A typical chain of timber supplies is made of a forest landowner, the buyer, the user, and a wood mill. Other than those, loggers, forestry consultants, and trucking firms are also involved. There are millions of acres of timberland that are owned by federal and state government, private owners and by other corporations. It is essential to understand and follow the long chain that works behind timber supplies. The demands of this timber are much higher than it can potentially meet the demands.
1. Forest Landowners and Forest managers
Forest managers and landowners are hired to manage lands and timber supplies. However, the landowners often hire forestry consultants or managers who work for them on a contract basis. Certain education and experience are essential for the Forest managers before they can be hired. These consultants are licensed to practice forestry and appraise and sell timber for the forest landowners.
Forest landowners enter into long-term timber supplies contracts if they hold large tracts. Large landowners often enter into agreements with forest product manufacturing companies to supply wood to a mill for a more extended period. The chain of the wood supply is very long and till the time the product actually reaches the user the price is increased.
2. The Timber Buyers
A dealer buys the timber from a forest landowner, and he sells the harvested wood to wood processing mills, with which he carries a contract. It has been observed that historically, the practice saw large sawmills and pulp mills grow much of their timber supplies on company land. They bought the timber directly from landowners. However, in later years, the forest product manufacturers began to rely more on the timber supplies from privately-owned timberland.
3. Harvesting timber supplies
The wood that has been purchased has to be harvested and hauled. The logging company is not involved with trucking of logs, and another firm typically does it under contract by the timber buyer. A contract is made for logging, and weight of the wood harvested. Timber supplies and products are delivered to a mill based on the pre-arranged rates in the contract.
4. The biological potential timber supplies
The timber output carries a maximum biological level, and there is a limit to what can be harvested from the land. Achieving the biological potential timber supply within a region is hard. The management inputs like drainage, herbicide treatments, and fertilizer strongly influence the upper limit of biological potential timber supply. Thus, a forest seldom operates at optimum capacity.
It is often seen that the demands being greater creates more pressure for the timer supplies. The failure to supply wood on time will result in a decrease in the economy of the timberland.
5. The Economics behind
Physical timber is the inventory of commercial timber in the forest, and it is rarely available for harvest at any precise point in time within a region. Just because there is timber, doesn’t mean that it is ready for harvest. Also, when a tree is cut down there should be an alternate to cover up the damage. Some landowners may just refuse to harvest timber, and it is a big mistake to look at physical timber to be the same as timber supplies.
There is an economic concept that works behind the working of the system. A small rise in timber price results in an increase in timber is supplied. Thus, most of the timber in the timber inventory is inoperable or inaccessible. It is impacted by higher harvesting costs and lower stumpage prices, or any objection to timber harvesting. Economic timber supplies are the timber available under current market conditions and the right one to use for planning purposes.
However, as there can be a shift in the demand and supply, the timber supplies and resulting timber prices can get complicated to follow. The complexity is accompanied by the changes in forest inventory. The term timber supply is often misused as the issues of biomass get more common.