Forest2Mill E-Newsletter
August 2009
In This Issue
Housing Market Update
Product Feature
European Demand for Wood Fiber
Wood Fiber Supply Agreements
Look for Forest2Market
Quick Links


The Institute for Supply Management manufacturing report contains the first ray of sunshine to fall on Wood Products since we first started tracking individual industry performance back in September 2008. Overall activity, new orders and production all increased in that industry in June (see Table). The Federal Reserve's industrial production and capacity utilization reports for June confirm this pickup in Wood Products activity. Production improved by 1.8 percent, and capacity utilization was up 1 percent. Year over year, production has fallen 23.8 percent.

For a performance overview of the Wood and Paper Products industries in June, click here.
Housing Dominos  
Housing inventories dropped for both existing and new homes in June, and housing starts increased. Though prices still lack stability, it appears we may finally have found the bottom of the housing market. The way up is unlikely to be swift or dramatic, but a tentative start has begun.
Seasonality is one of the reasons for the improvement, as sales in June are generally higher than May. However, affordability, tax credits and ample available supply are also driving the market.
Forest2Mill August 2009Port Blakely Tree Farms Uses Forest2Market's Delivered Price Benchmark
Port Blakely Tree Farms does business in Washington and Oregon and has been around for 145 years. Over the decades, the company has built a reputation as a high class operation governed by the values of sustainability and innovation. Living by these values, Port Blakely focuses on rigorous forest management practices and the meticulous balance of harvest and growth rates. Their approach produces the highest quality and largest trees in the area, and it is this quality that has become synonymous with Port Blakely Tree Farms.
Wood Chips
Recently, the Wall Street Journal's Russell Gold reported that the wood pellet industry in the United States is being driven largely by European utility companies.  European Union member countries are required to produce 20 percent of their electricity from renewable sources by 2020. Because of this standard, the European Union imported nearly $100 million wood pellets and other wood fuels in 1Q2009, which Gold points out is 62 percent higher than 1Q2008.
Wood Chips and Conveyor
What Effect Will Bioenergy's Demand Have?
Globally, securing a steady and affordable supply of feedstock has become critical path for wood bioenergy companies. As plant completion dates draw nearer, many energy producers are in discussions with wood suppliers as part of the process of understanding their wood basins (what energy producers call supply sheds), identifying suppliers and determining the characteristics of mutually beneficial supply agreements. As this process gears up, it is almost certain to ripple into the supply agreements of competing users of wood fiber.
Pete Stewart
On August 4, Pete Stewart will be making a presentation on the wood fiber supply chain at the International Biomass Utilization Conference at the Bost Conference Center, Mississippi State University, Starkville, Mississippi.
You'll also find an article by Pete on the effects of bioenergy industry growth on engineered wood products manufacturers in the Fall issue of Engineered Wood Journal, a publication of the Engineered Wood Association (
10030 Park Cedar Drive, Suite 201
Charlotte, NC 28210-8902
 Phone: (704) 357-0110
Fax: (704) 357-3574