The paper industry has a long and storied history in the Northeastern United States but is being challenged by two of the largest paper making costs, fiber and energy. According to Forest2Market's Delivered Price Benchmark, the Northeast average hardwood total fiber cost was over $10.00 higher than the average hardwood total fiber cost in the Lake States and over $14.00 higher than the average in the South.

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As an expanding source of pulpwood consumption in the US South, wood pellet manufacturers compete for feedstock with two other major industries. Historically, the pulp and paper industry has been the single largest consumer of both pine and hardwood pulpwood.

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In 2013, prices for the wood raw materials used by sawmills and ply mills gained modest ground over 2012 prices. As the following figure indicates, chip-n-saw prices* (DBH higher than 8.6" but less than 13") increased.

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In 2013, prices for the wood raw materials used by pulp, paper, OSB and pellet mills gained modest ground over 2012 prices.

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After edging up by 0.1% in October (revised from -0.1%), the seasonally adjusted industrial production (IP) index gained another 1.1% in November. The bulk of November's gain is attributable to utility output, thanks to colder temperatures.

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"Structural changes in the United States (U.S.) forest industry have undercut support of the science and technology required to maintain a competitive position. Forest products companies' spending on research and development (R&D) has fallen.

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In the US South, the distribution of forest ownership can be broken down into two categories, public and private. Public lands in the South are owned by federal, state and local governments; they make up 12 percent of the timberland-just over 29 million acres.

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The majority of wood consuming facilities take a portfolio approach toward their supply chains and use multiple models to balance costs with assurance of supply. The basic structure and process flow for forestry supply chains are relatively consistent across the US.

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