Dear Reader - U.S. wood products exports, column by Mark Dries - Brief Article - Column - Statistical Data Included

AgExporter, Jan, 2001

USDA

United States Department of Agriculture

Foreign Agricultural Service

Solid wood may not be the first product that comes to mind when you're thinking about U.S. agricultural exports. But if you think of it as fiber-like cotton- the connection to agriculture and the agricultural exporter is easier to make.

In dozens of states, timber ranks as one of the top income-producing agricultural products. There are over 1 million landowners who grow trees for timber harvest, supplying fiber to over 70,000 wood businesses nationwide. You'll find other interesting factoids on the U.S. forest products sector in a special center spread included in this issue.

In the midst of the current home construction boom and the ubiquitous presence of Canadian and other foreign lumber products at your local retail outlet, it should come as no surprise that the United States is the world's largest consumer and importer of wood products.

Perhaps less apparent, however, is the fact that we're also the world's largest producer of wood and a leading exporter-ranking second only to Canada in international markets.

Taking a quick look back in time, U.S. solid wood exports exceeded $7 billion for five straight years from 1993-97, peaking at $7.5 billion in 1995. In 1998, U.S. sales fell significantly to $5.8 billion due to financial and economic instability in world markets, the strong dollar, and our own housing boom.

Now, we're on the slow road to recovery. Last year, U.S. solid wood exports climbed back over $6 billion and we're forecasting further growth to $6.3 billion in the year ahead.

In addition to these macroeconomic factors, the single most critical issue facing U.S. companies in today's international marketplace is competition. Rising production in South America, Scandinavia, the Baltics, Oceania, and parts of Asia is challenging North American pre-eminence in many of our large well-established markets, including Japan, Korea and Western Europe. These competitors are also targeting newer emerging markets such as China and the Caribbean. A good example is Brazilian plywood, which has eroded U.S. share in Europe and is increasingly making inroads in Mexico and the Caribbean.

While Europe and Japan remain our largest and most important overseas markets, finding new customers and developing innovative promotional programs will be critical to countering the competition and growing demand.

In this issue, short articles by Tom Westcot and Alan Hallman highlight U.S. efforts in Japan and Korea to promote world-class design with wood. And in Europe, our top market by far for U.S. hardwoods, the potential for growth is by no means saturated. In his article, Bill Bomersheim discusses U.S. industry efforts to generate publicity that is making American hardwood more fashionable than ever among European designers and specifiers.

Meanwhile, the quest to identify and create new growth opportunities in "emerging markets" is front and center here at FAS. Roseanne Freese's article on privatization and housing reform in China and Andy Salamone's piece on tourism-led growth in the Caribbean both illustrate the growing importance of such developing markets to U.S. exporters.

Lastly, I encourage you to read the first article of this month's AgExporter carefully. It provides a timely update on an issue of major importance for all U.S. exporters using pallets and other wooden packaging. You should be aware there is a global trend toward greater regulation of solid wood packing material (SWPM) in international commerce. While many of these measures address legitimate concerns countries (including the United States) have about the entry of invasive pests, they also have major potential to disrupt trade. The issues involved are complex and still unfolding. We hope this article will help you better understand the situation and recognize that the stakes are high since so much of what is shipped internationally is transported on wood.

Mark Dries

Director, Forest and Fishery Products Division

Foreign Agricultural Service

U.S. Department of Agriculture