MARKETWG 'E'EMSER PRQBU-C'm 5N SiLEC‘E'ED AREAS (3‘? THE MCBR'E‘H CFNTML $155189?! Thssis fur H18 Degrw at? Fh. 9. ééECi-EEGAH STATE UNWERSiT‘Y‘ fi‘flichmfi £32.. {2. Masaéa 3965i Wm,” firwm. ‘ "’ L I B R A R r Michigan State University (mass This is to certify that the thesis entitled MARKETING TIMBER PRODUCTS IN SELECTED AREAS OF THE NORTH CENTRAL REGION presented bg Michael R. C. Massie has been accepted towards fulfillment of the requirements for Eh. D. degree mm I x, l/ . _ 7 . y . (1." ///. /;"- "’W‘"" Majoerrofessor Date June 15, 1965 0-169 ABSTRACT MATHTIT‘IG TIMBER PRODUCTS IN SELECTED AREAS OF THE NORTH CENTRAL REGION by Michael R. C. Massie This report is an analysis of the marketing of raw wood products in the North Central region. It is based on the field data collected during the years 1960 and 1961 for the North Central Regional Research Project NCM-27, "Timber Products Marketing in Selected.Areas of the North Central Region." The Objectives of the study are (1) to evaluate how effectively present marketing practices reflect woodause demands backward to wood processors and timber producers, and producers' supplies forward to primary manufacturers or concentrators, (2) to determine the costs and margins of moving forest products frOm the woods to primary manufacturers, and (3) to determine the changes in marketing practices which might raise marketing efficiencies. Study areas were selected in nine cooperating states--Illinois, Indiana, Iowa, Kansas,.Michigan, Minnesota, Missouri, Ohio and Wisconsin--to cover an area of active timber production. Detailed interviews were held with representatives of firms at three levels of the marketing chain--producer, intermediate market agent, and primary manufacturer--that handled sawlogs, pulpwood, veneer logs, cooperage bolts, and posts, poles and piling. Altogether, 825 producers, 152 intermediate agents, and 581 primary manufacturers were interviewed. Michael R. C. Massie Firms in the North Central region draw their wood supplies from relatively localized timbersheds. Where concentrations of pulp mills occur, however, wood is shipped in long distances by rail. Also, quality veneer logs are frequently shipped long distances to mills. In general, truck transportation is increasing. Pulpwood and quality veneer logs are frequently trucked distances greater than 100 miles. Other products are usually trucked only 15 to hO miles. The procurement system relied on most heavily by primary manu- facturers is one of direct purchase from producers. Usually 50 to 80 percent of mill receipts, depending on study area and product, come from producers. Purchases are frequently made on a delivered no prior agreement basis. However, informal oral agreements are not uncommon. Producers are increasing in importance, whereas intermediate agents are decreasing. In some areas smaller wood- mills are increasing self-production of their inputs. Relatively few producers are large specialists in timber pro- duction, but there are many small, part-time operators who produce seasonally and receive only a small income from timber production. Producers and landowners exert little market power in selling. Also, both show only minor interest in the promotion of forest management practices; especially on small private holdings. Margins and profit ratios are somewhat low at the producer level, but they vary widely by species and product and by study area. [Many producers lack capital and/or credit, technical training and under- Michael R. C. Massie standing, and the desire to invest in a seasonal, part-time, and unstable productive enterprise. Frequently hand labor is substituted for machine capital and highly efficient tools. Changes in marketing practices which might raise marketing efficiencies could be developed in three broad areas with continued research. One area concerns the reconciliation of the producer to existing measures benefiting the landowner and the resource but presently opposed by him. The second would be to assist producers to achieve more efficient, profitable operations. The third would be ways and means of making adjustments in degrees of market power held by different agents and firms in the marketing system to attain a more equitable balance. MARKETING TIMBER PRODUCTS IN SELECTED.AREAS OF THE NORTH CENTRAL REGION by Michael R. C. Massie A THESIS Submitted to Michigan State'University in partial fulfillment of the requirements for the degree of DOCTOR OF PHILOSOPHY Department of Forestry 1965 FOREWORD This report is based on a portion of the field data collected during the years 1960 and 1961 by the North Central Regional Technical Committee as part of the Cooperative Regional Research Project, NON-27, "Timber Products Marketing in Selected Areas of the North Central Region.” Nine state agricultural experiment stations-~Illinois, Indiana, Iowa, Kansas, Michigan, Minnesota, Missouri, Ohio, and Wisconsin-- participated in the overall project. The Central States Forest Experiment Station and the Lake States Forest Experiment Station of the U. S. Forest Service cooperated. The project was supported in part by regional funds provided under Title I, section 9b3, of the Bankhead-Jones Act, as amended August 1h, l9h6 and the Hatch Act, as amended August 11, 1955. Objectives of the regional project are as follows: (1) to evaluate how effectively present marketing practices reflect wood- use demands backward to wood processors and timber producers, and producers' supplies forward to primary manufacturers or concentra- tors; (2) to determdne the costs and margins of moving forest products from the woods to primary manufacturers or concentrators; and (3) to determine the changes in marketing practices which might raise marketing efficiencies and strengthen working relations among landowners, producers, processors and market agents. Cooperating states followed a uniform approach. Localized study areas were selected in each state. Standardized interview schedules were developed for use at each market stage considered in the study --producer, intermediate market agent, and primary manufacturer. Definitions and procedures including sampling were standardized. Agreement was reached to Obtain coverage of the following wood- products industries: lumber, face veneer, container veneer, cooperage, woodpulp, and posts, poles and piling. This report, which follows a series of individual timber-products reports, is an over-all analysis of timber-products marketing. It is a general treatment of the marketing functions observed in selected areas of Ohio, Indiana, Illinois, Iowa, Missouri, Kansas, Michigan, Wisconsin and Minnesota. The writer wishes to acknowledge his debt to the many individuals who contributed to the collection and analysis of data used in this report, particularly to Drs. Robert S. Manthy, J. Edwin Carothers, and Williaij. Lord and.Mr. Charles R. Miller. The writer is indebted and grateful to Dr. Lee M. James of the Department of Forestry, Michigan State University, for his guidance, criticisms, and continuous encouragement in completing the manuscript. Also, a large measure of appreciation is due the writer's wife, Rosanna, for her excellent assistance in typing and preparing the dissertation. iii TABLE OF CONTENTS Page FOREWORD ii LIST OF TABLES viii LIST OF FIGURES xvi INTRODUCTION 1 Study Areas 1 Procedure 2 Sample Size 6 REVIEW OF LITERATURE 15 Theory and Background 15 Timber Products Marketing 16 Regional Studies 16 State or Within State Studies 16 Allied or Component Reports 17 National Reports 17 Regional Reports 18 State or Within State Reports 19 Product or Industry Reports 20 Specific Supporting Literature 21 THE FOREST RESOURCE 23 THE FOREST PRODUCTS INDUSTRIES IN THE NORTH CENTRAL REGION 3h Regional Timber Production 39 Regional Consumption of Timber by Primary Industry h5 Regional Production of Wood Products by Primary Industry 57 LANDOWNERSHIP SOURCES OF WOOD 72 PATTERNS OF RAW MATERIAL ASSEMBLY IN THE WOOD PRODUCTS INDUSTRY 77 The Pulp and Paper Industry 77 The Veneer Industry 79 The Sawmilling Industry 80 The Cooperage Stock Industry 81 The Post, Pole, and Piling Industry 82 PRODUCERS OF RAW FOREST PRODUCTS 8h Characteristics of Producers 8h Timber Products Handled 9h iv Size of WOod Supply Area Minimum Logging Chance for Producers Wood Procurement Methods and Policies Methods of Stumpage Acquisition Purchase Contracts Subcontracting of Logging and Hauling Operations Sales of Timber INTERMEDIATE MARKET AGENTS Pulpwood Dealers Timber Handled Characteristics of Dealers ‘Wbod Procurement Methods and Policies Post and Pole Intermediate Agents Timber Handled Characteristics of Dealers Size of Wbod Supply Area Neod Procurement Methods and Policies Sales of Posts and Poles Sawmills as Veneer Log Intermediate Agents Sample Size and Timber Handled Characteristics of Agents PRIMARY MANUFACTURERS OF TIMBER PRODUCTS Pulp and Paper Mills Transportation Procurement Systems PurchasenAgreements Seasonal Deliveries and Storage Veneer‘Mills Characteristics of Veneer Mills Transportation Procurement Systems Purchase Agreements Seasonal Deliveries and Storage Sawmills Characteristics of Sawmills 'Wbod Procurement Purchase Agreements Seasonal Deliveries and Storage Change in Sawmill Size Production Capability Cooperage Stock Mills Characteristics of Mills Agent Sources of Wbod Supply ‘Wbod Procurement Methods and Policies Seasonal Deliveries and Storage Page 96 97 100 100 102 105 106 11h 11h 115 116 120 123 123 1217 121; 1217 125 126 126 128 131 131 135 135 138 139 1110 1143 1115 1145 1116 150 151 152 158 160 162 167 170 171 171 172 172 173 Primary Manufacturers of Posts, Poles and Piling Michigan Fence Companies Missouri and Illinois Pine Post and Pole Treating Plants Ohio Oak and Pine Highway Post Treating Plants Neod Preserving Plants Treating Piling COSTS AND PRICES Costs of Production Posts and Poles Producer Stumpage Costs Pulpwood Sawlogs Veneer Logs Cooperage Timber Producer Logging Costs Pulpwood Sawlogs Veneer Logs Cooperage Timber Producer Hauling Costs Pulpwood Sawlogs and Veneer Logs Cooperage Timber Intermediate Agents Costs and Prices Prices Paid and Received Pulpwood Sawlogs Veneer Logs Cooperage Timber Cedar Fence Posts Comparisons of Costs and Prices Pulpwood Sawlogs Veneer Logs Cooperage Timber Primary Manufacturer Prices Value Added.by Primary Manufacture Price Negotiation SUMMARY AND CONCLUSIONS The Forest Resource Patterns of Raw Material Assembly Primary Manufacturers of Forest Products Pulp and Paper Mills Veneer Mills Sawmills Cooperage Stocijills The Post, Pole, and Piling Industry vi Page 17h 1717 175 176 177 179 179 180 182 185 185 192 192 195 195 195 198 199 199 199 201 206 207 211 211 212 217 217 221 221 223 226 226 233 233 235 239 2117 2177 2147 2119 2179 250 250 252 252 Intermediate Market Agents 253 Producers of Raw Forest Products 255 The Forest Landowner 25? Costs of Production 259 Prices Received by Producers 260 Returns to Agents 261 Inadequacies and Needs in Timber Products Marketing 263 LITERATURE CI TED 266 APPENDIX 271 Table 1. 3. 10. ll. 12. 13. 1b. 15. LIST OF TABLES Producers sampled in the North Central region, by type of producer and study area, 1961 Intermediate market agents sampled in the North Central region, by type of intermediate agent and study area, 1960 Primary manufacturing firms sampled in the North Central region, by type of firm and study area, 1960 Comparison of primary manufacturers sampled to population of regional primary manufacturers Comparison of producer volumes handled in the sample to total regional production, 1959 Comparison of intermediate market agent volume handled in the sample to total regional production, 1959 Comparison of sampled primary manufacturer receipts to total regional mill receipts, 1959 Ownership of commercial forest land area, by state, in the North Central region, 1953 Ownership of commercial forestland area, by state in the North Central region, 1963 Net annual growth, annual cut, and net volume of growing stock and sawtimber on commercial forest land in the North Central region, 1952 Net annual growth, annual cut, and.net volume of growing stock and sawtimber on commercial forest land in the North Central region, 1962 Roundwood production from growing stock by product and region, 1962 Timber cut from sawtimber by roundwood product and region, 1962 Timber products output, by state, 1952 and 1962 W00d products mills in the North Central region and United States, 1958 viii Page 11 12 13 lb 25 26 27 28 30 31 32 35 Table 16. 17. 18. 19. 20. 21. 22. 23. 2h. .25. 26. 27. 28. 29. 30. Selected statistics for wood products manufacturers in the North Central region, 1958 Estimated volumes of round timber products harvested, North Central region and other selected areas, 195u.and 1958 Estimated volume of round timber products harvested in the North Central region, by state and product for 195A and 1958 Output of selected primary forest products for the North Central region, 1950 and 1958 Total value of selected primary forest products produced.in the North Central region at local points of delivery, 1950 and 1958 Veneer log production and consumption in the North Central region, for selected years, 1952-1963 Production and exports of pulpwood.in Michigan, Wisconsin, and Minnesota, 1958-1962 Cooperage timber production and consumption in the Central States for selected years, by state North Central region hardwood plywood market ship- ments (except container and packaging type), l9Sh-l960 Production, consumption and net imports of wood pulp, North Central region, 1959 Lumber production in the North Central region for selected years, 1939—1961 Lumber production in the United States for selected years, 1939-1963 Landownership sources of timber products out in the study areas of the North Central region, 1959 Landownership sources of posts and poles produced in selected study areas of the North Central region, 19 59 Mode of transportation by which pulpwood was delivered to sampled Lake States mills, 1959 Page 37 RD 81 AB A? 50 56 6O 61 63 6h 73 75 78 Table 31. 32. 33- 3h. 35. 36. 37. 38. 39. to. MA. US. Size class of sampled producers in the North Central . region, by product, 1959 Numbers of producers and volume produced by size class of producer and product produced in the North Central region, 1959 Producers classed as full-time or part-time and principle alternate occupations of part-time producers in the North Central region, by major product, 1959 and 1960 Volumes of timber products handled by producers in the North Central region, 1959 and 1960 Income data for pulpwood producers in the North Central region, 1959 Average volume and gross sales value of sawlogs sold by sawlog producers, by region and size class, 1960 Average gross sales values of all timber products sold by producers, by size of producer, 1959 and 1960 Occupations and size class of sampled pulpwood dealers, 1959 Products handled and size class of sampled pulpwood dealers, 1959 Number of sawmills acting as veneer log intermediate agents and average volumes handled, by study area, 1960 Sources of logs for sawmills selling veneer grades to veneer mills, by study area, 1960 Page 85 86 90 109 110 111 118 119 127 129 Principal products of sampled pulp and paper manufacturers, 19 59 Distribution of sampled pulp and paper mills by size class of mill and study area, 1959 Pulpwood species received at sampled Lake States mills, by study area, 1959 Agent source of wood supply delivered to Lake States pulp mills, by size class of mill, 1959 132 133 13A 136 Table A6. A7. h8. A9. 50. 51. 52. 53. SA. 55. 56. 57. 58. 59. 60. 61. Sampled veneer mills by size class of mill, by sub- region, 1960 Sampled veneer mills by number of employees, by sub- region, 1960 Agent source of veneer logs and number of suppliers reported by sampled veneer mills in the North Central region, 1960 Volume of logs delivered to veneer mills in the North Central region from different landowner- ship sources, 1960 Number of sawmills sampled, by major product and study area, 1960 Numbers of sampled portable and stationary sawmills, by study area, 1960 Alternate occupations of sampled part—time sawmill operators in the North Central region, 1960 Reasons specified for variation in sawlog receipts, by sampled sawmill, by study area, 1960 Average volume limitations of sawlog inventories reported by sawmills, by product group, 1960 Estimated costs of production by sampled.Missouri producer-dealers, by pine post and pole size, 1959 Averages and range in pulpwood prices paid for major species by sampled producers, by study area, 1959 Average cost of stumpage for sampled sawlog producers in the Lake States, 1960 Average cost of stumpage for sampled sawlog producers in the Central States, 1960 Average price paid for stumpage by sampled sawmills in the Lake States, 1960 Average price paid for stumpage by sampled sawmills in the Central States, 1960 Average cost of stumpage for sampled veneer log producers, 1960 Page 1&2 11411 It? 1&8 153 1517 157 163 168 181 186 187 188 190 191 193 Table 62. 63. 6h. 65. 66. 67. 68. 69. 70. 71. 72. 73. 7h. 76. White oak stumpage prices reported by sampled cooperage timber producers, by study area, 1959 Logging costs reported by sampled pulpwood producers, by study area, 1959 Average logging costs for sampled sawlog producers in the Lake States, 1960 Average logging costs for sampled sawlog producers in the Central States, 1960 Average logging costs for sampled sawmills purchasing their own stumpage in the North Central region, 1960 Average logging costs for white oak cooperage timber reported by producers and primary manufacturers, by study area, 1959 Average truck-hauling costs for varying distances of haul reported by sampled pulpwood producers, by study area, and costs established by formula in Lower Michigan, 1959 Average hauling costs for sampled sawlog producers in the Lake States, by distance zones, 1960 Average hauling costs for sampled sawlog producers in the Central States, by zones, 1960 Average hauling costs in the Lake States for sampled sawmills purchasing their own stumpage, by distance zones, 1960 Average hauling costs in the Central States for sampled sawmills purchasing their own stumpage, by distance zones, 1960 Average hauling costs for sampled quality-veneer log producers in the North Central region, 1960 Margins between prices paid and prices received by Central States' dealers in pine posts and poles, 1959 Base prices paid for pulpwood in the North Central region by species and method of delivery, 1959 Average prices received by sampled producers in the Lake States for sawlogs delivered to the mill, 1960 xii Page 197 197 197 200 202 203 203 20h 20h 205 210 211 213 Table 77. 78. 79. 80. 81. 82. 83. 88. 85. 86. 87. 88. 89. .Average prices received by sampled producers in the Central States for sawlogs delivered to the mill, 1960 Average prices paid for sawlogs delivered to sampled sawmills in the Lake States, 1960 Average prices paid for sawlogs delivered to sampled sawmills in the Central States, 1960 Average prices received by sampled producers for quality veneer logs delivered to shipping point or mill, 1960 Average prices received by sampled producers for white oak stave bolts delivered to the mills; by bolt grade, 1959 Average prices paid by sampled primary manufacturers for white oak stave bolts delivered to the mill, by bolt grade, 1959 Typical price list of Michigan dealers and fence companies for delivered cedar fence posts, 1959 Margin and profit ratios for the production of pulpwood in the North Central region delivered to mills by trucks, by study area, 1959 Margins and profit ratios for the production of pulpwood.in. the North Central region delivered to railroad sidings, f.o.b., by study area, 1959 Margins and profit ratios for the production of sawlogs by sampled producers under assumptions of average costs and average prices, Central States, 1960 Margins and profit ratios for the production of sawlogs by sampled producers under assumptions of average costs and average prices, Lake States, 1960 Margins and.profit ratios for the production of veneer logs by sampled producers under assumptions of average costs and average prices, 1960 Margins and profit ratios for the production of stave bolts by producers under assumptions of average costs and average prices, by study area, 1959 .0].- Page 216 218 219 220 222 22h 225 227 229 231 23h Table 90. 91. 92. 93. 95. 96. 97. 98. 99. 100. 101. 102. 103. 10h. Average price received by sampled Lake States sawmills for rough lumber, f.o.b. mill, 1960 Average price received by sampled Central States sawmills for rough lumber, f.o.b. mill, 1960 Value added by manufacture per cord of wood received and pulpwood price as a percent of value added by manufacture for sampled pulp mills, by study area, 1959 Value added per pine post and post price as a percent of value added by manufacture by sampled wood preservation plants in Missouri, 1959 Value added per pine and oak highway post and post price as a percent of value added by manufacture by sampled wood preservation plants in Ohio, 1959 Value added by manufacture of lumber and sawlog price as a percent of value added by manufacture for sampled sawmills in the Lake States, 1960 Value added by manufacture of lumber and sawlog price as a percent of value added by manufacture for sampled sawmills in the Central States, 1960 Price determination for sawlog stumpage, sawlogs, and lumber, by study area, 1960 Price determination for veneer logs and veneer, North Central region, 1960 Lumber production in.Michigan for selected years, 1939-1961 Lumber production in Wisconsin for selected years, 1939-1961 Lumber production in Minnesota for selected years, 1939-1960 Lumber production in Illinois for selected years, 1939-1961 Lumber production in Indiana for selected years, 1939-1961 Lumber production in.Missouri for selected years, 1939-1958 2h0 2h0 2&1 2n2 2&5 2h6 272 273 27h 275 276 277 Page Lumber production in Ohio for selected years, 1939—1961 278 Lumber production in Iowa for selected years, 1939-1958 279 Lumber production in Kansas for selected years, 1939-1958 280 Figure l. 9f 10. 11. 12. 13. LIST OF FIGURES Location of study areas in the North Central region in which timber products marketing was sampled Pulpwood production and consumption in the Central States, 1952-1961 Pulpwood production, imports and apparent consumption in the Lake States, l9h6-l963 North Central region lumber production for selected years, 1939-1961 U. S. lumber production for selected years, 1939- 1961 Michigan lumber production for selected years, 1939-1961 Wisconsin lumber production for selected years, 1939-1961 Minnesota lumber production for selected years, 1939-1961 Producer classification and specialization Average radius of producers' supply operations, by product, 1959 and 1960 Average radius of wood supply area of sampled dealers, by size class of operation, 1959 Monthly variations in rate of sawlog receipts at sampled sawmills, by study area, 1960 Monthly variation in size of inventory of sawlogs at sampled sawmills, by study area, 1960 Page 89 51 65 66 69 7O 71 87 98 121 16h 165 INTRODUCTION Within the North Central region more than 868,000}! cubic feet of standing timber was converted into forest products in 1958. This represents about nine percent of the total national output of forest products. Since 195b.both the regional and national output have declined slightly. Lake States production decreased some 10 percent, but Central States production increased seven percent. In 1958 the local market value of timber products harvested equaled 1h percent of the value of all farm crops harvested in the United States. In the rural economy timber products are often very important to the small community. While the value of the raw product in the main is attributable to lands other than those classified as farm, timber products output is becoming increasingly more important to the farm family, as it has become firmly entrenched as an alternate form of "employment" or revenue during the seasonal or slack periods of farming in many areas of the North Central region. In value added by manufacture, timber products industries have a significant place in the region. In 1958 the value added by manu- facture for these industries amounted to some 811 million dollars. Paper mills contributed about one-half of this amount, and paperboard mills almost another one-third. The remaining percentage was con- tributed primarily by sawmills and planing mills, and'by veneer and plywood products. Study Areas Study areas were delineated within each state participating 2 in the regional project. They were selected, not to provide a statistical sampling of the region as a whole, but to provide coverage in each state of an area of active timber production. Attention was given to scattering the study areas so that a diversity of market conditions would be sampled. The study areas in which the major timber products industries were sampled adequately for inclusion in this report are shown in Figure 1. These areas include portions of Michigan, Minnesota, Wisconsin, Indiana, Iowa, Kansas, Missouri, Illinois, and Ohio. 'Within this complex, minor groupings of states can clarify parts of the analysis. The Lake States can be separated from the Central States both by geographic criteria and by major timber types. The Central States can be further subdivided into a western division (Kansas, Missouri and Iowa) and into an eastern division (Ohio, Indiana, and Illinois). Some products are not produced in all study areas (e.g., cooperage was not encountered in the Lake States study areas) andsome products differ widely in importance by study area (e.g., pulpwood is relatively more important than sawlogs in the Lake States, and the reverse is true in the Central States). Boundary lines of study areas were not considered to be rigid. (Market agents outside the delineated areas were included in the sampling when their activities were found to be heavily influenced by marketing within a study area or if they, in turn, exerted a substantial influence on marketing activities within a study area. Procedure Detailed interviews were held in 1960 and 1961 with representatives s in the N sampled. ion of study area ts marketing was Figure 1.__Locat hich timber pr uc h of firms at three levels of the marketing chain-~producer, intermediate market agent and primary manufacturer. Interview schedules were standardized for each market level, and identical schedules were used in all states.1 .All products were fitted to identical schedules at each market level, with the exception of the sawlog producer-sawmill complex. For the latter a revised schedule allowing more pertinent coverage was used. Interest was focused on data for the year 1959, again with the exception of the sawlog producer-sawmill complex. Here, interest was focused on the year 1960. A lOO-percent sample of primary manufacturers and intermediate market agents was sought. In the case of sawmills a lOO-percent sample was taken only for mills having an annual production of 100.M bd. ft. or more. A sample of mills producing less than 100 M bd. ft., if important in a study area, was left to the discretion of the investigator. Intermediate agent sampling, noticeably lacking in the sawlog producer-sawmill complex, was left to the discretion of the investigator using the standard intermediate agent schedule. Inter- mediate agents for other products, and producers for all products ‘were sampled in each study area only to the extent that the inves- tigator felt was necessary for a reasonable cross section. Again, sawlog producers were sampled on a revised schedule. Problems of definition required arbitrary decisions. Agreement was reached as to the distinctions among producer, intermediate market agent and primary manufacturer, and the treatment cf firms 1The interview schedule used for producers appears in the .Appendix. The intermediate market agent and primary manufacturer schedules were similar. 5 which exercised more than one role in the market. A producer was defined as an individual (or firm) who harvests purchased stumpage or stumpage from his own land and sells the cut product roadside or delivered to a designated point without substan- tially changing its form. For posts, poles and piling, bark peeling or modification of shape by sawing was not considered a substantial change of the round product. Similarly, for cooperage timber cutting and/or splitting the round product into cooperage bolts was not considered a substantial change. Bark peeling of pulpwood, was also not considered a substantial change of form. Essentially, two levels of intermediate agents were recognized. .A first-stage intermediate market agent or dealer was defined as an individual (or firm) who purchases cut products from a producer and sells them to second-stage intermediate market agents or dealers, or to primary manufacturers. A second-stage intermediate market agent or dealer was defined as an individual (or firm) who purchases cut products from other intermediate agents or dealers, and sells them to primary manufacturers. Only one type of dual role was prominently associated with interviewed market agents--producers who also act as dealers. These I'producer-dealers" purchase cut products from other independent producers and sell these products along with material that they have harvested as producers. Producer-dealers were often interviewed both as producers and as dealers. When this occurred total production volumes were split and recorded, according to appropriate function, on two forms. Intermediate agents, and agents performing a dual role, varied 6 by type of product. Sawtimber marketing agents are not prominent at the intermediate level. Both veneer and cooperage intermediate agents were prominently single stage agents; that is, they bought from producers and sold to primary manufacturers. Double stage intermediate functions were prominent in the marketing of pulpwood, and posts, poles and piling. The dual role of producer-dealer was present in the marketing of all timber products except sawlogs. A primary manufacturer or processor was defined as a firm that sells its products only after performing some type of processing operation which substantially changes their original form. Primary manufacturers were not classified as producers of the product they process if they Obtained their raw materials by harvesting their own stumpage or purchased stumpage. Sawmills and veneer mills constitute the point of primary manufacture for saw and veneer logs. ”Wood pulping plants, generally integrated with paper and'board plants, usually constitute the primary stage of manufacture for pulpwood. Barrel stave and heading plants constitute the primary stage of manufacture for cooperage, and wood preservation plants usually constitute the primary stage of manufacture for posts, poles and piling. Sample Size The total sample of 1,558 agents on which this report is based, with a partial classification by agent function, was drawn as shown in Tables 1, 2, and 3.2 2Producer-dealers are entered in both the producer table and the intermediate agent table. cone modem mam mm oa as we 06 com a: oaa Ada eQHQEwm medoaeoed Has mam om mm mm mg as HHH mm on ema passage masapaaa Hesse New N ma am am as as as on as possess mameam Heads ma N m a a H weaaam.s uoaod .mpeom mm NH m m owmnomooo mm m m 0 OH m N Homemb mm m m m a a ma ma eoozaaem «NH m an . 4H m om m 4H mm swoasdm 1.8.2 .501 Row! .62 AS .2: 2.18 .82 . 8E .82 l I :1 ILfifim Hmeabonm no came coma «mono henna one Headband no camp mp snowmen Hmwpnoo apnoz map ea madness mnoospowmnla mqmea «H H d m a 4 H H 2 3 sesame 333535 H2 2. d m m H d om OH 382m deHpHaH H369 i H m H N 6H e D on Seeded .Hmfim H38. H H m m H m ASHE e 8H8 .mpnod N N mmdwomooo m N m Hoonob om H e 6 H mm eooRHd awoawwm £92 . He saw: . 6: .HHH 65.. one .mmHz . 8H: . £on HHe enema opmfieosnoan 8.3 .826 we RE coma nomad heaps new poems mpmflpoewopcfl no mean an .dowmon flamenco npwoz one ea toadsmu oedema poxnwe sweatpanochTlN mqmda gm 8 mm dd 3 am ow S ow SH messengesfiz 85.5 He mN H N b N m Ha xoowm owwuodooo 8 m m H. N H a mfiHE e SHE .325 :m N m N m H N NH m Hoocob S N m H H a mm d 3388 ded a 3:88: am: 8 R om em 3 S em 2 S .823 use: .931 «SH .02 .HHH in one .52 . 9:3 :1on I Had nonspomwenwz hwwednm w®0H¢leudbvm HO mag SmH amend henna one swan no camp an .eoawoa Hmwpeoo apnea cap cH beameon mend“ wewhdwoousnme hndsanmtlm mqmda 10 There are no criteria available by which the number of sampled producers and intermediate market agents can be compared to the total number of agents in the entire region. A comparison can be made, however, between number of primary manufacturers sampled and total number of primary manufacturers in the region on the basis of Census data (Table A). The sample amounted to some 2h percent of all the relevant primary manufacturers operating in the North Central region. Sample comparisons can also be made on the basis of volume of production rather than the number of agents. For producers this is shown in Table 5. A calculation of percent sample on this basis indicates that the possibility of sampling a large number of agents producing only a minor volume of total regional production did not occur. Sample volume should not be overstressed, however, at the expense of sample by number of agents as many agents sampled gave useful market information, but would not report volumes produced. Sample volume comparisons are also made for intermediate market agents and primary manufacturers in Tables 6 and 7. 11 TABLE h--Comparison of primary manufacturers sampled to population of regional primary manufacturers Number Number Percent Primary manufacturer Interviewed in Region Sample Wbodpulp A7 71 67 (woodpulp producers) Lumber b57 2,119 21(a) (sawmills & planing mills) veneer 3h 8h hO (veneer &.plywood plants) Cooperage Stock 23 61 38 (special products sawmills) Posts, Poles &.Piling 13(b) AB 27 (wood preserving plants) Total 57h 2,383 211 (a)The 21 percent sample is heavily weighted with mills producing over 100 M bd. ft. per year. (b)Seven companies were omitted. These include fence companies and treating plants not applicable or supplying insufficient inf omation 0 Source: Population of mills frome. S. Bureau of the Census, Census of Manufactures. Census data vary in time by product from 12 ohms whoodfionm Ham ma cmbm .voms mmma now cowvostOHm HmGOfimmonV .vmms magma“ oomHAnv .vmnowmu on 90: cases coaponvonm chowmmn Hmpou .vmsmfibhmpcw .maoosbonm Umzmw>nmpcfl an.voosfionm ma Amwmnm mHmEmm no vmmwpv soaposvonm Hmpop no pcmonom pan: mngson mnapwowvnfi ca own mpH aw wand» can no scam» mace on» .oocmm .mzono mcawwoa mcwmsoo no Haas paw mnmfiammsm pownpnoo an coaposfionm mousaoqw soaposvonm Hmcofiwmm, .aofipogvonm noosvonm amcoflmon Hmpop no pcmonmd map pom ma pa mcoapodvond assoflwma mo unmoumm map ma csonm punched mnemwv a3 .3 .3 833a 8.1m .3 .3 8335 fimfi 333 a 83m .333 wcwvsaocfl wocv mposbonm HH¢ 0.3 .3 .833 z :8; .3 .383 z «3-3333 0.2 . 883 z 4%. $33 2 $3333 o.m $83 833: mam 8332 mflfiuumpmom 3333 a. .33 .323 am .3 .3 5332 .2. .3 .3 5335 «.3 3.33 33380 0.2 .3 .3 833a 83 .3 .3 5332 m.2 33 3.5» 03 .3 .3 8335 mac; .3. .3 833s .3 A3333 .3 238 833a dm «33 833a :3. 3333 auwpodvonm cowposvonm mmwpodbonm 11‘ pofiflohm 1| HwGOfiwmn Ho chefiwom ,oamfiwm oHQSda admonom Amvmmma .coaposvonm HwQOflmma Hmpop op mamswm on» 2H Umdnnwn umsdaob Houstonm no naaanwmsoonnm mqmda 13 .Am.m m3 vmavcmn soaposfiopm 03:0 mo pcmommmv .mohm hoopm 0320 map cw mpcmwm KHonV .0333333w02333 .mpcoww opopvosnopca vosmwbnopqa no voaucwn m3 Amwond madam» no ommwnv cofiposvoum Hmpop no pcoohom pans manmson mappmoflvafi c3 map mp3 m3 manmp opp Ho osawb mace map .ooqmm .mzouo madmwoa hanSoo no 3335 and unopadddm pownpcoo mp cofipodoonm moosaoca coaposvonm Hmcopwom .coppodoonm noosvoum choawon Hmpop Ho pcoonod map poo m3 p3 «copposfionm Hmcofiwon mo pamopma map «3 :303m pcoonmm mnava a; .3 .3 003333 83.3 .3 .3 303333 3.33 33333 3 00303 .3003 . . _ _ 333333033 3033 03033033 333 mooofim z mmnuwcfla3m mmompm 2.4mmnummaom ADV moooflm 2033335 m.mmnumpmom Apv wcflaflm @ mmHom .mpmom 33V .33 .03 3033335 ma 30V.33 .03 30333E mmm. 33303.033303000 3.3 .33 .03 3033333 303 .33 .03 303333a.3.o3 0303 300303 33 .3 .3 303332 m3; .3 .3 303333 3 30333 m.33 . 00300 303333 3.3 00303 c0333a m3m. 30023333 coppodvonm coppodvonm ll woavnwn noppospoha poavonm chopwou no Homopwom oamfimm coated: coapostona madame pnoonom Aavama3 .coaposfiohm Hmnoawon prop op oaqswn map c3 ooavqwn oEdHob pcomw poxnds opoapmshopqa Ho momwummsooluo mqmda lb .o3nw33wbm pozAnv .mpm3ooo3 3mco3mo3 opmaflxonmmw v3donm 303posfionm 3mco3mo3 mono: 03333s 03 psonw 3335 op mocwpm3v wconsnp mwm3o>m new .mo3fls um msfloou nosmnmnEHp 33353mm ommpobwv oogd3dn.v3sosm mp30m§33mphoaxo oop3533 pwnp moms m3 303pdsdmmw one .vmmd on:M3H co3posoonm 3mao3mom .upd3moo3 mo33wm no“ o3nd33d>w ondm33 ozva 3.0m .3 .3 303333 83.3 .3 .3 303333 $3.3 0303303 333. nu an an Apvmc333q a mo3oa .npmom 9mm .3 .3 303333 ma .3 .3 303335 3.33 03303 03.3000 mém .3 .3 303333 33 .3 .3 303333 m3 0303 .3030» 3.33 3.3. .3 303333 33.3 .3 .3 303333 333 30333 m.m~ monoo 3033333 m.m . .mvnoo c033335 mm.m noozn3sm upm3ooo3 upm3oooh mpm3ooo3 pospohm 3wco3mon Ho 3mao3wom vo3mswm upm3moon oo3mswn pcmopom mmm3 .mpm3oom3 3338 3mco3mm3 3mpop op meHoooH Hondpomwsuwe hhws3nm oo3mswu mo com3ndmsoOIuwlm3m p02 ps0 dwsnc< npzohm Hununw vmz NOOH .OOOOOO H328 3.32 on» 5 93H pmmnom Hwfionoasoo no umnfiapzwm.wqw xoopu wcfi3onm no Qazaob pm: dad Opso Hmduuw .npsohm Hugues pozwtaa mqmda n... J; ‘0" ‘ ml. at. m 9:". a“ \vsuuy. a-es, s‘w 29 hardwood sawtimber reserves, if utilized to a greater extent, might maintain a more balanced forest resource in the long run. In the Central States, the two states of Illinois and.Missouri are notable for decreases in net volumes of growing stock and sawtimber. The former decreased stocks of hardwood sawtimber by about three billion bd. ft. in the lO-year period. Production of specific forest products from the annual cut of timber are shown on a regional basis in Tables 12 and 13. The first considers production from growing stock, while the second denotes production from live sawtimber. Since only the major products with which this study is concerned are considered, their total is somewhat less than the cut for all products. In Table 1h output of major forest products is presented on a state basis. Here some measure of comparison can be made on production from specific states for specific products. For sawlogs, veneer logs, and pulpwood, output figures for 1952 and 1962 may be compared. The output of sawlogs in the North Central region declined by some 200 million bd. ft. This was caused by major reductions in output in 'Wisconsin and especially in.Michigan. Minnesota, on the other hand, increased production. IOutput in all the Central States increased with the exception of Iowa and Kansas, where output remained essentially stable. Veneer log production declined nearly three million bd. ft. Decreases in production in.Michigan, Wisconsin, and jMissouri were not quite offset by increases in other North Central states. ‘While output in Iowa and Kansas is not large in comparison 'to the other states, it should be noted that these states have more 'than doubled production in a lO-year period. Pulpwood production in 30 .moma .NH .02 whommm monsommm pmopom .oofibhmm pumnom .m .D «mowfiom OOH.N ONO.ON NmO.OO OONOO OOO.NOH OON.mOOH OOHOOO HONOOOO Oppoz OOO.H NOm.OH NON.OO ONO ONO.Hm OOOOOOO OOOOOO HOOOOOO OO mOO.H OOO.NH HNN ONN.OH OON.HOH OHOO m mOm.N mNm.OH NH OO0.0 OOO.OHN HOOOOOHz NON‘ OOH.N ONN.m OOm.OH OOOOOO mam oqum OH NONOO oquN: «30H OOO OOH.O Nm OOO.NH OOH.NNH OOOHOOH ONm.H NOO OOO.ON OO OO0.0H Ooo.OOH OHOOHHHH ONO HOO.OH OON.N OOO.N ONO.Om OOO.OOO OOOOOO OOOH OOH NOH.O OmO.N mmO OON.O OOH.OmH Opomoquaz ON NOH.O OOH.m mOO ON0.0N OOO.HmN OHOOOOOHO. OON NON.N . OOO OON.HN OOm.OON OOOOOOO: A.OO.OHH OOOOOHO A.ON .On NOONOO O.ONI.OO A.pu .On Farawafiv OOOOMOEOE Passes? OOOOOE-...II.O..OMWEI. fihfié- l. H: wcHHOm mmHoQ mpaon voosaasm uwoa mwoaswm madam .d mpuom mmdgomooo noocmb .I .trvoosbhmm III moma Onowmon was podvoan an xoopm mndzonm scum cofipostonm voosvnsomruma mqmds 31 .‘l' ’3' f .moma «NH .02 paommm oohsommm pmmnom «mowbhmm pmopom .m .D “condom .mmnvfimon mcawmoa-vcw.voozamsu mqudHocO pozva Ill NO0.0HH.N NOO.HNN OOO.NHm OHO.NOH OOO.NON.H OOOOOm HOOOOOO apnoz OO0.0NO NO0.0NH NOO.HO ONO.Hm OO0.000 OOOOOO HOOOOOO OHN.OON OO0.0H NNm.ON ONN.OH OOO.HOH OOOO OONHHON OOHHNO ON0.0 OOO.O OON.mON HOOOOOHz OOO ON NNN N ONN.O NOm.mH OOOOOO OON.HO OON.O OOO.N NON.O NON.oO OsOH mOO.OOH NN0.0 OmN.OH OOO.NH NO0.0NH OOOHOOH OO0.00H OON.ON OO0.0N OOO..OH OOO.OO OHOOHHHH NOO.OOH.H OHO.OO HOO.OOO. OOO.OO OOO.OOO spam 23 HNNHOOO OOOHON NNN.NOH NON.O OON.ONH OOOOOOOHO oomqam: Joaqmm NNOHNJH mmmazm mooqamm :Oncoomwz OHN OOO ONO NO NOO OOH HOO.HN OOm.mmN OOOHOOHz x; OnmN‘uOO.OmOOOOmmv_ i. I: vapdo HawnpmsbcH voozaasm mwoa awoazmm madam hmnEHp .omOE nomcm> HOOOO NOOH «seamen was pontoam coozficson mp umnsavzmn scam poo wonswauumannmqmH find HHH Opnwmv mmuspommscmz no msmcao mmmH Omsmcmo esp Ho dwmadm .m .D «meadow .conmn Hwnpcmo apnoz mna cH mHHHS Moopw mmwammooo thszAmv OH com m: I N H N m N OH m m mcH>poumnm poo: OH OOO OO H O H O O ON O NN N OOOOHO OOOsOHO .é Hmmcmb OH ONO ON H ON O OH O N . O O NmeHHHesOO .poam HwHommm OH HOH OOO OO N NH H N O O O O ON OOHHOOHO O M .EHO OOOsOnOm HOH OOO.OH OHH.N ON OOO NO ONH OHO OON NHN ONN ONO OHHHe OOHOOHO . O OHHHszOO ONO HOH NO . O N OH OH O O N O OHHHs OHOOQ O A HOOOO OOOOHHOO H ON HHO NON ON N N N HH ON O N N OH OHHHs A Unmonhwmwm H MNN OOO OO . H u N OH N O OO NN OHHHE HOOON HOH OO HH . u H O H u - O . OHHHE OHON AOHHHE no nmnsnm~ .O.O NO HOOOO HOOOO .OOO .OO OsOH .HHH OHOO .OOH .OOHz .OOHz .OOHO OHHHE pcmonmq .m.=. HacOHmom no mama am It. cOmem [1| wmmH Ommpmnm Umpaab.wqw coawoh Hwhpcmo nvhoz 0:9 GO nHHHE unambOHQ voozwlmH mHm mOHmb owwno>m moomonsm ampedz no mama no patched OHHohmwm Ho Hones: OO.HHOHNNN, 1t mwmnmpmw til :1 AmvwmmH .conon Hwnpnmo npAoz esp cw unmnspowwsnma uposmonn too: you uofiqupwau mopooHomluwH mqmda 38 highly skilled labor. The pulp and paper industry complex seems to fall ideally into this group. A relatively intermediate position isheld by the veneer and plywood industry, the wood preserving industry, the hardwood dimension and flooring industry, and the cooperage industry. Notably lower in average wage is sawmilling. Both the sawmill and planing mill classification and the special products sawmill classification pay an average wage of less than $3,000. Value added by manufacture and the value of shipments are indicative of the relative importance of the industries in the economy of the North Central region. The difference, a lumping of costs (i.e., raw material and other production costs) is of only minor value for comparison purposes without a separation of the components. A measure of the degree of labor intensity is given for each industry in the form of payroll taken as a percent of the value added.by manufacture. 'This is extremely useful in that it puts a "value" on labor or relates it to the value of the product. Labor plays a very vital role in value added by manufacture in three secondary industries: notably, veneer and plywood container plants, hardwood dimension and flooring plants, and cooperage plants. It plays a slightly lesser role in the primary manufacturing of veneer and plywood and in sawmilling and planing. Labor and machine capital seem to be of about equal importance in special products sawmills, in building paper and board mills, in paper mills and in pulp mills. Capital equipment plays a relatively greater role in wood preserving plants and.paperboard mills. 39 Regional Timber Production Statistics are available to denote estimates of timber production, but regional differentiation, product type, and type of measurement make it difficult to present meaningful regional and within region estimates and comparisons. Table 17 considers undifferentiated roundwood, measured in cubic feet, harvested regardless of intended product. It relates state, regional, and.U. S. production. Several relationships are noteworthy. ‘U. S. timber production has decreased slightly in the four years shown. Eastern United States produces almost two-thirds of total U. S. production. However, the East has had a slight decline during the four-year interval, while the'West has shown a slight increase. The North Central region has shown a net decline; production in the Central States increased 7.1 percent but this was offset by a larger 10.3 percent decline in the Lake States. North Central regional production declined slightly, moving from 8.7 percent to 8.6 percent of total national production. All of the Central States, with the exception of Kansas, increased production. All the Lake States decreased production, with the largest decreases coming in Michigan and Wisconsin. The trends that have been indicated would be more meaningful if some indication of product differentiation could be shown. Table 18 gives such a breakdown, indicating the major timber products into which the cubic foot-roundwood volumes are diverted in the North Central region. In the Lake States production in all major timber products declined, with the exception of pulpwood which increased 140 TABLE 17--Estimated volumes of round timber products harvested, North Central region and other selected areas, l95h and 1958 State or region 195b 1958 ’i ’ "-"'.‘-’” ""”"IEEBEEEHEO of cubic feet7—— Ohio 62,350 68,000 Indiana 52,100 55,050 Illinois b3,850 h5,650 Iowa 25,550 32,300 Missouri 107,h50 112,100 Kansas 12,750 12,h50 Central States 30h,050 325,550 Michigan 227,550 193,150 Wisconsin 210,350 188,250 Minnesota 167,150 161,250 Lakes States 605,050 5h2,650 North Central region 909,100 868,200 Eastern United States 6,596,250 6,1h2,050 western United States 3,831,300 3,90h,100 United States 10,h27,550 10,0L6,150 ____ ——— _ _._.._ “v "Hf—v— Source: The Economic Importance of Timber in the U. S., U. S. Department of Agriculture, Forest Service,.Misc. Publication, 9bl, 1963. .OOOH .HOO .HOON .Oonfl.OoH>HOO OOOsom .mpdesoHHw¢ no pcmapasdmm .m .D .mmpapm vmpHc:.m£p cO amnaHp.uo monwpnoaaH oOEocooo may ”condom N.OOm m.mom m.wmm m.m4: 0.0HN m.NmH N.NH H.OH H.Omw O.Nmm proa O.HOH H.NOH O.NO 0.0N 0.00 0.00 N.H N.H 0.0N 0.0N OOOOOOOHO N.OOH _O.OHN O.NO O.OOH OOHO O.HO ONN N.O O.NO O.OO OHOOOOOHO N.OOH O.NNN N.NN 0.00 O.OO O.HO O.N 0.0 N.OO O.NO OOOHOon O.NH N.NH 0.0 0.0 - . N.O O.O N.N O.O OOOOOO H.NHH O.NOH 0.00 O.OO O.O H.O 0.0 O.H O.NO O.OO HOOOOOHO N.NO N.ON O.NN O.OH H.H O.O O.O O.O O.N N.O OsOH N.OO 0.00 O.NN 0.0N 0.0 0.0 N.H O.H O.OH N.OH mHOOHHHH O.OO N.NO N.ON O.ON O.H O.H N.H O.H O.ON H.ON OOOHOOH O.OO O.NO 0.0N 0.0N O.OH 0.0 O.H O.H N.OO O.OO OHOO Aumem oHndo COHHHOE v OOOH OOOH OOOH OOOH OOOH OOOH OOOH OOOH OOOH OOOH OOOOO Haves Oposvoad vmmrmHOm OOOH Hmccm> mwoflmmmll Mohave HQ 1 {I - 4 in II wmmH was ammH no“ postoad 6cm madam Np OcOmea Hmapcoo apnoz esp cH Umpmm>nmn mpodfionm nmcaHn essay «0 oasHo> vmpmaHpmmran HHmOH A2 substantially. The pattern in the Central States is more diverse. Net production increased; but increased and decreased production on an individual product basis varied by state. Pulpwood, in general, increased throughout the Central States. Veneer log production decreased in Ohio, Indiana and.Missouri, but increased in Illinois and Kansas. Sawlog production declined slightly in Kansas, remained stable in Ohio and Indiana, but increased in Illinois, Iowa and Missouri. Production of other prpducts declined in Illinois and Missouri but increased in the other states. Unofficial estimates of the U. S. Forest Service can be used to show production of the five product types covered in this inves- tigation for the states in the North Central region using specific units of measurement that are common to each product. These are shown over an eight-year period-~1950 to l958--in Table 19. A more meaningful relative importance is also shown through the listing of the total dollar value of the products, based on local points of delivery, in Table 20. Production and value of the major forest products in the North Central region changed considerably between 1950 and 1958. Sawlog production declined, but the value of production increased. The increase in the average per unit value of sawlogs was about $5. This may or may not have quality and/or availability implications, but the possibility is highly reasonable. .Production and value of veneer logs and cooperage bolts decreased. The per unit value of veneer logs increased $22. Such a large increase strongly supports the contention of a growing scarcity of quality veneer logs. Pulpwood bolts showed a substantial increase in production. Total value, however, did not 2.33% «:5.» A v.5. \w 1 a .3. — LODOpH N.N;HJ NOV-.3 -.Np~pw2 f. H O .« 'PaHo.‘ Ev“ Ihl .‘Kl‘llli b3 .ooflbmmm unmaom .m .5 map mo mmmeHpmm HwHonmocb "meadow cowwmn ONO.H OOO HOO OHH OO O.NO O.NNO.N OOO.H 0.0N OO O.OOH OOH OON.H NNO.H HOHOOOO t . . I . II , EOE. I I I I m.H w. I I m.. I m.N I ow NH mmmcmm OO OO OON OH OOOH ‘OH NH HH OO OO .O OH ONO ONO HHOOOOHO I I I I N.H O OH I O.H H 0.0 N 0O OO ssOH ONO OOH I I O.N. O N.OO NO N.ON OH .OH HH OHH OOH OHOOHHHH ON I I I ©.m m.: cram HH mON a 0.0H mH owH mmH mamOOCH OO I I I 0.0 .O O.OOH OH 0.0 HH 0.0 OH ONN OON OHOO OHN OO ONH OO O O.N .OOO OOO O. O.N .O N OOH OOH OOOOOOOHO OOH HOH OO O N.O OH 0.0NO OOO O O.H O.ON OO OOO OOO OHOOOOOHO HON O NH ON 0.0 O N.OOO ONO I I .ON OO OOO ONO OOOHOOHO H.ON .OHH HOOOOHO HOOOOHO NOOHOO.OHO O.ON .OO H.ON .On NOO .On IquMOOOOLI OOOOOOHNOLI OOmHIHIHE OOOOOOONOL HNOIOHHOE SOHHHE III OOdHHev OOOH OOOH OOOH OOOH OOOH OOOH mmmH OOOH mmmH ommH mmmH ommH mmOH OOOH opmpm chHHm mmHomII mpmom voodeOm IpHon IIOmwwwl Oonsmml II wwmamaooo ammcmp OOOH OOO OOOH .OOHOOH HOHHOOO OHst OOO HOH OOOaOOHs OOONON OHOOHOO OOOOOHOO NO HOOOOOIIOH OHOOH ht mHQmHHm>¢ poz I.<.z mHnmeHmmc I I .OOHsamm pmmaom .m .D_mg¢ mo mmpOEOpmm HmHonmocD “condom .ummcmx was Ondommfiz psoans Hmpop apnomfiwv II H.OH HOOOHHV AOOOHOV AOOOHOV HOHOO.OOOV O.OO.OO 2V H.OH.OO av O.OO.OO av OOHO> OO. ON. ON.N ON.N NN. ON. N0.0H ON.NH .OO. ON OOH ‘ NO OO . OO OHO: NOO .I , IIIII . . . IIIII IIIIIIIIIIIIII II mwmambd , conmn OO. HH. OO.H O. O0.0 HOvO.OH OO.OO N.NO NH.O OO.N O.HH N.OH O.OO 0.00 HONOOOO . . . . 5.82 I I I I odoz Me I I NC. I Q. I m. m. mwmgm HO. HO. OO. NO. .O.z N.O OH. H. OO.N O.O O. O. O.O O.O HOOOOOHO I I I I O. OON N. I OO. H. N. H. H.N O.H OOOH OH. OO. I I O.H OON O. O. NN.H N.H H.H N. 0.0 0.0 OHOOHHHH HO. I I I O.N O.H O. H. OH. O. O.H N.H H.O N.O OOOHOOH NO. I I I O.H H.O O.H N. NNO O. O. H.H O.O H.O OHOO NO. I OO. O N. N.H O.N 0.0H 0.0H OO. OO. N. O. NON O.O OHOOOOOHO OO. OO. NH. HO. OO.H 0.0 OONH H.N ON, NOO O.N O.N O.NH 0.0H OHOOOOOHz OO. I. OO. NOO O.H O.N OOOH OOOH I I N.N 0.0 0.0H 0.0H OOOHOon IOOHOHHOO OO OOOHHHHEV III OOOH OOOH OOOH OOOH OOOH OOOH OOOH OOOH OOOH OOOH OOOH OOOH OOOH OOOH spasm wnHHOMI, mmHom mpmom voosmHOm OuHon awOH uwmmsmm IIIIII I III IIIIII mmwamdopb. amen»? OOOH OOO OOOH .OHOOHHOO NO OOOHOO HOOOH pm cOHmmH Hmecmo apaoz map cw Umodvoad mpodponm pmopow NHOEHHQ empomHmu no osHmp HmpoaIION mquH 16 increase at a comparable rate, with the result that the average price per cord decreased slightly over $1. Post production has decreased, and the average per unit price has remained relatively stable. Pole production increased substantially, but the average per unit price decreased slightly. Piling production also increased substantially, but the average per unit price increased only a little. Regional Consumption 2f Timber by Primary Industry A few comments are important concerning consumption of timber by the primary forest products industries in the North Central region. Regional production figures cannot be taken as a source of raw material inputs for primary industry. They indicate available inputs, but apparent consumption or an estimate of raw material receipts can only be made by considering exports and imports of material on a regional basis. For sawlog inputs into sawmills this is not considered highly relevant. The sawmill industry, on a percentage basis, has several hundred times the number of production units that the other industries possess, and spatially these units have a wide distribution, providing productive sawmilling enter- prises wherever the raw material appears in any degree of abundance. Similarly, the relativelylow value of sawlogs, their weight and bulk, impose severe limitations on shipping. Hence, the production of sawlogs in the North Central region, allowing minor adjustments for exports and imports, should give a fair indication of the apparent consumption of sawlogs by sawmills. Few, if any, statistics are available to fully supportthis, but the industry sampled in the North Central regional study upon which this dissertation is based h6 does, in fact, fit the situation. Veneer log production and the consumption of veneer logs by primary manufacturers in.the North Central region varies considerably. Transportation of veneer logs across the region's boundaries is fairly extensive. For this reason production is rarely the same as consumption. This pattern is partially a result of the high relative value of veneer logs which can justify long shipping distances. In general, as shown by Table 21, the Lake States, the Central States, and the whole North Central region consume more veneer logs than they produce. In the Lake States, Michigan and.Mfisconsin are the big producers and consumers; Minnesota produces and consumes only a minor volume in comparison. Both Michigan and.Minnesota are net exporters, and.Uisconsin is a net importer. “Wisconsin is the largest producer, and by far the largest consumer of veneer logs in the Lake States. In the Central States, Ohio, Illinois, and Missouri and Iowa are net exporters of veneer logs. Indiana, while appearing to produce veneer logs in quantities somewhat similar to adjacent Central States, is a net importer of veneer logs. Indiana's consumption is more than the other Central States combined. Pulpwood has traditionally been a product that has been trans- ported long distances in comparison with other forest products. It has a lower relative value than veneer logs, but price alone cannot be considered as a significant reason for distance shipped. Ease of handling of a bulky product (in comparison to logs) and the spatial distribution of the large primary manufacturing plants or pulp mills must also be considered. Production and consumption of pulpwood varies widely in the North Central region. A detailed .OOOH amnamomm .OIoz mpoz zoammmmm NOHSOHSOOacd mo pcmapammmm .m .D NmoObamm pumaom .m .D was OOOH NOOH .oz mamdmm .coma ONHH .oz mpoz .nome NcOHpmpm pamEHNmaxm pmmaom Ompmpm HNHHCOU .OOO .NOO .NOO .OOO .NOO .OOO .OONII.Oz .OOOOz .OOOO .OOHOOHO OOOEHHOOOO OOOHOa OOOOHO OOOH uOO.HOOO .mHQOwOmec mm cOHmedOcoo and O.HO .UQ GOOHHOE m.m mm cm>Hm amp» COOpoObonm OmomH HHpCd mmmcmm How oHanOmbm Ho: meastmAmv b7 cOHpmadcho I o ** . 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A regional graph is not shown, for fear of misrepresenting the minor importance of the Central States and the extreme importance of the Lake States in formulating the total regional picture on any meaningful volume basis. The consumption of pulpwood in the Central States is minor in comparison to the Lake States, but an increase from under 100,000 cords in 1950 to 500,000 cords in 1963 has occurred. Figure 2 indicates this trend which peaked in 1962. The downward trend is explained largely by the fact that chipped slabs and edgings and other primary and secondary plant by-products have come into wide use for pulping between 196l.and 1963. In 1961 only two percent of total pulpwood consumption was in the form of residues; by 1963 the use of residues had increased to over 15 percent. Considering the relatively low use of pulpwood in comparison to the Lake States, it is not surprising that other fibrous materials serve as a basic raw material in many cases. Lake States production and exports of pulpwood are shown in Table 22 and the trend in production and apparent consumption of pulpwood are shown in Figure 3. The Lake States use considerable imports, but have been relying more heavily upon locally produced wood in recent years. In 1951 imports reached 980,000 cords, or .38 percent of total consumption. By 1963, they had declined to about 39h,000 cords, or 10 percent of total consumption. The three Lake States form an important but diverse production and.consumption pattern. Wisconsin has traditionally imported more L9 Thousand Cords 600 - I- as I, \‘\ I \ I \ 500 - ’ Consumption hOO - I P / Production 300 200 100 . L O J L L n 4 1 _l l 4 J— L 1952 195k 1956 1958 1960 1962 Figure :2... Pulpwood production and consumption in the Central States, 1952-1961. Source: Central States Forest Experiment Station, U. S. Forest Service, Columbus, Ohio. 1952 data from Misc. Release 13. 1955-1961 data from Tech. Paper 188. 1962-1963 data from Research Note CS—23. O: «‘2- .O- “I" .4. . 50 TABLE 22--Production and exports of pulpwood in Michigan, Wisconsin and Minnesota, 1958—1962 8Tbtal ‘Retainedffor Exported—to: _— State and year production use in state Minn. ifihc.'—Mich. 0*her - (thousands standard cords) Minnesota, 1958 903 626 267 7 3 1959 99h 721 251 7 15 1960 1,0u8 711 308 - 29 1961 968 712 2&0 - 16 1962 979 753 216 l 9 1963 1,062 827 221 - 18 ‘Wisconsin, 1958 828 811 1h - 3 1959 972 915 21 3 33 1960 1,052 1,008 19 - 25 1961 1,078 1,050 1h 1 13 1962 1,180 1,11u 15 1 10 1963 1,20u 1,176 20 2 6 Michigan, 1958 900 b58 - hh2 - 1959 1:053 603 - bk? 3 1960 1,237 727 — 51o - 1961 1,106 628 - 861 1A 1962 1.223 677 - BAG 6 1963 1,26u 669 - 59s - Source: 1958-1962 figures: Lake States Forest Experiment Station, Research Paper LS-5, 1963. 1963 figures: Research Note LS-h8, l96h. Lake States Forest Experiment Station, 51 Million Cords r 1W h.O N Apparent consumption /\ ,e’ 3-5 3.0 2.5: 2.0 1.5 1.0 H.“__ r . 3‘“ Imports 19h6 19h8 1950 1952 195A 1956 1958 1960 1962 Figure ,3---Piflpmood production, imports and apparent consumption in the Lake States, 19u6-1963. Source: Lake States Forest Experiment Station, U. S. Forest Service, St. Paul, Minn., Tech. Note series, and Research Note LS-HB. (_ 4 [u tn 52 pulpwood than it produces. This trend reversed for the first time in 1961, when increasing production passed declining imports. Curtailment was noticeably sharp in imports of Canadian pulpwood. Wisconsin is noticeably the largest consumer of pulpwood in the Lake States. Wisconsin consumption averaged about two million cords annually during the 1950's, whereas Minnesota and Michigan consumed in the vicinity of three-quarters of a million cords each. As one would expect, both Michigan and Minnesota produce more pulpwood than they consume, with the excess production going to Wisconsin. The Upper Peninsula of Michigan is expected to remain a stable supply area for'Wisconsin mills, but imports from Minnesota to Wisconsin show signs of decreasing.\ Canadian imports to all three states have shown a declining trend. Production has shown a generally increasing trend; it exceeded 1.2 million cords in both Wisconsin and Michigan in 1963, but remained more nearly constant at slightly over one million cords in Minnesota in 1963. Production and consumption of posts, poles and piling cannot be placed in the same frame of reference as veneer logs, sawlogs, and pulpwood without making some adjustments. Total production, after considering imports and exports, cannot be considered as being consumed by a primary forest-products industry. Posts, poles, and piling, recognized as cut forest products, are in themselves final consumer products. Additional manufacturing of the product, or the first time this woods product enters a mill or plant (i.e., 'wood preserving in most cases) could be considered secondary manufacturing. Thus, production and consumption of these products must be first considered without reference to consumption by a 53 primary manufacturing industry. The residual not consumed in the raw form that undergoes preservation will be considered along with the outputs to primary manufacture in the next section even though accepted terminology speaks of this as secondary manufacturing. Production figures for posts, poles, and piling are extremely hard to compile on a regional basis. Local differences in defining what constitutes the product, personal home production and consumption, the various criteria used by public and private agencies in compiling statistics-~these all contribute to inconsis- tencies in estimating production and consumption. Manthy and James, using unofficial estimates, Census of Agriculture data, and various reports, estimate 1958 production at slightly less than no million posts, about 29h,000 poles, and 25,000 pieces of piling in the North Central region. 'Unofficial estimates of the United States Forest Service indicate that production may be as high as L6 million posts and that Missouri pole production, depending on classification criteria, could range from 63,000 pieces to 250,000 pieces. If Manthy and James' figure of 63,000 pieces is increased to 250,000 pieces, the Forest Service estimate, regional production can be set at h80,000 pieces in 1958. The unofficial Forest Service estimate of piling produced is approximately one million linear feet. Manthy and James, using state report figures and Census data, approximate this with a production figure of 25,000 pieces. Considering all the various estimates, agreement can be seen on a decrease in post production from about 67 million posts in 1950 to same ho million in 1958. Missouri, the region's larger 5h producer, contrary to the trend in other states, has increased production. This increase in output reflects an increased demand by wood preservation plants for shortleaf pine posts. Pole production, limited mainly to the Lake States (historically a long-time producer of a large-size pole product) and to Missouri (a more recent producer of diverse sized poles), has increased. On an individual state basis Michigan production decreased from 29,000 pieces in 1950 to 17,000 pieces in 1958; Wisconsin increased production from 6,000 pieces in 1950 to'39,000 pieces in 1958; andeinnesota increased production from 65,000 pieces in 1950 to 175,000 pieces in 1958. Missouri, depending on the various estimates considered and the pole size classification used, increased production from about 10,000 poles in 1950 to either 63,000 pieces or 250,000 pieces in 1958. Piling production estimates are available both in linear feet and by the piece. Production in the Lake States has fluctuated widely between 1950 and 1960, and since 1958 a slight downward trend is noticeable. In 1958, Michigan produced 261,000 linear feet, Wisconsin 13h,000 linear feet, and Minnesota 219,000 linear-feet. Estimates, in number of pieces, indicate that the decline from 1958 to 1960 has been as follows: Michigan from 7,000 to 6,750 pieces, Wisconsin from 3,750 to 1,000 pieces, and Minnesota from 5,500 to h,000 pieces. The Central States by comparison produce very little piling, with one notable exception. Illinois produced 320,000 linear feet of piling in 1958 as compared to 190,000 linear feet in 1950. The total regional production of over one million linear feet in 1958 can be divided as follows: 600,000 linear feet in the Lake States and SS hO0,000 linear feet in the Central States. Only limited statistics are available to denote cooperage bolt production; estimates of consumption by cooperage stock mills, to denote inter-regional and inter-state exports and imports, are not available. However, previous research on timber marketing in the North Central region indicates that cooperage bolts are not trucked significant distances to cooperage stock mills, and that the mills are mainly portable and locate close to their raw material supply (35). Thus, although some flow occurs across regional boundaries and between states, production estimates do give some measure of consumption trends by cooperage stock mills. The regional production of cooperage bolts is composed mainly of white oak bolts for tight cooperage; less than 10 percent of the region's production was from other species for slack cooperage. Regional production was estimated to be 9h.million bd. ft. in 1950, 75.b.million bd. ft. in 1958, and 107.7 million bd. ft. in 1960. The Central States (as can be seen in Table 23) produce most of the region's cooperage'bolts, with the Lake States production accounting for about only 10 percent of the total. The leading producers in the Central States have consistently been Missouri, Illinois, and Ohio. The 1962 production and consumption decreases are thought to be partially the effect of curtailed industry production while awaiting the outcome of proposals to change federal regulations regarding the reause of whiskey barrels. The most drastic reduction in production and consumption came in Missouri. As might be expected, cyclical fluctuations and demand are strongly linked to the production of new charred white oak whiskey barrels. 56 TABLE 23--Cooperage timber production and consumption in the Central states for selected years, by state 19:50 195_2_ _1958 1960 _. 1962 State P(a) P P P C(b) P C ‘—(aillion ha; ft) ’“ Ohio 11.0 9.h 8.5 13.6 18.7 12.h 12.7 Indiana h.0 3.0 2.3 6.9 6.8 6.2 7.0 Illinois 1h.0 11.2 28.2 27.h 26.9 25.0 25.h Iowa 1.0 3.5 1.5 3.5 h.h 3.9 2.8 Missouri 60.0 52.5 30.0 b0.9 h0.7 27.3 28.0 Kansas - — 0.3 5.0 (c) 2.3 ' (c) Total 90.0 79.6 70.8 97.3 93.5(d) 77.1 75.9(d) (a) P - production (b) C - consumptinn (c)Consumption unknown (d)0mits Kansas 'Sources: 1950 and 1958 estimates are unofficial records of the U. S. Forest Service. 1952 estimates are from various publications of the Central States Forest Experiment Station, U. S. Forest Service. 1960 and 1962 estimates from the Central States Forest Experiment station, Note 153, 1962, and Research Note CS-22, 196h. 57 Regional Production 2f Wbod.Products by Primary Industry Consumption of timber products by the primary manufacturing industries can now be related to the outputs of wood products by these industries. Those industries of relatively minor importance, and for which production estimates are limited, will be mentioned first: Also, as previously noted, posts, poles and piling will be considered here regardless of the fact that the final consumer product is often a raw wood product not undergoing primary manufacture in a plant or mill, and that further manufacture of this product (namely preservation treatment) is considered by many as secondary manufacture. Posts, poles and piling production estimates are mainly derived from previous North Central regional research (33). Only about 10 percent of the posts produced in the region receive preservation treatment. Preservers, moreover, frequently import posts from the west and South. The North Central region, although increasing the number of local poles receiving preservation treatment, is a net importer of poles. In 1959 about three times as many poles were preserved as were produced within the region. Again, imports came mainly from the West and South. The region is also a net importer of piling, and treating plants in general handle about two and one-half to three times as much piling as was produced in the region. The volume of piling treated has been increasing. However, fluctuations in local production indicate that a stable flow of imports is balanced with total annual demand by increasing or decreasing preservation of local material. Local piling production is thus 58 dependent on increases in construction activity. Cooperage stock production statistics are not available, but some evidence is available from previous regional research to indicate the distribution of cooperage stock produced in the region. In the preceding section it was pointed out that cooperage bolts are produced close to cooperage stock mills, and that the North Central region does not import significant amounts of cooperage bolts. However, exports of cooperage stock out of the region and inter-state flow within the region are of major importance. Available data indicate that while considerable cooperage stock is used for barrel manufacture within the region, large quantities are exported to foreign countries, other regions, and adjacent states. Reduced bulk, ease of handling, and a relatively high value (about $600 per thousand staves and the common price of $3 per set of heading) allow for long distance shipping of the product. Major importing areas include the British Isles, Canada, and closer to the region, the barrel-making and distilling companies centered in Kentucky. In 1958 cooperage timber production in the region approached 75 million bd. ft. and increased to almost 108 million bd. ft. in 1960. Output of cooperage stock can only be estimated by blowing up sample figures on known production from sampled tight cooperage stock mills, which is at best a rough measure. On this basis, the Central States, responsible for nearly all the tight cooperage stock production, pr0bab1y produced in the vicinity of 15 million staves and a half million sets of heading in 1958. Estimates of veneer and plywood production by mills in the North Central region are not readily available. Some indications are 59 present, however, to point out general production patterns. Hardwood plywood market shipments are shown in Table 2h. This one sector of the industry seems to be substantially increasing production. Exact estimates of veneer production are not available. Mills in the North Central region did ship some 32.7 million dollars worth of veneer, which at 1958 prices indicates that production could have approached 1.5 billion square feet of commercial and utility grades of veneer. Container mills shipped about 5.2 million dollars worth of veneer containers. This would reflect a production figure of about 500 million square feet at 1958 prices. The production of p1ywood.and veneer in the North Central region is heavily concentrated in two states. ‘Wisconsin and Indiana accounted for about 85 percent of the value of all veneer and plywood shipped from North Central mills in 1958. Wisconsin is the leading state in the nation in the production of hardwood plywood, and is responsible for over one-half of the regional production. Indiana is the leading state in the nation in the production of hardwood veneer, and is responsible for over one-half of the veneer produced in the region. Most of the wood pulp manufactured within the North Central region is produced and consumed in vertically integrated plants which manufacture paper or paperboard. However, paper and paperboard mills are more than twice as numerous as pulpmills. A regional deficit in wood pulp production necessitates that paper and board mills import about hO per cent of the wood pulp consumed within the region. This wood pulp comes from other regions of the United States, Canada and Europe. The 1958 Census of Manufactures indicates wood pulp production and consumption for the North Central region (Table_25). 60 TABLE 2h-4North Central region hardwood plywood market shipments (except container and packaging type), 1958-1960 Veneer Other All hardwood Year core core plywood (millions of squaO;“IeetI —‘* ——' 195A 69.8 22.h 92.2 1955 9h.0 28.h 122.h 1956 93.0 26.6 119.6 1957 90.0 2h.5 11h.6 1958 85.5 22.5 107.0 1959 103.2 27.5 130.7 1960 90.5 27.0 117.u 1961 113.1 25.7 138.8 1962 l3h.6 28.5 163.1 Source: U. S. Bureau of the Census, U. 8. Census of Manufactures, 1958, Special Report MC58(s) —-2, 3. 61 TABLE 25--Production, consumption and net imports of wood pulp, North Central region, 1958 State Production Consumption Net imports " (thousand tone) Michigan 390 797 hO7 Wisconsin 1,181 1,282 101 Ohio 120 638 518 Indiana ( 150 ( (126 (57 Illinois ( 33 ( East North Central 1,817 2,900 1,083 West North Central 528 861 333 North Central region 2,3h5 3,761 l,hl6 Source: U. S. Bureau of the Census, 1958 Census of Manufactures. It should be noted that waste paper and other fiberous material plays just as important a role as wood pulp as a source of raw material for paper and'board mills. In 1958 the region's paper and board industry consumed about 3.9 million tons of waste paper and other fiberous material. This was mainly in the Central States; the Lake States paper and board mills depended largely on wood pulp. The Lake States wood pulp production varies widely as to type. Sulphate, sulphite, ground wood, and semi-chemical pulps are all produced in quantity. The Central States wood pulp production is not as extensive; here production is mainly semiechemical, or defibrated and exploded pulps. Production of wood pulp in the North Central region has increased from about one million tons in the 1930's to nearly three million tons 62 in 1961. Despite this gain, the region has declined drastically in relative importance. The West and South, producing about the same amount in the 1930's, increased production about five million tons and over fifteen million tons, respectively, in 1961. Lumber production in the North Central region, while not a large percentage of national production, is of considerable importance. Hardwood lumber production is specifically important, and in 1961 the region produced about 18 percent of all hardwood lumber produced in the United States. Also, in 1961 the region produced five percent of the national output of eastern softwood lumber, which totals 1.3 percent of all softwood lumber produced in the United States. Over-all, the North Central region is responsible for about h.5 percent of national lumber production. The Lake States produced about 712 million board feet of lumber in 1958 which declined slightly to about 691 million board feet in 1961. Central States production in 1958 amounted to some 8h5 million board feet. Tables 26 and 27 give production figures for selected years from 1939 to l963for the North Central region and the United States, respectively. Yearly comparisons may be of interest in many cases, but general production trends can best be pictured graphically as shown in Figures h and 5. Here it should be noted. that national lwmber production has shown considerable fluctuation from year to year, but regardless of fluctuation, showed increased production during the early 1950's. A decrease in production occurred in 1957 and again in 1960, but 1962 and 1963 estimates indicate that production has again increased. Eastern softwood lumber production shows, comparatively, little TABLE 26--Lumber production in the North Central region for selected years, 1939-1961 _— Year Softwood Hardwood Total —9 —(millions Ef'bEI—ftfl) 1939(a) h79.9 1,333.7 1,813.6 19h0(a) A77.3 1,h01.8 1,879.1 19h1 585.5 1,637.3 2,222.8 19b2 535.2 1,599.0 2,13h.2 1913 hhh.7 1,h39.3 1,88h.0 19hh(a) h85.0 1,692.9 2,177.9 1985 360.1 1,359.6 1,719.7 19h6(a) h38.2 1,h96.3 1,93h.5 19h7(a) 521.1 1,660.0 2,181.1 195h 3h8.8 1,315.1 1,663.9 1955(b) 193.0 1,386.0 1,579.0 1956(b) 256.0 1,h18.o 1,67h.0 1957(b) L36.o 1,269.0 1,705.0 1958 350.2 1,206.7 1,556.9 1959(b) (o) (e) 1,67h.0 1960(b) 38h.o 1,19u.0 1,578.0 1961(b) 3h9.0 1,088.0 1,h37.0 (a)Includes Nebraska. (b)Includes North Dakota and Nebraska (c) Not available. Sources: 1939 to 1945 estimates from Steer, Henry B., Lumber Production in the United States, 1799-1946, Misc. Publ. No. 669, U. S. Department of Agriculture, Forest Service. 19h6 and 1947 estimates from U. S. Bureau of the Census, l9h7 Census of bhnufactures, MC-2hA. l9h8 to 195u estimates from U. 3. Bureau of the Census, 1954 Census of Manufactures, MC-2uA-l6, and various estimates of the U. S. Forest Service. 1955 and 1956 estimates from U. S. Bureau of the Census, Facts for Industry, pear-06 and h2hT-07. 1957 estimates from U. S. Bureau of the Census, Current Industrial Reports, M2uT (59)-1. 1958 estimates from, U. S. Bureau of the Census, 1958 Census of Manufactures. 1959 estimates from U. S. Bureau of the Census, Current Industrial Reports, M2uT(59)-1. 1960 and 1961 estimates from U. S. Bureau of the Census, Current Industrial Reports, M2uT(61)-l. 1962 and 1963 estimates from U. S. Department of Commerce, the U.S. Industrial Outlook for 1963. éh TABLE 27--Lumber production in the United States for selected years, 1939-1963(a) EaStern Tatal gear softwood softwood__g Hardwood A__ All lumber (billions of’bd. ft.)' 1939 11.3 23.3 5.5 28.8 1980 12.8 25.6 5.5 31.1 l9hl 1h.2 29.9 6.7 36.6 1982 13.9 29.5 6.8 36.3 1983 11.9 26.9 7.h 38.3 1988 10.2 25.2 7.8 33.0 1985 9.0 21.1 7.0 28.1 l9h6 11.5 25.9 8.3 3h.2 19h? 11.6 27.9 7.5 35-h 1919 (b) (b) (b) 32-2 1950 (b) (b) (b) 38.0 1951 10.6 29.5 7.7 37.2 1952 10.6 30.2 7.2 37.h 1953 9.7 29.6 7.2 36.8 195h 9.3 29.3 7.1 36.h 1955 (b) 29.8 7.6 37.8 1956 (b) 30.2 8.0 38.2 1957 (b) 27.1 5.8 32.9 1958 7.8 27.0 6.0 33.h 1959 (b) 30.7 6.8 37.1 1960 7.1 26.7 6.3 33.0 1961 7.0 25.9 6.0 31.9 1962 (b) (b) (b) 32.9 1963 (b) (b) (b) 311.3 (a)I960-1961 not including Alaska; 1963 figure is an estimate. (b)Not available. Sources: Same as for Table 26. 65 .meanmmma «was?» copomaom .aom ceaposwofia .aoo.E:a moamom Hmapmoo £98211: mammaru. owma mmma mmma amma mmma 0mma mama mama aama mama oama 11 1‘ 1% Id I J1 J I q dull 1.1 d u 1 + J 3 4 n J u 1 . OON /I.I.I..I.|I.|l 'Il” L 00.: .\\\ . com eooseeom ._ 00$ .1 OOOH IIIIII: gozupwm L OONH ’ J ” I l I E3 .d' H I I I O O \O H '13 '08 J0 SUOIIIIN ‘UOIQDRPOIH .1 coma ’1 . 95m 00mm moaoomm Hg.\ 1 ooam .ammaummma “manta oopooamm pom scaposbopm popesa .m .D tum mhsmam mmma omma wmma mmma amma mmma 0mma mama mama :ama mama oama d." d d d d I II 1- ! I I q d d d d J- 7 d I J I d é“|tli'|||l8|| 6003.0me I " ll, ' ""' "' " doozpmom apopmmm.\\\\ ©003Phom Had. / ’I I, I, A moaoonm Had. \ 1 o.m m.» 0.0H m.ma O.mm new 6.6m 6% 9% 2m o .3 '1& '09 5° SUOIIIIH ‘u01100001a 67 fluctuation and has declined. Hardwood lumber production shows slightly more fluctuation in yearly production. In general, slight increases in production occurred in the 19h0's, but a slight general decrease in production occurred during the 1950's and early 1960's. In the North Central region, lumber production has notably declined.since the 1950's, with most of the decline coming in hardwood production. Softwood lumber production declined up to 1955, but increased from 1955 to 1957. Production then remained relatively stable at slightly less than h00 million bd. ft. The nine states comprising the North Central region vary widely in their contribution to total regional lumber production. Briefly, the percentages of regional production of both hardwood and softwood lumber, by state, for the most recently available year are shown below: Percentage of total regional lumber production for latest available year State_and Year Softwood Hardwood —_ —' (percent) _1= Michigan (1961) 11..6 20.11 Wisconsin (1961) 11.1 17.h Minnesota (1960) l8.h 7.6 Illinois (1961) 2.6 10.b Indiana (1961) 2.0 10.8 Missouri (1958) 7.7 23.8 Ohio (1961) 11.0 15.9 Iowa (1958) 2.8 3.3 Kansas (1958) 1.1 0.8 Lumber production figures for each state in the North Central region for selected years from 1939 are shown in the.Appendix in 68 Tables 99 through 107. In general, lumber production has fluctuated widely through the years. In the Lake States the trend for both hardwood and softwood lumber production has been one of a decline. One exception is notable: the increase since 1958 in hardwood lumber production in Minnesota resulting in greater hardwood lumber production than softwood production by 1960. The trends for the three Lake States are depicted graphically in Figures 6, 7, and 8. Hardwood lumber production has taken precedence over softwood lumber production in every state within the region. Michigan, Wisconsin, Missouri and Ohio are the major producers of hardwood lumber. In the Central States, increases of several hundred percent in softwood lumber production are noticeable since the l9b0's, with the exception of Missouri. In hardwood lumber production, recent increases are evident in Illinois and.Missouri. Indiana has continued to decrease its production, as have Ohio and.lowa. Some limited evidence is available to indicate that Kansas is slowly increasing production. 7. .PV .IA-\.. 69 . on 9a .3 EH cmwazoaz Inc madman amma-mmma amass» emeemamm new soap 6 p mama omma mmma mmma amma mmma cmma mama mama aama mama oama \ 1q I 1 a 1I u 1 J 8 d I q q d I d d d d u q \ 030 \ ../ so an m.:/J. // \ I \ II \ I a I / l I I I I l \/\/\ coo3©ammj . L I I’I II, J I], ~ (III \ 2’ mmaomam aa< g 0m OOH Oma 0mm oom ooa ema 00m 0mm com ‘lJ 'pa JO SUOIIIIN ‘uorqonpoxa .ammatmmma «mammua mopomamm .aom doaposmoam amnasa damqooma: slum magmam omma mmma mmma amma mmma cmma mama mama aama mama oama . Om I I I I I I j OOH III: I I aoozpwow III / Oma. d 1 O p /\/\/ .1 OON m . a. T: o :n W 1111/ .. 0mm N IIIIII woozmawm . oom m. I”, w I ll 0 I; . 0mm I III m 8 a .7), v . cma moaowmm Had. 00m 0% Com .omma1mmma .mHMmm dmpomamm pom neaposmoag ampesa upOmmqnaz 11w magmam 71 omma mmma mmma amma mmma cmma mama mama aama mama oama III I 1 ‘1‘ d 1 I 11 '1 I d I 11 I I J 11 I I|11 7 4 q . mm \oIII \ I, s It \ III 0 \\ [’0 / I \IsII III m o\ I II, n /.1.. [I m. 1111111111111 I: 1 111111 I: o ‘Illl'lllllllu' (u ’I” W T... I T— T... \\./ \ m o\\‘\ I” mHvOOSP.H0m OWH S ..., a [II 3am ..,. a [.1, com ’I” .1/, mmm asaaaam aa< . 0mm g mam. 72 LANDOWNERSHIP SOURCES OF WOOD Timber products out by firms in the North Central region are somewhat concentrated as to landownership source, depending on the specific product. In general, slightly more timber products, proportionately, are cut from private land than from public land. This is indicated by Table 28. Volume of product is reported for the year 1959, while ownership was considered for the year 1963. Table 28 summarizes the ownership of commercial forest land in the region and compares this with the actual percent of volume cut in the study areas by product. For the region as a whole, farm ownership includes to percent of the classified commercial forest. Excepting pulpwood in the Lake States and cedar posts in Michigan (the former depending more heavily on public land and the latter on other private) the remaining timber products cut in the region's study areas are dependent heavily on farm land. A greater proportion of timber in the sampled areas is coming from lands classified as farm than from other ownerships. Production on private lands is mostly attributable to lands not under any form of intensive forest management. This situation does not present special pr0b1ems in the short run, but in the long run, there is a question as to whether increasing timber requirements can 'be met. An increasing shift to utilization of timber on public land Inay possibly meet the future demands for timber. However, the risk :18 very high that public lands may not be able to meet the required EIrOduction without sacrificing their higher level of management, thus IIPecipitating even further reductions in sustained timber output. .mmma smoabamm pumaom .m .3 «Na .02 anommm moadommm ammaom «Kamcmmm< mnp Eon“ mama pmmaow amaoamasoo Ho magmamnzo "meadow mpmeapmm oonv .Ucwa UmGSo nonsmoam mam moaapmdmna pmoaom npon omsaosa pgmaa esp op madaob mo mmwmpcmoaom .moaapmzmna pmmaom mp douse mama hacoAnv .omma ammm on» How mmoasmmva 73 ooa ooa ooa ooa ooa ooa ooa ooa ampoe 11 11 11 4a 11 11 11 11 axonxcb o A A ma A m ma 0 oaandm amnpo a A m A A a A A am m A oa ma m pmmpom mumpm A m m oa om A aa aa m esteem .paz m am am am m am am am saweaaa sense am om ma ma am aa mm am assesa a m ma Aev o Anva Abvm Apva mesa ego mega: Mo £80.83 %Hmonaw..r Mo anoammv .mpm coammm 7coamom .mam .mpm :oamom .mpm .mpm magmamczomnma amawcmo, mama Hmapcwp mama, amapnwb mmmAmmooo mmpH,ammc@>1, mmonwm moosmamm1l mmma mama pmmhom anamoam mo mmmsl, (Hmaoamasoo.mnluammamQSOII Aavamaa acoamoa amaacmo nanoz 039 we mmmam mmdpm map ca 950 mpo:@oum amneap Ho mooasom maamhmcgobnwurnmm mqmdw 7L1 Over 90 percent of the pulpwood harvested in the Central States comes from private land, and nearly all of this is from farm holdings. In the Lake States, however, more pulpwood is derived from public land, despite the fact that private ownership is more extensive in area than public ownership. Sawlog production in the North Central region is concentrated primarily on private land. Inventories of sawtimber on public forests are limited; depletion of timber in the past, combined with the time restrictions imposed by forest management, has limited present production. Veneer log production is, similarly, heavily concentrated on private land with most of the production coming from farm land. An even larger proportion of cooperage logs and bolts comes mainly from farm holdings. Timber quality is a severely limiting factor in veneer and cooperage log production. Evidently, the quality needed is most readily available, at the present time, from farm holdings in the North Central region. ' Posts and poles production by land ownership sources, is shown in Table 29. Cedar posts in Michigan and'Wisconsin are produced mainly from private land. "Other" private land supplies as much, if not more, of the cedar poles out than farm land. About one-third of the post production comes from public land. Pine posts in Missouri are derived from all types of private ownerships, with only slightly more than 10 percent Coming from public lands. In Ohio, locust posts, both for fence and highway use, are cut on private lands, predominantly farm holdings. An evaluation of the data collected in sample areas of the North 75 .mmma a.o.m acopmcanmmz..ooa>hmm pmmaom .m .2 .Na .02 paommm meadommm pmmaom ammpmpm Umpacm.mnp ca mmcmae amnsae Scam mama pmmaom amaoamssoo Ho manuamczo. "meadow .Ucma Umcxo1amostona mam mmaapmsmca pmmaom span mmdaoca pnmaa map op madaob mo mmwmacmoamm .mmaapmmea pmmaom an Umnzo mama hacoAnv .msaam anaemmaz ucm.maocaaaa naop an pan .aHSommaz ca coaposmonmAmv I). II" [III it'll ooa ooa ooa ooa oca ooa ooa ooa ooa ampoa 11 mm 11 11 11 11 11 11 11 :zocxcp o o 0 ma a a O aa a eaaaaa sense 0 o m :a gm 3 a a ma pmmhon mpmpm o 0 aa m m m m ma ma pumaom .pmz m cm ma mm mm mm mm om mm mpmbaam amspo mm mm N: mm am mm mm a: Om HmEhmm o a mm m o a Apvm Apvm Anvm mama :so I. AmadHob mo pcmoammv 11Aammoasz acmoammvi mmsnmam modem Amv.oz .omaz .noaz oano .02 .omaz .SOaz magmamczomcma mamMMHMWWUOA mmaom mam mpmom amvmo mmma .mcma pmmaow mamom mama, amaoamssoo no magmamczo Podmoam Mo mama, mmma .eoamms amapcmo spaoz mnp mo mmmam mvspm Umpomamm ca mmosmoam mmaoq cam mpmoa mo abandon magmaoczomcmA11mm mamde 76 Central region indicates that the raw material for the region's timber industries is being cut mainly from lands in private ownership. Furthermore, the percentage of the volume coming from private land, and especially farm land, is higher proportionately than the percentage of total commercial forest that private land represents. One exception is noteworthy. Pulpwood in the Lake States is cut mainly on public lands which represent about to percent of the commercial forest area. 77 PATTERNS OF RAW MATERIAL.ASSEMBLY IN THE WOOD PRODUCTS INDUSTRY The Pulp and Paper Industry The chapter on Land Ownership Sources of Raw Material shows that pulp mills in the Central States receive less than 10 percent of their supply from public land, with more than 90 percent coming from private holdings. In the Lake States, some two-thirds of the supply comes from public land. Localized timbersheds are common in the Central States, with pulpwood and other fibers being drawn from within 20 to 100 miles of the mill. In the Lake States, timbersheds are larger and, often, not localized, Minnesota mills reach out over 100 miles; Michigan mills, about 235 miles; and Wisconsin mills, about 1175 miles. Both truck and rail transportation of the raw material is common in the Lake States, but trucking predominates in the Central States. Average truckhaul distances reported by Lake States mills in 1959 ranged from 12 to 160 miles. The average in Minnesota was 28 miles; in Wisconsin, 33 miles; and in Michigan, 71 miles. Truck hauls in 1959 averaged about 50 miles in the Central States and seldom exceeded 100 miles. The modes of transportation used in the Lake States are shown below in Table 30. 'Wisconsin makes heavy use of rail transport and Michigan has a significant percentage of pulpwood shipped by water. 78 Table 30-aMode of transportation by which pulpwood was delivered to sampled Lake States mills, 1959 F— " w w__—_ *— Study area Truck Railroad water Total ’ ‘7' (percent 5T_volume) Michigan 67 23 10 100 Wisconsin 27 7O 3(a) 100 Minnesota 56 hh —— 100 . Lake States 38 58 h 100 (a)Combination of water and rail. Source: (3h) Pulp mills obtain their raw material from three general sources: (1) mill-produced, (2) independent producers, or (3) pulpwood dealers. The functions and sub-classifications of these agents are discussed in other chapters. (Lake States mills depend mainly on producers (57 percent) for their supply, but receive 26 percent and 16 percent from dealers and self—production, respectively. In the Central States, all but about 1h percent of the supply comes from producers: the latter comes from dealers. Points of delivery are discussed in the various agent chapters, but it can be noted that for pulpwood in general, the delivery pattern is fairly complex. ‘Most of the supply arrives directly at the mill storage yard by truck, but large shipments are received by rail (or water in Michigan) from concentration points, regardless of agent source or the complexities of agreements between mill and supplier. 79 The Veneer Industry About 95 percent of the veneer log production in the North Central region comes from private land. Mills in the North Central region have large timbersheds, and the average procurement radius is 2h5 miles. Lake States and west Central States mills have slightly smaller timbersheds than east Central States mills. Face veneer mills have larger timbersheds (average radius of 312 miles) than container veneer mills (average radius of 72 miles). In general, the larger the mill, the larger the timbershed. Both truck and rail are used to transport raw material to face veneer mills. Container veneer mills do not use rail transportation. Large face veneer mills, especially those in the western part of the region, rely heavily on rail transportation. Mills in the northern and eastern parts of the region rely heavily on delivery by truck. Veneer mills obtain their raw material from several sources. The container veneer industry purchases raw material locally and tends to compete with the sawmill industry. Most of the supply comes from producers, but a minor fraction is self-produced. Agent source of quality veneer is shown in Table 31: Table 31-aAgent source of quality veneer logs, 1959 All '7 Sub-region___i Producer Dealer Mill Sources (percent of mill requirements) _. Mich., Wisc., Minn. 75 16 9 100 Ohio, Ind., Ill. bl 16 M3 100 Mo., Kan., Iowa 71 13 16 100 Most of the raw material used arrives directly at the mill log 80 yard by truck. Substantial amounts are picked up roadside by mill trucks. An important point to note is that it is difficult to classify a supplier who owns a sawmill as a producer or dealer in veneer logs. If the logs are actually produced by the sawmill owner he is a producer, but if they are sorted from logs produced by someone else, then the sawmill owner becomes a dealer in veneer logs. Sawmills are the source of a large portion of the veneer logs sold to veneer mills. Nearly one—half of the veneer "producers" interviewed are also small sawmill operators. The Sawmilling Industry In the North Central region about 80 percent of the sawmilling industry's supply of logs comes from private lands, mostly from farm lands. Timbersheds for sawmills are relatively small in size, except where walnut is involved. Sawmills specializing in walnut will go considerable distances for their raw material; in Kansas, 128 miles or more. In the North Central region, sawmills reach out about 37 miles at most to secure their raw material. Nearly all sawlogs arrive at the mill by truck. Only a minor portion of the volume is skidded directly to portable sawmills. The average trucking distance to mills in the North Central region is 15.8 miles. Sawmills obtain their raw materials either with their own crews or from producers. Only 10 percent of the sampled volume was obtained by other means (i.e., dealers logging and hauling under contract, etc.). Some b2 percent of the volume was accounted for by employees of the sawmills, and LB percent by producers. 81 The Cooperage Stock Industry About 89 percent of the cooperage'ttmber comes from farm woodlands, eight percent from "other" private land, and three percent from public land. Cooperage stock mills need a raw material of high quality that is relatively expensive. They have, therefore, larger timbersheds than sawmills. On the average, their radius of supply area is 85 miles. However, the smaller size, portability, and scattered distribution of cooperage mills (regardless of the fact that grade cooperage bolt logs sometimes bring a better price as cooperage material than as veneer material) has resulted in smaller timbersheds than is characteristic of the veneer industry. Cooperage bolts are delivered to the mill by truck. The maximum truck hauling distance is, on the average, 106 miles. Average truck hauling distance is bl miles. Cooperage stock mills obtain most of their raw material in the form of cooperage bolts delivered to the mill by producers. Producers supply 62 percent of the total volume, and dealers three percent. Several of the producers could prdbably be classed as dealers since they are sawmillers who sort out cooperage material and sell it to cooperage mills. Point of delivery is almost always directly to the cooperage mill. In some cases, however, the cooperage mills have their trucks visit local sawmill log yards to pick up cooperage quality material. 82 The Post, Pole and Piling Industry3 Cedar posts in Michigan and.Misconsin are obtained.mainly from private land, but significant numbers of posts come from public land. Pine posts and poles in Illinois and Missouri are mainly Obtained from private lands (some 87 percent), mostly from farm lands. Ohio fence and highway posts come mainly from farm lands. Piling may come from any landownership source, but is generally a by- product of a stumpage purchase for other raw forest products. Size of timbershed presents an exceedingly complex picture, as there is no one specific type of primary manufacturer. Cedar posts may be utilized without further manufacture, but are also important to fence companies. Treating plants, conventionally considered the primary point of manufacture, usually do not treat cedar. Fence companies in Michigan have timbersheds from about three counties for the smaller companies up to several counties in both the'Upper and Lower Peninsulas for the largest company. Pine posts and poles treated in Illinois and Missouri are Obtained locally as well as from great distances. Much of the supply is shipped in by rail from other states. In Ohio, fence and highway posts treating plants tend to have timbersheds reaching out between 25 and 100 miles from the plant. Piling is obtained locally as well as imported from other states. Cedar posts and pickets are generally transported to the fence companies by truck. Pine posts and poles treated in Missouri and 3Sample composed mainly of: (1) Cedar posts in Michigan and Wisconsin; (2) Pine posts and poles in Illinois and.Missouri; (3) Ohio fence and highway posts; and.(h) limited piling production. 83 Illinois arrive by both truck and rail, and fence and highway posts in Ohio generally arrive at the treating plants by truck. Cedar posts going to fence companies are supplied mainly by dealers, although they are not recognized as such. Only minor amounts come directly from producers. Producers also sell large amounts of cedar posts to retailers. Dealers, similarly, supply manufacturers, wholesalers, retailers, and consumers. Pine post and pole treating plants in Illinois supply seven percent of their own requirements, but obtain 85 percent of their supply from producers. In Missouri, most of thesupply comes from producers, but about one-fifth is self-produced. Dealers are not prominently used by the sampled treating plants, but are known to supply other plants. In Ohio 25 percent of the oak and pine highway posts are supplied by sawmills to the treating plants in sawn form; the remainder of the supply, in round form, is purchased directly from producers. Locust fence posts are usually marketed by farm producers directly to other farms or to intermediate agents. The latter are truckers, sawmill operators, or store operators. Point of delivery in the post, pole and piling industry is generally the place of business of the buyer (i.e., treating plant, sawmill, store). Posts, poles and piling shipped in to treating plants from out-of-state are first assembled at rail»heads or concentration yards. PRODUCERS OF RAW FOREST PRODUCTS Characteristics pf Producers Timber producers in the North Central region are an extremely heterogeneous group with a wide diversity of characteristics., A size classification for producers is hard to formulate because many producers harvest two or more different products. However, an approximate classification is presented in Table 31. The significant point to note here is the concentration of producers (with the possible exception of pulpwood) in the small size classes. Numbers of producers in different size classes are compared with the corresponding volumes handled in Table 32. It can clearly be seen that a large number of producers in the smaller size classes produce only a small portion of the volume of timber produced in the region. Conversely, the fewer large producers (about 20 to 30 percent, depending on product) produce from.about 70 to 85 percent of the timber volume. The degree to which producers specialize or diversify is shown in Figure 9, About 311 Percent tend to specialize or concentrate on one product. Sixty-six percent of the producers produce at least two products, often three, and sometimes as many as four products. Figure 9 also indicates the combinations of products produced by those classified as multiple-product producers. For example, 225 of the sawlog producers interviewed also produced other products--135 produced pulpwood, 66 produced veneer logs, 19 produced posts, poles and piling, 55 produced cooperage bolts and 35 produced a variety of miscellaneous products. 8h 85 TABLE 31--Size class of sampled producers in the North Central region, by product, 1959(a) ‘Veneer Cooperage Size class(b) Sawlogs logs bolts Pulpwood Total (number of'prOducer377 Small 1111 50 . 31 33 255 Medium—small 1011 ( 33 75 212) (88 )+88 Medium—large 76 ( 10 22 108) Large 19 23 11 30 83 Very large -- -- -- 32 32 All sizes 3110 121 85 192 738 (a)Sawlogs producers for the year 1960. Cooperage (b)Classification: Sawlogs Vaneer logs bolts Pulpwood (MBF) (MBF) (MBF) (cords) Small 1-119 0-211 0-9 0-99 Medium-small 50-1119 (25_100 10-39 100-199 Mediumalarge 150-b99 ( h9-99 500-999 Large 500 & up 100 &,up 100 &.up 1,000-1,999 Very large -- -- -- 2,000-1&.up 86 TABLE 32-aNumber of producers and volume produced, by size class of produce and product produced in the North Central region, 1959(a) (Veneer (Cooperage Size c1ass(b) Sawlogs lqgsr bolts Pulpwood No.(6) V01.(d) No. Vol. No. V01. No. Vol. 7(percent) Small 81 8.5 81 7 36 h 17 1 Medium-small 31 19 ( ( 39 17 39 11 (L10 (211 Medium-large 22 82.5 ( ( 12 16 11 8 Large 6 3O 19 69 13 63 16 22 Very large - — - - - - 17 58 All sizes 100 100 100 100 100 100 100 100 —— _‘Ot_nW-’O— (a)Sawlogs producers for the year 1960. _ Cooperage (b)Classification: Sawlogs Veneer logs bolts Pul ood (REF) (NEE) (MBF) (co¥ds) Small l-h9 O-2h 0-9 0-99 Medium-small 50-1119 ( 25400 10-39 100-1199 Medium-large 150-h99 ( h9-99 500-999 Large 500 &mup 100 &.up 100 &.up 1,000-1,999 Very large -- -- -- 2,000 &.up (c)Numbers of producers sampled. (d)Volume accounted for by producers sampled. 87 Figure 9--Producer classification and specialization Total producers 825 I r 317 195 128 70 85 Interviewed for Sawlogs Pulpwood Veneer Posts, Poles & Piling Cooperage l Single product producers 277 ‘ 2 F l 2 .83 b 28 F 19 b2; Interviewed for Sawlogs Pulpwood Veneer Posts, Poles & Piling Cooperage If Multiple product producers(a) 5118 _l r- 225 1- 112 B 100 r 51 L60 Interviewed for Sawlogs Pulpwood Veneer Posts, Poles & Piling Cooperage (a)A further breakdown of multiple-product functions is presented on the next page. 88 Figure 9--(Continued) Multiple-product producers Producers interviewed for: Also produced: 225 Pulpwood Veneer Posts, Poles & Piling Cooperage 0ther.Miscellaneous 112 , Sawlogs Veneer Posts, Poles &.Piling Sawlogs Pulpwood Cooperage Other Miscellaneous Veneer 100 Sawlogs Pulpwood Posts, Poles &.Piling Cooperage OtherjMiscellaneous Posts, Poles and Piling-———51 Sawlogs Pulpwood Veneer Cooperage Other Miscellaneous 60 ‘ Sawlogs Pulpwood Veneer Posts, Poles &.Piling OtheriMiscellaneous Cooperage 135 66 19 35 78 2o 39 3o 25 16 17 25 17 36 111 15 112 15 89 Classification of producers is complicated by the fact that most producers have at least one other occupation. In Table 33 the numbers of full- and part-time producers are shown, and part-time producers are listed by their major alternate occupations. As a matter of fact, many part~time producers have two or more alternate occupations. The most common combinations are sawmill-farmer, sawmill-other, and farmer-other. Considering the whole region, about two-thirds of the producers sampled consider timber production as a part-time occupation. Of the 529 part-time producers sampled, 23 percent are also sawmill operators; hl percent, farmers; and 36 percent, other. Timber-producing activities are frequently seasonal. About 70 percent of the cooperageébolt producers, and 80 percent of the posts, poles and piling producers tend to operate on a seasonal basis. Similarly, 80 percent of the veneer log producers operate seasonally. Pulpwood and sawlog producers also tend toward seasonality, but to a somewhat lesser degree. The seasonal production patterns are highly variable, affected by the work demands of alternate occupations, purchasing patterns of primary manufacturers, and the influence of weather on logging conditions. 'With the exception of sawlog producers, timber-products producers nearly always use at least one part-time or full-time employee. Posts, poles and piling producers have an average of one employee; in Michigan, the employee is usually seasonal; in Missouri and.Illinois, he is usually full-time. Cooperage producers tend toward one full-time employee. M05t small pulpwood producers have one employee either part-time or full-time. Large pulpwood 90 TABLE 33--Producers classed as full-time or part-time and principal alternate occupations of part-time producers in the North Central region, by major product, 1959 and 1960 ‘Posts, poles & All Occupation Sawlog Pulpwood Veneer piling Cooperage _products (number of producerS) Full-time producers 1&2 80 25 13 2h 28h Part-time producers: Sawmill 12 23 L11 18 28 122 operators Farmers 111 50 2h 15 18 218 Other occupations 75 39 31 22 15 182 Unclassified 7 —- -- -- __ 7 Total part-time 205 112 96 55 61 529 producers 91 producers may have four or five full-time employees. Veneer log producers have an average of more than two full-time employees and one part-time employee. Since a large portion of the veneer-log producers own sawmills, there is an implication here that sawmill workers may also be employed in veneer-log production. Sawlog producers report that they frequently work without any employees. In fact, only 37 percent indicate that they use full- time employees, and h7 Percent part-time employees. Those using employees report an average of two full-time employees and nearly three part-time employees. The extensive one-man operations in sawlog production cannot be visualized as efficient operations. It is difficult to visualize them at all without the assumption that part of the work is subcontracted to individuals who would be regarded as employees in another context. Producers in the North Central region have been in business, on the average, some 10 to 15 years. Product, size of operation, and location strongly influence the number of years in operation. More than 50 percent of the cooperage producers have been in business only one to six years, while about 20 percent have been in business for more than 20 years. Large posts, poles and piling producers have operated for over 20 years, but smaller ones in.Michigan and those in the Central States less than 10 years. Pulpwood operators average 13 years in business in the Lake States, and seven years in the Central States. Veneer-log producers average 15 years in business, and sawlog operators, 12 years. These figures indicate a considerable turn-over in producers (movement to and from production), which may or may not be excessive for any one product. 92 However, considering the added fact of multi—product and/or occupation roles, together with a great diversity in volumes handled (to be discussed.under the next heading), a pattern of inefficiency and non—stability is suggested. Timber Products Handled The volumes of wood involved in the producer function often cannot be accurately ascertained due to difficulties in delineating the producer function. Producers, as defined, are responsible for a (1) total output, (2) volume handled, and (3) volume produced. Volume produced includes only those volumes produced by an agent whose primary function is production and who harvests stumpage to attain his production. Volume handled includes minor volumes acquired by producers by means other than harvesting, but these volumes are sold freely in the open market along with the larger volumes actually harvested by the producer. Total output includes volume handled and the output of producers who are also primary manufacturers Obtained through the harvest of their own or purchased stumpage.h The characteristics of the latter agents are aptly described.under the section on primary manufacturers in accordance with their definition, but a few output figures are relevant in that they reveal more correctly total volumes being harvested by agents interviewed. hThe dual function of producer-dealer did not cause a similar problem as volumes in most cases could be assigned to the appropriate function and the agent was accordingly recorded as one firm with an intended dual function; both functions could be analyzed separately. 93 Producers of posts, poles and piling have an output that closely approximates volume handled. In most cases also, this does not differ appreciably from volume produced. Cooperage mills, however, acquire an average of about 35 percent of their own supply of cooperage bolts. Thus, while producers of cooperage bolts indicate volumes handled closely approximate volumes produced, output in the sample areas would be more than one-third again as large. Similarly, veneer-log producer volumes could.be increased by 2b percent. Pulp mills supply nearly one-third of their own raw material. Producer production of pulpwood in 1959 in the sample areas of the region was some 15,000 cords less than the volume handled, indicating producers do not always concentrate on harvesting, but deal among themselves and contract minor volumes to be harvested. Sawlog producers are not clearly represented under the definitions used in this report. Self-production by sawmills is four times as prevalent as buying from producers. Most sawmillers are, in effect, their own sawlog producers. Many sawmill owners (generally smaller agents) switch back and forth between log production and primary manufacture, depending on whether their sawmill is running or not. V01umes produced almost approximate volumes handled. Timber handled by producers, by product and size class of producer, is shown in Table 3h. To some extent Table 3h does not fully reflect producer size as producers often produce more than one product. In general, however, pulpwood producers concentrate mainly on pulpwood, and sawlog producers (but to a lesser extent) on sawlogs. Veneer log producers are less specialistic. Many produce more than one product, especially sawlogs or cooperage bolts. Cooperage producers 98 TABLE 3h--Volumes of timber products handled by producers in the North Central region, 1959 and 1960 —Product’ Average “‘ (by size class Volume Producers volume of producer) handled reporting per producer (cords) (cords) Pulpwood A 0-100 1,683 33 51 101-500 23,100 75 308 501-1,000 17,556 22 798 13001-21000 87,370 30 1,579 2,000 or more l2h,h80 32 3,890 Total 21h,189 192 1,115 (MBF) (MBF) Sawlogs 1'19 3 3 722 1h]- 26 50-lh9 8,hlh 10h 81 150-h99 18,782 76 2h? 500 or more 13,288 19 699 Total hh,l66 3h0 130 (MBF) (MBF) Veneer logs O-2h 570 50 11 2 5-100 2 , 583 118 511 100 or more 7,371 23 320 Total 10,52h 121 87 (MBF) (MBF) Cooperage bolts ' 0-9 127 31 L 10-39 717 33 22 ' 110-99 ‘ 589 10 59 100 or more 2,820 11 p 256 Total —D;253 85 50 u TABLE 3h--(Continued) 95 Producti— ‘Average (by size class Volume Producers volume _of produc er) handled reporting perjroduc er 7' ‘(piece577 (pieceS) Posts, poles & piling Cedar posts h55,h00 28 16,26h Shortleaf pine posts 678,300 ( (70 680 Shortleaf pine poles 28,500 (10 ( ’ Locust posts b,500 3 1,500 Highway posts 6,000 8 750 Piling 5,100 10 506 Total 1,177,800 59 19,963 — 4 _— 96 are specialists in some cases, but in general they turn out twice as much material in sawlogs, veneer logs, and.cther raw products as they do cooperage bolts. Table 3h Points up the fact that the larger producers in each product category (relatively few in number) account for a large portion of the timber volume handled. The numerous small producers are the uncertain element in production. They expand and contract with changes in the market. In times of expansion, (or even without an expansion should they locate and acquire a "block" of, or nlump sum" title to quality material), they lay down their alternatives and rush to production. In times of contraction these same producers are the first to leave production. Not able to compete with the larger producers, they often return to alternate occupations. Regardless of where the stability initiating actions start,during a contraction the burden is shifted from the stronger to the weaker--in general down the marketing chain, until the small producers and the small forest landowners at the end absorb the shock. Size 23.WC°d Supply Area The extent of a producer's timbershed is determined by a number of interrelated factors. These include: (1) the geographic relation- ship of the producer's home both to suitable stands of timber and available markets; (2) the degree of specialization in occupations, market roles, and species and products handled; (3) the scale of the producer's operations; and (h) the degree of competition encountered for available stumpage. All of these influence the 97 distance producers travel to obtain adequate amounts of raw material. In general, timber producers Operate in small timbersheds. Only the producers who tend to specialize more in cooperageébolt or veneer- log production reach out much more than 25 miles for their timber supply. Large producers show a definite tendency to go out farther than small producers. Figure 10 indicates the similarity between pulpwood, sawlog, and posts, poles and piling producers. Two factors underlie the longer hauls required for veneer logs and cooperage bolts. These products are more valuable per unit of volume and are thus able to support higher transportation costs. Also, they are products where quality is important. Producers, knowing this, have harvested the quality material in the vicinity of their homes and now must travel farther for the more profitable quality material. Producers indicate that the average timbershed has increased slightly in size in the past 10 years. A few, noticeably small producers, state that they have refused to seek timber farther from their homes, and have, in fact, reduced the size of their operations. The influence of lesser competition, as well as better bargaining power with neighbors for stumpage, might be factors which would compensate for restricted access to more and/or quality stumpage. Minimum Logging Chance for Producers Limited information is available to indicate that some producers will only accept logging chances above some minimum size. Insufficient information on veneer-log producers and post, pole and piling producers precludes considering what the minimums are for these products. Clearly defined minimums were obtained for pulpwood operations in 1P Figure 10-_Average radius of producers'supply operations,by product, 1959 I T and 1960 98 J A \ Radius 10 20 0 ho 50 Pulpwood . Miles Sawlogs 'osts, Poles & Piling All Products Cooperage bolts Veneer logs 99 Michigan and in Minnesota. In Michigan, 90 percent of the sampled producers indicate that a logging chance must have five cords to the acre, that the total tract (usually a minimum of hO acres) must have about 160 cords, and that the stumpage value of the pulpwood should be about $250 to justify a pulpwood operation. In Minnesota, 50 percent of the producers sampled indicate that a tract must have at least 80 cords with a delivered market value of about $1,325 to justify pulpwood logging. About 33 percent of the cooperage producers sampled in the Central States indicate that they must have at least 20,000 board feet of sound white oak on a tract before they will consider logging. Some 22 percent also state that the tract must have a value of $950 as stumpage. Sawlog producers in the region also recognize acceptable minimums. About 37 percent indicate that a tract must have close to 2,000 board feet; and some he percent state that the tract must contain 20,000 board feet; and some 17 percent state that the tract must have a minimum stumpage value of $200. A footnote of interest can be added here. From the data supplied on minimum volumes and stumpage values, it can be deduced that producers intended paying about $1.60 per cord for pulpwood stumpage in Michigan, about $h5 per M.bd. ft. for sound white oak cooperage thhber in the Central States, and about $10 per M bd. ft. for sawlog stumpage in the region. 100 Wood Procurement Methods and.Policies Methods of Stumpage Acquisition Over two-thirds of all the producers contacted in the North Central region who purchase stumpage reported that they initiate their contracts with landowners. The remaining, and in many cases, larger producers rely on landowners (both public and private) to initiate some or all of their contracts. For those producers initiating their contracts, it was found that most of them are active in seeking out suitable stands of timber. These producers are continually "scouting," and when a tract is located, the owner is contacted personally concerning an offer to purchase. Only a few of the producers use mail, newspaper advertising, or a third party in locating suitable stumpage. Sawlog producers, in particular, follow the personal contact method. Number of contracts per year varies both by main product produced and by geographic location. Veneer log producers average about three contracts per year in the Lake States, about 15 in the eastern Central States, and nearly to in the western Central States. Many of the latter are small producers who average less than one thousand board feet per contract. Lake States pulpwood producers producing less than 1,000 cords per year average about three contracts; those producing over 1,000 cords average six contracts. In the Central States, regardless of size, pulpwood producers average two or three stumpage purchases a year. Sawlog producers vary widely. About 28 percent make only one contract per year; 57 percent make two to 10 contracts per year; 15 percent make more than 10 contracts per year. 101 The average for all sawlog producers is seven contracts. Posts, poles and piling producers vary widely by size class and geographic area. Cooperage producers tend to make numerous agreements for fairly small volumes; they average lh contracts per year. Stumpage contracts are usually negotiated from a few days to one or two years in advance of harvesting operations. In general, larger operators tend to negotiate for stumpage well in advance of harvesting operatinns; smaller operators often delay negotiations until a few weeks before they intend to begin harvesting. Large pulpwood operators in the Lake States usually negotiate for stumpage six to 18 months in advance, and some of the larger firms buy tracts large enough to meet requirements for two or more years. Smaller pulpwood producers and those in the Central States usually negotiate less than four months in advance of harvesting. Sawlog producers in the North Central region negotiate from a few days to a year before harvesting. About 30 percent negotiate from one day to one week in advance, hO percent from two weeks to 10 weeks, 19 percent frdm 11 to 25 weeks, nine percent from 26 weeks to one year, and two percent over one year in advance of logging. About half of the pulpwood producers and a fourth of the sawlog producers purchase stumpage only if they have a market or a contract for the sale of their product. 0n the other hand, 10 percent of the sawlog producers interviewed indicated that their stumpage purchases in 1960 were not specifically for sawlogs. This fact supports the hypothesis that many producers reject specialization and tend to produce whatever timber products appear to be profitable. 102 Purchase Contracts Producers purchase stumpage from public lands under written contract as required by public landowners. However, most of the timber cut in the North Central regioncomes from private land where oral contracts are used as widely as written contracts. Oral contracts generally favor the producer. They allow him wide leeway in his harvesting method, choice of timber, and method of payment. If the timber operator considers the stumpage a bargain, and if he has sufficient capital, he will, in many cases, purchase merchantable timber on the tract for a cash lump sum paid in advance. This is often attractive to the landowner, and it assures the producer of a good supply of timber usually at a very reasonable price. If the value of the stumpage is more open to question, and especially if the producer is low on capital, payment may be made to the landowner on the basis of a mill scale after the producer has harvested and sold the timber. 'In some cases a combination of the two methods mentioned is used. dwritten contracts with public landowners merit little discussion here. They are formal, and consistent by agency. They protect the interests of the public landowner and offer timber (generally on some sort of competitive basis) for sale on a reasonably equitable basis for both landowner and purchaser. written contracts for the purchase of private timber do not exhibit the consistency and formality of public contracts. In most cases, their common characteristic is that they are a bill of sale tendered the landowner for his stumpage by a producer, primary 103 manufacturer, or other agent. The main purpose of the contract is, usually, to guarantee that the landowner does not default on a worthwhile tract of timber. About 66 percent of the stumpage purchased by Lake States pulpwood producers from private landowners is obtained under written contract. Some 55 percent of the stumpage purchased by cooperage producers, and about 27 percent of the stumpage purchased by sawlog producers are purchased under written contract with private landowners. Veneer log and post, pole and piling producers also make frequent use of written contracts with private landowners. In general, written contracts refer to "all merchantable" or "all marketable" timber on the tract. Frequently, species and amount of timber are not mentioned. This allows the producer broad leeway in that he can cut any timber he considers marketable. Specialized producers may be more specific. Many cooperage producers, for example, indicate they will out only merchantable stave bolt material from trees in the white oak group. Few producers specify how much they will cut. In most cases less than 10 percent indicate any contract limitations on cutting. Size of timber is usually not mentioned by pulpwood producers, but cooperage producers frequently indicate a minimum stump diameter of 1h to 16 inches. About 70 percent of the sawlog producers refer to some minimum stump diameter in the contract. "Good" or "sound" quality timber is frequently written into contracts by cooperage specialists, but such a reference is not used by most other producers. Time or period of harvest is, for the most part, a feature of contracts; in most cases, it is more than six months and, not infrequently, it is listed 10h as one or more years. Method of payment is almost always a feature of the contract. Three methods are notable. The first, applying to about 35 percent of the contracts, is lump-sum payment in advance of harvesting. The second, applying to some 55 percent of the contracts, is payment on a per unit of volume measure (M bd. ft., cord, etc.), with measurement made after harvest by the producer's buyer. The third method is a combination of the other two. Logging provisions appear in about 50 percent of all producer- landowner contracts. The remaining 50 percent of the contracts do not specify any logging provisions, and.the producer is free to harvest in any manner he sees fit. His conscience and his standing in the community appear to be the only checks which would promote his using approved logging practices. The situation becomes even more complex in that about one-third of the producers harvesting under a contract without logging provisions state that they would not accept any logging limitations even at a landowner's insistence, The lack of market power on the part of landowners is further pointed up by the fact that in nearly all cases where contracts contain logging provisions, the provisions are those selected by producers. Logging provisions, when stated, usually call for the producer to do some of the following: (1) log only in good weather; (2) clear or remove slash; (3) repair and/or be responsible for the maintenance of fences, gates, roads, and waterways, etc.; (h) agree to the location of access roads; and (5) promise "no damage" to the property. Fewer than five percent of all the producers interviewed indicate that they have any responsibility for young growing stock during logging operations, and more than 85 percent state that they would not assume any responsibility 105 for the care of young growing stock, even at a landowner's insistence. Evidence of concern for maintaining or increasing the pro- ductivity of privately owned tracts, harvested either under written or oral contract, is almost totally lacking. Producers are not interested in any concern the landowner may have in silviculture or forest manage- ment, and in fact, oppose such a concern if it imposes any restrictions on their methods of operation. Subcontracting of Logging and Hauling Operations Producer subcontracting of both logging and hauling operations often occurs in the North Central region. It is more prevalent among the year-round producers harvesting large tracts and handling two or more products than among small seasonal producers, although small producers often make use of a part~time contract helper. Some eight to hO percent of sampled pulpwood producers, depending on geographic area, subcontracted part or all of their logging. Similarly, some 10 to 60 percent subcontracted for hauling operations. About l9 percent of the sawlog producers interviewed subcontract logging, and about 17 percent, hauling. For veneer the figures were 1h percent and 19 percent, respectively; for cooperage, 17 percent and 20 percent. About one- third of the cedar post producers in.Michigan and Wisconsin subcontract some or all of their logging, but subcontracting of hauling operations is not common. Producers of posts in Ohio, Illinois, and.Missouri do little subcontracting of logging or hauling. Subcontracting is often adopted'by producers to avoid the financial outlays and employee responsibilities involved in maintaining a logging crew or transportation equipment. Many producers indicate that sub- 106 contracting is "cheaper." Others believe that their time is more valuable for other purposes. Sales 2f Timber The output of timber producers, depending on products produced, moves to market in widely varying patterns. Cedar posts in the Lake States are sold mainly to intermediate agents, but considerable numbers are also sold to manufacturers, retailers, and consumers. Pine posts and poles in.Missouri and Illinois move directly to treating plants, bypassing intermediate market agents. In Ohio locust fence posts are often sold directly to truckers who combine transportation with an intermediate market agent function. Pine and oak highway posts are sold directly to treating plants. Cooperage bolts in the Central States are nearly always delivered and sold directly to the primary manufacturers--in this case stave and heading mills. Veneer log output of producers usually goes directly to the veneer mill. However, veneer mills indicate about 2b percent of their supply is obtained from their own logging operations, and about 16 percent from intermediate agents. The intermediate agents are saw- millers who sort out high grade logs for sale to veneer mills. Pulpwood producers sell 83 percent of their output directly to primary manufacturers and 17 percent to intermediate market agents. Delivery is nearly always to the mill or f.o.b. rail siding. Sawlog producers invariably sell their sawlogs directly to a sawmill. Posts, poles and piling producers selling directly to a primary Ix 107 manufacturer usually sell to a single firm. Cooperage producers also tend to concentrate on supplying only one stave and/or heading mill. Veneer log producers, on the other hand, indicate more competition for their product. They sell to an average of three mills each, depending on the price received. PulpWood producers in the Central States tend to sell to only one pulp mill or dealer. In the Lake States, however, as a result of varying species require- ments by mills, producers tend to sell to several pulp mills or dealers. Half the sawlog producers in the region limit their sales to a single sawmill; the other half sell to two, three, four, five or even more sawmills. Producers, in general, report no difficulty in obtaining price information. They indicate that mill- and dealer—offered prices are well-known to them. Rarely does the producer exert any upward market power in the form of price negotiation. The producer, however, does exert market power downward to the private forest landowner. The landowner frequently accepts the producer's offered price. Estimating gross sales value of producers' timber products is exceedingly complex. Most producers do not keep accurate records; the records obtained from interviews were fragmentary. Producers interviewed primarily for cooperage timber production indicate that their average gross sales value of cooperage timber is $3,h00; their average gross sales value for all timber products is $10,800. Veneer log producers in the region indicate an average gross sales value for all timber products between $13,000 and $16,000. Unfortunately, a gross sales value for veneer logs alone could not be isolated. 108 Many pulpwood producers concentrate on pulpwood (Table 35). Of the 177 producers giving gross sales information, hS percent indicate they produce pulpwood almost exclusively. Non-specialist pulpwood producers, while producing other products and having other functions (i.e., dealer in pulpwood or other products, and sawmill operators) tend to be highly dependent on pulpwood. Specialist pulpwood producers average $lh,h00 gross income from pulpwood, $25,300 from all occupatinns. Non-specialist pulpwood producers average some $12,000 from pulpwood production, $8,000 from other timber production, and $31,000 from all occupations. Sawlog producers report an average gross sales for sawlogs of $h,h69 (Table 36). Large Lake States producers deal in larger volumes with bigger gross sales values than large producers in the other regions. In general, large producers receive less per thousand bd. ft. than smaller producers. Sufficient information was not available for sawlog producers to accurately indicate gross sales values of other timber products produced. Considering all timber-products producers, it is obvious that there is a great size range with a consequent range in gross sales value (Table 37). Large producers, relatively few in number, produce large volumes and have large gross sales values, and a far greater number of smaller producers produce small volumes and have very small gross sales values. Many of the small producers interviewed are actually contractors or loggers-—they cut timber, sometimes transport it, even sell it-- but the buying and'business details and, frequently, the selling are 109 TABLE 35--Income data for pulpwood producers in the North Central region, 1959 Specialist pulpwood producers NMber reporting 00.00.000.000.00000000000000.0000 82 Average volume in COI‘dS 00.000000000000000.00000000 1,095 Average gross receipts coocoo-00000000000000.0000. $111,1100 Average percent of gross income represented by plllpWOOd prOdUCtion ooooooooooooooooooocoooocoo 57 Average total gross income from all sources ....... $25,300 Non-specialist pulpwood producers Number reporting ................................ 95 Average volume of pulpwood in cords ................ 932 Average volume of other timber in.M bd. ft.(a) ..... 157 Average gross receipts from pulpwood ............. $12,385 Average gross receipts from other timber .......... $ 8,355 Average gross receipts from all products(b) ......... $20,7h0 Average percent of gross income represented by timber production ooocoooooo00000000000000...oco 6? Average total gross income from all sources ......... $31,000 (a)Not including posts, poles, and piling. (b)Includes posts, poles and piling, firewood, and miscellaneous products. I O O O I V D O 9 Q . O I I O O t a s‘ o z a ) o v o A O I O ’1 110 TABLE 36-«Average volume and gross sales value of sawlogs sold by sawlog producers, by region and size class, 1960 Region and Average ‘rlverage Average size class Number of volume gross gross value in producers per ovalue per per thousand bd.ft. reporting producer producer thousand'bd.ft. (thousand’ (dollars) (dallars) bd. ft.) Lake States 1+L9 53 20.5 786 38 So-1h9 39 81.2 3,252 to 150-899 2h 255.6 9,125 36 500 or more 11 793.9 26,537 33 Total 127 150.5 5,350 36 East Central 50-lh9 32 88.8 3,308 37 150-b99 23 255.6 9,927 39 500 or more 3 6h6.7 lh,h58 22 Total 107 110.6 3,896 35 West Central SO-lh9 27 79.6 2,755 35 150-h99 22 268.7 7,681 29 500 or more h 738.3 1h,525 20 Total 82 lhl.l 3,855 27 All Producers 316 l3h.6 h,h69 33 111 TABLE 37-eAverage gross sales values of all timber products sold by producers, by size of producer, 1959 and 1960 Average ‘AVerage Size class Average percent estimated of Number gross sales of gross total gross producers(a) reporting value income income (dollars) '7' _'——"(dollarsffi Small producer 15h 3,77h 37 10,200 Team producer 16 6,567 38 17,300 Medium producer h9 15,637 b9 31,900 Larger producer 1? h5,62l bl 111,270 All producers 236 9,hh3 hO 23,600 *W 1 —-————‘___— (a)Description of size classes: Small producer-eA producer who either works by himself, or has one and sometimes’two part-time helpers, but rarely has a full—time helper-~even a family member. This producer nearly always has an alternate occupation. Team.producer-eA producer who acknowledges that his entire production is nearly always due to two men working as a team, without outside help. This is usually a partnership, or two brothers, or a father and son combination. These two men often do not report alternate occupations, but sometimes they participate part-time in farming. Medium producer-«A producer who has at least one permanent helper or contractor and at least one or two part-time helpers and, if no permanent helpers, at least four to six part-time helpers. He may have an alternate occupation; frequently a dealer or sawmill function. Larger prgducer-eA producer who has more than one permanent employee or contractor and several part-time employees or contractors. He often has an alternate and/or allied occupation in which the employee participates (e.g., sawmill, dealership). 112 arranged by a larger producer with whom they have some kind of an agreement. The small contractors often consider themselves producers, and not employees. Thus, no employer-employee relationship exists with any legal or social responsibilities. These small contractors perform many, if not nearly all, of the functions of a producer, but they are not really producers, or for that matter, employees. Perhaps the best description would be contractors by arrangement, with the latter meaning that the function of decision making and/or compensation is largely controlled by another party. These men work seasonally or part-time and produce small volumes of. timber. While this system could have considerable merit if executed efficiently and equitably, it could also, under conditions of inefficiency and exploitation, especially with high rural seasonal unemployment, amount to nothing more than a portion of the marketing system controlling a source of cheap labor. Deliveries of timber products and the timing of deliveries are dependent on several factors. Pulpwood has been adequately covered in a previous report, but one or two points are notable. Deliveries are not uniform even by full-time producers, and part-time producers are almost invariably seasonal. Deliveries are at a maximum during the winter and reach a low by April or May. Deliveries by producers are dependent on weather and road conditions, on other work alternatives, and on the availability of mill purchase contracts. Post, pole and piling producers in the Lake States indicate that sales usually follow logging and are concentrated in the late winter and early spring. Sales in the Central States are more scattered throughout the year, and deliveries often coincide with decreased 113 activity in alternate occupations. Cooperage timber deliveries do not show a regional trend. Stumpage availability, alternate employment, and weather conditions peculiar to an individual state or area account for deliveries at various times of the year. Veneer log production in the Lake States tends to be somewhat seasonal with deliveries to the veneer mills reaching a peak after the winter logging season. Deliveries in the Central States tend to be more scattered throughout the entire year. Sawlog producers report a general situation comparable to veneer log producers. However, besides reporting that the timing of their deliveries are dependent upon weather and logging conditions, and on the demands of other businesses, they also report that deliveries are made at their convenience and when enough time has elapsed to accumulate sufficient volumes for efficient hauling. Nearly 80 percent of the producers report that timing of deliveries is not required by their product buyers. INTERMEDIATE MARKET AGENTS Information concerning agents in the North Central region who act as middlemen between the producer and the primary manufacturer of raw forest products is limited. Accurate description of this segment of the marketing system is difficult; it is limited mainly to those agents who prominently deal in a specific product. In the sample of 152 intermediate agents, 7h.handle one product, 68 handle two or more products, and ten cannot be clearly classified by product.5 The most commen intermediate market agent is the pulp- wood dealer; nearly one-third of the agents interviewed deal exclusively in this product. Pulpwood dealers in the North Central region have been described on a regional basis by Manthy and James (3h) and specifically for Michigan, by Carrothers (3). Intermediate agents are responsible for handling a minor volume of posts produced in the region, and an adaptive intermediate agent function has been assumed by many of the region's sawmills in that they handle or sort and re—sell high quality sawlogs as veneer logs and/or cooperage bolts. Intermediate agent functions are of very minor significance for sawlogs. Pulpwood Dealers Two types of dealers are recognizable in the North Central region --agent middlemen and merchant middlemen. The former are actually commission representatives of pulp mills and do not take title to the 5See page 8, Table 2, for sample breakdown. 11h 115 wood. They receive from $0.50 to $1.50 per cord for services rendered to the pulp mill. These services can be, for example, any or all of the following: organizing numerous producers to supply the mill, aiding producers to get into production by financial assistance, timing the flow of wood from producers to the mill, locating timber supply, and relieving the mill of the costs and responsibilities of direct procurement. The merchant middleman takes title to the wood, He is not an agent of the pulpmill. His profits are obtained from the margin between his buying price from producers and his selling price to the mill. Pulpmills consider him to be a large producer and not a dealer. Timber Handled Pulpwood dealers in the Central States were found to be relatively unimportant, except in Ohio. The eight dealers interviewed in Ohio handle 20 percent of the pulpwood marketed by Ohio producers. Dealers in the Lake States handle large volumes: 29 Michigan dealers handle 17 percent of the pulpwood marketed by producers in Michigan's Lower Peninsula; 31 Wisconsin dealers handle 26 percent of the pulpwood marketed by producers in Wisconsin; and lb.Minnesota dealers handle 15 percent of the pulpwood marketed by producers in Minnesota. Pulpwood dealers tend to specialize; 5h of the 82 dealers interviewed concentrate specifically on pulpwood. The remaining 28 also deal in posts, sawlogs, veneer logs, or cooperage bolts. About to percent of the dealers interviewed are also pulpwood producers. The latter group tend to be the smaller dealers; in most cases, they produce more pulpwood themselves than they purchase as intermediate ag ents o 116 Characteristics of Dealers In the North Central region about 60 percent of the dealers sampled were merchant middlemen. However, only in Lower Michigan do these merchant middlemen handle a substantial volume of the pulpwood moving through dealer channels. Merchant middlemen are usually responsible for smaller volumes than agent middlemen and frequently are also part—time producers. This might very well explain, in part, a lack of recognition by many pulpmills. While many merchant middle- men and especially merchant middlemen-producers (especially those handling smaller volumes) are only recognized by the mills as producers and not middlemen, several merchant middlemen in Lower Michigan who handle large volumes are recognized and used fairly extensively as a source of supply. Merchant middlemen do not seem to be increasing in their role-~apparently any increases in supply are being filled by direct producer-to-mill deliveries. In general, lack of increases in dealer volumes throughout the region, support the contention that the dealer function is not increasing in significance. Increased wood requirements of the pulpmills are being obtained from independent producers or company logging operations. (Ohio appears to be an exception in that some large dealers have moved into operation in the last five years and are actively supplying pulpmills.) Possible explanations for decreasing significance of the dealer system should be noted. Evidently, increased availability of local wood that can be trucked to the mill favors producers. Dealers were favored when shipping distances to the mill were longer and when rail transportation was 117 used more extensively. Also important is the fact that by moving away from agent middlemen,the pulpmill saves $0.50 to $1.50 per cord in dealer bonuses. Failure to recognize merchant middlemen, along with the absence of agent middlemen, deflates the market power of the mill suppliers. More and smaller suppliers give the mill less dependency on any one supplying individual. This, in turn, relieves any pressure to increase price through control over major supply volumes._ Dealers range in size from 200 cords per year to over 100,000 cords per year, but over three-fourths of the dealers sampled handle less than 5,000 cords per year. In general, larger dealers are apt to be full-time dealers, whereas small dealers tend to be part-time dealers. Dealers handling less than 5,000 cords, and especially those handling less than 1,000 cords per year, usually have an alternate occupation. This is shown in Table 38. Many of them have two or more alternate occupations, one of which is frequently timber production. While dealers often tend to have alternate occupations, in respect to their handling of raw forest products, they tend to specialize rather than diversify. Table 39 indicates that almost two-thirds of the dealers sampled handle only pulpwood. The remaining one-third are divided equally into those handling one additional product and those handling two or more products. Dealers handling two other products frequently handle larger volumes in at least one of the other products than in pulpwood. Aspen is the principal species handled.in Michigan and Wisconsin, although pine and spruce-fir are also handled in considerable volume. Minnesota dealers handle three or more species and do not tend to specialize. 118 TABLE 38--Occupations and size class of sampled pulpwood dealers, 1959 Size class in cords handled ’l,000 or 1:001- 5:001- Over Occupation less 5,000 10,000 10,000 (number of dealers) Full-Time dealers Regular 2 l2 6 6 Cooperative Assoc. 1 Total 2 12 6 7 Part-Time dealers More than one other occupation 1h 5 _ _ Sawmill operator 2 3 1 1 Store or service station 1 - - 3 Farmer 2 1 _ l wage earner — 1 - _ Timber producer 7 S _ _ Other occupation 2 S 1 _ Total 28 21 2 5 All Dealers 30 32 8 l2 119 TABLE 39--Products handled and.size class of sampled pulpwood dealers, 1959 Size class in cords handled 13000 or 1,001- 5,001- Over _rProducts handled less 5,000 10,000 10,000 (number of dealers)7 One additional product Sawlogs h - l - Veneer logs l 1 - l Cooperage bolts - l - - Posts, poles & piling 2 2 - - Other 1 - _ _ Total 8 A l l O\ 42" I E‘ Two or more products Pulpwood only 16 2h 7 7 All products 30 33 8 12 — —__ ————__. .._— __ 120 Ohio dealers specialize in mixed hardwoods. Sizes of wood supply areas are shown in Figure 11. As might be expected, dealers handling larger volumes reach out farther for their supply. Small dealers (in many cases dealer-producers) only reach out about 30 miles, whereas large dealers (frequently specialists) reach out an average 90 miles for their supply. The regional average supply radius for dealers is h8 miles. Some slight state variation is noticeable. Minnesota dealers, regardless of size, generally reach out farther than dealers in Michigan and Wisconsin. Size seems to be only of minor importance in Ohio; the average radius is some 30 to to miles regardless of volumes handled. Wood procurement methods and policies Dealers Obtain their wood from one supplier or as many as two hundred. In.Michigan, dealers average 28 suppliers; in Wisconsin, h8; in Minnesota, 118; and in Ohio, 70. In Michigan large dealers are fairly active in seeking out and contacting wood suppliers. Smaller dealers and dealers in the other states are not as active in seeking out suppliers; more frequently contact is made by the producer. Most dealers have either informal or written purchase agreements with their suppliers. Dealers in Wisconsin purchase 86 percent of their volume under written agreement. In Minnesota the corresponding figure is 22 percent, and in Michigan, one percent. Remaining volumes are purchased under oral agreements. Looseness in purchase agreements is inherent in dealer operations and functions, and most dealers do not consider agreements legally enforceable. ,MOSt dealers will not handle pulpwood unless they have 121 Figure ll-eAverage radius of wood supply area of sampled dealers, by size class of operation,8 1959. Large Dealers ——-0- Medium Large Dealers All Dealers Small Dealers Radius A l I 70 8O 9 Miles aSmall Dealer - less than 1,000 cords handled. Medium Dealer - 13001-5,OOO cords handled. Medium Large Dealer - 5,001-10,000 cords handled. Large Dealer - over 10,000 cords handled. 122 a contract for delivery or resale at the time of producer delivery. ‘Written agreements are usually made several months in advance and nearly always more than one month in advance of purchase. Informal agreements are generally made less than one month in advance of purchase. Payment is usually made on the basis of mill scale (per cord or ton) upon receipt of the wood at the mill or railhead. Depending on the type of middleman (agent or merchant) payment may be made at the mill or collected from the merchant middleman. Prices are standardized, and suppliers delivering the same species to the same point generally receive the same price. Some dealers do, however, pay a bonus of from $0.50 to $1.50 for wood hauled from distances greater than 50 miles. Pulpwood in the region can be accepted roadside, at the dealer's or pulp company's yard, or f.o.b. railhead. Roadside acceptance is common in Michigan and with smaller Wisconsin dealers. Railhead delivery is secondary in importance (by percent of volume) in Michigan but account for more than 50 percent of total volume in the remaining states. Delivery to the dealer's yard is fairly common in Minnesota, and to a lesser degree, in Ohio. Only in Wisconsin and to a lesser degree in Ohio (2h percent of the volume and 19 percent, respectively) is direct delivery of the wood to pulpmill widely used. Dealers frequently aid producers. Financial aid, however, is limited in scope.' Most dealers will only offer loanscr prepayments on pulpwood that is cut and ready for delivery. Few dealers offer loans for operating expenses or stumpage purchases. Other types of aid include technical advice, assistance in finding markets for other timber products, and the supplying of producers with price and 123 market information. Deliveries of pulpwood are strongly seasonal. In Minnesota and Wisconsin, peak volumes are delivered from December to early March. Minimum volumes are delivered from late March through June. In Ohio and Michigan, peak volumes are delivered in the summer and early fall, and minimum volumes are delivered from January through April. Dealers in Michigan frequently sell to only one pulp mill. Dealers in the other states more commonly have two or more outlets. Post and Pole Intermediate Agents This section covers cedar posts in Michigan and Wisconsin, pine posts and poles in Missouri, and locust fence posts in Ohio. Timber Handled Dealers in Wisconsin handledan average of over 100,000 posts in 1959, while those in Michigan averaged 31,000. Cedar post dealers handle only minor amounts of other timber products, except for pulpwood. Most cedar post dealers have a primary interest in pulp- wood. In Missouri, dealers in pine posts and poles tend to be specialists. They do not handle large volumes of other products or engage in other businesses. However, most dealers are also major producers of posts and poles. Often, they produce more volume than they handle as dealers. Sampled post dealers in Ohio purchased 12,hOO locust posts from producers in 1959. Posts are accumulated at a sawmill, store, or other place of business during the late winter months for the sale period which begins in April. 12h Characteristics of Dealers Cedar post dealers average 21 years in business and usually handle more pulpwood than posts. They usually operate part-time, handle other timber products, and are often producers of timber products as well. Pine post and pole dealers in Missouri average four years in operation and usually operate full-time; they purchase unpeeled posts and poles and deliver them peeled to treating plants. Locust post handling is a sideline activity of dealers in Ohio whose main occupations are either sawmilling or store operation. Size of WOOd Supply Area Cedar post dealers in Michigan and Wisconsin, regardless of size, have a radius of operations of between 50 to 60 miles. Dealers in pine posts and poles in Missouri have a considerably smaller radius of operations. On the average, they reach out only 22 miles. Locust fence post dealers in Ohio receive their posts locally from producers in their area. Most purchases are made on the spot delivered to their place of business. ‘Wood Procurement Methods and Policies In Michigan and Wisconsin cedar post dealers frequently have an oral agreement with suppliers, usually initiated by the seller. Many purchase posts at their yard with no prior agreement. If delivery is to be made in the future, and especially if advance payment is made, then written contracts are often used. Most posts are purchased delivered at dealers' yards, but some are purchased 125 roadside and f.o.b. railhead. Dealers frequently assist producers with loans. In Missouri pine posts and poles are usually purchased delivered to the dealer under loose oral agreements. Most transactions are "on-the-spot" purchases resulting from offers to buy. Loans and other forms of assistance to producers are made only occasionally. Dealers in locust fence posts, similarly, purchase posts "on-the~spot" delivered. Generally, delivery is made without prior agreement. Sales of Posts and Poles Cedar posts are accumulated during late winter, and sales reach a peak in the spring-~inventories reach a minimum by October. Sales are varied and frequent, and can be to one type of buyer or to several. In Michigan, outlets are frequently retailers or menu- facturers. In Wisconsin, wholesalers are the chief outlet. Smaller firms tend to have local sales, while large firms also supply city or out-of-state outlets. Pine posts and poles are sold year—round in Missouri. However, following producer seasonality, they tend to peak in the spring and fall and reach minimums in mid-winter and mid-summer. Sales are mainly to treating plants in Missouri and adjacent states (especially Illinois); shipping distances average 175 miles. Locust fence post dealers sell their product locally to farmers or to a special intermediate agent, namely, truckers who are roving post buyers. The latter purchase most of the posts and transport them to retailers or consumers in other areas. 126 Sawmills as Veneer Log Intermediate Agents Sawmill owners frequently act as producers and intermediate agents for raw forest products they accumulate with their inputs of sawlogs. Many sawmills indicate it is more profitable to sell high grade logs as veneer logs rather than utilize them in their sawmill operations. In some areas, other products are also handled. Many sawmills in the Central States handle white oak logs for cooperage bolts, and in Wisconsin, many sawmills also handle pulpwood. Occasionally, the marketing of veneer logs, cooperage bolts, or pulpwood takes precedence over sawmilling operations. About one-fourth of the sawmills sampled in this study sold at least some of the logs they had accumulated. The average volume of logs sold per firm in 1960 was slightly in excess of 100 M bd. ft. Sample Size and Timber Handled In the Lake States, Michigan and Minnesota sawmills are not as prominent handlers of veneer logs as Wisconsin sawmills (Table hO). Some 39 percent of the sampled Wisconsin sawmills handled an average of about 31 M bd. ft. of veneer logs in 1960. One-half of these sawmills also handled an average of l,h75 cords of pulpwood. Seven other sampled sawmills in Wisconsin, while not handling veneer logs, handle pulpwood or other products. A large portion of the Central States sawmills deal in veneer logs, especially in the western part of the region. Sawmills in the three eastern Central States (Ohio, Indiana, Illinois) handle greater volumes than mills in the Lake States but lesser volumes than mills 127 TABLE hO--Numbers of sawmills acting as veneer log intermediate agents and average volumes handled, by study area, 1960 _____ —__ —-—-— Average Number Percent of volume Study area of mills state sample handled _: “'II —" ‘I' " " 7' (MEET— Michigmn 10 11 9 ‘Wisconsin 16 39 31(a) Minnesota h 7 -(b) Ohio 2h 36 31 Indiana 16 39 16 Illinois 8 31 31 Iowa 15 60 67(0) Missouri(d) - - — Kansas 18. 61 132 (a)0mits one company handling in excess of 1,000,000 bd. ft. (b)Sample inadequate. (c)0mits one company handling in excess of 1,000,000 bd. ft. (d)No mills recorded as agents in study area. 128 in Iowa and Kansas. Eastern Central States mills handle walnut veneer logs in larger volumes than any other species; white oak veneer logs and cooperage bolts rank next in importance. Nearly 60 percent of the sampled sawmills in Iowa and.Kansas sell veneer logs. They prominently handle walnut. Some sawmills in both states also handle white oak stave and heading material. Some Kansas sawmills sell walnut sawlogs as well as veneer logs. Characteristics of Agents An important question that needs clarification is whether sawmills selling veneer logs are acting in an intermediate agent role or in a producer role. Table hl shows that mills do both, and that in most study areas, the intermediate agent role is somewhat less prominent than the producer role. Logs purchased from producers and resold to veneer mills give rise to an inter- mediate agent function. Veneer logs from owned land, or from sawmill purchased stumpage, whether cut by sawmill employees or contractors, must be viewed as the product of the producer function. Many sawmills in the North Central region, especially those large enough to have substantial volumes in their log yards, have become an important source of veneer logs for the region's veneer mills. In more cases than not, the sawmill does not recognize its suppliers of veneer logs as veneer log producers, and the veneer mills do not recognize the sawmill as any sort of intermediate agent. Sawmills buy sawlogs; the higher grade logs are then sorted out for resale as veneer 10gs. The motive is simply profit. Sawmills sorting out veneer logs indicated on the questionnaires that they do this 129 TABLE hl--Source of logs for sawmills selling veneer grades to veneer mills, by study areas, 1960 ____source Owned Purebased Independent, Study area lands stumpage producers (percent ofwvo1ume) Michigan 0 b8 52 'Wisconsin 20 38 h2 Minnesota(a) — - _ Ohio 9 A9 142 Indiana 9 76 15 Illinois 3 55 142 Iowa 5 52 D3 Missouri(b) - - ' Kansas 7 £8 pg *0 ‘— ——-'- (a)Sample inadequate. (b)No mills recorded as agents in study area. 130 because it is "more profitable" or that the logs had a "higher value" as veneer logs. PRIMARY MANUFACTURERS OF TIMBER PRODUCTS The forest products in the North Central region were discussed on a broad basis in an earlier section. No attempt was made to fully explore characteristics specific to any one type of industry. In the following section, specific characteristics peculiar to each timber- products industry and their relation to the regional framework will be discussed. Pulp and Paper Mills Many of the distinctive characteristics that separate pulp and paper mills from other primary manufacturers are inherent in the physcial size of the processing or productive facilities. Usually, paper or board products as well as pulp manufacture are involved. In the Central States, mills tend to specialize in board products, while Lake States mills tend to specialize in paper products. Lake States mills commonly produce as many as four or five grades of paper. A classification of mills by principal product is shown in Table h2. Pulp and paper mills vary greatly in size (Table h3.) Central States mills are noticeably smaller (averaging 19,000 cords of wood consumption in 1959) than Lake States mills (averaging 66,000 cords of wood consumption in 1959. In the Central States, the principal species used are hardwoods, while in the Lake States, aspen and softwoods form the major raw material inputs (Table hh). Smaller mills in the Lake States indicate a preference for aspen. Larger Inills tend to use more softwoods. 131 132 TABLE h2--Principal products of sampled pulp and paper manufacturers, 1959 Product Michigan Wisconsin Minnesota Central States (number of firms) Pulp and excelsior l h 1 Papers Fine paper 2 1 Tissue 2 5 1 Book paper 1 Other papers 1 l2 2 Paperboard and building board(a) Container board 2 1 2 Other paperboard 1 2 Building paper 3 Building board(b) 2 1 Total 9 2S 6 7 (a)Includes corrugated medium. (b)Includes particle board. 133 TABLE h3--Distribution of sampled pulp and paper mills by size class of mill and study area, 1959 Thousands ofcords purEhased less than 10:0001 50,000’ More than Total _—§£Egy area 10,000 50,900 100,000 100,000 sample (number of miIIs) —’ Michigan 2 3 3 1 9 Wisconsin h h 10 7 25 Minnesota h l 1 6 Lake States 6 11 1h 9 hO Ohio(a) 1 Indiana 1 1 IllinOis l l 2 Iowa 2 2 Missouri 1 1 Central States 2 he 7 North Central . 8 15 1h 9 U7 region (a)Data not reported by mill. 13h TABLE hh--Pulpwood species received at sampled Lake States mills, by study area, 1959 All Species Peeled Rough Pulpwood I(thousand cords) MICI'TIGAN Aspen-Birch 102.1 205.0 307.1 Mixed hardwoods 1.8 27.5 29.3 Spruce-Fir 78.8 - 78.8 Pine 10024 109 09 12003 Total 193.1 3&2.h 535.5 WISCONSIN AspenéBirch 3h8.b 21h.7 563.1 Mixed hardwoods 9.h 158.2 167.6 Spruce-Fir 1h6.2 323.6 b69.8 Pine 37.9 319.0 356.9 Hemlock lh.9 67.2 82.1 Tamarack 1.0 15.5 16.5 Other(a) h8.6 h8.6 Total 557 .8 1,1h6.8 1,7oh.6 MINNESOTA AspenéBirch 160.5 67.7 228.2 Spruce-Fir 1h.0 62.8 76.8 Pine 9.0 58.5 67.5 Other(b) 18.5 18.5 (a)Includes ponderose and lodgepole pine. (b)Species not specified. 135 Transportation Pulpwood, unlike most other raw forest products, is often transported by rail, especially where long hauls are involved. As hauling distances diminish, truck hauling becomes more common. A wide spatial distribution of pulp mills and an abundant wood supply promote truck hauling. On the other hand, concentrations of pulp mills and a relative scarcity of specific species, if not total wood supply, promote the importation of wood by rail from adjacent areas or neighboring regions. In general, rail haul is not used for distances of less than 100 miles. Truck hauls often exceed this distance, but rail haul definitely becomes more prominent with the longer distances. Competition for pulpwood supplies, which is enforced by spatial mill concentration, and individual species requirements, tends to increase the size of procurement territories. Mills in the Lake States, and especially in Wisconsin, fit this situation. These mills often have supply areas 200 to LOO miles from the mill, and in some instances, specific quality or species requirements are met from shipments originating in Canada or western states. Pr ocurement Sy st ems Procurement systems range from dependence on one type of agent source to more complex systems where wood is drawn from a combination of company lands, contract loggers, independent producers, and intermediate agents. The main agent sources of wood in the Lake States are shown by study area and mill size class in Table h5. 136 TABLE h5—eAgent source of wood supply delivered to Lake States pulp mills, by size class of mill, 1959 Study area and Contract 4 All size class cutter PrOducer Dealer agents _ (cordS) ‘(thousand _EordS) Michigan Less than 50,000 57.9 16.7 7u.6 More than 50,000 396.8 6h.l h60.9 Total h5h-7 80.8 535-5 Wisconsin 1,000 "' 50,000 301 69.7 85.0 15708 50,001 - 100,000 205.5 322.8 171.5 699.8 More than 100,000 16h.0 hh5.0 238.0 8A7.0 Total 372.6 837.5 h9u.5 1,70h.6 Minnesota 10,001 - 50,000 32.0 68.1 15.3 ll5.h More than 50,000 31.2 1h0.h 10h.0 275.6 Total 63.2 208.5 119.3 391.0 Lake States Less than 10,000 .6 10.0 16.7 27.3 10,001 - 50,000 3h.5 185.7 100.3 320.5 50,001 - 100,000 205.5 559.6 235.6 1,000.7 More than 100,000 195.2 7hs.h 3A2.0 1,282.6 Total h35.8 1,500.7 69h.6 2,631.1 137 Nearly all mills purchase wood from producers, and in many cases the most popular system involves only one agent--the independent producer. The hO sampled Lake States mills purchased pulpwood from 9,800 producers in 1959. The average purchase per producer was 153 cords in the Lake States (an average of th cords in Michigan, 138 in Wisconsin, and 73 in Minnesota) and 210 cords in the Central States. Producer contracts vary in size, but Michigan mills tend to use fewer and larger contracts. Where producers are an important source, mills frequently supply the agent with financial aids and other Services. Loans and advance" payments are made if the producer has harvested sufficient timber to provide adequate security, or the company may buy stumpage for the producer, deducting the cost from the pricepaid the producer for the delivered wood. Dealers are an important (but seldom exclusive) agent source of pulpwood, especially in the Lake States. Dealer contracts averaged 2,300 cords in 1959. The main responsibilities of the dealer are concentrating the output of a large number of small producers, scheduling deliveries (Which in a sense helps to stabilize supply), and relieving pulp companies of responsibility for Observance of labor laws by producers. Dealers often relieve the mills of the need to supply financial aids and services to producers, but they them- selves often receive loans or prepayments from mills. In many cases dealers receive a commission for services rendered of from $0.50 to $1.50 per cord. A number of mills have lessened their dependence on the dealer procurement system. One reason, at least in theory, is that by direct purchase from producers, pulp companies are better able to regulate 138 the dispersion of logging through an area and, hence, the ability of forests to maintain sustained flows of timber yield. With their own procurement personnel, pulp companies are also able to promote better woodland management by private landowners. An improved forest inventory situation and wider use of local hardwoods have made direct purchase from producers more attractive. Also, improved highway systems and trucking facilities since the early 1950's have made it more economically feasible for producers to transport wood to mills and over much longer distances. Lastly, the use of pulping processes requiring green wood has encouraged company procurement. Inventories have declined in importance and a continuous flow of wood, that is however flexible enough to meet frequent and rapid adjustments, can be maintained by direct contact with many producers rather than a few large dealers. Several mills, particularly larger mills in Wisconsin, use company employees or contract cutters. Rarely do mills rely on this method for more than 25 percent of their supply requirements. Contract cutters relieve the mills of heavy investments in logging equipment and the expenses involved in maintaining logging crews, including workmans' compensation payments. Company logging and, to a lesser degree, contract cutting, can help overcome problems inherent in seasonality of supply. Purchase Agreements 'In general, where keener competition for available supplies of wood exists, the mills are more active in initiating wood purchase agreements. In areas of lesser competition, suppliers 139 usually initiate agreements. Suppliers initiate agreements at two-thirds of the Central States mills and one-half of the Lake States mills. Informal agreements are common. These may be advertisements that the mill is buying upon delivery, oral requests for wood from suppliers, or letters to suppliers stating that the mill needs pulpwood. Most agreements, as indicated by sampled mills, take some written form. These written agreements, however, are not formal in one sense: neither party would consider them legally enforcible. The agreements are formal, however, in the sense that if specified conditions are not met, future transactions would either be altered or curtailed. The more formal purchase agreements usually specify details concerning volumes, price per cord, method and time of payment, specifications for acceptable wood, and method of delivery. Time of delivery, while not highly specific because of producer problems with weather, transportation, and labor, etc., usually refers to a period within which deliveries are to be made. Payment is usually made upon delivery or within two weeks. Bolt lengths and minimum end diameters are frequently specified, and the unit of measure indicated (usually the standard cord, although other volume units are used). A few mills also purchase by weight. Measurement is done by the buyer. Seasonal Deliveries and Storage Deliveries of pulpwood over a yearly period are mainly dependent on weather conditions, the availability of woods labor and what might 1h0 be called traditional "logging season" in an area. In the Central States the logging season is heavily dependent on the availability of off—season farm labor. In the Lake States this is also true, but weather conditions are important. For instance, there is an under- standable preference for logging wet spruce-fir sites in the winter. Local pine and aspen in the Lake States can be logged year round, depending on the availability of labor, but logging falls off in early spring because of wet conditions and highway weight restrictions. In Minnesota and Wisconsin, deliveries to the mills are at a peak in January, February, and.March. They are lowest during April and.May. In Lower Michigan, receipts peak in late summer and are at a minimum from March to early June. In the Central States, there is lesser seasonal variation, but deliveries tend to be greatest during local area off-farming seasons. As insurance against uncertainties in pulpwood deliveries and requirements, most pulp mills stock several months' supply of wood. Mills having a technological preference for green wood tend to carry smaller inventories; mills using dry, aged wood, carry larger inventories--a few up to a year's supply. On the average, mills carry a four to six months' supply as inventory. Veneer Mills The veneer industry in the North Central region manufactures two types of hardwood veneer. First, and foremost, a major segment of the industry produces quality veneer. This material itself, or in the form of hardwood plywood, is used in the manufacture of furniture and fixtures, wall and door panels, radio and television cabinets, small 1A1 boats, etc. The furniture and fixture industry is, by far, the largest user of quality veneer. Secondly, a lower-valued product, container veneer, is used in the manufacture of fruit and cheese baskets and boxes, and similar containers. 0f the 117 veneer and plywood plants in the North Central region, 8h produce face or commercial veneer (quality veneer) and plywood, and 33 produce container veneers and/or containers. The veneer and plywood mills shipped over one—quarter of the United States production in 1958, valued at over 75 million dollars; the container veneer and container mills shipped slightly over six million dollars worth of products. Characteristics of Veneer Mills Of the 3b veneer mills sampled, only five quality veneer mills and one container veneer mill came into operation within the last 10 years. Most of the mills sampled are older, long-established firms. The average length of operation for established mills is 28 years for quality veneer, and 33 years for container veneer. As indicated by number of employees and inputs of raw material, veneer mills comprise an industry of many small firms in comparison to pulp and paper mills. However, they may be considered relatively large in comparison to the majority of the region's sawmills and cooperage stock mills. Five of the sampled mills had over three million board feet of log receipts in 1959, and 1h had receipts between one and three million board feet. Table A6 indicates that "small" and "medium” sized mills are more numerous than larger mills. Nearlyone-half of the mills employ between 50 and 100 employees 1&2 TABLE h6-—Sampled veneer mills by size class of mill, by sub-region, 1960 Size class in terms of log receipts Type of Below 1,000- Over Sub—region veneer 1,000 3,900 3,000 Unknpwn Total (thousafidwsd. It.) Lake States Quality 2 7 3 - 12 Container h - - 1 5 Total 6 7 3 l 11 East Central Quality 1 6 1 1 9 ’ Container 1 l l - 3 Total 2 7 2 l 12 'West Central Quality 2 - - 2)- Container 2 - _ (1 2)1 Total 5, _ _ 1 5 North Central 12 lb 5 3 3b region A; _—L ——— —_ 1A3 (Table A7). Quality veneer mills average 82 persons, while container veneer mills average 28 persons. While veneer mills occur in all states within the region, the spatial distribution is noteworthy in specific areas. 'Wisconsin is the leading state in the nation in the manufacture of hardwood plywood and accounts for over one-half of the regional production. Indiana, on the other hand, leads both the region and the nation in the production of hardwood veneer. Ohio accounts for one-third of the regional output of container veneer. Veneer mills in the northern portion of the region rely mainly on northern hardwoods. The major species, in order of importance, are birch, hard maple, elm, basswood, and oak. In the eastern sub—region, walnut, cottonwood and white oak are favored. In the western sub-region, primary interest is centered on walnut. Mills Obtain about 90 percent of their log supply from within the region. The remaining 10 percent is imported, largely from Kentucky and Canada. Northern mills concentrate heavily on hardwood plywood and flush doors; eastern mills mostly supply hardwood veneer to the furniture industry. They consume a lesser volume of logs, but because the chief species is black walnut and mainly high quality veneer (i.e., a high percentage of face veneer) the value of products produced is higher. Much of the black walnut used is imported from other areas, chiefly Kentucky and the western sector of the region. Quality veneer mills sampled in Wisconsin and Indiana, the two states responsible for most of the region's production, indicate that they operated at an average of 89 percent of full capacity in 1960. Container veneer mills averaged 69 percent of full capacity in the in TABLE h7--Samp1ed veneer mills by number of employees, by sub-region, 1960 Type of Number of employees Sub-region veneer 1-19 20-h9 50-99 100-1h9 150+ Total Lake States Quality - l h 5 2 l2 Container 3 — 2 - _ 5 Total 3 1 6 5 2 17 East Central Quality - - 6 2 1 9 Container - - 2 l - 3 Total - - 8 3 1 12 West Central Quality 1 l l (1 - - 3( Container — l ( - - 1(1 Total 1 2 2 - - 5 North Central A 3 l6 8 3 3b region 185 Lake States and 63 percent in the Central States. Transportation Most aspects of transporting veneer logs were covered adequately in the chapter "Patterns of Raw Material Assembly in the WOOd Products Industry." It should be noted that high quality veneer logs are one of the few products frequently transported by rail, a consequence of the relatively long hauls required. Here is a classic example of a quality differentiated raw material, which can bear the cost of extensive transportation because of its relative scarcity in specific areas and because it comprises a relatively low percentage of the value in the finished or manufactured product. Quality black walnut, especially from the western part of the region, is a striking case in point. Logs of marginal species or value, especially those going to smaller local mills, and logs for container veneer, are transported much shorter distances, almost invariably by thk0 Procurement Systems Veneer mills obtain their inputs of logs from three major sources. Independent producers are by far the most important source’ but substantial volumes of lOgs for quality veneer mills are either self-produced or purchased from dealers. There may be some error in reported sources since some mills do not recognize distinctions between dealers and producers. Nearly half of the agents inter- viewed as veneer log producers own sawmills. This presents the possibility that some mills purchased logs and resorted quality logs 116 for resale to veneer mills. Agent sources of logs, as reported by veneer mills, are summarized in Table A8. Several mills indicate the proportion of logs received from producers has been increasing over the past several years. Other mills report they have turned more toward self-production and, in some cases, to dealers. There is no clear-cut trend to indicate which, if any, agent source will become more prominent in the future. Landownership sources of logs delivered to veneer mills are recorded in Table 89. Farm lands are the prime source of veneer logs, but other classes of ownership assume greater importance in the case of quality veneer logs than for container veneer logs. The indication is that all classes of landownership must be tapped to adequately supply quality veneer log requirements. Veneer mills indicate that they assist their supplying agents only to a very limited extent with financial and.business aids. The only significant aid noted is assistance by quality veneer mills to producers in the purchase of stumpage. Some mills will advance funds for stumpage provided the producer contracts to deliver the logs to the mill and provided that the amount advanced is only a minor proportion of the value of the delivered logs. Five sampled mills state this is common practice; 10 others state the practice is acceptable but not very frequent. Similar aid is extended to dealers, but to a lesser extent. Purchase Agreements Sampled veneer mills in the North Central region purchase about 1E7 TABLE h8-9Agent source of veneer logs and number of suppliers reported by sampled veneer mills in the North Central region, 1960 Type of Agent Type of Veneer Producer Dealer SelfLProduced(a)I Quality Veneer Mills: Percent of receipts 63 18 19 Number of suppliers 53 21 -- Container Veneer Mills: Percent of receipts 96 0 h Number of suppliers 30 0 ~- (a)Either from owned lands or purchased stumpage, usually by mill employees, but occasionally by jobbers under contract. 1&8 TABLE h9--Volume of logs delivered to veneer mills in the North Central region from different landownership sources, 1960 __5 Container Quality Source Veneer mills Veneer mills (percent of volume) Own land 0 7 Farm land 76 51 Other private ll 28 National forest 2 3 State forest 5 2 Other public 6 3 Unknown 0 6 W Total 100 100 1N9 30 percent of their log supplies on a no prior agreement basis. These logs are simply purchased when an agent appears at the mill with them. Another hO percent of the sampled log receipts are purchased under oral agreement, and the remaining 30 percent, under some type of written agreement. Many of the written agreements could be considered formal in that they outline several conditions to which both parties agree. Container veneer mills and medium and small mills rarely use written contracts; they rely heavily on oral contracts. Large mills tend to use written contracts or rely on prior agreement. All contracts cover some type of specifications, and there is no appreciable difference between written and oral specifications. All contracts specify species or species group. In most cases, the amount of timber specified is simply an estimate of what the agent has to offer. Size of wood is usually stated in terms of minimum acceptable top log diameters. Quality is usually on the basis of mill grade or some standardized grading system. Time of delivery is usually specified-~a compromise between mill needs and agent ability to deliver within a specified.time. Payment is usually called for upon delivery or within one week, and usually on the basis of mill scale in thousands of bd. ft. by whatever type of log rule the mill uses. No conditions are placed by the mills on the agents' methods of harvesting, except for one mill which cautions against destructive logging practices. In general, contracts give maximum protection to the mill and a minimum to the seller. Stumpage purchase contracts by sampled veneer mills usually indicate the species to be cut. The amount of timber is not clearly 150 noted in many cases. Size of timber is also not clearly noted except that several mills stipulate a minimum d(b.h. The quality of timber in most cases is understood to be "veneer grade." Time of harvest varies from a few months to several years. Method of payment and time and'basis of measurement are not noted in many cases. However, mills indicate about one-half of the agreements are on a lump-sum basis paid in advance, while the remainder are cash or check payments on the basis of mill scale when the wood reaches the mill yard. Five mills indicate they operate under harvesting stipulations, notably, time limitations and promises of no damage to property. Two of these mills indicate they would accept operating under minimum "good forestry practices" if the owner insisted. Five mills report there are no harvesting stipulations they would accept. Sampled mills report that, on the average, 50 percent of their log receipts are obtained on the basis of mill initiative, and 50 percent through the initiative of agents. On a volume basis, slightly more than half was Obtained by mill initiative as several large mills favored this method. Container veneer mills almost invariably depend on supplying agents to take the initiative. Seasonal Deliveries and Storage Veneer mills in the region do not usually receive a continuous flow of raw material inputs. In general, receipts are lowest during July and.August. Several mills prefer a minimum of inventory during the summer months because of problems with end-drying or weathering and with "spoilage" in general. Receipts increase in September and reach a peak in the months of December, January and February. By March, 151 receipts begin to decline, and.nsually continue to do so through.April, May, and June. A few companies, usually under special circumstances and contrary to the general trend, buy heavily in the summer. Twenty- two sampled companies indicate they did not like seasonal fluctuations in wood receipts. Nine companies, however, indicate they prefer them. Aside from summer "spoilage" prOblems, some mill operators prefer slack seasons so they can devote more time to other business enter- prises or because the slack period coincides with vacation plans. Most reasons given for seasonality in wood receipts are tied to weather, custom (such as winter logging), and farming activity or other seasonal work patterns. Inventories follow a pattern somewhat similar to receipts. They are heaviest from.December through March-~gradually declining until a low is reached in July or August. However, even though receipts increase in the fall, inventories still remain low in September, October, and early November. Supplies are usually replenished by December. Sixteen sampled mills indicate they do not prefer seasonality in log inventories. Fourteen mills, however, prefer them. Half the sampled companies point out they have physical storage limitations. Technological limitations on holding inventories are not considered a problem by 13 of the sampled mills. Seventeen others point out prOblems with summer "spoilage," disease and insect damage, and end-drying or weathering. Sawmills The sawmilling industry in the North Central region produces a variety of products. The major types of production are shown in 152 Table 50. Hardwood lumber (particularly hardwood grade lumber) is the most important product in the region. Pallet material and pallets rank next. Softwood lumber and railway ties are of lesser importance, and other manufactured products and flooring stock are relatively minor in importance. Hardwood grade lumber and pallet material production are prominent in Michigan, and both hardwood grade and standard hardwood lumber production are prominent in the eastern Central States. Softwood lumber production was sampled primarily in Minnesota, while railroad tie and flooring stock production was sampled mainly in Missouri. The sawmills sampled in the North Central region vary greatly on the basis of size class. Small mills are most numerous, but very small mills (producing less than 100,000 bd. ft. in 1960) were deliberately limited in sampling. The sampling of mills on the basis of size class follows: Size Number of Mills (thousanafbd. ft.) 1-99 33 lOO-h99 19S soc-1,000 91; Over 1,000 128 All sizes ES? Characteristics of Sawmills About 26 percent of the sawmills producing less than 500 thousand.bd. ft. and seven percent of the larger mills are portable (Table 51). No portable mills were sampled in Illinois and Kansas, but in most parts of the region portable mills are common. About 153 II 1|! ll qu mm om em om No H: mm mg on nauseonm HHa mm m I I I m m I N I UeHMHumeocb .JH I q I I I m H m : apostoam andpowuscwz nonpo 0H I mH I II H I I I I xoopm mCHAOOHm on I Nm OH I N m I I I uoHp vwoaHme am I m I I I I Hm mH o nonEdH UooSpwom @0H m E” m. w wH w NH 0 N m Ha 9.09 on m N m N m I H N am speaaaa N0 H m H 0 OH 0 HH 4 mm Hwfihovwfi poHHwnH mmH mH om mH wH mm mm NH mH mm Hagoa .qw N NH 4 mH 0H NH m I N nonsdH vooztham QOH m m m m NH NH 4 mH mm ovenw voozpnwm Hapoal, .aaa .oa msOH .HHH oaeo .eaH .eaaz .omHB .aon .II. panache II some 359m 0 mH «some mvdpm was podvoam newws an .UonEwm mHHHEzmm no nonEdero mqmde o .‘ ll pouppoa 15h H38 haw:0prpu 7 as S 8 ma am a . aH HH an S H309 w I H I I I N I I I :sonxcb Hm I m H .. H m m H OH oHpafiom 8H @ Hm NH H mm m aw Hm 2 Ecoflfim H.HH .3 238% 08 goes mHHHE 0H I I I I I :H I I m agonxcb cm I mm I I NH I N m N QHQNPHOm 8H mH Hm w NH mm H H H Hm aaaoflupm H.HH .3 efisaap 8m SHE aHHHE H309 Jae . oz «:3. .HHH 8.30 .9: .afiz . 3 H3 .3qu II HHHES no name oomH .wona mvspm an .mHHHESmm meQOprpw was oHnmphom UonEwm Ho wthEderHm MHmHH 155 20 percent of all reporting sawmills are portable. Sawmills sampled in the region averaged about nine fulhtime employees and two part-time employees in 1960. However, as can be seen below, the variation between study area averages was considerable: —'f Average number Average number of full-time of part-time Study area employees employees Wisconsin 33 2 Kansas 1h 5 Michigan 8 2 Iowa 8 1 Indiana 7 1 Illinois 7 2 Ohio 6 2 Minnesota 5 h Missouri 5 1 Region 9 2 The highest averages occur in Wisconsin and Kansas, while the lowest occur in Missouri. As might be expected, the average number of full- and part-time employees increases as the size of the mill increases. In general, mills producing less than 100 thousand bd. ft. per year average one full-time employee and one part-time employee; mills producing from 100 to A99 thousand bd. ft. average three full- time and two part-time employees; mills producing from 500 to 999 thousand bd. ft. average seven full-time and two part-time employees; and large mills producing over 1,000 thousand bd. ft. per year average 23 full-time and four part-time employees. The average number of years in operation in the region is 15. Mills in Ohio and Illinois average somewhat less than 11 years, while mills in Indiana, Kansas and Wisconsin average well over 20 years. 156 By product, sawmills producing railroad ties or flooring stock average the least number of years in operation (about 11); at the other end of the scale, mills producing hardwood grade and manufactured products average 18 and 25 years, respectively. Size class of mill appears to make little difference in years of operation. About 70 percent of the sawmill operators sampled obtain virtually all of their income from the production of lumber. The remaining 30 percent are part-time operators with alternate occupations. As might be expected, smaller mills tend more toward part-time operation. The altennate occupations from which part-time sawmill operators receive income are listed in Table S2. Farming is the most frequently mentioned alternate occupation in all states except Michigan and.Wisconsin, where the ownership of other business enterprises and the retailing of forest products, respectively, out- rank farming. Approximately 15 percent of the total number of firms sampled operate at least one other woodeusing mill. The average number of mills, for multiamill firms (including the sampled mills) is three. Sampled sawmills indicate they purchased their sawlogs by the following units of measure: Unit of measure Number of mills Doyle Log Rule 200 Scribner or Scribner D.C. 87 International Quarter inch 15 Standard Cord 11 Lumber Scale 85 Unknown 59 Total h57 157 TABLE S2-eAlternate occupations of sampled part-time sawmill operators in the North Central region, 1960 Number of Percent of Alternate occupation operators sample Farmer 65 h9 Owner of other enterprise 19 lb Retailer or wholesaler of forest products 16 12 Salaried occupation ll 9 Producer of sawlogs or contract logger 5 b Other 16 12 All occupations 132 100 158 Mills in Michigan use a variety of measures, but the Doyle Log Rule and the Standard Cord are predominant. In'Wisconsin and Minnesota, the Scribner or Scribner Decimal C rules are most common. In the Central States, the Doyle rule is predominant, but in Missouri, "lumber scale" is of equal importance. About 50 percent of the sampled sawmills have done some custom sawing, but custom sawing represented less than five percent of the total 1960 production. 'Wood Procurement Sawmills sampled in the North Central region Obtain their sawlogs from several agent sources. Dealers are unimportant as suppliers of sawlogs, accounting for less than one percent by volume of the total sample. Producers supply about 50 percent of the volume, while over hO percent is supplied by the sawmills themselves (mostly by their own employees cutting purchased stumpage). Very minor volumes are Obtained from other sources. Landownership sources of sawlogs are: own lands, 15 percent; farm ownerships, hS Percent; other private lands, 21 percent; national forests, 10 percent; and state forest lands, nine percent. Sawmills do not as a rule offer aids or financial assistance to producers, although several of the mills offer advance payments to producers for stumpage purchasing. Usually such advances represent a percentage of the selling price to be received by the producer after harvest and delivery to the mill. Most mills do not consider this standard procedure. About three-fourths of the sawmills indicate that their sawlog supply area has not changed in size over the past several 159 years. Decreases in supply area are almost non-esistent, but about one-quarter of the mills have expanded their timbersheds. Expansions have been most prominent in Michigan and Missouri and for manufacturers of hardwood and hardwood grade lumber. Nearly all the sawlogs used by sawmills in the North Central region arrive at the sawmill by truck. As might be expected, the larger the sawmill the larger the timbershed supplying the mill. Supply area radius by mill size class is as follows: Size Class Average Radius (thousand.bd.ft.) (miles).-_- 1—99 15 loo-A99 27 500-999 D7 1,000 and over 63 Average radii of sawlog supply areas, by study area, are shown below: Study area Average Radius (mileS) Michigan 36 ‘Wisconsin 59 Minnesota 37 Indiana 37 Ohio 30 Illinois 3h Iowa 81 Missouri 16 Kansas 121 Region bl Variations from the regional average of hl miles are not difficult to explain. Wisconsin, with a heavy population of long—established sawmills, is gradually increasing the size of its sawmill timbersheds 160 as quantities of and/or quality material becomes more scarce. Missouri is below the regional average because of the high percentage of local farm sawmills, many of which are sawing railroad ties. Iowa and Kansas sawmills tend to saw quality hardwoods, which are more scattered and widely dispersed than sawlog volumes located in Other study areas. Sawmills tend to purchase logs from producers under oral purchase agreements or with no prior agreement. Only larger sawmills purchase a substantial volume of sawlogs from producers under written agree- ment, and this is limited to 15 percent of their total requirements. For all sampled mills, 10 percent of the sawlog volume is purchased under written agreement; 50 percent under oral agreement; and no percent under no prior agreement. Purchase Agreements Usually, purchase agreements are negotiated from one to 15 weeks in advance of delivery. The regional average is five weeks, and larger mills usually negotiate agreements for delivery nine or ten weeks in advance. Oral purchasing agreements usually include specific details that are desirable for the sawmill operator. In most cases, quality specifications were not stated, but they are mutually understood. Size of sawlogs is usually specified as a minimum top diameter, frequently 10 inches. Quantities of sawlogs to be purchased are specified by about hh percent of the mills; other mills are apparently prepared to accept all the producer can deliver. Method of payment is usually on the basis of mill-scale, and the actual payment is in the 161 form of check or cash usually upon receipt of the logs or within one week. In only a few cases are oral contracts considered legally binding by both parties. Most mills, however, indicate that they would not default on oral purchase agreements once made. Sawmills supply some ho percent of their own sawlog needs. Sampled sawmills producing less than 500 M'bd. ft. annually purchased over 25 million bd. ft. of sawlogs as stumpage in 1960, while the larger sawmills, producing over 500 M bd. ft. annually, purchased some 110 million bd. ft. For all mills, 27 percent of the stumpage was purchased under written contract with a public landowner, 55 percent under written contract with a private landowner, and 18 percent under oral agreement with a private landowner. About 85 percent of the stumpage contracts or agreements refer to the kind of timber, but in the majority of cases the reference is simply to "all merchantable" timber. Only 30 percent of the agreements or contracts specify species. Some 75 percent of the contracts or agreements mention quantity of timber, but in most cases, the reference is a vague "all merchantable."- Size of timber is specified in 87 percent of the contracts.or agreements. It is measured either in terms of minimum stump diameter or minimum diameter at breast height. Quality of timber purchased is usually not included in the contract or agreement; most mills assume the selection of quality in their option. Over three-quarters of the sawmills, particularly the large ones, specify a period of harvest, usually six months to two years. IMethod and time of payment are nearly always included in the agreement or contract. The three methods in general use, in order of importance, are: 162 (l) lump sum in advance; (2) payment per unit of volume after cutting on the basis of mill scale; (3) and a combination of the methods above. Only a few mills pay on the basis of scale in the woods before delivery to the mill. Logging provisions are frequently included in contracts and agreements for stumpage. Purchasers commonly agree to: (l) repair damage to fences, gates, roads, and/Or waterways, etc.; (2) clear slash from roadways and boundaries, etc.; and (3) locate roads as requested and avoid crossing fields. Less commonly, purchasers agree to exercise care in logging so as to preserve growing stock. Only one-fifth of the sawmills would be willing to accept any limitations on logging to preserve growing stock, even at the landowner's insistence. Few sawmills show any concern about good forestry practices. About 80 percent of the sawlog volume purchased by sawmills is obtained in sales initiated by producers. Sawmills find it necessary to contact producers to obtain only 20 percent of their total raw material needs. Seasonal Deliveries and Storage Sawlog deliveries to mills are not uniform throughout the year, although 60 percent of the mills indicate they would prefer a continuous flow throughout the year without seasonal fluctuation. The reasons behind uneven receipts are varied and they frequently differ among geographic areas. The explanations are set out in Table 53. Figures 12 and 13 indicate the seasonal trends in deliveries and inventories by geographic areas. Sawlog timber in 163 mmmHHomm hmEEdm .qH 383829. 3&3 ans”: .MH mCHwMOH nepeHz «wens p03. .NH meHenmm memoseoam .HH cOHpmmdooo evennmpHH .OH COHmeSUUO mpmcampHH Meagan GH 3mm .m hood wcwaOH nopeflz mQOHpoHHpmmn seem meOHpoanmma beam .m wcmeOH ampeHz Hammad wedoam pmomeCHnam Happen mmOH ampeHB .N mpmxnwz mmOH :mmHoIzmnpmms meow happen wewaOH hepCHB .0 mocchmcho quwwOH Hme hmmmnm COHpmmdoeo mpwehmpH< m.anHmm5m ampHHHanHmbd .m mon ampeHs nemonm mmeHomm Aegean Hakeemm eH umnpmmz. .: mcdeHeeoo ewes Sham astmmnp quzmm xaoz 59mm weHHsmn no meHmon .m 33.82 ciao; Ema 33a: manages wfiemm .m Hmhmcmw CH neapmmz Hemmemm eH HmnvmmB Hdhmdmm CH nospmmz mpmthz .H HamemmHz nausea Use eBOH mmwspm mmwpcmo pmmm III mmpmpw mme semaphomaw II I. III we nacho wwHw heave mp mmowmmm oomH «wees medpm an .wHHHezwm UeHmEmm an .mpmHmomn mOHsmm eH SOHpmHnmb now UmeHemmm mcommmmIImm mHm.m I ow.o owcmm mo.m owmhmbe «umpwpm Hmapcmo oo.m . mm.m oo.m . oo.m oo.m . m~.H om.H . om.o emcee Hq.: _ am.m m®.m mo.H mmeeeea umpomm:CHz OO.OH . oo.~ oo.a . om.q mp.m u me.m oo.m . ma.o oo.m . oo.H smear mm.w ma.m . eo.m om.m am.m emeeeea ucflmcoomfiz mm.m . om.m mm.s . om.m OO.: . oo.m oa.a . OO.H emcee mo.z mm.m ma.m 4m.a mwwhm>< “emmaneflz illompoo 9mm mAMHHomp magnum may ocwm unearned: comma mil samHmm (eewwz .11- (xii. mmma amend hvdpm mp .mno05609m UoHdEmm an mofiommm henna How warm vamooflnd mwwmespm voosdasa cw ownwh new mowwmmbarnom mqmdy 187 TABLE 57-eAverage cost of stumpage for sampled sawlog producers in the Lake States, 1960 v—Lake §pecies ”Mich. Wisc. Minn. States "" (dollars per thousand bd. ft.) Hard maple 37.50 26.00 Mixed hardwood 19.00 Birch, white(a) 8.00 35.00 6.00 Cherry 27.00 Basswood 23.00 20.00 8.00 Pine 18.00 26.00 18.00 Aspen (logs) 8.00 (bolt6)(b) b.00 6.00 (logs & bolts) 6.50 5.00 Hemlock 12.50 19.00 Oak 11.00 Elm (logs) 12.00 17.00 (bolts) 7.00 (logs & bolts) 11.00 Beech 13.00 Soft Maple (logs) 13.00 (bolts) 7.00 (logs & bolts) 11.00 Hardwood (except aspen) All Hardwood Softwood 18.00 15.00 19.25 (a)Some yellow birch included in Wisconsin. (b)Smaller material purchased by the cord. 188 TABLE 58--Average cost ofstumpage for sampled sawlog producers in the Central States, 1960 All— Species Ohio Ind. Ill. Mo. Iowa Kan. states (dollars per thbusandfbd. ft.)— 7”, Mixed Maple 12.00 Soft Maple 15.00 17.00 Mixed Oak 13 .00 12 .00 10.00 111.00 17.00 Poplar and Cottonwood 11.00 13.00 7.00 9.00 8.50 Cherry 18.00 Ash 9.00 Sycamore 13.00 7.00 Elm 11.00 10.00 9.00 Pine 17.00 Basswood 13.00 'Walnut 31.00 h2.00 51.00 Mixed Hardwood 11.00 23.00 All Hardwood (except'walnut) 12.00 All sawlogs 15.00 189 made to eliminate false and non-pertinent information in the compilation of averages. Some attempt was made to eliminate such imperfectly known influences as "free" stumpage involved in land clearing operations in Ohio and Illinois, but supply and price implications are immediately evident. Two species produce wide variation in the over-all averages. Aspen bolts and small sawlogs in the Lake States are frequently obtained at the same cost as pulpwood stumpage. This has a lowering effect both on the average cost of aspen sawlogs and on the average cost of hardwood stumpage. The reverse is true in the Central States where walnut included in lump-sum purchases has a marked tendency to increase stumpage prices. The costs for walnut stumpage shown in Table 58 are averages for walnut paid where it was a minor component of stands to be harvested. The more a tract has to offer in quantities of desirable quality and species, the higher the average price paid; the less attractive the total stand is, the lower the average price paid-~regardless of the size and quality of minor stand components. Tables 59 and 60 indicate stumpage costs of primary manufacturers. These stumpage costs agree, in general, with costs reported by producers, but some differences are apparent. These differences reflect more attention given by sawmillers to species and/or quality in stumpage purchases. It is also likely that sawmillers have an advantage over producers, in general, in estimating and.understanding costs as well as some advantages in capital availability for acquiring stumpage (especially the larger tracts). Moreover, it is likely that sawmillers can better recognize the technical qualities of standing timber. All TABLE 59-eAverage price paid for stumpage by sampled sawmills in the Lake States, 1960 Lake ——' Species Mich. ‘Wisc. Minn. States (dollars per thousandfba:7ft.) Hard maple 38.00 39.50 Soft maple 3h.00 26.00 Birch, white(a) 16.00 39.00 7.75 Basswood 29.00 81.00 10.50 Cherry hb.00 Elm 13.00 16.00 Ash 27.50 25.00 b.25 Beech 1h.50 Oak 15.00 28.00 10.15 Aspen 9.00 7.00 b.25 Jack Pine 8.50 15.60 White & red pine 31.25 33.75 2h.10 Hemlock 16.50 2b.00 Hardwood (except aspen) 2h.65 A11 hardwood l9.h5 Softwood 22.20 (a)Some yellow birch included in Wisconsin. TABLE 60-aAverage price paid for stumpage by sampled sawmills in 191 the Central States, 1960 A117 Species Ohio Ind. Ill. Mo. Iowa Kan. States (dollars per’thousandfbd} ft.)’ Mixed maple 16.00 15. 50 Hard maple 38.00 b7.00 Soft maple 18.00 19.00 19.00 Mixed oak 15.00 33.00 19.00 10.00 18.00 White oak 19.00 Black & red oak 11.00 Poplar and cottonwood 19.00 12.00 13.00 8.25 Cherry 65.00 65.00 h2.50 Ash 10.00 Sycamore 13.50 9.00 Elm 11.00 12.00 8.00 Pine 18.00 Basswood 16.00 11.25 walnut 67.00 Beech 18.00 Mixed hardwood 1h.50 25.00 10.00 Soft hardwood 12.00 7.00 All hardwood (except walnut) 16.00 All sawlogs 20.00 192 these factors would support the slightly higher price paid for stumpage by primary manufacturers. Veneer Logs: Average costs of veneer log stumpage bought by producers are shown in Table 61. These figures vary widely by study area, and are influenced by predominant purchase policies. In some areas, veneer log stumpage is purchased along with sawlog stumpage at relatively lower prices. In other study areas, such as Illinois, Iowa, and Kansas, veneer log producers are more often specialists who seek out high quality timber which they selectively out (no reference implied regarding the forest management usage of the term) on an "all merchantable basis" lump-sum purchase; average prices are consequently relatively high. One additional cost should be noted at this point. Several producers report a "scouting" or locating cost for finding quality timber. In general, this is about $3.50 per M bd. ft. With producers specializing in walnut, this cost may run up to $30 or $h0 per M bd. ft. In many cases, it is considered as part of the stumpage cost. Cooperage Timber: Stumpage prices reported by sampled producers for white oak cooperage timber are shown in Table 62. Divergent averages by study areas are clearly apparent. Four cooperage stock mills purchasing stumpage reported costs averaging slightly more than $50 per M bd. ft. The reason for such higher stumpage prices is not entirely clear, but there is a probability that the mills limited their purchases to higher quality white oak stands. 193 owmnmbm camcoomwB one cmmflnofiz cw magma pmom one «scoop “saw oo.mw 00.44 Hwnpcoo HH< O0.0wH OHH-mm .aoaan soars masasaapv .pm .vn.2 and NH% mwmnmpm mflocflHHH ca meoosewwn pmom .pH .63.: and mm% .nmSOH ma mmmdadpm nmmcm> wocfimpcooAmv oo.m~a oo.m: oo.ms OO.H: oo.mmH oo.om A A oo.mm 8.3 Ba .3 assessors. sea oaflowv mon .HHH mopwpm Hmhpcoo anHt ooeaa oo.mm oo.mm oo.aw oo.oo I'll oooaoase Has Apocams paooxmv voosvwmm oo.wm Apocam3 pmmoxmv Uoozvnmm pecan: anyone meadow and 60m xmo opens OO.HM voosmmwm Anvoo.mm roaam oo.ms oaaoz Advamocob hpfiamda mmpmpm mmfiomdm mqu coma .mwoogfiond moa mooco> vadEmm now omeESpm mo pmoo mwwhobarlao mqmm pH .90“ 0:0 005900 cw 0m.:a flaw «comma ca thou you 0m.m% .manwp map :a 03000 #02 Empfi pwoo chOfipwvvw cm ad .0900 cons smcflamom xuwmva I.‘| 00.0 I 0m.m owcwm , m0.m . mwmpobd , ”mopmpm Hmapcmo 0m.HH I 00.5 0m.HH I 00.5 0m.HH I 00.m 00.0 I 00.m omasm 4w.m mm.w . m~.o mm.0 owwnmba “wpommccfiz 00.HH I 00.w 00.HH I 00.0 00.5 I 00.0 00.5 I 00.m omcmm 0m.a HH.a 00.a 00.0 omsaoea ”camcoomfiz 00.0H I 00.a 00.0H I 00.a 0m.» I 00.m 0m.0 I m~.s owner mm.m mm.m mm.0 Hw.m mmwnobe aesmaeoaz 08o oimoa mabog II oodpdm haw mcfim mtooSUhmn Comma ewmamm UmNHz mmma steam mUSpm an .mnmosfiond voosdasm andewm an umphommn vampmoo wcwwwoqIImo mamas 197 TABLE 6h-«Average logging costs for sampled sawlog producers in the Lake States, 1960 — ———— _— Species Michigan Wisconsin Minnesota _;Lake States (dollars per thousand b8; ft.) All Species 18.50 1h.25 13.00 18.25 TABLE 65-2Average logging costs for sampled sawlog producers in the Central States, 1960 East Centrali’ 'Kansas and Central Species States Missouri Iowa States ’7 —' *(dollars.per thousand.ba: ft.) All Species 11.50 9.00 11.00 10.75 TABLE 66—«Average logging costs for sampled sawmills purchasing their own stumpage in the North Central region, 1960 _—' EaSt Lake Central Iowa Central Species Mich. Wisc. Minn. States States Mo. Kansas States (dollars per thousandfibd. ft.) All species 13.10 1h.75 13.85 13.75 15.75(a) 8.50 lh.l5 12.95 Walnut -- -- -- -- -- -- 26.00 -- (a)This figure is noticeably higher because many sawmills in Ohio, Indiana, and Illinois are portable mills; the figure shown includes a greater cost for skidding longer than average distances directly to the Mill. 198 producers and harvesters understand the nature of logging costs and their compilation, it is entirely possible that lOgging costs are less in Missouri than elsewhere in the region. Loggings costs reported by producers and primary manufacturers in both the eastern part of the Central States and.the western part show a noticeable difference. This may be due to a better understanding of the nature of the costs involved and a more accurate estimate by primary manufacturers. Few species differences were noted, with the striking exception of walnut; logging costs for walnut are reported to be almost double average logging costs. Veneer Logs The cost of logging quality veneer timber seems to be relatively uniform throughout the entire region. Few costs were reported by primary manufacturers, but nearly 100 producers of quality veneer logs indicated all species (with the exception of walnut) cost about $16.25 per M bd. ft. to log. Producers of walnut reported their logging costs between $25 and $27 per M bd. ft. In comparing quality veneer log logging with sawlog logging, it is evident that the former is some two to three dollars more expensive (two to five dollars in the case of walnut). Container veneer logs have logging costs similar to those for sawlogs-—about $12.25 per M bd. ft. for soft hardwoods in Illinois and $1h.50 per M bd. ft. for elm, beech, and soft maple in Michigan and Wisconsin. 199 Cooperage Timber Average logging costs for white oak cooperage timber are shown in Table 67. Producers report lower costs than primary manufacturers. The probability is that producers do not calculate their costs as accurately as the primary manufacturers. This supposition is reinforced by the fact that recognized subcontractors to producers report logging costs of nearly $23 per M bd. ft. (the figure reported by primary manufacturers). In comparison with sawlogs, logging for cooperage timber is costly. This is not surprising since logging for cooperage timber is usually a highly selective operation (i.e., individual trees or clumps of trees of only the white oak group, frequently some distance apart, are involved); also, there is an added cost in splitting logs into cooperage bolts. Producer Hauling Costs Pulpwood Hauling cost for pulpwood refers to truck haul from roadside loading points to pulp mills or to railroad reloading points. Rail- road transportation is not considered here because the cost does not comprise part of the suppliers' costs of production--usually pulpwood is purchased by mills at railroad loading points with the pulp company paying the freight. Truck hauling distances are highly variable. In Wisconsin and the Central States, hauls of over 50 miles are usually avoided. In Minnesota, the median truck haul ranges from 55 miles where producers 200 TABLE 67-eAverage logging costs for white oak cooperage timber reported by producers and primary manufacturers, by study area, 1959 Producer Primary manufacturer Study area logging logging '—' (dollars per thousandfbd. ft.) Ohio 18.75 -- Indiana 17.60 13.25 Illinois 15.62 23.36 Iowa 21.28 28.75 Missouri 17.88 25.85 Kansas 23.67 20.00 All study areas 18.31 23.00 201 market their pulpwood in Wisconsin to about 30 miles for pulpwood marketed in-state. In Lower Michigan, where longer truck hauls are encouraged by sliding price scales, the median distance ranges from 70 miles for aspen up to 200 miles for a small amount of spruce and fir. Again, reported costs may reflect differences in the understanding of costs by producers. No costs are available from primary manufacturers on truck hauling for comparison purposes. However, James and Lewis (1961) have established formula costs for hauling in Lower Michigan. These costs are shown in Table 68 along with reported producer costs. It is believed that the formula rates have a higher degree of accuracy than those reported by sampled producers. Hauling costs commonly represent from 12 to 35 percent of the delivered price of pulpwood. Because of their magnitude, these costs are frequently a determining influence on the decision to produce pulpwood in a given locality or stand of timber. Sawlogs and Veneer Logs Average hauling costs reported by sampled sawlog producers are shown in Tables 69 and 70. Since sawmills are frequently active in hauling large volumes of sawlog inputs, their reported average hauling costs are shown separately in Tables 71 and 72. Hauling costs were not available from primary manufacturers of veneer logs, but sampled veneer log producers indicated the average hauling costs shown in Table 73. In the Lake States, sawmills report somewhat lower hauling costs than producers. This can be explained by the shorter average hauls 202 TABLE 68-aAverage truck-hauling costs for varying distances of haul reported by sampled pulpwood producers, by study area, and costs established by formula in Lower Michigan, 1959 _rr. Formula' . Distance costs in Hauling costs reported by producers(b) in Lower Central miles Michigan(a) (_fiMichigan Wisconsin Minnesota States (dEllars per 00rd) 10 3.00 3.75 20 b.00 b.00 3.85 b.25 5.60 30 8.50 8.08 6.50 b.86 80 5.00 8.88 50 5.00 5.33 8.91 5.00 8.79 60 5.00 6.20 70 5.50 6.13 8.16 7.00 80 5.50 6.01 90 6.00 7.25 7.00 100 6.25 7.01 110 6.25 120 6.60 130 7.20 1h0 7.70 9.00 (a)When hauling is to railroad reloading points rather than to pulp mills, an average of $1 should be added to the charges shown to cover the additional costs of loading and unloading necessary to place pulpwood on rail cars (27). (b)Average hauling cost figures shown represent averages of reports by at least three producers. Michigan data based on reports of 51 producers; Wisconsin, b5; Minnesota, 38; and Central States, 18. 203 TABLE 69-eAverage hauling costs for sampled sawlog producers in the Lake States, by distance zones, 1960 Self—hauled Subcontracted Zone All Sawlogs Aspen Sawlogs A11 Sawlogs (Miles) (dollars per‘thousand bd. ft.) 1-10 8.10 7.30 8.85 11-20 10.60 8.50 10.85 21-30 11.90 10.15 13.85 Over 30 -- 10.75 16.80 Average cost 10.30 8.85 12.15 Average distance 17.8 mi. 21.0 mi 25.8.mi. TABLE 70--Average hauling costs for sampled sawlog producers in the Central States, by zones, 1960(a) Ill. Ohio , Kansas Central _gone Ind. Mo. Iowa States (Miles) (dbllars per thousandfbd. ft.) _(I—I 1-10 8.00 7.50 31-50 18.50 12.00 Average Cost 11.75 7.90 11.15 10.80 Average Distance 23 mi. 13 mi. 25 mi. 19.8 mi. (a)Hau1ing costs for walnut average 25 to 50 percent more than for other species. 208 TABLE 71-eAverage hauling costs in the Lake States for sampled saw— mills purchasing their own stumpage, by distance zones, 1960 Zone Michigan Wisconsin Minnesota Lake States (haleS) (dollars per thousand bd. ft{) 21-31 11.00 8.80 -- -— Average cost 10.50 8.80 7.55 8.90 Average distance 15 mi. 19 mi. 13 mi. 16 mi. TABLE 72--Average hauling costs in the Central States for sampled saw- mills purchasing their own stumpage, by distance zones, 1960(a) Ohi0(b) Illinois Iowa Central Zone ‘__Indiana Missouri Kansas States (miles) (dollars per'thousand.'5d.lt.)w 1-10 8.80 7.80 10.00 Average cost 10.50 8.25 11.80 9.75 .Average distance 15 mi. 8.6 mi. 17.5 mi. 12.9 mi. (a)Hau1ing costs for walnut average 25 to 50 percent more than for other species. (b)Figures for these three states based only on mills hauling sawlogs; portable mills using direct-to—mill skidding are not con- sidered here. 205 TABLE 73-«Average hauling costs for sampled quality-veneer log producers in the North Central region, 1960 Illinois Ohio Kansas Central Lake Species Indiana Iowa States States_ ((dollaFEHEEF_tE6usand bd. ft.) ——( All species: Average cost 21.00 19.00 20.75 12.25 Average distance 73 mi. 85 mi. 65 mi. 28 mi. Walnut: Average cost 28.75 20.50 23.75 Average distance 73 mi. 87 mi. 65 mi. 206 reported by sawmills and the fact that sawmills frequently do not report separate costs for hauling aspen sawlogs (which reportedly cost less to haul). subcontracted hauling figures in the Lake States are slightly higher. Some variation is noticeable in hauling costs in the Central States between producer-reported costs and primary manu- facturer-reported costs. Part of this can be explained by the fact that sawmills generally do not haul harvested sawlogs as far as producers. Other minor variations in hauling costs may be due to either inaccurate estimations of costs or to inadequacies in the data to correctly interpret the zone-cost relationships. As might be expected, veneer logs are hauled substantially greater distances than sawlogs. The longer distance, and to a lesser degree, quality, are the major factors in higher hauling costs. Hauling distance in the Central States is usually three to four times greater for veneer logs than sawlogs. Container veneer logs appear to have hauling costs similar to those for sawlogs. In Michigan and Wisconsin, the average hauling cost for container veneer logs is $10 for an average haul of 19.7 miles; in Illinois, the cost is $18 for an average haul of 36.6 miles. Cooperage Timber Cooperage timber producers haul cooperage bolts an average distance of 38 miles in the Central States. Both the distance they haul and the costs they incur are between sawlog and veneer log distances and costs. Hauling costs reported by producers in 1959 can be summarized by distance zones as follows: 207 Cost per Distance zone M bd. ft. (miles) (dollars) 0-19 9.00 20-39 13.20 80—59 15 .85 60 & over 20.00 Average 38 18.00 Several producers subcontract their hauling; these agents indicate an average haul of about 35 miles and an average cost of $15 per M bd. ft. Intermediate Agents' Costs and Prices Dealers who are agents of pulpmills pay producers the prices offered by the pulpmills. As payment for their services they receive a commission of $0.50 to $1.50 per cord handled. Merchant middlemen not affiliated with pulpmills perform essentially the same function, but their services are not recognized by the pulpmills--essentially the mill recognizes them as large producers and they receive the same price for their wood as other large producers. In turn, these agents act independently of the price policies of pulp companies; they buy from producers at prices determined by their own negotiations. Recognized dealers who handle sawlogs were not sampled, although several large producers assume an intermediate agent function in buying sawlogs from other small producers in their areas and delivering these logs along with their own production to sawmills. The price paid the small producer can be assumed to be the price for delivered sawlogs less hauling costs and a small margin for profit and risk. The margin for profit and risk might be large where small producers have weak 208 bargaining power due to a lack of capital and access to hauling equipment. Two types of intermediate agents can be recognized for veneer logs. One consists of agents who buy veneer logs from producers, usually at designated points (i.e., wood-using mill, railhead, concentration yard, etc.), and sell to veneer mills or their buyers. Prices received are those established by the buyer veneer mills; in turn, producers are paid a lower price covering the cost of their productive services and a margin for profit and risk. Frequently, but not always, this price is very close to the price paid for high grade sawlogs which are not actually bought on a grade basis. To a lesser extent, some agents purchase logs on a grade basis at published prices. The other type of veneer log agent is the sawmiller who sorts or separates quality logs from stocks of sawlogs. These agents rarely pay producers more than average sawlog prices for the timber delivered to them unless the material is obviously veneer-log quality. Sawmillers, in turn, sell at delivered prices established by veneer mills, or at prices negotiated by veneer mill buyers or other agents. Comparing veneer log prices with sawlog prices and average stumpage costs (especially if the timber is purchased for sawlogs) leaves little doubt as to the profitability of sorting sawlogs for salable veneer-log material. Sawmills in the Central States, especially Ohio, sometimes act as intermediate agents for white oak cooperage bolts. Usually they sort and split sawlogs that are more profitable to sell as cooperage stock material, but sometimes they purchase bolts delivered to their .4! .- 209 sawmill. Prices received by producers for bolts can be assumed to be the price paid by cooperage stock mills less the cost of handling and additional transportation, plus a margin for profit and risk. Sawmills sorting and splitting white oak logs usually pay sawlog prices to producers supplying the material. They, in turn, receive cooperage- stock-mill delivered prices when they sell. Dealers in posts in Michigan usually pay less than fence companies --from one-half to one cent less for small posts and five cents or more less for large posts. In Missouri and Illinois, dealers usually pay substantially less for pine posts and poles than treating companies. Dealers' margins for various sized posts and poles are shown in Table 78. Dealers in locust fence posts in Ohio indicate they pay very little more than the posts cost to produce. The average cost of production reported by producers is about 35 cents, and dealers pay in a price range from 30 to 80 cents. Producers in this situation obviously have very little market power. Prices Paid and Received Prices paid by primary manufacturers and prices received by producers are the topic of this section. Pulpwood Most North Central mills purchase pulpwood either delivered to the mill by truck, delivered on board rail cars at designated loading points, or at both of these locations. The prices paid are summarized in Table 75. These may be considered base prices in that they do not include special bonuses paid to large producers or bonuses 210 TABLE 78-—Margins between prices paid and prices received by Central States' dealers in pine posts and poles, 1959 Size ofl’ Tribes pafil’ Iiices paid posts by by Dealers' and poles treating plants dealers margins (cents per piece) 8" x 7! 18-33 13-25 5-19 6" x 7! 30-60 18-82 19—35 5" x 8' 28-50 20-83 10-29 6" x 8' 85-90 35-72 10-65 7n x aI 60-90 88—92 35-85 8" x 10! 50-60 21-88 25-30 6" x 10' 85—100 82-88 33—87 6" x 12! 105-115 52-138 55-62 6" x 181 135-155 66-160 60-70 6" x 16! 155-190 93-185 85-95 6" x 18! 210-230 122-200 90-105 6" x 20' 290-310 167-255 130-175 - a...” 211 0m.>HIm~.:H ma.0HI00.NH beam woosuwwn vmxfiz mmpwpm Happcmo 00.aHI00.0H 00.0H saw essasm 00.:m-00.m0 00.HN seesaw 0m.0a 0m.~a ooaa 00.0HI0m.aH 00.0H 00.0HI00.m doaoa wpommccflz 00.00I0m.mm 00.mm 0m.aH 00.0HI0m.aH oawa 00.mmI00.mN 00.mmI00.mm 00.dHI00.aH 00.0NI00.0H aooHEom 0m.0mI00.0m 00.0m-0m.0m 0m.NmI00.HN 00.:mI0m.Ha sag sander 0m.mmI00.Hm 00.mmI00.Hm 0m.amI00.mm 00.aNI0m.0m oosaam 00.HNI0m.aH 00.HNI0m.0H . 00.0H 0m.maI0m.:H ooosoasa .oaaa 00.HNI00.0H 00.HNI00.0H 00.0HI00.ma 0m.aHI00.NH cease Gunmcoomflz 00.HN 00.0w awe assasm 00.mm 00.Nm seesaw 00.0H 00.00-00.0H seam 00.nHI00.NH oooaossa .oeaz 00.0HI00.NH 00.HNI00.~H 0m.NH 0m.mHI00.NH seams damages: $.30 .80 mHmeOUV Hams .m.0.a Haas Hash .m.0.a Haas moaooao OPIWWE CECE .003 .0094 Umamom anOm mmma «mambflamv H0 000me has mmfioodm mp coawmn Hwnpcoo npwoz 00v ca voosmasm new data mmofinm mmmeImw mamae 212 which most mills pay suppliers for wood trucked from specified distance zones. Mills using recognized agents also pay these men bonuses of from $0.50 to $1.50 per cord for their services. Bonuses for distance hauled vary greatly between mills, but in general, they range in amount from $0.50 to $1.50 per cord for distances over 20 to 30 miles and under 100 miles, to $2.00 and $3.00 for distances greater than 100 miles. Sawlogs Average prices received for sawlogs, as reported by sampled producers, are shown in Tables 76 and 77. Tables 78 and 79 indicate average prices paid by reporting mills. Very little variation is noticeable in the Lake States and almost no variation in the Central States. For this reason, prices shown can be assumed to be quite representative of the prices in effect in the study areas in 1960. Insufficient data were reported to allow presentation of sawlog prices by grade. Nearly all the sawlogs sold in the sampled study areas in 1960 were sold on a woods-run basis. Most prices reported are average prices for average quality 10gs. Volume measurement of logs as a basis for payment is unstandard— ized (although several mills frequently used the same log rule). Invariably, the prevailing mill method in force is used as a basis for producer payment. The Doyle log rule is very popular, but frequent use is made of other log rules or other criteria such as the cord or mill lumber tally. Payment to sawlog producers on the basis of lumber tally raises an interesting point about sawmill efficiency. In effect, the mill can be wasteful with its raw material inputs since the producer is paid only on the basis of 213 TABLE 76-—Average prices received by sampled producers in the Lake States for sawlogs delivered to the mill, 1960 (Lake Species Mich. Wise. Minn. States , (dollars per thousand bd. ftil Hard Maple 65.00 56.00 Mixed hardwood 88.00 Birch, white(a) 33.00 62.00 Cherry 62.00 Ash 80.00 Basswood 58.00 88.00 33.00 Pine 86.00 58.00 88.00 Aspen (logs) 35.00 28.00 (bolts)(b) 30.00 (logs & bolts) 33.00 Hemlock 83.00 82.00 Oak 81.00 Elm (logs), 36.50 38.00 (bolts) , 31.00 (logs & bolts) 35.00 Beech 37.00 Soft maple (logs) 81.00 (bolts) 31.00 (logs & bolts) 37.00 Hardwood (except aspen) All hardwood Softwood (a)Some yellow birch included in Wisconsin. (b)Smaller material purchased by the cord. 88.00 86.00 89.00 218 TABLE 77-~Average prices received by sampled producers in the Central States for sawlogs delivered to the mill, 1960 —I ' ' Central Species Ohio Ind. Ill. Mo. Iowa Kan. States . (dollars per thousand.Ed. ft.) Mixed maple 65.00 Soft maple 88.00 56.00 57.00 Mixed oak ' 88.00 38.00 29.00 87.00 89.00 Poplar and _ cottonwood 50.00 83.00 38.00 33.00 Cherry 82.00 Ash 70.00 82.00 Sycamore 39.00 83.00 Elm 35.00 38.00 Pine 37.00 \ Basswood 82.00 walnut 98.00 93.00 108.00 Secondary hardwood 39.00 Mixed hardwood 58.00 Soft hardwood 28.00 All hardwood 85.00 (except walnut) All sawlogs 50.00 215 TABLE 78—eAverage prices paid for sawlogs delivered to sampled saw- mills in the Lake States, 1960 Lake Species Mich. Wisc. Minn. States '5 ’(dollars per tHOusand‘bdlwft.7' Hard maple 65.00 58.00 Soft maple 56.00 52.00 Birch(a) 78.00 39.00 Basswood 87.00 55.00 36.00 Cherry 73.00 Elm 35.00 38.00 Ash 50.00 85.50 31.00 Beech 39.00 38.00 Oak 85.00 89.00 36.00 Aspen 38.00 38.50 28.00 Pallet materia1(b) ~ 36.00 35.00 Jack pine 80.00 81.00 White pine 52.00 Red.& White pine 86.00 86.00 51.00 Hemlock 82.00 86.00 Hardwood (except aspen) All hardwood Softwood 87.60 88.10 88.10 (a)White and yellow birch (b)Lower quality soft maple, oak, beech, elm, and some aspen. 216 TABLE 79-eAverage prices paid for sawlogs delivered to sampled saw- mills in the Central States, 1960 Central Species Ohio Ind. Ill. Mo. Iowa Kan. States (dollars per thousandfbd. ftQT Mixed maple 65.00 52.00 55.00 Hard maple 66.00 71.00 Soft maple 62.00 88.00 g 53.00 Mixed oak 51.00 53.00 81.00 28.00 88.00 White oak 55.00 Black & red 38.00 oak Poplar and cottonwood 55.00 65.00 36.00 38.00 33.00 Cherry 98.00 93.00 85.00 Ash 80.00 Sycamore 37.00 36.00 Elm 37.00 37.00 38.00 Pine 35.00 Basswood 85.00 86.00 walnut 105.00 96.00 125.00 Beech 89.00 Mixed hardwood 88.00 53.00 23.00 Soft hardwood 32.00 28.00 Hardwood (except walnut) 85.00 All sawlogs 50.00 217 output. On the other hand, if the mill is efficient and produces an over-run, it must pay the producer correspondingly. Veneer Logs Average prices received by producers of veneer logs are shown in Table 80. These are essentially the same as prices reported by veneer mills. Price comparisons between species and regions should be made cautiously since many of the averages in Table 80 were compiled from widely varying prices strongly influenced by variable quality. For example, the average walnut veneer log is of higher quality in Iowa and Kansas than in the eastern portion of the Central States; prices are different, but if similar qualities could be compared, prices might also be similar. Producers in Michigan and Wisconsin indicate they received an average of $52 per thousand.bd. ft. in 1960 for elm, beech, and soft maple container veneer logs. In Illinois, producers received an average price of $50 for soft hardwood container veneer logs. Cooperage Timber Prices for delivered white oak stave bolts are shown in Tables 81 and 82. Producer-reported prices received agree fairly well with primary manufacturer prices paid. This is especially true when considered on the basis of grade. For ungraded material, producer prices are reported somewhat higher. Comparisons are difficult to draw as many mills have different grading systems and there is a wide range in prices. Ungraded material appears to sell for less in the western than in the eastern portion of the Central States. On a 218 TABLE 80——Average prices received by sampled producers for quality veneer logs delivered to shipping point or mill, 1960 Lake ‘Central’StaEEs ‘lAll Species States Ohio ‘Ind. 4111. Iowa Kan. Central Tdollars per thousand bd. ft.) Maple 113 99 Birch 113 Basswood 85 91 White Oak 225 ) ) )165 )136 Red Oak 108 ) ) 89 Poplar 118 Cherry 168 walnut 238 309 286 323 326 Iardwood (except walnut) 133 All hardwood 105 198 219 TABLE 81-eAverage prices received by sampled producers for white oak stave bolts delivered to the mills, by bolt grade(a), 1959 Premium Grade Grade Ungraded __g _Study area grade No. 1 No. 2 Average Range (dollars per M bd.ft.) Ohio -- -- -- 118.86 85-185 Indiana -— -- -- 123.00 100-130 Illinois 150.00 125.00 72.00 106.50 50-150 Iowa 150.00 110.00 71.25 109.88 80-125 Missouri 150.00 112.50 77.50 88.82 60-125 Kansas 150.00 100.00 65.00 85.00 -- All study areas 150.00 115.00 72.00 108.85 50-150 (a)A low grade of bolt is sometimes differentiated by cooperage stock mills. Sampled producers received an average of $30 per M bd. ft. for this grade of material. 220 TABLE 82-2Average prices paid by sampled primary manufacturers for white oak stave bolts delivered to the mill, by bolt grade(a), 1959 Premium Grade Grade Ungraded Study area grade No. 1 No. 2 Average Range 7(dollars per Mlbd. ftill Ohio -- 123.00 97.00 85.00 75-100 Indiana -- -- -— 100.00 80-120 Illinois 150.00 101.25 60.00 115.00 loo-125 Iowa -- —— __ __ __ rfissouri 135.00 105.00 72.50 87.00 78-100 Kansas 150.00 100.00 65.00 85.00 -- All study areas 180.00 106.00 78.00 95.00 75-125 (a)A low grade of cooperage bolt is sometimes differentiated by cooperage stock mills. An average of $38 per M bd. ft. was reported for this grade. 221 grade basis, the geographic difference seems to diminish. Cedar Fence Posts Prices paid for delivered fence posts are shown in Table 83. These are fairly well standardized by sizes with a consistent differential between peeled and unpeeled posts. It can also be noted that dealer prices are close to fence company prices, particularly in small post sizes. When dealers sell to fence companies, their profit margin is very small. Comparisons 2f Costs and Prices Costs of production are compared with delivered wood prices. The margins and profit ratios shown in the tables in this section should be interpreted with caution. Prices received and costs are averages; also, many producers use their own stumpage or labor and equipment in logging and.hauling. Such producers often impute lower costs to their operations than if stumpage had to be purchased or logging and hauling contracted. Relatively few producers are specialists; they usually produce a mix of products--and substantial margins for any one product are frequently offset by very narrow margins for another product. Since a mix of species as well as products is often involved, wide or narrow margins or profit ratios for any one species do not necessarily indicate profitability for the average producer. Size of producer operations would also have to be considered in determining whether producers are receiving adequate returns. While margins and profit ratios may appear to be adequate, size of 222 TABLE 83--Typical price list of Michigan dealers and fence companies for delivered cedar fence posts, 1959 m Dealer prices (Fence company prices: for unpeeled Paeled (Unpeeled Post size posts posts posts ~_‘ l" (cents per post) 3" x 7! 12 113-31 a) 3!! x 8! 18 18%(a) 8" x 7' 21 27 2O 5n x 7! y 28 32 25 6" x 7' 28 32 25 8" x 8! 23 as 27 5" x 8' 30 39 31 6" x 8' 8U 55 85 7" x BI 50 60 55 8!! x 10! 9.5 60(b) 50(b) Sn x lo! 50 65(b) 55(b) (a)0ne-half cent more when quantity is 10,000 posts or more. (b)Three cents more when quantity is 10,000 posts or more. 223 operations may limit a majority of producers to several hundred dollars of profits for a season's work. ‘Without supporting research and more adequate experience, one cannot judge how satisfactory the various margins and profit ratios are. What can be done, however, is to draw comparisons of relative profitability. Pulpwood Tables 88 and 85 indicate the margins and profit ratios for various pulpwood species delivered to pulp mills and f.o.b. rail- cars. The last column in the tables expresses the profit margin as a percentage of the price received. This measure of profitability -—termed profit ratio-~15 often considered a more revealing measure of profits than is the absolute margin. Some reservations apply to negative margins. Inadequacies in the data may not reflect average conditions. Nevertheless, comparisons seem warranted. For truck-delivered wood, the margins are consistently highest for spruce, followed in descending order by balsam fir, pine, peeled aspen, mixed hardwoods, and rough aspen. For pulpwood delivered to railroad, the margin relationships for different species are roughly similar except for a few deviations. Spruce usually yields the highest profit ratio in the Lake States, followed in descending order by balsam fir, pine, peeled aspen, and rough aspen. The striking exception is in rail deliveries in 'Wisconsin where profit ratios for aspen are relatively high. By method of delivery, profit ratios are generally higher for truck deliveries, again with the notable exception of aspen in Wisconsin. By study areas, no meaningful comparisons can be drawn. 228 TABLE 88e-Margin and profit ratios for the production of pulpwood in the North Central region delivered to mills by trucks, by study area, 1959 Price Stumpage ‘Logging Hauling Profit’ Specie§_¥ received(a) cost cost cost Margin ratio(b) (dollars per cord) (percent) Michigan Aspen rough 13.50 1.38 5.81 5.50 0.85 6 peeled 19075 1050 9031 5050 3.88 17 Pine 18.75 3.86 6.22 5.50 3.57 19 Spruce 32-00 8.69 8.55 9.80 8.96 28 Balsam fir 28-00 3.79 8.55 9.80 5.86 21 Mixed hdwds. 13-75 Wisconsin Aspen rough 13.00 2.57 6.22 8.75 -O.58 peeled 19.50 2.95 9.77 8.75 2.03 10 Pine 18.75 5.06 6.88(c) 5.00 2.21 12 Spruce 27.75 8.53 9.30 8.50 5.82 20 Balsam fir 22°50 5-79 9.11 8.50 3.10 13 Mixed Hdwds. 13-50 2.30 7.00 8.25(d) -0.05 Iinnesota Aspen rough 12.25 1.05 6.83 5.00 —0.63 peeled 17.75 1.21 10.38 5.00 1.16 6 Spruce 23-25 8‘81 8.28 5.00 5.60 2g Balsam fir 19-00 2.57 7.52 5.00 3.91 21 Central States Mixed hdwds. 13-11 1.87 5.05 8.50 1.69 13 —¥ (a)Unless otherwise noted, prices and costs are for unpeeled wood. (b)Profit ratio is the ratio of the margin to price received. (c)Sample data inadequate. $6.88. (d)Sample data inadequate. miles at a cost of $8.25. Assume MichiganAWisconsin average of Assume average hauling distance of 25 225 TABLE 85--Margins and profit ratios for the production of pulpwood in the North Central region delivered to railroad sidings, f.o.b., by study area, 1959 Price Stumpage Logging 'Hauling ‘IProfit Species received(a) cost cost cost Margin ratio(b) (dollars per COED ( percent) Michigan Aspen rough 12.50 1.38 5.81 8.50 0.85 7 peeled 17.50 1.50 9.31 8.50 2.19 12 Pine 18.00 3.86 6.22 8.50 3.82 21 Spruce 25.00 8.69 8.55 5.25 6.51 26 Balsam fir 21.00 3.79 8.55 5.25 3.81 16 Wisconsin Aspen rough 15.50 2.57 6.22 8.00 2.71 18 peeled 19.80 2.95 9.77 8.00 2.68 18 Pine 17.33 5.06 6.88(c) 5.00 0.79 5 Spruce 26.80 8.53 9.30 5.00 3.97 15 Balsam fir 21.75 5.79 9.11 5.00 1.85 8 Minnesota Aspen peeled 16.25 1.21 10.38 5.00 “003“. Pine 16.00 2.89 6.75 5.00 1.36 8 Spruce 21.75 8.81 8.28 5.00 8.10 19 Balsam fir 17.50 2.57 7.52 5.00 2.81 18 (a)0nless otherwise noted, prices and costs are for unpeeled wood. (b)Frofit ratio is the ratio of the margin to price received. (a)Sample data inadequate. $6.88. Assume Michigan-Wisconsin average of 226 Sawlogs Margins and profit ratios for sampled producers, by species, are shown in Tables 86 and 87. In general, more substantial margins and profit ratios exist in the Central States than in the Lake States. Reported logging costs in the Central States are lower, but hauling is slightly more expensive. The larger profit ratios in the Central States are usually the result of relatively low stumpage costs. Profit ratios appear satisfactory in the Central States for most study areas and most species. There are some notable exceptions. Profit ratios are unattractive for all species in Missouri, for poplar, cottonwood and elm in Iowa and Kansas, and mixed oak in Illinois. Profit ratios average considerably lower in the Lake States than in the Central States. No species stands out as very profitable in Michigan, Wisconsin, or Minnesota, but several instances of low profitability stand out-~hard and soft maples in Michigan, birch in Wisconsin and aspen in Minnesota. Even more striking is the evidence of several negative margins of profit-~elm in Michigan and Wisconsin, and hemlock in Michigan. Veneer Logs Quality veneer log production (Table 88) results in larger margins and profit ratios than sawlog production. Veneer log stumpage is costlier than sawlog stumpage, but the differential between the selling price of veneer logs and that of sawlogs is even greater. Lake States quality veneer log producers show a fairly consistent one-third profit ratio. 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Anvofipmn vacawawz pmoo pwoo pmoo Umbfimomn mmflomam 1 935.5 1 mafia mfinmwop mwaeanm 8mm Aumsqfipcoovunmm mgm Volume Product 7 Volume a. l d. 1 b. l e. 1 c. l f. L was 1959 a typical year? Yes No If NO, why not? IF NO, SKIP TO C. SOURCES OF WOOD SUPPLY. 2. What changes in the annual volume of your timber purchases took place in the years 1950-59? (List by products) Y All oducts 283 C. Sources of wood supply: l. 3. Where is your 1959 wood supply area located? (List counties if only a few are involved. State radius of operations in miles.) a. Counties .1, b. Radius of operations Have there been any significant changes in your wood supply area over the period 1950r59? Yes ___ No If YES, what were the changes? What is the ownership of the forest land from which your 1959 wood supply was Obtained? (Estimate % of total volume each source.) % % a. Own land d. Nat. Forest b. Farmer e. State forest c. Other private f. Other public Have there been any significant changes in your wood supply from different forest landownership sources over the period 1950-59? Yes No If YES, what were the changes? ITIYES, what explanatIOns can you giro for these change§7 __ _—¥ From what agent sources was your 1959 wood supply obtained? (Estimate % of total volume obtained from each source.) % % a. Own employees: _' b. Other producer '- (1) From own 0. Other agent lands (specify) (2) From other <__ lands '— Have there been any significant changes in the agent sources of your wood supply over the period 1950-59? Yes ___ No If YES, what were the changes? II—YES, what explanatIBnS can you giPE’for these changes? D. 288 ‘Wood;procurement methods and policies: 1. What percentages of your 1959 wood supply were obtained by the following stumpage acquisition methods? % a. Stumpage from own lands ‘— b. Stumpage purchased by producer c. Stumpage purchased in producer's name by product buyer d. Stumpage provided by product buyer QUESTIONS 2 TO 15 APPLY ONLY TO STUMPAGE PURCHASES BY PRODUCER. IF NO STUMPAGE PURCHASES WERE MADE, SKIP TO QUESTION 16. 2. 3. 8. What percentages of your 1959 stumpage purchases (in terms of volume) were obtained under the following types of agreements? a. Written contract with public landowners '— b. ‘Written contract with private landowners c. Oral contract What are the details of your standard contracts for stumpage purchases from private landowners? (Check the following items which are included in agreements; then describe as much as possible.) a. Species b. Amount of timber c. Size of timber d. Quality of timber ’“ e. Time or pefiodfiof harveSt f. Method of payment g. Time andEEaSis of'measurement If the standard contract for stumpage purchases from private landowners is a written contract, and if oral contracts are also made, how does the oral contract differ in its provisions from the written contract? 285 5. Does your standard contract for stumpage purchases from private landowners specify any conditions under which timber is to be harvested? Yes No If YES, to what percentage of your 1959 purchases do these specifications apply? Percent. If YES, what are the specifications? If NO, are there any harvest conditions your firm will accept in contracts for stumpage purchase upon a private landowner's insistence? Yes No If YES, what are the conditions? 6. How binding are your contracts for stumpage purchase (i.e., how much leeway do you allow yourself in terminating contracts)? 7. How far in advance of the beginning of harvest operations are stumpage purchase contracts usually negotiated? A. 8. Do you buy stumpage only when you hold a contract for the sale of products? Yes No If NO, explain your policy of stumpage purchases in advance of contracts for the sale of products. 9. 10. 11. 12. 13. 18. 15. 16. What percentages of your 1959 stumpage purchases were obtained through negotiations initiated by you or initiated by land- owners? 2‘5. a. Producer b. Landowner c. Indefinite When you take the initiative in negotiating stumpage purchases, what are the methods you use in contacting potential suppliers? How many stumpage purchase contracts did you make in 1959? contracts. 'Was 1959 a typical year? Yes No If NO, why not? From how many different persons or agencies did you obtain your stumpage purchases in 1959? persons or agencies. Was 1959 a typical year? Yes' No If NO, why not? Is there a minimim volume per acre below which you will not consider stumpage purChase? Yes No If YES, what is this minimum? Is there a minimum volume per tract below which you will not consider stumpage purchase? Yes No If YES, what is this minimum? Is there a minimum value of timber per tract below which you will not consider stumpage purchase? Yes No If YES, what is this minimum? Did you receive funds from any of your product buyers for stumpage purchases in 1959? Yes . No If YES, which buyers? IfIYES, what’portion of your total stumpage purEhases in 1959 did these funds cover? 287 17. Did you subcontract some or all of the logging operations in your timber-producing business in 1959? Yes No If YES, what percentage of the volume handled was subcon- tracted? percent. If YES, did subcontracting apply to a. Felling and bucking? Yes No b. Skidding? Yes No If YES, why didn't you handle all the logging operations yourself? (Check. If more than one reason, number in order of importance.) (a) Lacked necessary equipment (b)_ Lacked logging experience (c)* Inadequate family or hired labor available (d)* Believed subcontracting to be the cheaper method (e)_ Producer's time more valuable for other purposes (f) Other demands on producer's time (g )~ *Other (specify) 18. Did you subcontract some or all of the hauling operations in your timber-producing business in 1959? Yes No If YES, what percentage of the volume handled was subcontracted? percent. If YES, why didn't you handle all of the hauIIEg operations' yourself? (Check. If more than one reason, number in order of importance.) (a) Lacked necessary equipment (b) Lacked hauling experience (0) Inadequate family or hired labor available (d) Believed subcontracting to be the cheaper method (e) Producer's time more valuable for other purposes (f) Other (specify) 19. Did you receive in 1959 funds from any product buyers in advance of time of payment specified in a standard contract to facilitate your logging or hauling responsibilities? Yes No If YES, which buyers? If YES,’for what purposeSTI 288 20. Did you receive in 1959 any other business aids from any product buyers to facilitate your logging or hauling respon- sibilities? Yes No If YES, which buyers? If YES, what aIHS? E. Prices Received: 1. What prices did you receive per unit of volume for wood products you sold in 1959? (Fill in as many items as possible, by products and/or species.) Products and or s ies a. b. c. . . rr. d. 0 mill e. . o 2. To which agents did you sell the products and/or species listed above? (Check appropriate cells.) Products andZor species a. Dealer b. Concentratibn yard c. Other inter- mediate agent d.‘WoOd:uSing mill e. Other producer f. Other (specify) 3. Did you have any difficulty in obtaining sufficient market price information as a basis for your business decisions? a. On the products you have to buy? Yes No b. On the products you have to sell? Yes No If YES, to a. or b., explain. 289 F. Cost: 1. What stumpage costs per unit of volume applied to the wood products you handled in 1959? (Estimate cost imputed by you if you used your own stumpage.) (Products andICr ‘PurEhased s ies stum e Own 2. What logging costs (felling and bucking and skidding) per unit of volume applied to the wood products you handled in 1959? (Estimate cost imputed.by you if you performed your own logging.) Products and70r subcontracted Own 5 ies l l 3. What truck-hauling costs per unit of volume applied to the wood products you handled in 1959? (Estimate cost imputed by you if you performed your own hauling.) 5 Con ac species hauling logging Cost Distance Cost Distance 290 G. Sales of timber products: l. 2. What was the gross sales value of timber products sold by you in 1959? What was the total volume, by product and unit measure, of your timber products sales in 1959? (List only timber handled as part of your business as a timber producer.) Product Volume a. O C. 0 e. What were the seasonal variations by product, in your timber products deliveries in 1959? Product a. (Peakfmonths and amounts (aver.) b. waeEt months and amounts ( aver.) c. Other months and amounts (aver.) Do you consider the timing in your timber products deliveries in 1959 to be a typical pattern? Yes No If NO, why not? Was the timing in your timber products deliveries in 1959 required by your product buyers? Yes No If YES, would you have preferred a different timing of deliveries? Yes No If YES, what is your preferred timing of deliveries? If_NO, how do you explain the timing of your deliveries? 291 6. What changes in the annual volume of your timber products sales took place in the years 1950-59? (List separately by products.) Year All oducts 7. What explanations can you give for annual fluctuations in your timber product sales? 8. To which types of buyers did sales of your principal products in 1959 go? (Estimate by % of total volume.) % % a. Manufacturer — d. Other interme- - b. Concentration diate agent (specify) yard C. Dealer e. Other w(specify) 9. Have there been any significant changes in the volumes of your products going to different types of buyers over the period 1950-59? Yes No If YES, what were the changes? IfIYES, what explanatitns‘EEnIyou give fer these changes? 10. ll. 12. 13. 292 How many different buyers of your timber products did you sell to in 1959? No. No. a. Manufacturer -—" d. Other intermediate -—-' b. Concentration agent (specify) yard c. Dealer e. Other —(specify) Have there been any significant changes in the numbers of buyers of your principal products over the period 1950-59? Yes No If YES, what were the changes? If YES,—fihat explanations can you give fhr these changes? Did you have a contract(s) to sell prior to your harvesting of wood in 1959? Yes No What is the typical time interval between data of a purchase contract with a buyer and product delivery? a. How much variation from the typical time interval occurs? b. What are the causes of_variations ffbm the typical time intervals? H. Otherhproducers of raw wood products, 1959: Name Address