|Last Quarterly Update:||1/2/2017|
|SIC Codes:||0811, 0831, 2411|
|Industry Overview||Trends & Challenges||Industry Forecast|
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Companies in this industry own timberlands and grow and harvest timber on production cycles of 10 years or more, primarily for use as lumber. Major companies include US-based Potlatch, Rayonier, and Weyerhaeuser, as well as Resolute Forest Products (Canada), Stora Enso (Finland), and Svenska Cellulosa (Sweden).
Top timber-producing countries include Brazil, Canada, China, India, Russia, and the US. Although international trade in value-added wood products like lumber and plywood is substantial, trade in cut timber is limited because of the cost of transporting such a bulky product relative to the product's value.
The US timber operations industry includes about 8,500 companies with combined annual revenue of about $11 billion.
Some large companies have vertically integrated operations that may combine land ownership, land management, logging, sawmills, and manufacturing of wood or paper products. Companies that grow Christmas trees and other trees (woody crops) on production cycles of less than 10 years, primarily for use by the paper and pulp industries or as raw materials for engineered wood products, are not included in the industry.
Demand for timber used to make lumber is driven primarily by residential construction activity. The profitability of individual companies depends on efficient operations. Large logging companies can have a cost advantage over smaller ones through the use of more efficient (and more expensive) machinery, but logging is a very local activity, often without significant economies of scale.
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