Even if you leave out the effects of the covid-19 pandemic, the year 2020 was rocked by news related to wood, good and bad.
The industry’s expansions and investments in Arkansas in 2020 included Green Bay Packaging’s expansion of its virgin fiber facilities in Morrilton to use more pine wood standing on the company’s land in northern Arkansas.
After closing a paper mill in Crossett in 2019, Georgia-Pacific announced a $ 37 million investment in the remaining Crossett paper mill. Koppers, a wood treatment company based in Pittsburgh, expanded its operations in Little Rock. Montreal-based Resolute Forest Products has acquired factories in El Dorado and Glenwood with plans to upgrade and expand each one.
Canada’s StucturLam announced a new cross-laminated timber facility in Conway, with the commitment of Walmart Inc. to build a cross-laminated timber corporate headquarters in Bentonville. On the other hand, Domtar, based in South Carolina, announced the closing of the last paper machine at its Ashdown plant, although it continues to produce fiber. And the vast Sun Paper Co. project in Clark County has been canceled – the loss of a $ 1.5 billion investment for the state. Sun Paper is also based in South Carolina.
Opportunities for the forest carbon and bioenergy markets look good for Arkansas. Highland Pellets is upgrading its facilities at Pine Bluff and has plans to build in Union County. Exports are mainly to the European Union, but Asian markets are expected to grow substantially. Seventy-six percent of the US’s capacity to build wood pellets is located in the Southeast.
CARBON SEQUESTRATION INITIATIVES
As energy producers turn to wood pellets to reduce their carbon emissions, forest landowners are seeing the creation of more carbon markets, where carbon-emitting industries are paying landowners for carbon sequestration. growing trees. The Family Forest Carbon Program is a joint venture of The Nature Conservancy and the American Forests Foundation to bring carbon markets to family forest landowners who typically own wood on relatively small plots.
Public and private partnerships
Cooperation is the name of the game for federal, state and private forests in 2020. Initiatives include the Rural Forest Markets Act, designed to help family forest landowners buy and sell carbon credits and create other streams of environmental revenue for water clean and protection of biodiversity.
The Good Neighbor Authority is a cooperative US Forest Service program that allows the Arkansas Forest Division to carry out forest management activities on federal land.
The Joint Chiefs’ Restoration Program and the Ozark and Ouachita Highlands Projects are conducting forest restoration programs on federal and private land using local cooperators, including commercial logging, to meet ecosystem restoration goals.
Regulatory changes
Other notable federal initiatives include the final decisions on United States waters that have restricted federal regulatory jurisdiction under the Clean Water Act. Additional changes were the inclusion of forest workers as essential workers in the US economy, the relaxation of H2-B visa restrictions for forest workers and the Trillions of Trees Initiative announced at the World Economic Forum in January. The initiative seeks to have a trillion trees regenerated, saved from losses and better protected worldwide by 2050.
Landowner’s concerns
Some 345,000 family-owned forest landowners own about 11 million acres of Arkansas’s 19 million acres of forest. The main concerns of these landowners are access to markets and invasive species.
The hardwood markets were significantly affected by the US-China trade war, and the pandemic worsened the situation.
Landowners with family forests also have trouble accessing markets due to the abundance of timber and overproduction of timber in Arkansas and the south. There is simply not enough production of wood products and standing wood prices are lower than 25 years ago.
The reopening of global markets for Asia and investment in new timber products, such as mass timber construction and wood bioenergy, are necessary to support good forest management by family forest landowners.
These landowners also face serious threats to forest health from invasive species. The most notable in Arkansas are the wild pigs and the emerald borer. Wild pigs are very destructive to native wildlife and even reduce water quality, destroying vegetation near streams and ponds. The emerald ash borer is an exotic beetle that is likely to kill large amounts of white and green ash, important wood species in Arkansas.
Covid-19 effects
Finally, the covid-19 pandemic caused major upheavals in the economy in 2020. During the early spring, the pandemic resulted in a historic job loss.
Demand for many vital wood products such as tissues, disinfectant tissues, masks and filters was extremely high, but the structure of the pulp and paper industry was unable to keep up with demand for several months. At the same time, the housing market has plummeted, but house reform and residential wood consumption have soared.
Then, as the first wave of the pandemic calmed down in the summer and interest rates cut to boost the economy, the housing market rebounded strongly, causing price spikes in sawn and plywood costs. Like the paper industry, wood production cannot increase rapidly as demand increases. The industry has been very hesitant to add capacity, anticipating the second wave of the pandemic this fall and winter.
To learn more about outreach and research programs in Arkansas, visit https://division.uaex.edu/. Follow the agency on Twitter at @AgInArk, @uaex_edu or @ArkAgResearch.
Matthew Pelkki, Ph.D., is associate director of the Arkansas Forest Resources Center at the University of Arkansas System Division of Agriculture, as well as professor and George H. Clippert Endowed Chair College of Forestry, Agriculture and Natural Resources at the University of Arkansas in Monticello.
Matthew Pelkki