Patterns of hardwood sawmill industry concentration: Tennessee case study, 1979 to 2005
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Forest Products Journal. 59:(5): 76-80.
This paper examines changes in sawmill concentration and hardwood lumber production for Tennessee between 1979 and 2005. In 1979, only 2 percent of the lumber manufactured in Tennessee was produced by very large mills with capacities of 10 million board feet (MMBF) or more annually. By 2005, such mills produced more than 43 percent of the lumber, generally following an "expand or exit" model of industry concentration. The greatest change in sawmill concentration, however, occurred in the eastern region of Tennessee, where very large mills accounted for 61 percent of the production in 2005 compared to 0 percent in 1979. Construction of mills in eastern Tennessee seems to have been facilitated by relatively low delivered log prices and improved highway systems. Such changes seem to follow a different model of industry concentration, one that occurred during the timber boom of the early 20th century -- if timber can be economically transported it will be "severed and sawn." Since 2005 there has been a decline in demand for higher grades of hardwood lumber and large increases in energy costs. This combination could influence the future size, location, operational objectives, and the industrial concentration of sawmills in Tennessee and other eastern hardwood states.
Luppold, William G.; Bumgardner, Matthew S. 2009. Patterns of hardwood sawmill industry concentration: Tennessee case study, 1979 to 2005