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Red Alder; Market Reasons for Optimism!
Larry Mason University of Washington College of Forest Resources Rural Technology Initiative
Washington Hardwoods Commission Annual Meeting, June 14, 2006
5/06 price in 2004 $ Red Alder: $699 Douglas-fir: $620
Puget Sound Region.
Source: Log Lines (1989-2004, 2006), Forest Product Price Report (1959-1990), Timber Management Plus (current), U. S. Dept of Labor
Net Present Value (NPV)
$0
$200
$400
$600
$800
$1,000
$1,200
Douglas-fir 45 year rotation Red Alder 35 year rotation
$/A
cre
2004; 5% rate of return
Price Indexes for Hardwood Lumber, 1965 - 2002
Average increase/year since 1965 of 4.9%
More stable than softwood lumber
Source: U.S. Forest Service
Western producers produce < 5% of hardwood lumber
U.S. Hardwood Exports1986-2002
500
1000
1500
2000
2500
3000
1986 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002
Logs & Chips Value-Added
$ Million
Source: American Hardwood Export Council
Top Five Hardwood Lumber Species Exported to China in 2004
$0
$5
$10
$15
$20
$25
$30
$35
Alder Red Oak Yellow Poplar Maple White Oak
Mil
lio
n $
Source: USDA Foreign Agriculture Service
Value of Alder Lumber Exports for Total World and Top Markets: 2001-2004
$0
$20
$40
$60
$80
$100
$120
2001 2002 2003 2004
Mill
ion
$
World China EU-25 Canada
Source: USDA Foreign Agriculture Service
2005 $121 Million Total Sales
Alder lumber export statistics for Jan-May of 2004 and 2005.
Source: Hardwood Review (2005) and USDA Foreign Agricultural Service (2005).
Alder LBR Exports by Country
Jan-May 2004 Vol. (m3)
Jan-May 2005 Vol. (m3)
Change 05 vs. 04
Jan-May 2004 Value (1000 $)
Jan-May 2005 Value (1000 $)
Change 05 vs. 04
China 47,397 65,349 +37.9% $12,897 $19,620 +52.1% Canada 13,467 18,515 +37.5% $3,751 $4,283 +14.2% Mexico 11,740 12,380 +5.5% $4,065 $4,552 +12.0% Italy 7,990 8,774 +9.9% $5,125 $6,517 +27.2% Germany 3,031 6,657 +119.6% $2,506 $5,433 +116.8% Spain 5,483 4,961 -9.5% $3,479 $3,601 +3.5% EU-25 21,398 25,725 +20.2% $14,261 $18,831 +32.1% Taiwan 5,504 4,049 -26.4% $1,548 $1,209 -21.9% Philippines 1,388 2,617 +88.5% $617 $1,365 +121.2% Vietnam 855 1,907 +123.0% $313 $746 +138.2% Portugal 1,762 1,501 -14.8% $952 $829 -12.9% World Total 107,159 135,315 +26.3% $40,304 $52,589 +30.5%
Source: Roos, J., G. Donovan, D. Nicholls. How does species name affect consumer choice? An analysis and implications for PNW cabinet door marketers. Forest Products Journal. 55(5). Pp. 21-26.
How Do Domestic Markets Respond to Alder?
560 respondents in Anchorage 900 respondents in Seattle
Cabinet Door Species Preference
0.00%
5.00%
10.00%
15.00%
20.00%
25.00%
30.00%
Alder(HeavyStain)
Alder(Moderate
Stain)
Alder(Unstained)
Cherry Maple Red Oak Hickory
Pe
rce
nta
ge
of
tim
e c
ho
se
n a
s a
fa
vo
rite
Name No Name
Cabinet Door Species Preference
0.00%
5.00%
10.00%
15.00%
20.00%
25.00%
30.00%
35.00%
40.00%
All Alder Cherry Maple Red Oak Hickory
Pe
rce
nta
ge
of
tim
e c
ho
se
n a
s a
fa
vo
rite Name No Name
Combined alder preferences dominate selections!
C - ?
#1 - $2.20
#2 - $1.70
C - $1.40
#1 - $1.00
#2 - $0.60
But can Alder price get too high?
C - $1.50
#1 - $1.20
#2 - $0.70
Poplar
C - $3.75
#1 - $2.50
#2 - $1.50
CherryMaple Alder
http://www.innernet.net/galleryofwood/pricelist.htm
Working Properties for Selected Com m ercial Hardwoods
M achining
Nailing
Scre w ing
Gluing
Finis hing
Red alder American cherry Hard maple Soft maplePOOR GOOD
One reason for alder popularity among manufacturers is its workability
Source: American Hardwood Export Council
South West Rustic Furniture
???????????????
4/4 Premium Frame$825/MBF
4/4 Standard and #3 Shop
$550/MBF
Source: Bill Redman, North Pacific Lumber
Alder is the only wood approved for grocery pallets by the West coast food industry.
But > $300/MBF?
Source: Hardwood Lumber Review and Bill Redmond
What about the pulp price?
The west produces < 3% of U.S. hardwood chips
Source: USDA Forest Service
Red Alder is not a tropical hardwood.
Planting Red Alder will diversify commercial forestland investments.
As prices rise more plantations are established.
Red Alder logs are likely to become increasingly scarce because present plantations are few.
Increases in research in intensive management and genetic improvements will likely result in hardier stock, shorter rotations, higher grades, and greater yields.
Shorter rotations mean quicker return-on-investment and reduced risk.
Rapid growth does not appear to compromise lumber quality.
Red Alder appears well established in Domestic and Export niche markets.
Products markets can be strengthened and expanded through consumer education.
Engineered Wood Products may help with raw material shortages.
200 MMBF in Alaska more in Canada.
Available on the web at no charge or on DVD-ROM for $10 (this can only be viewed on a computer with DVD reader).
To order, contact Clara Burnett (clara75 @cfr.washington.edu), or call the RTI office at (206) 543-0827.
Available on the web at http://www.treesearch.fs.fed.us/pubs/22325
Or in hard copy from: Pacific Northwest Research StationP.O. Box 3890Portland, OR 97208
(503) 808-2592