Toward Top Quartile: Southern Pine Recovery Insights

by Bryan Beck, President, The Beck Group Consulting

Southern Pine Economics Series Blog #4

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Throughout this series, we’ve been discussing recent events in the Southern Yellow Pine lumber industry. As we’ve seen, over the past decade this industry has seen manufacturing and labor costs rise faster than inflation. SYP mills have gotten larger, and productivity per labor hour has increased.

Today we’re going to explore how lumber recovery at SYP mills has changed in recent years.

Lumber recovery is, in essence, the yield from each sawlog. It is one of the lumber industry’s most important metrics, and is one that technology has impacted in recent years.

It would appear that the industry’s capital investments have produced good fruit when it comes to lumber recovery (expressed in terms of tons of logs consumed per thousand board feet of lumber produced). As the chart illustrates, lumber recovery at SYP mills has shown steady improvement of about 1% annually over the last four years. In other words, each year 1% fewer logs have been required to produce the same amount of lumber.

Several factors can influence lumber recovery, and the most important is log size. These improvements in recovery have occurred despite the fact that average bucked log small end diameter has not changed materially during the period considered, staying right around 9.3-9.4”.

So if the log supply hasn’t changed, what brought this on?

The recovery improvements are most likely the result of several manufacturing changes that add up to better recovery. The capital investment has produced improvements in computer optimization at key machine centers, reductions in manufacturing and drying defects, and reductions in saw kerf and/or rough green lumber size. All of this means less mill residuals, which from a lumber production perspective mean less waste. (There are uses for mill residuals, but hardly any mill would prefer them to better lumber recovery.)

In light of this lumber recovery improvement, it is not surprising that chip yields (tons of chips produced per thousand board feet of lumber) have been improving at a pace of 1-3% per year. That is to say, more of each log is turned into lumber—and less into chips.

This continued improvement in lumber recovery is quite remarkable. There is a geometric limit to the amount of rectangular lumber that mills can produce from round(ish) logs, but the sawmill industry keeps finding ways to squeeze a bit more lumber out of each stem.

We continually work to improve our benchmarking services to be 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 training on the Business of Forest Products (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