United States 

Department of 

Agriculture 

Forest Service 

Pacific Northwest 

Research Station 

General Technical 

Report 

PNW-GTR-532 

April 2002 

Utilization of Oregon’s 

Timber Harvest and 

Associated Direct 

Economic Effects, 1998 

Krista M. Gebert, Charles E. Keegan, III, 

Sue Willits, Al Chase 
Authors	 Krista M. Gebert was formerly employed as the manufacturing research project 

coordinator with the Bureau of Business and Economic Research, University of 

Montana, Missoula, MT 59812 and is presently employed as an economist with the 

U.S. Department of Agriculture, Forest Service, Rocky Mountain Research Station, 

Missoula, MT 59807; Charles E. Keegan, III is the director of forest industry research 

and research professor, Bureau of Business and Economic Research, University of 

Montana, Missoula, MT 59812; Sue Willits is program manager, Forest Inventory and 

Analysis, U.S. Department of Agriculture, Forest Service, Pacific Northwest Research 

Station, Portland, OR 97208; and Al Chase is a research forester, Bureau of Business 

and Economic Research, University of Montana, Missoula, MT 59812. 
Abstract 

1998 Report 

Highlights 

Gebert, Krista M.; Keegan, Charles E., III; Willits, Sue; Chase, Al. 2002. Utilization 

of Oregon’s timber harvest and associated direct economic effects, 1998. Gen. 

Tech. Rep. PNW-GTR-532. Portland, OR: U.S. Department of Agriculture, Forest 

Service, Pacific Northwest Research Station. 16 p. 

With more than 16 million acres of commercial timberland, Oregon’s forest products 

industry is an important part of Oregon’s economy and a major player in the Nation’s 

wood products market. Despite declining production over the last decade, in 1998 

Oregon was still the leading producer of softwood lumber and plywood in the United 

States, and the timber harvested in Oregon is the major supplier of the raw material 

used by Oregon’s wood-processing mills. This report traces the flow of Oregon’s 1998 

timber harvest through the various primary wood-using industries and investigates the 

relations between the harvest and key economic variables such as the value of production, employment, and workers’ earnings. Also included is a section on Oregon’s secondary wood products industry. 

Keywords: Wood products industry, timber harvest, economic effects, employment, 

labor income, sales value, Oregon. 

• 	 In 1998, Oregon’s primary and secondary wood-using industries generated $10 

billion in sales and employed nearly 75,000 workers earning about $2.8 billion in 

labor income. 

•	 Oregon’s primary wood products industry employed more than 51,000 workers and 

paid out $2 billion in labor income, including logging and forestry, with most (86 

percent) of this associated with Oregon’s timber harvest. 

•	 Oregon’s secondary wood products industry (also referred to as the value-added 

industry) generated around $2.9 billion in sales, 23,000 jobs, and $752 million in 

labor income. Firms manufacturing doors, windows, moulding, and cutstock generated the most sales revenue at $701 million. 

•	 The 1998 Oregon timber harvest was an estimated 3,752 million board feet 

Scribner. This equals 749 million cubic feet (MMCF) of timber of which 64 percent 

flowed to sawmills, 22 percent to plywood and veneer plants, 10 percent to chipping 

mills, and another 3 percent directly to pulp, paper, and board plants. The remainder of the harvested timber went to log export companies; shake and shingle mills; 

and post, pole, and piling facilities. 

•	 The processing of Oregon’s timber harvest generated an estimated 350 MMCF of 

mill residue. Sawmills produced 76 percent of this residue, and plywood and veneer 

plants produced 24 percent. Other wood products manufacturers produced less 

than 0.5 percent of the mill residue. 

•	 Of the 350 MMCF of wood fiber residue derived from Oregon’s timber harvest, 286 

MMCF (82 percent) went to the pulp, paper, and board industry, and 61 MMCF (17 

percent) was used as hog fuel or for miscellaneous uses such as firewood, wood 

fuel pellets, or livestock bedding. The remaining 1 percent of wood fiber residue 

was in the form of peeler cores shipped to sawmills for processing into lumber (2.5 

MMCF) or went unused (1.6 MMCF). 
•	 Altogether, 382 MMCF of wood fiber from Oregon’s timber harvest went to the pulp, 

paper, and board industry, with most of this (75 percent) coming from mill residue. 

The remaining 96 MMCF was in roundwood form, with 24 MMCF flowing directly 

to pulp, paper, and board mills and 72 MMCF going to separate chipping mills. 

•	 The stumpage value of Oregon’s timber harvest was about $1.1 billion, or on average, $300 per thousand board feet (MBF) Scribner of timber harvested, and the 

mill-delivered log value was about $1.8 billion. 

•	 The total sales value of products made from Oregon’s 1998 timber harvest was 

$4.2 billion, of which lumber products accounted for $1.8 billion; plywood and 

veneer—$1.2 billion; pulp, paper, and board products—$1.2 billion; log exports— 

$44 million; and other primary wood products—$17 million. 

•	 Primary processing of Oregon’s timber harvest generated an estimated 44,000 jobs 

and $1.7 billion in labor income, including the residue and fiber-processing sector, 

with harvesting and timber management activities accounting for 46 percent of this 

employment. 

•	 In addition to the 749 MMCF of timber harvested in Oregon, Oregon’s primary 

wood-using mills processed 148 MMCF of timber from outside of Oregon in 1998, 

69 percent of which came from the state of Washington. 
Introduction 

Oregon’s Forest 

Products 

Industry—The 

Last 10 Years 

With more than 16 million acres of commercial timberland, Oregon’s forest products 

industry is an important part of Oregon’s economy and a major player in the Nation’s 

wood products market. Despite a decline in lumber production of 36 percent and in 

plywood production of 56 percent since 1988, Oregon was still the leading producer 

of softwood lumber and plywood in the United States in 1998. Oregon mills produced 

about 5.5 billion board feet, lumber tally, of lumber or nearly 16 percent of U.S. lumber 

output (Warren 2000). At 3.5 billion square feet of plywood (3/8-inch basis), Oregon 

was also the Nation’s leading producer of softwood plywood, accounting for 12 percent 

of the Nation’s softwood structural panel production (Warren 2000). 

The sales value of Oregon’s manufactured primary wood and paper products in 1998 

was about $7 billion, with secondary manufacturing adding an additional $3 billion in 

value. These sales translated into thousands of jobs and billions of dollars in income 

for Oregon’s residents. In 1998, Oregon’s primary and secondary wood and paper 

products industry employed nearly 75,000 workers earning about $2.8 billion in labor 

income. 

The primary forest products industry consists of manufacturers that process timber 

into manufactured wood products and facilities that use the wood fiber residue directly 

from the timber processors and includes lumber, veneer and plywood, pulp and board, 

shake and shingle, log export, and post, pole, and piling manufacturers. The secondary 

industry (also referred to as the value-added industry) comprises facilities such as 

wood cabinet or furniture manufacturers that further process the outputs from primary 

forest products industries. 

Oregon’s timber harvest is the major supplier of raw material for Oregon’s wood-processing mills, supplying over 83 percent of the timber used in 1998. This report traces 

the flow of Oregon’s 1998 timber harvest through the various primary wood-using 

industries and investigates the relations between harvest and key economic variables 

such as the value of production, employment, and worker’s earnings. These relations 

are examined in sections describing (1) the utilization of Oregon’s 1998 timber harvest, 

(2) the value of the products derived from that harvest, (3) the direct employment and 

earnings associated with the harvest, and (4) the direct effects of all timber processed 

in Oregon. We also include a section on the secondary wood products industry to give 

a more complete view of the wood-using industries in Oregon. 

Wood product markets in Oregon, as with the rest of the Nation, were sluggish in 

1998 owing to the expanding Asian financial crisis. After near record high prices in the 

first half of 1997, lumber prices dropped sharply throughout the rest of the year and 

remained low throughout 1998. Lumber production in Oregon fell slightly in 1998, from 

5,589 million board feet (MMBF), lumber tally, in 1997 to 5,486 MMBF, and softwood 

structural panel production increased from 3,471 million square feet (MMSF), 3/8-inch 

basis, in 1997 to 3,492 MMSF in 1998 (Warren 2000). The effect of the Asian crisis on 

the wood products industry in Oregon was most clearly seen in the nearly 17-percent 

decrease in log exports from the Seattle and Columbia-Snake Custom Districts from 

1997 to 1998 (Warren 2000). 

1

Compared to a decade earlier, lumber production, softwood plywood production, and 

log exports were all significantly lower in 1998. Lumber production in Oregon decreased 

36 percent from 1988 to 1998, softwood plywood production by 56 percent, and log 

exports by 76 percent (from the Seattle and Columbia-Snake Customs Districts combined). In addition, timber flowing into Oregon mills from outside the state increased 

from 7 percent of total timber processed in 1988 to nearly 17 percent in 1998 (Ward 

et al. 2000). 

Declining harvest levels contributed to the fall in log consumption, and resultant production, by Oregon’s primary forest products industries. From 1988 to 1998, Oregon’s 

timber harvest fell almost 60 percent, from 8,615 MMBF in 1988 to 3,542 MMBF in 

1998 (Warren 2000). Though harvest fell on all timberlands during this time, regardless of major ownership category, the largest effect came from the decline in harvest 

on federal lands, which fell more than 89 percent over the 10-year period. Harvest on 

state lands fell nearly 48 percent, and private timber harvest fell 13 percent (Warren 

2000). The fall in timber harvest was due primarily to legislative and administrative 

requirements emphasizing nontimber resources and habitat conservation strategies 

over timber production, particularly on federal lands. 

As a result, the number of primary mills, and thereby log consumption, decreased 

dramatically. In 1988, 360 separate mills used about 8.8 billion board feet of logs. By 

1998, the number of mills had fallen to 200, and log consumption had dropped to 4.5 

billion board feet (Howard and Ward 1991, Ward et al. 2000). Changes in Oregon’s 

forest products industry during this time also reflect the continuing substitution among 

forest products. In particular, expansion of reconstituted structural panel production 

such as oriented strand board has taken markets away from plywood, which is more 

expensive to produce. Moreover, expanded production of these reconstituted structural 

panels has been seen in regions other than the Western United States (Haynes 

2001). 

During this same time, employment in Oregon’s wood-using industries (not counting 

furniture) fell from 89,693 workers in 1988 to 71,360 workers in 1998, a decrease of 

more than 20 percent. The decrease in employment, however, was proportionally 

much smaller than either the decrease in timber harvested or the decrease in log consumption. In fact, employment per MMBF harvested doubled from 1988 to 1998, from 

10 workers per MMBF harvested to 20 workers per MMBF. This increase in labor intensity was due to several factors including: 

• Expansion of the secondary wood products industry. 

• Increased use of timber from other states and Canada. 

• Reduced volume of log exports. 

• The use of lower quality timber, which requires more labor to harvest and process. 

• More labor-intensive harvesting practices owing to environmental and aesthetic 

considerations. 

• Increased use of recycled fiber by pulp, paper, and board mills. 

2

Data Sources and 

Methodology 

Timber Harvest and 

Use Data 

We describe available timber harvest and use data and outline possible reasons for 

discrepancies between the sources, but we do not imply that one source is more 

accurate than the other. It is difficult, if not impossible, to report exactly how much 

timber is harvested in a region during a particular period. Lump sum sales, differences 

in conversion factors, and problems with determining dates of harvest versus log flow 

together make determining the volume of timber harvested particularly complex. It is 

not cost effective, therefore, to estimate the volume of timber harvest with extreme 

accuracy. 

Two sources of timber harvest data were available for use in this report. The Timber 

Harvest Report, published by the Oregon Department of Forestry (2000b), gives data 

on volume harvested by major ownership type estimated at 3,452 MMBF Scribner for 

1998. The other source of harvest data is a report on Oregon’s forest products industry 

by Ward et al. (2000), which states that 3,752 MMBF of logs flowed to mills in Oregon 

from Oregon’s 1998 timber harvest. The analysis in the remaining sections of this 

report is based on the timber harvest and wood fiber flow reported in Ward et al. 

(2000) as it is the only source that (1) identifies product use and (2) identifies log 

flows and residue use. 

Possible reasons for the differences between the volumes reported by the two sources 

are outlined below. If adjustments were made to the reported values as discussed, 

reasons 1, 2, and 3 would tend to make the two values even further apart; reason 4 

would bring the values closer together, and it is unclear what effect reasons 5 and 6 

would have on the difference between the two values. 

1. Ward et al. (2000) report the volume of logs flowing to Oregon’s primary wood product mills in 1998 from Oregon and other regions. Timber flowing out of Oregon to 

mills in other states is not reported. Therefore, the log flow volumes reported in the 

Ward et al. (2000) understate Oregon’s timber harvest. 

2. Although the response rate for the survey in Ward et al. (2000) was 92 percent, 

several of the 17 nonrespondent mills were relatively large (using more than 25 

MMBF each), leading to an understatement of timber use. 

3. Timber harvest reporting for tax purposes may sometimes result in harvests being 

reported in later periods, such as when payment was received. Given that 1997 

wood product prices were higher than 1998 prices, the volume of private timber 

sold was likely higher. If much of the 1997 harvest was reported in 1998, it would 

lead to an overstatement of ODF harvest for that year. 

4. Comparing Tables 3 and 7 of Ward et al. (2000) reveals that most of the logs of 

unknown origin (100,800 MBF of the 126,043 MBF of unknown origin) were attributed 

to the state of Oregon in the log flow table. If these logs were from out of state, then 

the harvest from Oregon reported by Ward et al. (2000) is overstated. 

5. The two reports likely use different conversion factors to convert pulpwood and small 

saw logs sold on a green ton basis to board feet. 

3

Estimating Employment, Labor Income, 

and Sales Value 

6. Ward et al. (2000) report consumption of timber and the ODF reports harvest. This 

could lead to differences in several ways: 

•	 Changes in beginning and end-of-year log inventories at the mills will lead to a difference between what was harvested and delivered to a mill and what was processed 

by that mill. 

• 	 The volume delivered to a mill, which is often scaled as it is received, generally 

forms the basis for the estimate of harvest volume for various ownerships. The 

volume processed for that same batch of logs may be tallied in a different fashion, 

for example, via automated scanning or using an estimate of drain from log deck 

inventory. Also, different agencies or entities may require specific and differing scaling standards. The mills might purchase logs by using these standards but keep 

records based on their own standards. 

•	 Lump sum timber sales can cause problems with reported harvest levels. Dates of 

harvest versus dates of consumption or log acquisition may not be exactly the 

same. Some lump sum timber sales are reported as cut when sold by the agencies, 

but mills may not report them until they are harvested and received. In fact, 1998 

was a low harvest year, so if Ward et al. (2000) included any data from 1997 harvests (but reported as acquired or consumed by the mill in 1998) it would inflate the 

volume in Ward et al. (2000). Additionally, the timber volume for a lump sum sale is 

estimated and is most likely not the actual volume that is delivered to, and reported 

by, the mills. 

To estimate employment and labor income in the primary and secondary forest 

products industries, we use four standard industrial classifications (SIC) that closely 

correspond to the industry. These classifications, as defined by the U.S. Office of 

Management and Budget, are SIC 08—Forestry, SIC 24—Lumber and Wood Products, 

SIC 25—Furniture and Fixtures, and SIC 26—Paper and Allied Products. Total 

employment and labor income for the forest products industry came from the U.S. 

Department of Commerce, Regional Economic Information System (U.S. Department 

of Commerce, Bureau of Economic Analysis 2000). 

Although these industrial classifications give a good representation of forest industry 

employment and labor income, the correspondence is not exact. A number of activities 

involving several thousand workers associated with forest products are not included in 

these categories including log hauling by independent truckers; truck, rail, or barge 

transport of logs, wood fiber, or finished products; and forest management activities by 

government employees. Also, some workers in the secondary industry are included in 

these categories, but their work is not entirely related to Oregon’s timber resources, or 

wood products in general. For example, the activity of mobile home manufacturers 

included in SIC 24 is more closely related to the region’s construction activity than to 

the wood products industry. 

4

The proportion of employment and income for the individual sectors was estimated by 

using data from Oregon Covered Employment and Payroll for 1998 (Oregon Employment Department 2000), as well as the 1997 Census of Manufacturers (U.S. Department of Commerce, Bureau of the Census 2000b) and 1998 County Business Patterns 

(U.S. Department of Commerce, Bureau of the Census 2000a). Because SIC 25, 

Furniture and Fixtures, includes metal furniture as well as wood furniture, Covered 

Employment and County Business Pattern data were used to estimate the amount of 

employment attributable to wood furniture only. Employment and labor income was 

distributed among the various products within a sector, such as lumber versus mill 

residue, according to sales value. 

Published employment and wage data for Oregon’s forest products industry pertain to 

the entirety of Oregon’s forest products industry, not just that portion attributable to 

Oregon’s timber harvest. Therefore, to estimate the portion of employment and wages 

attributable to Oregon’s timber harvest, we first calculated employment and wageconsumption ratios using our sector-specific employment and wage estimates and 

all data on the flow of logs to the various mill types from Ward et al. (2000). Then, to 

determine the amount of employment and wages attributable to Oregon’s timber harvest, 

these calculated ratios were combined with information on the flow of logs coming 

specifically from Oregon’s timber harvest to the various mill types (Ward et al. 2000). 

Additionally, we assumed that the relation between log consumption and employment 

and labor income that occurred in Oregon was also true for other states and, therefore, the same employment and wage-consumption ratios were used for Oregon timber 

processed in other states. For the pulp, paper, and board industry, the employment, 

labor income, and sales value derived from Oregon’s timber harvest were calculated 

by (1) estimating the percentage of Oregon’s pulp and paper mills’ wood fiber consumption that is attributable to Oregon’s timber harvest and (2) multiplying total 

employment, labor income, or sales value in Oregon’s primary pulp, paper, and board 

industry by this percentage. 

Sales values for the other primary industries were estimated by converting the output 

of each sector into the appropriate market units (e.g., thousands of board feet, lumber 

tally, for lumber and thousands of square feet, 3/8-inch basis, for plywood) and multiplying by an average market price per unit. Average market prices for the various 

products were estimated by using information from Random Lengths (Random Lengths 

Publications 1998), the 1997 Economic Census of Manufacturers (U.S. Department of 

Commerce, Bureau of the Census 2000b), the Directory of Wood Products Industry 

(Miller Freeman Publications 1998), the Statistical Yearbook of the Western Lumber 

Industry (Western Wood Products Association 1999), and conversations with various 

mills. Delivered log values were estimated by using information from published log 

price reports from the Oregon Department of Forestry (2000a), as well as conversations with various mills. 

5

Utilization of 

Oregon’s Timber 

Harvest, 1998 

Timber Flow 

Although declining timber harvests in Oregon have resulted in an increase in consumption of logs from other states and Canada, 83 percent of the timber used by Oregon’s 

primary forest products industry in 1998 came from within the state. Oregon’s primary 

forest products industries include lumber; veneer and plywood; pulp and board; shake 

and shingle; log export; and post, pole, and pilings. The pulp, paper, and board sector 

consists of many pulp and paper mills as well as mills producing hardboard, particleboard, insulation board, and composition panel. 

Figures referring to Oregon’s timber harvest include timber products shipped to other 

states, primarily Washington. They do not include timber that was harvested in other 

states and shipped to Oregon for processing. Tables and figures dealing with the utilization of Oregon’s timber harvest and the associated sales value, employment, and 

labor income reflect the direct effects of Oregon’s timber harvest on Oregon and surrounding states. 

Both mill residue products and timber products are displayed in the diagrams and 

tables describing timber flow; therefore, volumes are presented in cubic feet, rather 

than board feet, Scribner. The following conversion factors were used to convert 

Scribner volume to cubic-foot volume: 

• 5 board feet, Scribner, per cubic foot for saw logs. 

• 5.5 board feet, Scribner, per cubic foot for veneer logs and log exports. 

• 4.2 board feet, Scribner, per cubic foot for pulpwood. 

• 4.5 board feet, Scribner, per cubic foot for posts, poles, pilings, and cedar 

product logs. 

In 1998, Oregon’s timber harvest was about 749 million cubic feet (MMCF), exclusive 

of bark (fig. 1). The largest volume, 476 MMCF, flowed to sawmills, and plywood and 

veneer plants received 162 MMCF of timber. About 96 MMCF of pulpwood in round 

form went to chipping facilities with 24 MMCF going directly to pulp and paper mills 

and the remaining 72 MMCF going to separate chipping mills. An additional 4 MMCF 

went to other manufacturers, which included post, pole, and piling facilities as well as 

shake and shingle mills. Finally, 11 MMCF of timber flowed to log export companies in 

1998. 

Sawmills received 64 percent of the volume harvested in Oregon in 1998. In addition 

to 476 MMCF of harvested timber, they received 3 MMCF of peeler cores from plywood and veneer plants. Of the total 479 MMCF, 45 percent became lumber or other 

sawn products. The remaining 55 percent of the volume, 265 MMCF, became wood 

residue. Most of this residue, 220 MMCF, went to pulp, paper, and board plants in 

Oregon and other states. The remaining 45 MMCF of residue was used as hog fuel 

(36 MMCF) and for various uses such as firewood, wood fuel pellets, and livestock 

bedding (9 MMCF) with less than 0.007 MMCF going unused. 

6

Total harvest of timber products 

749 MMCF 

4 MMCF 

Other 

manufacturers 

162 MMCF 

Plywood and veneer 

plants 

24 MMCF 

Pulp mills 

Board plants 

72 MMCF 

Chipping mills 

476 MMCF 

Sawmills 

3 MMCF 

Peeler cores 

0.5 MMCF 

Miscellaneous 

uses 

0.5 MMCF 

Hog fuel 

8 MMCF 

Miscellaneous 

uses 66 MMCF 

Residue 

96 MMCF 

Wood fiber 

9 MMCF 

Miscellaneous 

uses 

7 MMCF 

Hog fuel 

220 MMCF 

Residue 

36 MMCF 

Hog fuel 

382 MMCF 

Wood fiber 

2 MMCF 

Miscellaneous 

products 

11 MMCF 

Log exports 

79 MMCF 

Plywood and 

veneer 

Various 

pulp, paper, and 

board products 

213 MMCF 

Lumber and other 

products 

Figure 1—Utilization of Oregon’s timber harvest, 1998. 

7

Value of 

Shipments 

Nearly 22 percent, 162 MMCF, of Oregon’s timber harvest went to plywood and veneer 

plants with about half becoming plywood or veneer and the other half becoming mill 

residue. Of the 84 MMCF of residue generated by plywood and veneer plants, 79 percent (66 MMCF) flowed to pulp, paper, and board plants, 9 MMCF became hog fuel, 8 

MMCF was used for other miscellaneous purposes, and 3 MMCF of peeler cores was 

shipped to sawmills for processing into lumber. Only 0.4 MMCF of residue generated 

by plywood and veneer plants was reported as going unused. 

About 24 MMCF of Oregon’s timber was pulpwood delivered directly to pulp and paper 

mills. Additionally, 72 MMCF of pulpwood was received by Oregon’s chipping mills and 

then sold to pulp and paper mills as chips. Another 286 MMCF of mill residue from 

Oregon’s sawmills and plywood and veneer plants was used by pulp, paper, and board 

mills, so that altogether 382 MMCF of wood fiber from Oregon’s timber harvest flowed 

to pulp, paper, and board mills, both in and out of Oregon. 

Other primary manufacturers (shake and shingle mills; post, pole, and piling facilities) 

received 4 MMCF of Oregon’s timber harvest. The amount of residue generated by 

these facilities varies widely. Based on previous work and conversations with producers, we have assumed that two-thirds of the timber becomes finished product and one 

third becomes residue. Given this assumption, less than 0.5 MMCF of residue was 

used for hog fuel or other miscellaneous uses, whereas less than 1,000 CF of the 

residue produced by shake and shingle mills went unused. For the 1.2 MMCF of 

residue estimated to have come from post, pole, and piling facilities, no breakdown 

was available concerning its use. 

The value of Oregon’s timber harvest includes value from stump to finished product 

f.o.b. the processing mill. Stumpage values for all timber products were calculated by 

subtracting logging costs from delivered log prices. According to the Oregon Department of Forestry (2000b), logging costs (including haul costs) run from $125 to $225 

per MBF. We used an average logging cost of $175 per MBF for all timber except 

pulpwood. For pulpwood, we used the low of $125 per MBF, which because of its low 

value is generally harvested from sites on flat ground near the mill or in conjunction 

with the harvesting of higher valued logs, leading to lower marginal logging costs. 

The stumpage value of Oregon’s 1998 timber harvest was estimated to be around 

$1.1 billion, or on average, $300/MBF harvested for all timber products (fig. 2). By the 

time the logs were delivered to the mill, the value of the harvest had increased to 

$1.8 billion. Timber delivered to sawmills accounted for 60 percent of the delivered log 

value, at $1.1 billion, and timber flowing to plywood and veneer plants accounted for 

nearly a third of the value, at $580 million. Timber received by chipping mills and pulp, 

paper, and board plants accounted for another 4 percent of the delivered log value, 

and timber delivered to other manufacturers accounted for less than 1 percent. The 

remaining $44 million (2 percent) of delivered log value is attributable to the log export 

sector. 

8

Total harvest of timber products (millions of dollars) 

Stumpage value: $1,137 

Value delivered to mill 

Other 

manufacturers 

$14 

Plywood and veneer 

plants 

$580 

Pulp mills and 

board plants 

$15 

Chipping mills 

$50 

Sawmills 

$1,071 

Peeler cores 

$3 

Miscellaneous 

uses 

$0 

Hog fuel 

$0 

Miscellaneous 

uses 

$1 Residue 

$68 

Miscellaneous 

uses 

$1 

Hog fuel 

$1 

Residue 

$165 

Hog fuel 

$1 

Value of wood fiber 

from Oregon 

$323 

Miscellaneous 

products 

$17 

Log exports 

$44 

Plywood and 

veneer 

1,176 

Pulp, paper, and 

board products 

$1,160 

Lumber and other 

sawn products 

$1,778 

Chips 

$75 

Figure 2—Sales value of primary wood products produced from Oregon’s timber harvest, 1998. 

9

Employment and 

Labor Income 

The value added during the actual production of primary wood products was substantial. For the lumber sector, sales value in 1998 (not counting residue) was estimated to 

be $1.8 billion, an increase of more than $700 million (65 percent) from the delivered 

log value. Additionally, we estimate that the sale of residue from the milling process 

created another $171 million in revenue for the lumber industry. For plywood and veneer, 

the value added in the production process was about $596 million, an increase of 

more than 102 percent over the delivered log value. The sale of mill residue generated 

another $73 million in revenue for the plywood and veneer industry. 

In 1998, $15 million of pulpwood flowed directly to the pulp, paper, and board industry. 

Another $75 million worth of pulpwood was delivered to pulp, paper, and board mills 

via Oregon’s chipping mills, and $233 million worth of mill residue from sawmills and 

plywood plants flowed to pulp, paper, and board mills both in and out of Oregon. 

Altogether, $323 million of wood fiber attributable to Oregon’s timber harvest was consumed by the pulp, paper, and board industry. With this residue, the pulp, paper, and 

board industry generated an estimated $1.2 billion in pulp, paper, and board products. 

The value added by production was, therefore, about $837 million. Finally, other primary wood manufacturers added another $3 million in value to the $14 million worth 

of timber delivered to them from Oregon’s timber harvest. 

The 749 MMCF of timber harvested in Oregon in 1998 generated an estimated 44,000 

jobs in the primary forest products industry and $1.7 million in labor income, including 

the residue and fiber processing sector (fig. 3). Timber management and the actual 

harvesting of the timber accounted for about 46 percent of the employment and 41 

percent of the labor income with 20,220 workers and $707 million in labor income. 

Sawmills accounted for the next largest share of employment and income with 9,606 

jobs and $371 million in labor income. Distributing this employment and labor income 

according to the sales value of each of the products shows that the bulk of the 

employment and labor income was due to the production of lumber and other sawn 

products (8,761 workers and $338 million in labor income). The mill residue from the 

lumber production generated another 845 jobs and $33 million in labor income, with 

96 percent of the employment and income associated with the sale of mill residue to 

pulp, paper, and board plants. 

The plywood and veneer industry employed about 19 percent of the workers and paid 

out 19 percent of the labor income generated from the 1998 harvest, or about 8,539 

workers and $327 million in labor income. Most of the employment and income (8,042 

workers and $308 million) in this sector came from the production of plywood and 

veneer, whereas the rest can be attributed to the production of mill residue. Of the 

remaining 497 jobs and $19 million in labor income associated with mill residue, all 

but 32 jobs and $1.2 million were due to the mill residue sold to pulp, paper, and 

board plants in Oregon and elsewhere. 

Pulp, paper, and board plants, both in and out of Oregon, received about 382 MMCF 

of wood fiber from Oregon’s timber harvest: 286 MMCF of wood fiber residue from 

sawmills and plywood and veneer plants and 96 MMCF from timber delivered directly 

to pulp and paper mills or chipping plants. The processing of this wood fiber generated 

an estimated 4,178 jobs and $234 million in labor income. Other primary wood manufacturers accounted for less than 1 percent of the total employment and labor income 

generated by the Oregon timber harvest. In addition, log export is estimated to have 

accounted for 248 jobs and $9.6 million in labor income. 

10

Total employment = 44,231 

Total labor income = $1,702,800,349 

Logging and forestry management 

20,220 

$706,883,965 

Other 

manufacturers 

Plywood and veneer 

plants 

Pulp mills and 

board plants 

Chipping mills Sawmills 

Peeler cores 

18 

$687,284 

Miscellaneous 

uses 

1 

$1,344 

Hog fuel 

1 

$200 

Miscellaneous 

uses 

7 

$283,406 

Residue 

465 

$17,814,878 

Miscellaneous 

uses 

6 

$232,525 

Hog fuel 

7 

$249,904 

Residue 

815 

$31,449,125 

Hog fuel 

24 

$924,222 

Wood fiber 

from Oregon 

Miscellaneous 

products 

213 

$6,860,205 

Log exports 

248 

$9,566,733 

Plywood and veneer 

8,042 

$307,928,035 

Pulp, paper, and 

board products 

4,178 

$234,293,991 

Lumber and other sawn products 

8,761 

$338,214,069 

1,228 

$47,410,443 

Figure 3—Primary forest industry employment and labor income attributable to Oregon’s timber harvest, 1998. 

11

Table 1—Log flow to Oregon mills by industry and state of origin, 1998 

Industry Oregon Washington California Idaho Other Total 

- - - - - - - - - - - - - - - - - - - - - - - Millions of cubic feet - - - - - - - - - - - - - - - - - - - - - - -

Sawmills 476 78 10 3 8 575 

Chipping 72 6 1 0 0 79 

Pulp, paper, and board 24 0 3 0 6 33 

Plywood and veneer 162 18 15 1 0 196 

Log export 11 0 0 0 0 11 

Other 4 < 0.5 < 0.5 0 0 4 

Total 749 102 29 4 14 

Table 2—Wood fiber consumption by Oregon pulp and paper mills 

From From 

Type Oregon other Total 

Timber in round form


From chipping mills


Chips from mill residue


Sawdust


Shavings


Bark


Total residue 

Recycled fiber 

Market pulp 

Total wood fiber consumption 

- - - - - - - - - Millions of cubic feet - - - - - - - - -

24 9 33 

53 20 73 

108 42 150 

47 16 63 

32 11 43 

22 8 30 

286 106 392 

124 

2 

286 106 518 

Direct Effects of 

Oregon’s Wood 

Products Industry 

Primary Wood 

Products Industry 

The previous three sections have described the flow of Oregon’s 1998 timber harvest 

through the primary forest products industry and the associated effects on sales 

value, employment, and labor income. In the next two sections, we look at the direct 

effects of the entire wood-products industry in Oregon by including timber or residue 

purchased from other states but processed by Oregon’s primary mills. We also include 

a section on Oregon’s secondary wood products industry. 

Table 1 shows log consumption by Oregon’s mills in 1998 by area of origin. In addition 

to the 749 MMCF of timber coming from the 1998 Oregon harvest, Oregon’s mills 

processed 149 MMCF of timber from outside the state. More than 68 percent of outof-state timber (102 MMCF) came from the state of Washington, with the largest 

amount (78 MMCF) flowing to Oregon’s sawmills. The remaining 47 MMCF came from 

California (29 MMCF), Idaho (4 MMCF), and other states and Canada (14 MMCF). 

In 1998, Oregon’s pulp, paper, and board industry consumed about 518 MMCF of wood 

fiber (table 2). More than 55 percent of this fiber is estimated to have come from 

Oregon’s timber harvest, about 21 percent from other states, and 24 percent from 

recycled fiber and market pulp of unknown origin. The largest percentage of the wood 

fiber consumed by Oregon’s pulp, paper, and board mills (29 percent) was chips from 

12


898 
Table 3—Direct economic effects of Oregon’s primary wood products industry on Oregon’s economy, by 

sector, 1998 

Out-of-state timber 

and wood fiber Oregon’s timber harvest Total 

Labor Labor Labor 

Industry Employment income Employment income Employment income 

Forestry


Logging


Sawmills


Chipping


Pulp, paper, and board


Plywood and veneer


Log export


Other


Dollars Dollars Dollars 

0 0 7,033 281,980,000 7,033 281,980,000 

0 0 13,187 424,903,965 13,187 424,903,965 

2,000 77,216,445 9,605 370,819,941 11,605 448,036,387 

106 4,093,799 1,228 47,410,443 1,334 51,504,242 

3,399 190,634,784 4,178 234,293,991 7,578 424,928,774 

1,794 68,687,503 8,539 326,963,507 10,333 395,651,011 

0 0 248 9,566,733 248 9,566,733 

27 835,037 213 6,861,769 240 7,696,806 

Total 7,326 341,467,568 44,231 1,702,800,349 51,558 2,044,267,918 

Secondary Wood 

Products Industry 

sawmills and plywood and veneer plants, most of which came from the state of Oregon. 

The second largest type of wood fiber consumed by Oregon’s pulp, paper, and board 

mills was recycled fiber, which made up around 24 percent of the fiber consumed in 

1998. To arrive at these estimates, we assumed that the percentage of chips from mill 

residue purchased from within the state of Oregon was about the same as (1) the percentage of chips purchased from chipping mills in Oregon, and (2) the percentage of 

sawdust and shavings purchased from sawmills and plywood and veneer plants in 

Oregon. From Ward et al. (2000), both of these percentages were calculated to be 

around 72 percent. 

The processing of the timber and wood fiber brought in from outside the state contributed additional employment and labor income for Oregon residents (table 3). In 

total, Oregon’s primary wood products industry employed an estimated 51,558 workers 

and paid out $2 billion in labor income, including logging and forestry. Most of this, 86 

percent, was associated with wood fiber derived from Oregon’s 1998 timber harvest. 

Wood fiber flowing to Oregon’s mills from outside the state accounted for 7,327 jobs 

and $341 million in labor income. Most of these jobs (3,399) were generated from outof-state wood fiber (including recycled and market pulp of unknown origin) flowing to 

Oregon’s pulp and paper mills. Out-of-state timber provided another 2,000 jobs in the 

sawmill industry and 1,794 jobs in the plywood and veneer industry. The remaining 

133 jobs generated by out-of-state timber were in chipping mills; shake and shingle 

mills; and post, pole, and piling facilities. 

For a more complete picture of Oregon’s wood products industry, we consider the 

sales value generated by Oregon’s secondary wood products industry along with the 

associated employment and labor income. The secondary wood products industry 

consists of facilities that further process the outputs from primary wood-using industries, producing such goods as doors and windows, prefabricated buildings, cabinets, 

furniture, and so forth. 

13

Table 4—Profile of Oregon’s secondary wood products manufacturers by sector, 

1998 

Labor 

Industry Employment income Sales 

Trusses, structural 

building components 

Doors, windows, moulding, 

cutstock 

Wood preservation 

Wood kitchen cabinets 

Wood containers 

Wood buildings and 

mobile homes 

Wood furniture 

Pulp and paper products 

Other 

Total 

- - - - - - - - - - Dollars - - - - - - - - - -

2,003 72,224,500 606,305,745 

8,120 252,428,766 700,925,377 

458 16,231,479 104,514,387 

1,526 42,722,299 123,991,820 

434 9,222,206 51,869,477 

3,697 121,222,033 427,877,104 

3,207 86,058,057 228,413,823 

2,866 126,887,851 561,578,000 

947 24,824,868 75,578,105 

23,258 751,822,059 2,881,053,838 

Table 4 breaks down Oregon’s major secondary wood products manufacturers by 

product type. Not included are manufacturers that use wood products but that are 

classified under other industries (i.e., archery equipment, which is classified under 

sporting goods). 

During the 1990s, employment in the secondary wood products industry increased 

about 7 percent, generating 23,259 jobs, $752 million in labor income, and $2.9 billion 

in sales value in 1998 (U.S. Department of Commerce, Bureau of Economic Analysis 

2000). Secondary manufacturers use various wood types, many of which are purchased 

within the state of Oregon, but substantial volumes come from outside the state. The 

following discussion describes the entire secondary wood products industry and does 

not attempt to determine how much of the production is attributable to Oregon’s timber 

harvest. 

Of the eight types of manufacturers listed, firms manufacturing doors, windows, 

moulding, and cutstock generated the most sales revenue at $701 million, nearly a 

quarter of the total sales value. They also employed the most people, 8,120 employees, 

and paid out the most in labor income, at $252 million. 

The next largest sector in terms of sales value was trusses and structural building 

components, which generated $606 million in sales revenue. This sector ranked fifth, 

however, in terms of both labor income and employment. The second largest sector in 

terms of employment was wood buildings and mobile homes, accounting for 3,697 

employees. Secondary pulp and paper products came in second with regard to labor 

income, at $127 million. Together, the top four sectors in terms of labor income and 

employment accounted for 67 percent of sales value, 77 percent of employment, and 

78 percent of labor income. The smallest sector consisted of manufacturers producing 

wood containers, with $52 million in sales value, 434 employees, and $9 million in 

labor income. 

14

Table 5—Direct economic effects of Oregon’s wood products industry on 

Oregon’s economy, 1998 

Labor Sales 

Industry Employment income value 

- - - - - - - - - - Dollars - - - - - - - - - -

Forestry 7,033 281,980,000 

Logging 13,187 424,903,965 

Primary forest products 31,338 1,337,383,953 7,461,600,801 

Secondary wood products 23,259 751,822,059 2,881,053,839 

Total 74,817 2,796,089,977 10,342,654,640 

Oregon’s Forest 

Products Industry: 

Putting It All 

Together 

Acknowledgments 

Table 5 gives a complete picture of Oregon’s wood-using industry, showing the estimated 

sales value, employment, and labor income attributable to Oregon’s primary and secondary forest products industry in 1998. The sales value of manufactured primary and 

secondary wood and paper products in 1998 was about $10.3 billion, with primary 

wood products accounting for $7.5 billion or 73 percent of the value, and secondary 

manufacturing adding an additional $2.8 billion in value. These sales translated into 

the employment of nearly 75,000 workers earning roughly $2.8 billion. 

This report describes the state of Oregon’s wood using industry in 1998—a year of 

weak markets largely attributable to poor global economic conditions stemming primarily from the Asian financial crisis. Since 1998 there have been dramatic swings in 

market conditions but only modest changes through 2001 in the size and output of 

Oregon’s wood and paper products industry. A stronger U.S. and global economy in 

1999 led to improved prices, higher output, and slightly higher employment. Oregon’s 

forest products industry again experienced weakened demand during calendar year 

2000, worsening in 2001 with an official U.S. recession, the September 11 terrorist 

attacks, and poor global conditions including a recession in Japan. 

In terms of output and sales value the performance of Oregon’s industry in 2000 was 

very similar to the 1998 levels discussed in detail in this report with employment at 

about 75,000, Oregon again leading the Nation in lumber production, and sales value 

of wood and paper products at about $10 billion. Modest declines appear to have 

occurred in 2001, but the wood and paper products industry remains important in the 

Oregon economy, and the state remains one of the Nation’s leading wood products 

producers (Western Wood Products Association 2001, U.S. Department of Commerce, 

Bureau of Economic Analysis 2002). 

The authors thank Franklin R. Ward, Gary J. Lettman, Richard Haynes, Mike 

Niccolucci, and Bruce A. Hiserote for their contributions to this publication. 

15

References Haynes, R.W. 2001. Personal communication. Research forester, U.S. Department of 

Agriculture, Forest Service, Pacific Northwest Research Station, Forestry Sciences 

Laboratory, P.O. Box 3890, Portland, OR 97208-3890. 

Howard, J.O.; Ward, F.R. 1991. Oregon’s forest products industry: 1988. Resour. Bull. 

PNW-RB-183. Portland, OR: U.S. Department of Agriculture, Forest Service, Pacific 

Northwest Research Station. 91 p. 

Miller Freeman Publications. 1998. 1998 directory of the wood products industry. 

San Francisco, CA. 

Oregon Department of Forestry. 2000a. Log price information. 

http://www.odf.state.or.us/tmbrmgt/logppage.htm. (July 2000). 

Oregon Department of Forestry. 2000b. Timber harvest report. 

http://www.odf.state.or.us/annual_reports/. (July 2000). 

Oregon Employment Department. 2000. 1998 Oregon covered employment and 

payroll. http://olmis.emp.state.or.us/olmisj/CEP?areacode=01000000&year=1998. 

(July 2000). 

Random Lengths Publications, Inc. 1998. Random lengths yearbook 1998. Eugene, 

OR. 250 p. 

U.S. Department of Commerce, Bureau of Economic Analysis. 2000. Regional 

economic information system. http://www.bea.doc.gov/bea/regional/data.htm. (July 

2000). 

U.S. Department of Commerce, Bureau of Economic Analysis. 2002. Regional 

economic information system. http://www.bea.doc.gov/bea/regional/data.htm. 

(January 2002). 

U.S. Department of Commerce, Bureau of the Census. 2000a. County business 

patterns, 1998. http://www.census.gov/epcd/cbp/view/cbpview.html. (July 2000). 

U.S. Department of Commerce, Bureau of the Census. 2000b. 1997 Census of 

manufacturers. http://www.census.gov/epcd/www/econ97.html. (July 2000). 

Ward, F.R.; Lettman, G.J.; Hiserote, B.A. 2000. Oregon’s forest products industry: 

1998. Salem, OR: Oregon Department of Forestry. 82 p. 

Warren, D.D. 2000. Production, prices, employment, and trade in Northwest forest 

industries, 1998. Resour. Bull. PNW-RB-231. Portland, OR: U.S. Department of 

Agriculture, Forest Service, Pacific Northwest Research Station. 171 p. 

Western Wood Products Association. 1999. 1998 statistical yearbook of the 

Western lumber industry. Portland, OR. 36 p. 

Western Wood Products Association. 2001. 2000 statistical yearbook of the 

Western lumber industry. Portland, OR. 44 p. 

16

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dedicated to the principle of multiple use management of the 

Nation’s forest resources for sustained yields of wood, water, 

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should contact USDA’s TARGET Center at (202) 720-2600 

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and Independence Avenue, SW, Washington, DC 20250-9410 

or call (202) 720-5964 (voice and TDD). USDA is an equal 

opportunity provider and employer. 

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