Thriving in the Face of Disruption
The Georgia Forestry Industry’s Way Forward in a Changing Landscape
Fall 2024
By John Casey
COURTESY OF GEORGIA PACIFIC
Georgia’s forestry industry has arrived at a pivotal juncture. As the state holds its position as the number one forestry state in the U.S., the market is undergoing significant shifts driven by macroeconomic changes and environmental trends. From mill closures and international trade pressure to increasing land use change from urbanization, the forestry sector faces both significant challenges and promising opportunities. These forces are reshaping how landowners, operators and industry leaders navigate the current landscape, demanding innovation and adaptation to ensure the longterm sustainability of one of Georgia’s most vital industries.
MACROECONOMIC OVERVIEW:
A Historical and Current Perspective
Marshall Thomas, president of F&W Forestry, delivered a macroeconomic analysis at the 2024 Georgia Forestry Conference, emphasizing that the forestry industry, like any sector, goes through a lifecycle. He presented a product lifecycle curve that reflects the industry’s stages: development, growth, maturity and eventual decline.
“Any industry and any product within an industry goes through these cycles,” said Thomas. “It’s inevitable. It happens every time.”
Georgia’s forestry industry, which initially thrived on naval stores and lumber production, has evolved over time with the introduction of products such as pulp and paper. Thomas pointed out that despite significant growth, the industry now faces an inflection point.
As it adjusts to modern market demands, factors such as mill closures due to reduced demand and overall changing consumer preferences have placed strain on Georgia’s supply chains. Thomas noted that the regional market dynamics, particularly in neighboring states, have had a profound impact on Georgia’s forestry sector.
“With all the mill closures and new products we’re talking about, it’s a different landscape today,” said Thomas. These mill closures in South Carolina, Florida and Alabama have reduced demand in those areas and freed up wood to flow into Georgia, creating an oversupply, which has resulted in lower prices for landowners selling timber in the affected areas. The excess supply of wood, recognized as a valuable raw material for making green products such as aviation and shipping fuel, is now available to help the world transition to a carbon-neutral economy. We just need to attract the industry that can use the material.
A Historical and Current Perspective
Marshall Thomas, president of F&W Forestry, delivered a macroeconomic analysis at the 2024 Georgia Forestry Conference, emphasizing that the forestry industry, like any sector, goes through a lifecycle. He presented a product lifecycle curve that reflects the industry’s stages: development, growth, maturity and eventual decline.
“Any industry and any product within an industry goes through these cycles,” said Thomas. “It’s inevitable. It happens every time.”
Georgia’s forestry industry, which initially thrived on naval stores and lumber production, has evolved over time with the introduction of products such as pulp and paper. Thomas pointed out that despite significant growth, the industry now faces an inflection point.
As it adjusts to modern market demands, factors such as mill closures due to reduced demand and overall changing consumer preferences have placed strain on Georgia’s supply chains. Thomas noted that the regional market dynamics, particularly in neighboring states, have had a profound impact on Georgia’s forestry sector.
“With all the mill closures and new products we’re talking about, it’s a different landscape today,” said Thomas. These mill closures in South Carolina, Florida and Alabama have reduced demand in those areas and freed up wood to flow into Georgia, creating an oversupply, which has resulted in lower prices for landowners selling timber in the affected areas. The excess supply of wood, recognized as a valuable raw material for making green products such as aviation and shipping fuel, is now available to help the world transition to a carbon-neutral economy. We just need to attract the industry that can use the material.
“There’s a surplus of residuals, and it’s starting to create a bottleneck. With fewer mills to take in pulpwood and residuals, landowners are either sitting on excess material or having to export it at a loss. It’s affecting the entire supply chain.” — Alex Nixon, Augusta landowner and certified forester
REGIONAL MARKET CHALLENGES:
A View from Augusta
Alex Nixon, a landowner and certified forester in the Augusta area with over four decades of experience, provided a ground-level view of the challenges faced by Georgia’s forest owners, particularly in his region. Nixon spoke candidly about the difficulties resulting from mill closures and international trade pressures.
“South Carolina losing the old Champion mill at Canton, and then WestRock at North Charleston, decimated the pulpwood markets in the western side of the state, putting tremendous pressure on mills in Georgia, especially Augusta and Savannah,” said Nixon.
One of the unintended consequences of these mill closures has been an influx of forest residuals piling up across the state, leaving forest owners with few options to manage the excess.
“There’s a surplus of residuals, and it’s starting to create a bottleneck,” said Nixon. “With fewer mills to take in pulpwood and residuals, landowners are either sitting on excess material or having to export it at a loss. It’s affecting the entire supply chain.”
The buildup has driven down prices for forest residuals, forcing many landowners to explore alternative markets, such as bioenergy or even overseas buyers.
The Augusta region, heavily reliant on its local mills, has been particularly hard-hit by recent market shifts. Nixon explained how changing housing market dynamics and lumber imports from countries like Brazil have further exacerbated the situation.
“We’re importing specialty lumber that doesn’t go into what I call tract housing,” said Nixon. “Ever since the Great Recession, we’ve been told 1.5 million housing starts were the happy medium nationwide. Now, we’re looking at around 975,000 housing starts this year, a third less than needed.”
The reduction in housing starts has led to decreased demand for timber, placing even more pressure on local mills.
Labor, too, presents a significant challenge. Nixon underscored the dire situation faced by the logging industry, noting the challenges of rising costs and an aging workforce.
“I don’t see how the ones that are still standing stay in business,” said Nixon. “Labor costs have skyrocketed, diesel prices have run up, and there are shortages of trained labor. And the average logger in the Deep South is still 57 years old.” This aging workforce, combined with increased operational costs, has left many in the industry questioning the long-term viability of their businesses.
A View from Augusta
Alex Nixon, a landowner and certified forester in the Augusta area with over four decades of experience, provided a ground-level view of the challenges faced by Georgia’s forest owners, particularly in his region. Nixon spoke candidly about the difficulties resulting from mill closures and international trade pressures.
“South Carolina losing the old Champion mill at Canton, and then WestRock at North Charleston, decimated the pulpwood markets in the western side of the state, putting tremendous pressure on mills in Georgia, especially Augusta and Savannah,” said Nixon.
One of the unintended consequences of these mill closures has been an influx of forest residuals piling up across the state, leaving forest owners with few options to manage the excess.
“There’s a surplus of residuals, and it’s starting to create a bottleneck,” said Nixon. “With fewer mills to take in pulpwood and residuals, landowners are either sitting on excess material or having to export it at a loss. It’s affecting the entire supply chain.”
The buildup has driven down prices for forest residuals, forcing many landowners to explore alternative markets, such as bioenergy or even overseas buyers.
The Augusta region, heavily reliant on its local mills, has been particularly hard-hit by recent market shifts. Nixon explained how changing housing market dynamics and lumber imports from countries like Brazil have further exacerbated the situation.
“We’re importing specialty lumber that doesn’t go into what I call tract housing,” said Nixon. “Ever since the Great Recession, we’ve been told 1.5 million housing starts were the happy medium nationwide. Now, we’re looking at around 975,000 housing starts this year, a third less than needed.”
The reduction in housing starts has led to decreased demand for timber, placing even more pressure on local mills.
Labor, too, presents a significant challenge. Nixon underscored the dire situation faced by the logging industry, noting the challenges of rising costs and an aging workforce.
“I don’t see how the ones that are still standing stay in business,” said Nixon. “Labor costs have skyrocketed, diesel prices have run up, and there are shortages of trained labor. And the average logger in the Deep South is still 57 years old.” This aging workforce, combined with increased operational costs, has left many in the industry questioning the long-term viability of their businesses.
The Role of Georgia’s Forests in the New Green Economy
While the traditional markets for timber and lumber are facing significant challenges, the growing green economy presents new opportunities. Matthew Stone, vice president of business development at Resource Wise, spoke at the 2024 Georgia Forestry Conference about the evolving role of carbon markets and how they could shape the future of Georgia’s forestry industry — emphasizing that Georgia’s forests are uniquely positioned to benefit from the global shift toward carbon neutrality.
“You are actually in the negative carbon game,” said Stone. “One of the important things that you need to do is trace and document the sustainability credentials of your supply chains and build that into your product offerings.”
Corporations are increasingly turning to forestry and forest products as vital components in their pursuit of net zero goals, recognizing the critical role that sustainable forest management plays in carbon sequestration and reducing greenhouse gas emissions. These efforts have positioned forests as a key driver in achieving corporate sustainability objectives and fostering a greener, more resilient future.
“We are moving from a world where the carbon potential of a sequestering product was worth effectively nothing to a world where the carbon value of that product is worth something,” said Stone.
Stone also discussed the potential of using residual forest products for biofuels, particularly Sustainable Aviation Fuel (SAF) and bioenergy. These emerging industries, which are expected to grow significantly in the coming years, could provide crucial new revenue streams for Georgia’s forestry sector.
“SAF offers a potentially high revenue stack,” said Stone. “We will need torrefied pellets of some description as a feedstock, and forest residue can play a big role in that.”
The shift toward a carbon-based economy also aligns with broader global trends, such as the growing demand for sustainability from consumers and governments alike. Stone highlighted that companies like Google and Microsoft are now focused on carbon mitigation rather than offsets, increasing the pressure on industries to actively reduce carbon emissions rather than simply offset them.
“Carbon traceability is going to be critical in the future,” said Stone. “Consumers and governments want to know what they’re buying, and that traceability will be key to differentiating products in the market.”
Opportunities and Next Steps for Georgia’s Forestry Industry
Despite the challenges facing the industry, there are pathways forward. As Marshall Thomas noted in his presentation, the industry has always evolved by introducing new products and adapting to market conditions.
“The industry can perpetuate itself by coming up with new products,” said Thomas, underscoring that the key to survival and growth is innovation.
The growth of the green economy, carbon credits and sustainable forestry practices offers significant new revenue streams for landowners and operators. By documenting carbon sequestration and positioning itself as a leader in sustainability, Georgia’s forestry sector has the potential to thrive in the coming decades. The state’s strong leadership in forest management, coupled with its abundant natural resources, puts it in a prime position to lead the nation in this new era of forestry.
Moreover, the industry must continue to promote education and workforce development through industry initiatives to address the labor shortages and aging workforce.
“We need to invest in the next generation of loggers to ensure the future of the industry,” said Nixon.
Georgia’s forestry industry stands at a crossroads. Significant challenges, including market fluctuations, mill closures and international competition, are testing the resilience of the sector. However, as global demand for sustainable and low-carbon products grows, Georgia is uniquely positioned to leverage its forests in new ways. By embracing opportunities in the green economy, including carbon trading, biofuels and sustainable practices, as well as addressing structural challenges such as labor shortages and mill consolidation, Georgia’s forestry sector can continue to evolve, securing its future as a leader in the U.S. forestry industry.
The path forward will require a combination of innovation, investment and adaptation. But as history has shown, Georgia’s forestry industry has the resilience and capacity to thrive, even in the face of significant disruption. ■
John Casey is a strategic communications professional who supports clients through the art of storytelling. In his downtime, John can be found hunting and fishing on his family’s centennial farm in Northwest Georgia.
While the traditional markets for timber and lumber are facing significant challenges, the growing green economy presents new opportunities. Matthew Stone, vice president of business development at Resource Wise, spoke at the 2024 Georgia Forestry Conference about the evolving role of carbon markets and how they could shape the future of Georgia’s forestry industry — emphasizing that Georgia’s forests are uniquely positioned to benefit from the global shift toward carbon neutrality.
“You are actually in the negative carbon game,” said Stone. “One of the important things that you need to do is trace and document the sustainability credentials of your supply chains and build that into your product offerings.”
Corporations are increasingly turning to forestry and forest products as vital components in their pursuit of net zero goals, recognizing the critical role that sustainable forest management plays in carbon sequestration and reducing greenhouse gas emissions. These efforts have positioned forests as a key driver in achieving corporate sustainability objectives and fostering a greener, more resilient future.
“We are moving from a world where the carbon potential of a sequestering product was worth effectively nothing to a world where the carbon value of that product is worth something,” said Stone.
Stone also discussed the potential of using residual forest products for biofuels, particularly Sustainable Aviation Fuel (SAF) and bioenergy. These emerging industries, which are expected to grow significantly in the coming years, could provide crucial new revenue streams for Georgia’s forestry sector.
“SAF offers a potentially high revenue stack,” said Stone. “We will need torrefied pellets of some description as a feedstock, and forest residue can play a big role in that.”
The shift toward a carbon-based economy also aligns with broader global trends, such as the growing demand for sustainability from consumers and governments alike. Stone highlighted that companies like Google and Microsoft are now focused on carbon mitigation rather than offsets, increasing the pressure on industries to actively reduce carbon emissions rather than simply offset them.
“Carbon traceability is going to be critical in the future,” said Stone. “Consumers and governments want to know what they’re buying, and that traceability will be key to differentiating products in the market.”
Opportunities and Next Steps for Georgia’s Forestry Industry
Despite the challenges facing the industry, there are pathways forward. As Marshall Thomas noted in his presentation, the industry has always evolved by introducing new products and adapting to market conditions.
“The industry can perpetuate itself by coming up with new products,” said Thomas, underscoring that the key to survival and growth is innovation.
The growth of the green economy, carbon credits and sustainable forestry practices offers significant new revenue streams for landowners and operators. By documenting carbon sequestration and positioning itself as a leader in sustainability, Georgia’s forestry sector has the potential to thrive in the coming decades. The state’s strong leadership in forest management, coupled with its abundant natural resources, puts it in a prime position to lead the nation in this new era of forestry.
Moreover, the industry must continue to promote education and workforce development through industry initiatives to address the labor shortages and aging workforce.
“We need to invest in the next generation of loggers to ensure the future of the industry,” said Nixon.
Georgia’s forestry industry stands at a crossroads. Significant challenges, including market fluctuations, mill closures and international competition, are testing the resilience of the sector. However, as global demand for sustainable and low-carbon products grows, Georgia is uniquely positioned to leverage its forests in new ways. By embracing opportunities in the green economy, including carbon trading, biofuels and sustainable practices, as well as addressing structural challenges such as labor shortages and mill consolidation, Georgia’s forestry sector can continue to evolve, securing its future as a leader in the U.S. forestry industry.
The path forward will require a combination of innovation, investment and adaptation. But as history has shown, Georgia’s forestry industry has the resilience and capacity to thrive, even in the face of significant disruption. ■
John Casey is a strategic communications professional who supports clients through the art of storytelling. In his downtime, John can be found hunting and fishing on his family’s centennial farm in Northwest Georgia.
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Georgia Forestry Magazine is published by HL Strategy, an integrated marketing and communications firm focused on our nation's biggest challenges and opportunities. Learn more at hlstrategy.com
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