Arkansas Agriculture Edition 25 : Page 4

T he Taking a new approach to timber in Arkansas by Gregg Patterson photos by Keith Sutton Ax man Arkansas Farm Bureau Forestry Division Chairman Grant Pace is helping develop new national and international export markets for Arkansas-grown timber. 4 Arkansas Agriculture

The New Arkansas Ax Men

Gregg Patterson

Taking a new approach to timber in Arkansas Ax man Arkansas Farm Bureau Forestry Division Chairman Grant Pace is helping develop new national and international export markets for Arkansasgrown timber. The timber industry is big business in Arkansas. How big? Number 5 in the nation, that’s how big. Arkansas’ timber industry generates more than $2 billion in annual forest products sales, as well as providing the largest percentage of agriculture-related jobs that keep Arkansans working. Arkansas doesn’t have to watch a TV show to know how things are done in the timber cutting business. It’s happening in real life every day in our forests. Arkansas is blessed with forests.Almost 53 percent of the state is classified as “accessible” and “productive” forestland. The state is also blessed with a variety of tree species in both the hardwood (oaks, hickories) and softwood (pines) classifications. Arkansas’ timber industry has a long history, the beginning of which dates back to settlement. The vast bottomland hardwood forest of the eastern half of the state was systematically clearcut, Drained and converted to farmland; its rich soils needed to fulfill the nation’s insatiable demand for cotton and then other row crops. As professional forest management began to take hold in the early 20th Century, the realization of a renewable and sustainable forest took hold in many areas of the rest of the state where it made more sense to cut and replant forests rather than trying to replace them with row crops.Everything from small, local lumber mills to modern, large-scale paper and container mills took in all trees from grandpa’s back 40, as well as the bounty from professionally managed multisection tracts of industrial forestland.That process continued with most of the timber taken here feeding the in-state mills. However, change has swept across Arkansas’ timber industry the last 20 years – and particularly in the last 10.Much like happened to the U.S. textile Industry when the converting of raw cotton into clothing and household items disappeared to cheaper labor in foreign countries, so too is the timber industry going through a sea change of its own – overseas that is. Matt King is the coordinator of Arkansas Farm Bureau’s Forestry Division. He says no new mills have been built in Arkansas in more than 30 years. Instead, King says the newer mills are being built overseas, particularly in Brazil where environmental regulations are less stringent and labor is cheaper than it is here. So the belief that a log cut down on grandpa’s back 40 will become a finished product here in Arkansas is changing. Not only that, King believes the idea that that log should remain in Arkansas needs to change too. There’s a whole world out there with specific needs and specialty markets outside of Arkansas that forest landowners need to identify To get top dollar for their logs. “Some 96 percent of the world’s population lives outside of the U.S.,” King said. “A growing consumer class of people in other countries wants U.S.- grown wood. It’s a status symbol for them.” He mentions flooring as an example.Consumers outside of the U.S. want flooring for their homes made from U.S.- grown hardwood. “Asia is demanding flooring and hardwood lumber.” Ironically, King points out, the reverse is true too. U.S. homeowners want flooring made from Braziliangrown wood or Asian bamboo. The point is there’s a global market out there now. Grant Pace agrees. He is chairman of Arkansas Farm Bureau’s Forestry Division and runs his own forestry consulting business. “What’s important today is getting the product out to the changing markets around the world,” Pace said.“Improvements to rail, highways and river ports have made it easier to haul products to different mills across the U. S. and even to other countries.” He says these improvements have opened up different markets for timber products. King says Pace has identified and developed one of those markets. He ships veneer-grade southern red oak logs to a Michigan facility that produces the veneer then ships it to Italy to be used in furniture making. The furniture then comes back to the U.S. for sale. That quality red oak log fetches a much better price to the forest landowner when it’s used to its fullest end-product use as veneer then if it were simply cut down and sent to a local mill that doesn’t produce veneer. According to King, more and more furniture-grade hardwoods grown in the U. S. are being shipped overseas to be made into furniture; then it’s shipped back to the U.S. for sale. King says the wood biomass market in Europe – wood chips and pellets – as fuel for heating is another example of An overseas market. “Europeans have regulated themselves into the use of wood chips or compressed wood pellets as a heat source,” he said. He says it’s also a popular choice in the Northeast states. Identifying these markets and establishing ways for Arkansas forest landowners to take advantage of them is critical to keeping the timber industry strong here. With that in mind, King says Arkansas Farm Bureau is teaming up with surrounding states to host the “Forest Product Export Conference” Oct. 30-31 in Vicksburg, Miss. The conference will help provide information to mills, loggers and others on how they can take advantage of the export market. “Mills, loggers and forest landowners are going to have to continue to look for new markets and tailor production practices to meet what the market demands,” King said. Pace sees the future of timber Production in Arkansas following in the footsteps of what farmers and ranchers here are already doing in providing food to the world. “Arkansas, along with other states, already helps feed the world,” he said. “One day, we’ll also help with raw products such as wood pellets for heat, pulp for paper, logs for furniture and just about any other need a country has.” King says Arkansas can sustain itself as a Top 5 timber producer nationally with a worldwide export approach and if it continues favorable state policies that encourage continued harvest of timber resources. He says what’s needed now is tax savings legislation that’s competitive with what surrounding states offer. “The timber industry is strong in Arkansas, but we’re missing key legislation to maintain the industry in the future,” he said. “Surrounding states offer sales tax exemptions on forest product equipment. However, Arkansas Only exempts the first $50,000. That often is only the equivalent of 10 percent of machinery costs.” Pace agrees. “Starting a logging operation today costs around $1 million. The high cost of fuel, insurance and equipment make it very challenging to survive. Profit margins on logging jobs are small due to these high costs,” he said. King says Arkansas Farm Bureau will also work to maintain voluntary best management practices in Arkansas and help protect private landowner rights. Pace says it’s a big, wide world out there, and it’s important to get the product out to the changing markets in the U.S. and worldwide. “Doing it the way daddy or grandpa did it just doesn’t work anymore,” he said. And it’s a little more complicated then what you see on some TV show. Tax cut To keep Arkansas as a national Top 5 timber state, it’s important to eliminate the sales tax on forest products equipment like this buncher. Keep on truckin’ A load of logs doesn’t necessarily go to the local mill anymore. Raw logs are often trucked to other states or shipped overseas for processing and return to the U.S. as finished products.

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