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  • Building With Wood: Housing, the  Economy and Western Hardwoods

    Western Hardwood Association 2nd Annual Western Hardwood 

    International Convention & Exposition May 20, 2014

    Portland, Oregon

  • Forest2Market Data – Experience – Expertise • Neutral‐third party  (independent in ownership and structure) • Capture of transaction level data is the only way to achieve a true measure 

    of market price.  Transaction data is the foundation of all our products and  services

    Client relationships • Timberland owners and log marketers, forest products manufacturing 

    companies, pulp and paper, bio‐energy industries Market Intelligence • Resource studies / Market research • Timber price forecasts and economic analysis • Proprietary transaction level sales and cost data • Publications Headquartered in Charlotte, NC;  offices in Eugene, OR, 

    Appleton, WI and Curitiba, Brazil

    ©2013 Forest2Market®, Inc. 3

  • Today’s agenda

    • Western hardwoods market share • Western hardwood timber supply • Building construction trends • Economic outlook

    ©2013, Forest2Market, Inc. Slide 4

  • 5

    6

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    1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013*

    B ill

    io n

    B oa

    rd F

    ee t

    Hardwood Lumber Supply Available to the US Market from All Sources

    Imports Western Production Eastern Production

    Sources: US Census and Hardwood Market Report

    Graph: Hardwood Market Report *projected

  • Western hardwood timber supply

    ©2013, Forest2Market, Inc. Slide 6

  • Hardwoods in conifer forests • Mixed species stands in 

    forests west of Cascade  mountains; alder, big  leaf maple and others

    • Private and state  owned forests 

    • OR+WA = 200 MMBF~  annually; +/‐5% of total  timber harvest

    • Harvest restrictions on  federal forests and  private lands regulation

    • Furniture, cabinets,  millwork and pallets

    ©2013, Forest2Market, Inc. Slide 7

  • Irrigated Poplar plantation forests east  of the Cascade Mountains

    • Hybrid row crop  plantations

    • 12 year harvest  rotation

    • Irrigated desert lands • 2/3 plywood and 

    lumber, remainder for  pulp chips and  biomass

    • 35,000 acres +/‐

    ©2013, Forest2Market, Inc. Slide 8

  • Western valley hybrid plantations

    • Hybrid row crop  Poplar plantations

    • Agricultural low‐ lands

    • Short rotation • Mostly pulpwood, 

    few saw‐logs • Several thousand 

    acres sponsored by  paper industry

    ©2013, Forest2Market, Inc. Slide 9

  • Conifer values drive harvest levels

    ©2013, Forest2Market, Inc. Slide 10

    0

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    2008 2009 2010 2011 2012 2013

    DF average WA harvest

  • Washington Red Alder harvest

    ©2013, Forest2Market, Inc. Slide 11

     20

     40

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    2008 2009 2010 2011 2012

    alder other hardwoods total harvest

  • Value comparison: Alder and  Douglas fir sawmill logs

    ©2013 Forest2Market®, Inc. 12Source: F2M Benchmarks

    $0

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    DF West Domestic Red Alder saw Poly. (DF West Domestic) Poly. (Red Alder saw)

  • Hardwood applications: Beauty 

    ©2013, Forest2Market, Inc. Slide 13

  • Hardwood applications: Functionality

    ©2013, Forest2Market, Inc. Slide 14

  • 2013 distribution for hardwood lumber

    Western  hardwoods:

    • 70% KD lumber for  doors, millwork,  cabinets  and  furniture

    • 20‐30% pallet  stock

    ©2013, Forest2Market, Inc. Slide 15

    43%

    5%17%

    5%

    5%

    9%

    13% 4%

    US National Hardwood  Consumption

    pallets furniture exports millwork

    cabinets flooring RR ties mats

    Pallets Millwork, flooring  and cabinets 19%

    Source: Hardwood Market Report

    exports

  • Estimates of Consumption of US Hardwoods

    2005 2006 2007 2008 2009 2010 2011 2012 2013

    % Change

    2012

    % Change

    2005

    Pallets 3.8 3.7 3.6 3.5 3.0 3.2 3.26 3.27 3.643 11.4% -4.1%

    Furniture 1.2 1.1 1.0 0.7 0.3 0.35 0.29 0.30 0.427 42.3% -64.4%

    Exports 1.3 1.3 1.2 0.9 0.8 1.07 1.2 1.32 1.462 10.8% 12.5%

    Millwork 1.3 1.2 1.0 0.7 0.4 0.43 0.24 0.26 0.387 48.9% -70.2%

    Cabinets 1.6 1.5 1.3 1.2 0.7 0.4 0.34 0.36 0.392 8.9% -75.5%

    Flooring 1.5 1.4 1.3 0.8 0.5 0.59 0.51 0.55 0.753 36.9% -49.8%

    Railway Ties 0.85 0.96 0.92 0.94 0.89 0.89 0.98 1.04 1.114 7.1% 31.1%

    Board Road/Mat Timbers N/A N/A N/A 0.2 0.05 0.075 0.12 0.16 0.369 130.6% N/A

    Total Estimated Consumption 11.55 11.16 10.32 8.94 6.64 7.01 6.94 7.26 8.55 17.7% -37.1%

    © 2014 Hardwood Market Report

  • Building with wood

    ©2013 Forest2Market®, Inc. 17

  • Residential construction value  MM $ in place

    ©2013, Forest2Market, Inc. Slide 18

    50,000

    100,000

    150,000

    200,000

    250,000

    300,000

    350,000

    400,000

    450,000

    500,000

    2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013

      New single family   New multi‐family Residential Improvements

  • Changing demographics of housing

    ©2013 Forest2Market®, Inc. 19

    0

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    19 59

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    Total starts Single family Poly. (Single family)

    Single family=66 % in 2013

    1993 87%

  • Percent of new homes 4 bedrooms +

    ©2013, Forest2Market, Inc. Slide 20

    25

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    2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012

  • Hardwood applications: Style

    ©2013, Forest2Market, Inc. Slide 21

  • Trends in multi‐family housing

    ©2013, Forest2Market, Inc. Slide 22

    10

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    1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012

    1400 ft²

  • Hardwood applications: Efficiency

    ©2013, Forest2Market, Inc. Slide 23

  • Commercial construction MM $ in place

    ©2013, Forest2Market, Inc. Slide 24

    100,000

    200,000

    300,000

    400,000

    500,000

    600,000

    2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013

  • Hardwood applications: Utility

    ©2013, Forest2Market, Inc. Slide 25

  • Economic Outlook – 2014‐2015

    Slide: 26

  • How does this recovery stack up?

    ©2013 Forest2Market®, Inc. 27

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