Mill dynamics: Exploring factors that influence closure patterns of primary forest product mills in the Southern U.S.

Timber is the most marketable product obtained from the majority of forests. Approximately 60 percent of U.S. timber products are produced by mills in the Southern U.S. (Prestemon and Abt 2002). The USDA Forest Service Forest Inventory and Analysis (FIA) southern region conducts biennial surveys of Timber Products Output (TPO) to assess uses of roundwood in 12 southern states. The TPO survey targets the entire population of primary wood-using mills, this study included a set of selected mill types for surveys conducted between 2005 and 2017. Primary wood-using mills included sawmills, plywood, veneer, poles, and post mills. This historical TPO mill information was analyzed using a time to event methodology also called a survival analysis approach, to evaluate internal and external factors affecting mill survival. Internal variables included plant size, type, structure and ownership, tree species group (hardwood and softwood), and equipment. External factors included clustering, plant competition at 10 and 30 miles, as well as the socio-economic variables - population density and unemployment. Mill numbers declined by approximately 39% between 2005 (start of study) and 2017 (end of study). Smaller numbers were observed for the years 2007 to 2009, coincident with the Great Recession in the U.S., but consumption volumes gradually increased after that period. The results showed most of the variables had a significant correlation with the probability of closure. The exception was the socioeconomic variables, which were not correlated with mill exit. The analysis showed significant changes in the density of mills with a downward trend in mill numbers regardless of socio-economic conditions