trends in marketing wood products - illinois urban wood · trends in marketing wood products...

by Daniel Cassens

Professor of Wood Products Purdue University

Trends in Marketing Wood Products

©2016, Daniel L. Cassens, 5038 Morehouse Rd., West Lafayette, IN 47906

Bringing the Urban Forest Full Circle March 18, 2016

• Price is Critical

• Large Producers (semi loads)

– Low Labor Costs

– High Capital Investment

– Efficient

– Not Adaptable

• Certified Lumber FSC, SFI

Lumber is a Commodity Lumber is a Commodity


Truck Load Quantities

Lumber is Not a Commodity


• No Grades

• Mixed Species – Lumber vs. Pieces

• Slab Cuts

• Mantels

• Timbers (custom)

• Urban Wood

Trunk Load Quantities

Large End User

Small End User

Concentration Yard

Distribution Yard

Wholesaler

Large Sawmill

Small Sawmill

Hardwood Lumber Distribution





Traditional Industry Trends

1. Export Markets (China) under pressure

2. U.S. Housing Market 2016 won’t match up to 2015

3. Job Markets less robust

4. Rising Imports Flooring imports up (now 55% of domestic market) Large Chinese presence at Jan. Kitchen and Bath Show

5. Low-Grade Markets Soft markets for flooring grade lumber, frame stock, pallet cants, board road, crane mats; tie inventories high

Other: Hardwood Checkoff Program DOA

5 Market Drivers to Watch in 2016 (Hardwood Review Weekly)



Traditional Industry Trends

Technology Developments • Log Scanning • Lumber Grading

Wood Energy • Wood Pellet Export • Power and Steam Generation • BioFuels KIOR ZeaChem

• Fuel Wood

Substitute Materials • Panel Products • Laminates • Wood Substitute (Saves Trees?)

Environmental Issues • Life Cycle Assessment (AHEC) • Bats and Tree Huggers • Certification no longer buzzing



Trends for Small Mills

• Have wood worker/buyer recognition

• More small kilns

• Numbers have created competition

• Can fill niche for being local

• Can fill niche for processing urban timber

• Can fill niche for processing small lots

• Can fill niche for custom products

• Needs recognition as a separate industry segment



Electronic Media Trends (Forbes)

• Video Ads (YouTube)

• Apps – Mobile Optimized

• Mobile to Dominate Desktop

• Digital Assistance

• Virtual Reality

• Wearable Technology Watch

• Advertising More Expensive



Electronic Media Trends

Social Media (Woodshop News, Oct. 2015)

• Facebook

• Twitter

• LinkedIn

• Pinterest

• Google Plus

• Tumbler

• Instagram

• Flicker

• Vine

• Green Lumber

• Air-Dried Lumber

• Kiln-Dried Lumber

Seasoning Levels Seasoning Market Categories


Seasonal Levels

1 Northern (North Central) stock FAS/F1F truckload quantities 2 Appalachian 3 Large Flitches $25 to $30/BF 4 Hearne Hardwoods, Inc.

Table 4-2. Wholesale green and kiln-dried lumber prices (not surfaced) as reported by the

Hardwood Review Weekly (Hardwood Publishing, Inc. 2011) and kiln-dried surfaced on two sides

retail prices as reported by the Woodshop News (Dominion Enterprises 2010, 2011)

Kiln-Dried Lumber Uses Wholesale Green and

Kiln-dried Lumber Prices Wholesale green and kiln-dried lumber prices (not surfaced) as reported by the Hardwood Review Weekly (Hardwood Publishing, Inc. 2016) and kiln-dried surfaced on two sides retail prices as reported by the Woodshop News (Dominion Enterprises 2015)

Species Green

How drying affects lumber value

Wholesale1 Retail Kiln-dried

Dollars per MBF Green

Dollars per MBF Kiln-dried (KD) Net

Tally Dollars per BF

Ash 1110 1525 4.004

Cherry 1160 1730 5.40

Hard Maple #1@2 White 1825 2230 5.25

Hickory2 825 1590 4.504

Oak, Red 1150 1615 4.004

Oak, White 1510 2030 5.00

Walnut 22752 40952 6.50 – 8.503

Yellow Poplar 8302 11952 2.754


• Hardwood Grade Lumber – Wholesale quantities – Retail

• Industrial – Pallets and crates – Blocking – Timbers – Railroad ties – Truck and trailer flooring


Market Categories Market Categories

1 of 2

• General Construction – Framing lumber – Post and beam – Farm lumber

• Miscellaneous – Bending stock – Sofa frames – Boat builders – Signs – Urban Wood


Market Categories Market Categories

2 of 2


Hardwood Grade Lumber Wholesale Quantities

Hardwood Grade Lumber Retail

• Small custom manufacturers

• Institutions

• Contractors

• Weekend woodworkers

• Hobbyists

Types of Buyers

• Seasoning – Kiln dried

• Quality – Mostly 1C and better – Or character wood slabs

• Pricing – Between market reports and Woodshop News

• Delivery – Seller must be available to buyer

Hardwood Grade Lumber Retail Hardwood Grade Lumber Retail


Generating Interest Activities

• How many customers do you need?

• How many new customers do you need to replace due to attrition?

• How many new customers do you need to expand your business?


Customer Base


US. Small Business Administration recommends 7-8% of gross revenue if less than $5 million sales/yr.

Chief Marketing Officers (CMO)

58% < 4% of gross

16% 5-6% of gross

23% > 6% of gross

2% > 20% of gross


Marketing and Advertising Budget


• Trade Shows

• Forestry Field Days

• Your Own Demonstration

• Flea Markets

• County Fairs

• Auctions

• Farm Markets


Generating Interest (Traditional) Activities

Who can help you sell lumber?

– Farm Stores

– Farm Elevators

– Craft Shops

– Lumber Yards

– Large Sawmill

– Your Customers

Generating Interest (Traditional) Partnering


• Signs

• Newspapers

• Phonebooks

• Word-of-Mouth

• Give Aways


Generating Interest (Traditional) Advertising


http://cassenslumber.com


Generating Interest Electronic


• Considerations – Development Costs

– Maintenance


Generating Interest Electronic


• Ebay Store

• Craigslist

• WoodPlanet.com

• Etsy.com

• WoodWeb.com

• YouTube

• Forestry Forum

• Google Adwords

• Indiana Woodworkers

• I-Phone

• Printed Receipt with Disclaimer

• Credit Cards

Business Necessities


www.freedigitalphotos.net

• Greeting

• Probing

• Presentation

• Agreements

• Objections

• Negotiations

• Close


Seven Steps to a Sale

www.freedigitalphotos.net

• Traditional Producers will continue to Produce Commodity Lumber.

• Substitution for Solid Wood will continue. (No Check Off)

• Small Producers will gain local market share rather Urban wood or timber trees.

• Getting recognized will require work.


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trends in marketing wood products - illinois urban wood · trends in marketing wood products...

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