Toward Top Quartile: Southern Pine Productivity Insights
by Bryan Beck, President, The Beck Group Consulting
Southern Pine Economics Series Blog #3
The world of sawmilling has seen major changes throughout the forty-plus years of The Beck Group’s existence, and the past decade has reflected several such changes. As mentioned in previous posts, overall manufacturing costs—and labor costs in particular—have risen faster than the overall inflation rate over the past decade.
Specific to the Southern pine industry, capital investment has poured into the South’s mills. Part of this capital influx has gone to expand existing mills’ capacities; the rest has been deployed to build new large-scale greenfield operations. This has made the region a bigger player in the North American industry, increasing average annual capacity at SYP mills from 150 million board feet to nearly 200 million board feet.
Meanwhile, sawmills increasingly require less staff even as they grow larger. Since 2012, the average volume of lumber produced per labor hour has increased more than 20%, as illustrated in the chart below:
What’s driving this improvement? Largely, advancements in automation. But that’s not the only factor in play. The average production rate per operating hour (at sawmills and planer operations) did not skyrocket during that period. Average production volume per hour (in thousands of board feet) still hovers in the low 40s.
To achieve higher annual production levels, mills are running more hours. In 2012, the average SYP sawmill ran approximately 3,200 hours (about 60 hours per week). In 2023, that number rose to more than 4,500 hours (more than 85 hours per week) even as lumber markets weakened and supply began to outstrip demand.
What does the future hold? As new large-scale mills continue to come online, and ongoing capital investments continue to bear fruit, we expect SYP mills to continue to increase in scale, and continued advancements in automation should continue to provide productivity gains for the foreseeable future. Investments in automation (reducing labor requirements) become more attractive as the cost of labor rises (which we have explored in a previous post).
We continually work to improve our benchmarking services to offer the most complete, accurate, and timely information available to sawmillers. Sawmill TQ is offered in partnership with Forest2Market, a leader in industry analytics.
There are other ways that The Beck Group Consulting can help. We conduct regular timber industry workshops, including our upcoming trainings on Sawmill Management (December 3-4, 2024) and the Business of Forest Products Workshop (January 23, 2025) - an introduction to the business of utilizing materials from the forest. We also hold regular workshops on Maintenance for the Wood Products World, Sawmilling 101, and more.
And if you want to engage our experience more directly, please call (503)684-3406 and our staff will help guide you.
The Beck Group, Inc.
Forest Products Planning and Consulting Services
Telephone (503) 684-3406
Email: info@beckgroupconsulting.com
Comments