Stimulating Market Development for California’s “Urbanwood”

ResourcesRichard P. Thompson, ProfessorCalifornia Polytechnic State University, San Luis ObispoDirector Urban Forest Ecosystems Institute

John R. Shelly, Extension SpecialistUniversity of California Forest Products Laboratory

Urban Utilization Problems• Greenwaste flows have drastically limited

landfill capacity in California.• Solidwood represents the highest value

potential in these flows but utilization is low because an efficient market has yet to form.

Purpose To help the market for urban solidwood,

“urbanwood”, emerge in California.

ObjectivesPhase I - Primary Supply• Estimate urban sawlog supply potential• Evaluate economic viability of urban mills &

assist with technical informationPhase II - Secondary Manufacturers & the Market• Evaluate methods to describe urban wood raw

material characteristics (i.e. “grades”)• Evaluate the Internet to facilitate emergence of

urban wood markets– Develop directory of raw material suppliers and

secondary manufacturers

Challenges• Log Supply Potential

– Uncertain volume in urban waste stream– Poorly defined raw material quality

specifications • High log manufacturing costs and weak

capital funding• Deficit of log processing knowledge• Secondary wood manufacturer’s demands?• Industry infrastructure lacking

Estimating Urbanwood Availability in California

NEOS 1994 110 million BF > 12-inch Diam.

Larson 1995 20 > 12-inch Diam.

Arborist 1999 60 > 12-inch Diam.

Landfill 1999 4 6

>12-in. D, 4-ft L>12-in. D, < 4-ft

Challenges• Log Supply Potential

– Uncertain volume in urban waste stream– Poorly defined raw material quality

specifications • High log manufacturing costs and weak

capital funding• Deficit of log processing knowledge• Secondary wood manufacturer’s demands?• Industry infrastructure lacking

150 MBF-RG Cost Breakdown

Labor

Site Rental

Insurance Misc.

Mainten.

Deprec.

Debt

Utilities

Transp.

150 MBF-KD Cost Breakdown

Misc.

DryingDeprec.

Site Rental

Insurance

Mainten.

DebtLabor

Utilities

Transp.

220 MBF-KD Cost Breakdown

Misc.

DryingDeprec.

Site RentalInsurance

Mainten.

Debt

Labor

Utilities

Transp.

Wholesale Price Range vs. Cost Estimates per BF

$0.46$0.53

$1.10

$0.70$0.77

$1.30

$0.00$0.20$0.40$0.60$0.80$1.00$1.20$1.40$1.60$1.80$2.00

150 - RG 150 - KD 220 - KD

LOW COST

HIGH COST

HIGH COST

LOW LOW COSTCOST

High Value

Low ValueHIGH

COSTLOW COST

After-tax Profit Scenarios

Value

220-KD

150-RD150-KD

low medium highlow medium high

150 - RG150 - KD

220 - KD-$10.0

$0.0

$10.0

$20.0

$30.0

$40.0

$50.0

Species Quality

Best Case -Retail prices,

low costs

Worst Case -Wholesale

prices, high cost

Challenges• Log Supply Potential

– Uncertain volume in urban waste stream– Poorly defined raw material quality specifications

• High log manufacturing costs and weak capital funding

• Deficit of log processing knowledge• Secondary wood manufacturer’s demands?• Industry infrastructure lacking

• Inappropriate log storage (time and log deterioration)• High handling costs – no uniformity in log size, downtime

problems (equip. maintenance, metal scanning)• Wasteful sawing practices (also saw for value or volume?)• Drying knowledge is limited for many species

Challenges• Log Supply Potential

– Uncertain volume in urban waste stream– Poorly defined raw material quality specifications

• High log manufacturing costs and weak capital funding

• Deficit of log processing knowledge• Secondary wood manufacturer’s demands?• Industry infrastructure lacking

Promoting niche markets is the current focus of our project.

“Urbanwood” Demand• Highly non-concentrated secondary

manufactured products lines :– rough, green lumber of sub-grade dimensions– countless niche “figure wood” manufacturers (e.g., burl

products, blanks, exotics with unique figure and color)– woodworking guilds and individual hobbyists

• Potential substitutes for some traditional, non-commodity uses

• Unrealized residue utilization opportunities (e.g., compost, pet bedding)

High Value Potential• Dense Hardwoods

– Walnut– Ash– Locust– Acacia– Elm– Sycamore– Orchard Trees

• CA Dense Hardwoods– Madrone– Tanoak– Eucalyptus spp.– CA Black Walnut (Claro)– CA Laurel

• Unique Softwoods– Monterey Cypress– Monterey Pine– Redwood

Challenges• Log Supply Potential

– Uncertain volume in urban waste stream– Poorly defined raw material quality specifications

• High log manufacturing costs and weak capital funding

• Deficit of log processing knowledge• Secondary wood manufacturer’s demands?• Industry infrastructure lacking

Needs for “Urbanwoods” Market Emergence

• Processing and business education -- access to technical information and assistance

• Capital funding (e.g., initial govt. loan “supports”)

• Niche marketing assistance (e.g., industry assoc.)

• Market and distribution infrastructure– Identifying suppliers and buyers (Internet

directories)– Brokering mechanisms (brokers, Internet

transactions, cooperatives, etc.)– Raw material grading uncertainties

The Power of the Internet

• Disseminate technical & market information• Finding equipment and materials

• Connecting buyers and sellers

Related Websites www.woodweb.com

“This old woodpile” www.californiahardwoods.com www.ecotimber.com

HFIA’s http://hawaii-forest.org/

New urbanwood resource on UFEI websitewww.ufei.org