Monetary Subject Matter Meetings

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Financial Topic Gatherings. October 2002. Standpoint for Ranger service and Woods Items 2002 . Depiction: Woods Industry. ~ 12.4 to 12.7 Million sections of land in Timber 90% exclusive; New stock report will turn out in 3-4 months $117 Million to forest proprietors.

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Monetary Subject Matter Meetings October 2002 Outlook for Forestry & Forest Products 2002+

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Snapshot: Forest Industry ~ 12.4 to 12.7 Million sections of land in Timber 90% exclusive; New stock report will turn out in 3-4 months $117 Million to forest proprietors

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Snapshot: KY Master Loggers No. of KML graduates: ~5,000 Number of Logging Co.: 1,481 KML Loggers/Firm: 2.52 Website: www.masterlogger.org/

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Loggers in Insurance Squeeze 4 Types of Insurance overviewed: Worker's Comp, Equipment, Trucking and General Liability Biggest change: Equipment protection cost hopped ~ 20-half. ~ half decreasing deductibles or scope Some revealed most prominent increment was for Health Coverage.

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Snapshot:Forest Products Industry 30,000 representatives 1 out of 9 assembling employments Annual finance of $602 Million Value of Forest Products made in KY: $4.5 - 5.3 Billion

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Snapshot: Forest Industry ~ 530 Primary Industries (ex., Sawmills) ~ 540 Secondary Industries (ex., Pallet & Cabinet creators) Including Logging co's, ~ 2550 firms

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Forest Products Outlook Stumpage Prices Primary Industries Secondary Industries Non-Timber Forest Products

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Stumpage Prices Most Hardwood costs are about the same, no supported changes anticipated. Costs are down somewhat from a year ago: - 2% for HW Sawtimber (~ $18.50/ton) - 6% for HW Pulpwood (~ $5.00/ton)

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Stumpage Trends Recent species inclines in sawtimber: Cherry and Walnut up; Hard Maple & Ash down Cabinet configuration market is heading back towards darker woods 3-4 year cycle

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Stumpage Trends Hickory is slowly climbing because of Red Oak cost (loads of hickory in KY). High silica, dulls blades – yet potential substitute for ground surface (ex. Teak in Cuba) Yellow-poplar still solid for embellishment & millwork markets.

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Stumpage Trends Soft maple has climbed ~ 1/3 the previous 2 years (Hard maple substitute, value touchy).

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Stumpage Trends Not a considerable measure of data about Softwoods (ex., Pines) in Kentucky < 7% of the volume of standing timber in the state (not including Eastern red cedar). Inclines presumably like all the more southerly states, pulpwood going lower. "Mass of Wood" as manors develop, thinnings issue

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Stumpage Trends Kentucky harvests ~ 15-25 Million board feet (or more) of Eastern red cedar every year. Generation goes into shavings, sheets and 3.5" x 3.5" posts that rival treated southern pine for letter drop posts. (half or a greater amount of generation!)

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Hardwood Sawmills Losing little & moderate size plants, however expanding the volume of wood sawn Factors : Consolidation of factories Optimization of factories through innovation More resaws to change over cants all the more effectively

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Hardwood Sawmills ~ 1200 Portable sawmills in Kentucky Ave. process life span is 5 to 6 years 30-40% of factories sold leave the state ~ 80% of proprietors get out, 20% purchase a greater factory Hard to bring home the bacon sawing just 1,000 load up feet/day!

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Hardwood Sawmills Portable sawmills are useful for particular markets or high esteem included open doors, for example, Yellow-poplar siding Restoration siding for old structures Gunstock spaces, spalted blunder, groins Building designs

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Hardwood Sawmills Likely open door for sawyers in Quarter-sawn amble showcase, yet most feel it's "a lot of inconvenience" Quartersawn (An) and Plainsawn (B) sheets cut from a log

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Other Primary HW Products Boards & Staves: Consistent, great viewpoint Distillery business getting greater CA is thinking about KY barrels Poles Pine peeler shafts (SE KY) have a decent market, however lost much pine to bugs

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Other Primary HW Products RR Crossties Hot Market! Enormous request. Costs up in most recent 6 months, however costs tend to run hot-and-cool, can't foresee

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Other Primary HW Products Pallet Cants 4.5 Billion board feet of HW timber was utilized as a part of beds in 1995 (38% of aggregate U.S. HW blunder generation) 48% of all KY HW stumble goes into beds! Exceptionally aggressive market!

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Other Primary HW Products Pallet Cants Demand is up, however the market cost has remained about the same! KY bed wood is greatly modest. ~10% less expensive than neighboring states! Ex., $245/MBF in KY versus $250/MBF in TN, $275/MBF in W. VA

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Dry Kilns Good esteem added opportunity Companies have kept on including dry furnace limit, will probably keep on adding greater limit.

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Secondary Hardwood Products Millwork (Residential & Commercial) Flooring Cabinets Furniture Pallets

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Millwork Increasing generation in most recent 5 years More/bigger disintegrates have been included Yellow poplar supply is remarkable, best wood decision Outlook: V. great, renovating solid

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Flooring Growing business sector, will keep on growing Preferred over covering Species utilized (all together of interest): Red oak White oak Hickory Hard maple

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Cabinets Remodeling market, won't back off Very aggressive, heaps of little firms and a couple of huge ones (15-20+ workers) Most do well with custom cupboards Cheaper lines originating from abroad utilizing U.S. wood

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Cabinets Entertainment Center market is anticipated to increment. Custom Built-in market is likewise anticipated to increment. Updates of more seasoned homes Maturing families mean diverse requests Transition to Flat-screen TVs

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Hardwood Furniture Struggling! Chinese have made some real progress on the business with less expensive work. Higher-end organizations have moved out of NC, TN, VA ( with U.S. specialists!) to China. Creating great quality furniture abroad

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Hardwood Furniture Still great open doors for furniture that is costly to dispatch. Ex., Entertainment Centers, BR furniture Designers can institutionalize parts like board size, improve generation, bring down expenses BUT – very little open door for most KY producers to take genuine preferred standpoint of this, too little

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Pallets KY is a genuine constrain in the bed business Increasing number of bed factories & repair offices (could be either great or terrible … ?) SE KY beds are a ~little less expensive. Industry shakeout expected – however hasn't happened!

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Pallets Trend towards more rented beds, institutionalization of determinations in the previous 5 years Large interest for custom items, however industry doesn't showcase itself that way "Product" = Low Profits! Industry needs better promoting.

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Pallets Excess limit in KY, space to develop Kentucky bed plants are running at just 80% limit. 75% of different states report that bed factories keep running at 85-90% limit. KY upper hand is because of low wood cost (esp. for clients in Chicago, and so forth.)

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Non-Timber Forest Products Ginseng, Goldenseal, Black/Blue Cohosh Mushrooms Native natural products (persimmon, pawpaw) Nuts (dark walnut, butternut, hazelnut) Christmas trees Fence posts Fuelwood

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Ginseng & Medicinals Ginseng: 5 to 10 year development required $300 or better per pound of dry root Vandalism is most concerning issue. Goldenseal, Cohoshes: Lower esteem, however develop in shorter time Goldenseal ~ $20-50/pound of dry root Less than that for Cohoshes

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Mushrooms Shiitake mushrooms are developed 3" to 8" distance across HW stems ~$5/pound for crisp shiitake discount Morels Mostly reaped, hard to oversee Value is ~ $30/pound new

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Christmas Trees Marketable yield in 5 to 7 years Mostly Scots pine or white pine is developed in Kentucky. Near 14% ROI can be normal.

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Acknowledgments Dr. Jeff Stringer, UK Dept. of Forestry Dr. Deborah Hill, UK Dept. of Forestry John Cotten, KY Dept. of Agriculture Dr. Billy Watson, Georgia-Pacific Larry Lowe, KY Division of Forestry Gene Parker, Hardwood Market Report Global Wood Trade Network Timber Mart South Jeff McBee, Pallet Profile Weekly Pallet Enterprise Forest Resources Association

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This introduction was given the Agricultural Situation and Outlook, Fall 2002 , production number ESM-28, distributed by the Department of Agricultural Economics at the University of Kentucky with an extra commitment from Kentucky State University in October 2002. The whole distribution can be gotten to on the WWW at http://www.uky.edu/Ag/AgEcon/productions/esm_28.pdf . This article presents data on the financial circumstance and standpoint for Kentucky horticulture and is expected to help ranchers, agribusiness experts, Extension documented staff, and others with enthusiasm for farming and agribusiness. Data exhibited here depends on the latest data and research accessible. In any case, the quickly changing monetary and approach conditions for farming breaking point the convenience and life expectancy of conclusions and suggestions refered to here. Leaders ought to remember these truths. Don't hesitate to utilize the data incorporated into this production for different uses, however please give proficient reference about the source. This paper is distributed without formal audit and the perspectives communicated are those of the creators and don't really mirror the perspectives of the University of Kentucky, the Agricultural Experiment Station, or the Cooperative Extension Service. On the off chance that you require extra data or on the off chance that you might want to give remarks or recommendations about this slideshow, please contact Terry Conners, Forest Products Specialist at tconners@uky.edu. College of Kentucky, Department of Agricultural Economics 400 Charles E. Barnhart Bldg., Lexington, KY 40546-0276  Phone: 859-257-5762, Fax: 859-323-1913 URL: http://www.uky.edu/Ag/AgEcon/

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