While several commodities within the U.S. arsenal of imports and exports may be experiencing a softening, forest products seem to be holding their own.  In fact, the most recent USDA Foreign Ag Service (USDA FAS) statistics show a 15% increase in overall forest products imports over the same period of the previous year.  The multi-billion dollar industry saw increases in almost all of its import commodities including hardwood lumber (+14%), softwood lumber (+18%), hardwood flooring (+65%), assembled flooring panels (+8%), softwood flooring (+41%) and hardwood plywood (+19%).  Only softwood plywood saw a decrease, and that was very slight at 1 percent. This increase in imports could be the result of several scenarios including an uptick in housing starts which reached 0.92 million in 2013, up from recession lows; demand for diversified wood products; double digit growth in remodeling spending or perhaps even emerging markets. But, according to USDA Forest Services what is clear, is that the U.S. has become progressively more reliant on imports to meet domestic consumptions needs.   That doesn’t mean that industry in the U.S. doesn’t still pack a punch though.  According to the American Forest and Paper Association, the U.S. forest products industry manufactures approximately $200 billion in products annually and is among the top 10 manufacturing sector employers in 47 states.   Imports of wood and paper products as a share of consumption increased from 13% to 30% between 1965 and 2005 during which period there was a concurrent trend towards increasing exports which peaked in 1991.  Since that time however, exports have declined, while imports continue to rise.  Port of Mobile Profits From Forest Products And while exports are declining to imports, the Port of Mobile, which is a major gateway for breakbulk forest products, sees that their trade in and out is fairly balanced. And while the port also handles containerized forest products, they only track total containers in and out and not commodity held within.  Those numbers aside, breakbulk proves impressive all on its own.  In 2012, the port had 1.35 million tons of breakbulk forest products move through with 55% of that being exported.  In 2013, they saw 1.37 million tons, 50% of which was exported.   “We handle everything, pulp, lumber and other cut wood products, Kraft Liner Board, paper, etc.,” says Judith Adams, vice president of marketing for the Port Authority. “We are a significant forest products manufacturing region.  Just about every major forest products producer and shipper uses the Port of Mobile.” According to the Alabama Forestry Association, forest products are the second largest export commodity handled by the port, second only to coal.  Forest products are shipped from Alabama to destinations worldwide, “with the bulk moving to Northern Europe, Asia, Caribbean and Mediterranean.”  Softwood lumber, which accounts for about 80% of the world’s timber production and comes from cedar, pine and spruce trees, has seen the greatest growth in imports, over doubling that of its sister products.  And while data isn’t available for interstate imports and exports across U.S. regions, the USDA does roughly estimate that the north is leading in consumption followed by the south, pacific coast then Rocky Mountain regions.   Perhaps these imports are in preparation for what the recent national climate assessment calls a “gradual increase in temperature [that] will alter the growing environment of many tree species throughout the United States, reducing the growth of some species especially in dry forests and increasing the growth of others (especially in high-elevation forests).” The report goes on to say that climate change effects in forests are likely to cause losses of ecosystem services in some areas like timber production including in the southeast where the majority of the nation’s pulp and timber supply currently originates.  Perhaps if these changes come to fruition and the southeast can no longer supply the pine they are noted for, production can shift northward or perhaps the import to export ratio will continue to sway. Long-term global forecasts from the Campbell Group’s “Timber Trends” newsletter predicts that Asia will become the largest consumer of pulpwood fiber – used in paper – within the next five years. The three major importing countries in Asia – Japan, China and South Korea together already imported more than twice as much lumber in 2013 compared with five years ago.  The report also theorizes that biomass as an emerging, clean and renewable energy source could drive growth for wood pellets and energy chips – also in Asia.     Exports of U.S. softwood, though again not quite on par with imports, did see a spike in October before dropping in November.  All however was not lost as 2013 exports exceeded year-over-year totals from 2012 for 12-consecutive months and totaled 175.39MMBF (millions of board feet) in November 2013 alone.  China continues to be the top importer of U.S. lumber followed by Canada, Mexico, Japan, Taiwan and the Dominican Republic. It is thought that the lumber demand trends in the U.S., China and Western Europe will shape global markets in 2014 and beyond with a definite tightening in supply side dynamics in Canada.  IndustryIntel’s Wood Markets is predicting a steady growth in housing starts which will lead to higher lumber production but cautions that it will be less than the 20% needed to support a very strong market. Capitalizing on this historically strong market, a new program called the Paper and Paper-Based Packaging Promotion, Research and Information Order which was recently ushered in by the a vote conducted by the Agricultural Marketing Service, will begin placing an initial assessment of 35 cents per short ton on domestic paper and paper-based packaging either manufactured within the U.S. or imported therein.  U.S. Customs and Border Protection will collect the fee on imports for this program which covers four industry segments: printing and writing (except for newsprint); kraft packaging paper (used for products such as grocery bags and sacks); containerboard (used to make shipping containers and related products); and paperboard (used for food and beverage packaging, tubes and other miscellaneous products).  Assessment funds will be used for activities designed to raise awareness about and highlight the renewability, recyclability, and reusability of paper and paper-based packaging – a move that will position the commodity for the future.