has increased by 56%, hardwood sawtimber by 76%, pine pulpwood
by 32%, and hardwood pulpwood by 34%. Obviously, this enhances the forest owner's
investment and encourages new investments in forestry.
Q: The South is fast becoming the nation's wood and fiber provider. How does
Alabama fit into the Southern equation?
A: Approximately 40 percent of U.S. timberland is located in the 13 Southern States
(including Kentucky). The South grows 23 percent of the nation's softwood timber and 44
percent of the hardwood timber. In a recent survey 43 percent of the nation's softwood sawlogs
and 53 percent of hardwood sawlogs were harvested in the South. These Southern States also
accounted for over half the plywood roundwood and two-thirds of the pulpwood.
Trees thrive in this Southeastern temperate climate. Indeed, the South is the premiere
region of the nation, as well as globally, for present and future forestry production.
Alabama is a southern forestry leader. Only North Carolina and Georgia grow more total
volume of timber than Alabama's 22 billion cubic feet. In the number of commercial forested
acres - 22 million - Alabama follows only Georgia (Georgia and Alabama lead the nation in
available commercial forests). Alabama has the second largest net growth of all the Southern
States - 1.2 billion cubic feet annually.
Alabama leads the south in available timber resource. This is not a secret to those who need raw
materials for forest products. The Alabama Development Office indicates that national and
international requests for locating new forest product mills has become one of their most frequent
projects.
Q: Can the Alabama forest survive pressures that are sure to increase as timber
demand is increased?
A: There have always been those who predict the fall of forestry. To this point, Alabama
forestry has not only survived, but is growing vast numbers of trees with the greatest volumes
ever recorded. This is a tribute to adequate forest practices of the past, improved utilization, and
to a resilient, renewable forest that defies the saw.
The question is not whether we will have a forest, but whether the forest will continue to
provide the proper species, ample sizes and grades for specific products, proper genetic material
and maintain levels of available wood now used by existing industry. All of this has to fit with
non-consumptive uses of the forest - uses which cannot always be defined in monetary terms.
For forty years, Alabama has enjoyed a surplus of both pine and hardwood. Although the
hardwood resource still grows an annual surplus, Alabama's pine timber is now being cut heavier
than growth can replace this cut. This concerns the forestry community who have historically had
surplus volumes to use.
Q: How will this forest remain strong?
The TREASURE Forest owner - as well as any private owner of forest land in the State - is
extremely important to the State's forest future. The fate of Alabama forestry is tied to how
effectively private non-industrial forests are managed in the future since they own 70% of the
forest.
Estimates are that most forest land in Alabama can produce twice the timber presently being
grown. In fact, the forest industry is doing just that on their own forests. Growth and grade on
timber managed by professional foresters on industry property exceeds the same on lands owned
by non-industrial owners. Their timber remains healthy as well.
And timber prices have upped the ante. With sky-high values being paid for timber, your
investment must be protected and increased using proper management.
In a nutshell...most Alabama forest owners can increase stocking levels of valuable species and
maintain adequate grades. Forest owners can increase growth by introducing better management
routines. With increased management, forest owners can develop a healthy forest, free from
insects, disease and fire.
Forest owners can do all this by asking for professional help which is available in every county in
Alabama.