Economics of Merchandising Pulpwood in West Virginia

Shawn T. Grushecky, Curt C. Hassler

Abstract


There has been renewed interest in determining the feasibility of pulpwood merchandising yards in the Appalachian region. Intensive merchandising is a potential way to supply raw material to traditional markets as well as current and new weight-based pulp markets at a lower cost. The feasibility of developing a hardwood pulpwood sorting merchandising yard in West Virginia was investigated. More than 171,000 kg of pulpwood was procured for this project. The majority of the pulpwood purchased was red and white oak followed by black cherry and hickory. Results indicated that between 3.6 and 6.0 t of pulpwood was needed to saw 1 m3 of lumber. The merchandising operation resulted in negative net revenues for all species studied. Handling cost was found to be one of the most important issues leading to this finding. However, it was found that merchandising low-quality sawlogs on the log-landing could be profitable. The cost and revenues reported in this study represent a complex blend of pricing and product yields that are dynamic with time. As weight-based markets, such as engineered products and bioenergy, expand and competition increases with traditional markets, inputs could be refined which would create a new set of merchandising options for roundwood.

Keywords


Concentration yard;roundwood markets;merchandising;pulpwood;low-grade sawlogs

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