United States

Department of

Agriculture

Forest Service

Pacific Northwest

Research Station

General Technical

Report

PNW-GTR-683

August 2006

Alaska’s Lumber-Drying

Industry—Impacts From

a Federal Grant Program

David L. Nicholls, Allen M. Brackley, and Thomas D. Rojas
The Forest Service of the U.S. Department of Agriculture is dedicated to the principle of multiple use management of the Nation’s forest resources for sustained

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customers and employees

Authors

David L. Nicholls is a forest products technologist, Allen M. Brackley is a

research forester, and Thomas D. Rojas is a research economist, Alaska

Wood Utilization Research and Development Center, 204 Siginaka Way,

Sitka, AK 99835.

Photos by

David L. Nicholls
Abstract

Nicholls, David L.; Brackley, Allen M.; Rojas, Thomas D. 2006. Alaska’s

lumber-drying industry—impacts from a federal grant program. Gen.

Tech. Rep. PNW-GTR-683. Portland, OR: U.S. Department of Agriculture,

Forest Service, Pacific Northwest Research Station. 23 p.

A survey determined that installed dry kiln capacity in Alaska more than

doubled to an estimated 220 thousand board feet (mbf) within 4 years (2000-

2004). This increased ability to produce dry lumber and value-added products

resulted from industry efforts to obtain federal funding to support a dry kiln

grant program. This report reviews grantees’ progress in implementing grantsupported projects and their impact on the production capabilities of the

Alaska lumber drying industry. Data were collected in early 2005 by using a

standard set of questions asked of 19 dry kiln owners. Much of the growth in

drying and value-added processing capacity has been concentrated in southeast Alaska where there has been the greatest dry kiln investment. During

2004, the estimated volume of lumber dried in Alaska was 813 mbf, whereas

potential annual capacity was estimated to be almost 6,600 mbf. This indicates

that Alaska producers are drying just over 12 percent of their potential capacity. Factors that will increase the future production of value-added forest

products in Alaska include a continuing supply of economically priced timber,

the ability of the industry to support a reasonably priced grading service, and

the ability of producers to move value-added products to domestic and export

markets.

Keywords: Wood products, economics, dry kiln, dehumidification, lumber,

employment, Alaska.
Contents

1 Introduction

3 Methods

4 Kiln Capacity and Lumber-Drying Volumes

4 Lumber Value

5 Capital Investment in Dry Kilns

5 Employment

6 Market Destinations

6 Potential Lumber-Drying Capacity

6 Results

6 By Geographic Region

12 By Dry Kiln Type

12 Potential Lumber-Drying Capacity

15 Discussion

18 Considerations

19 Glossary

20 Acknowledgments

20 Metric Equivalents

20 Literature Cited

22 Appendix
Alaska’s Lumber-Drying Industry—Impacts From a Federal Grant Program

1

Introduction

The Southeast Timber Task Force report (Morse 1997) noted that rough, green

lumber was the major product traditionally shipped from southeast Alaska. The

same source stated that two small, but infrequently used dry kilns existed in the

region. Likewise, the McDowell report (1998) noted similar facts and suggested

an opportunity for small Alaska producers to substitute imported products with

those manufactured locally. Some factors cited as necessary to develop this opportunity were access to technical expertise, grading services, dry kilns, and up-todate machinery. Because of this industry pressure, in 2001 and 2002, the USDA

Forest Service, Alaska Region State and Private Forestry program received $4

million to fund a grant program for developing kiln drying facilities that would

produce value-added products. In 2005, the Alaska Region offered another round

of grants by using previously awarded funds from projects the grantees were unable to complete. This report reviews grant recipients’ progress in implementing

grant-supported projects and their impact on the production capabilities of the

Alaska lumber-drying industry.

Prior to implementing the federal grant program, lumber drying in Alaska

was limited to relatively few kilns drying small volumes of lumber primarily for

local markets. In 2000, Alaska kilns had a combined installed capacity of only

94 thousand board feet (mbf) (Nicholls and Kilborn 2001). However, since 2000,

installed dry kiln capacity in Alaska has more than doubled to an estimated 220

mbf, drying close to 813 mbf of lumber annually. These advances were driven

largely by the federal grant program that helped fund dry kilns (fig. 1) and related

equipment such as pre-dryer facilities, lumber storage buildings, planers, and

moulders (table 1). Grant recipients were required to provide matching funds (cash

Figure 1—Dry kiln, interior Alaska.
GENERAL TECHNICAL REPORT PNW-GTR-683

2

Table 1—Selected grant recipients and project status for federal grant program in Alaska (current February 2006)

Grant Alaska

recipient region Project summary

1 Interior Purchase: 1 five-headed moulder, 1 dust collection system, 1 wood-fired boiler,

1 four-headed moulder with dust collection system, 1 dry kiln

Construct: 1 building for wood shaping

2 Interior Purchase: 1 planer/moulder

3 Interior Purchase: 1 moulder/planer, 1 cantilevered lumber storage rack,

1 automated infeed/outfeed system

Install: 1 wood energy system, kiln components, 1 insulated steel building

Construct: 1 kiln building, 1 stickering rack, 1 air-drying T-shed, 1 storage

building, 1 planer/dry lumber protection facility

4 Interior Purchase: 1 Nyle kiln

Construct: 1 drying shed and pre-dryer

5 South-central Purchase: 1 planer, 2 dry kilns

6 South-central Purchase: 1 planer

Construct: 1 pre-drying and dry-lumber storage facility, 1 biomass boiler

7 South-central Move: 1 kiln, planers

8 South-central Purchase: 1 dry kiln system, 1 air dryer

Construct: 1 dry-lumber storage facility

9 South-central Purchase: 1 planer

Construct: 1 lumber storage building

10 South-central Purchase: 1 planer, 1 dry kiln facility

Construct: 1 dry-lumber storage building

11 South-central Purchase: 1 moulder, 1 grinder

Install: 1 boiler

Fix: 1 kiln

Construct: 1 drying shed, 1 building for the moulder and dry-lumber storage

12 South-central Construct: 1 dry-lumber storage building, 1 air-drying shed

13 South-central Purchase: 1 dry kiln

Construct: 1 planer building, 1 dry-lumber storage building

14 Southeast Purchase: 1 Nyle kiln

Construct: 1 dry-storage building

15 Southeast Purchase: 1 planer

16 Southeast Purchase: 1 sticker stacker, packaging equipment, 1 timber sizer

Construct: 1 air-drying shed, 1 pre-dryer, 1 dry kiln and heating system,

1 power plant, 1 dry-lumber storage facility

17 Southeast Purchase: 1 wood-energy system, 1 lumber dryer, 1 planer

Construct: buildings for 1 pre-dryer, 1 planer, 1 dry-lumber storage, 1 woodenergy system

18 Southeast Purchase: 1 moulder

Construct: 1 air-drying facility

19 Southeast Purchase: 1 planer, 1 profiler

Install: 1 wood-energy system

Construct: 1 dry kiln, 1 dry-storage building

20 Southeast Purchase: 1 central boiler for existing kiln

Construct: 1 covered storage building, 1 pre-drying facility
Alaska’s Lumber-Drying Industry—Impacts From a Federal Grant Program

3

or in-kind contributions) of not less than 20 percent of the total project cost; however, most successful applicants achieved matches of at least 40 percent of project

cost. Of 18 original projects, 3 were cancelled and the funds used toward 8 additional projects in 2005. From the remaining 15 projects, 10 projects are completed

(or substantially completed), 2 projects are approximately 50 percent complete,

and only 3 projects are less than 50 percent complete (status as of February 2006).

Further stimulus has been provided by a natural progression of new valueadded products, developing markets for export and domestic trade, overall business

savvy, operational skills, and determination of wood products manufacturers within

Alaska. Over the past 5 years, many of these factors have intersected, resulting in

broad successes for Alaska firms that produce and market secondary wood products of increasing quality and design innovation while also continuing with fundamental product offerings, including dimension lumber for construction. Indeed, if

current trends continue, we could soon see a combination of niche products and

commodity offerings, including a broad array of secondary products now emerging

on the Alaska wood products landscape. These include tongue-and-groove lumber,

hardwood flooring, architectural moulding and millwork, and furniture stock that

were previously reserved for only the most specialized applications.

Has the federal grant program been an effective means of stimulating lumber

drying and production of value-added products? What role will kiln-dried lumber

products have in the future Alaska wood products industry, a traditional industry

dating back to the early years of Alaska’s statehood?1

 Is the Alaska wood products

industry now at a collective turning point, poised for further success? The three

primary objectives of this paper are (1) assess the effectiveness of the federal grant

program as a means of stimulating lumber drying and secondary processing in

Alaska, (2) compare Alaska’s dry kiln industry in 2004 versus 2000 and summarize

recent advances and key trends, and (3) offer perspective for possible future direction of this industry, including employment and new and emerging markets.

Methods

In February and March 2005, data were collected over the phone by using a

standard set of questions asked of each dry kiln owner (app.). The survey included

19 dry kiln owners throughout Alaska, including some grant recipients and some

owners not participating in the grant program. In each phone conversation, it was

1

 One of the first well-known dry kilns in Alaska started operation in 1963 in the

Matanuska-Susitna Valley, drying birch lumber in a 22-mbf-capacity chamber. Newer units

later replaced this kiln, and it now includes facilities constructed in 2003 by using federal

grant funds described in this report.

If current trends continue, we could soon

see a combination

of products, including

tongue-and-groove

lumber, hardwood

flooring, architectural

moulding and millwork, and furniture

stock.
GENERAL TECHNICAL REPORT PNW-GTR-683

4

emphasized that confidentiality would be preserved in that no data would be

presented by individual mill. Rather, data would be aggregated by kiln type (dehumidification kilns, hot-water kilns, steam kilns, and “other” [including vacuum

kilns and electrically heated kilns]) or geographic region (interior, south-central,

and southeast Alaska) (fig. 2). Respondents were free to not answer any question at

their discretion, and to stop the conversation at any point. It was assumed that

respondents provided accurate and complete answers to the questions.

Kiln Capacity and Lumber-Drying Volumes

Certain parameters determined what kilns we included in the calculations of kiln

capacity and lumber-drying volumes:

Our data collection did include the following:

• Kilns in which construction was completed (even if not yet actively drying

lumber).

• Kilns under construction, if expected to be completed by the end of the year

(2005).

Our data collection did not consider any of the following:

• Experimental or research kilns.

• Idle kilns.

• Proposed kilns, not yet under construction.

• Kilns that were active in 2000 but have since become inactive (about three).

• Kilns that we believe to be currently active, but whose owner could not be

reached for comment (two).

Because this report includes only those firms remaining in business and actively

drying lumber between 2000 and 2004, the 2000 results understate somewhat the

actual dry kiln activity in Alaska for that year, as reported in previous studies

(Nicholls and Kilborn 2001). Also, previous studies included two small research

kilns that we did not consider here. It should be emphasized that our research did

not incorporate firms that sell exclusively green lumber or air-dried lumber (i.e.,

firms not engaged in lumber kiln-drying). Therefore, our results are for kiln-dried

lumber only, and should not be misconstrued as estimates of statewide lumber

production.

Lumber Value

Softwood lumber values were based on average price for 2 by 6 and 2 by 8 lumber

reported by Random Lengths for kiln-dried coastal-grown hem-fir dimension

lumber (Random Lengths 2002, 2004). The average prices used for our evaluation
Alaska’s Lumber-Drying Industry—Impacts From a Federal Grant Program

5

were $285 per mbf for 2000 and $360 per mbf for 2004. Hardwood lumber values

were based on market prices for birch (Betula L.) lumber (Hardwood Market

Report 2006).

Capital Investment in Dry Kilns

Capital investment was based on the total project cost of lumber-drying systems,

including dry kiln structure, process controls, heating system, and lumber storage

facilities (if any). Not included was investment in planers, moulders, or other

equipment ancillary to kiln drying.

Employment

Employment data is presented for both full-time employees (40-hours-per-week

basis), and part-time employees (assumed to work 20 hours per week). Results

include only employment directly linked to the dry kiln process (e.g., loading and

unloading lumber, stacking lumber, and measuring moisture content), but not for

related manufacturing activities (e.g., sawing or planing lumber). Respondents

provided actual employment (as of 2004) as well as employment expected on

completion of kiln projects currently under construction. In some cases, parttime employment was difficult to verify, as often these employees perform a wide

variety of tasks.

Figure 2—Alaska regions. Source: State of Alaska 2006.
GENERAL TECHNICAL REPORT PNW-GTR-683

6

Market Destinations

To determine market destinations, firms were asked to estimate the proportion of

their kiln-dried lumber sold within three geographic areas:

• Locally (within immediate vicinity of their community)

• Within Alaska (but outside their local community)

• Outside of Alaska

Potential Lumber-Drying Capacity

We defined potential lumber-drying capacity as the volume of lumber that could be

dried by kilns operated year-round, with no unscheduled down time, unexpected

delays, or seasonal plant closures. Additional assumptions were made for drying

times based on species, lumber thickness, and type of dry kiln. Lumber drying

times were based on the Dry Kiln Operators Manual (Simpson 1991). For this

calculation, we only used active kilns and did not apply idle kilns. In this context,

potential lumber-drying capacity represents the volume and value of lumber that

an operator could theoretically dry at 100-percent utilization of a dry kiln. This

volume is often considerably more than the actual volume dried.

Results

By Geographic Region

Kiln capacity and lumber-drying volumes—

Installed kiln capacity in Alaska increased by 110 mbf between 2000 and 2004,

from about 50 mbf to 160 mbf (table 2). By the end of 2005, an additional 60 mbf

of capacity is expected, bringing this total to an estimated 220 mbf. On completion of these kiln projects, there will be close to a 336-percent increase in statewide capacity between 2000 and 2005. The greatest regional increase in installed

capacity was in southeast Alaska (increasing from 20 to 109 mbf). The interior

was the region that showed the smallest increase in kiln capacity, slightly more

than doubling between 2000 and 2004 (table 2). The number of dry kilns has also

increased substantially during this time.

The volume of lumber dried in Alaska also multiplied from 2000 through 2004

more than sixfold (table 3). As with installed capacity, the most dramatic changes

occurred in the southeast region where an estimated 411 mbf of lumber was dried

in 2004 (versus none in 2000).

On completion of

these kiln projects,

there will be close

to a 336-percent

increase in statewide

capacity between

2000 and 2005.
Alaska’s Lumber-Drying Industry—Impacts From a Federal Grant Program

7

Lumber value—

In Alaska, the estimated value of kiln-dried lumber in 2004 was nearly nine times

that in 2000, increasing from about $34,000 to $293,000. The increase resulted

from a combination of increases in both lumber drying volume and value (table 3).

The most notable increases came in the southeast region, with an estimated dried

lumber value of almost $150,000 in 2004 (versus none in 2000). South-central

Alaska had the least lumber dried in 2004, and this could be linked to a continuing

spruce bark-beetle (Dendroctonus rufipennis Kirby) epidemic in the region. The

lack of a timber program on the Chugach National Forest could also be

contributing to low regional lumber production and drying volumes.

Table 2—Estimated installed statewide capacity, number of commercial dry kilns,

and volume of lumber dried in Alaska, by geographic regiona

2000b 2004 2005c

Kiln Number Kiln Number Kiln Number

Alaska region capacity of kilns capacity of kilns capacity of kilns

mbf mbf mbf

Interior 16.0 3 22.0 4 34.0 4

South-central 14.5 3 61.5 6 77.0 6

Southeast 20.0 1 77.0 6 109.0 9

Total 50.5 7 160.5 16 220.0 19

Note: mbf = thousand board feet.

a

 Does not include kilns that were idle at the time of data collection.

b

 Includes only those kilns that were active in 2000 and remained active through 2004.

c

 Includes dry kilns under construction that are expected to come on line by the end of 2005.

Table 3—Estimated volume and value of lumber dried in

Alaska,a by geographic region

Lumber volume Estimated lumber

 dried valueb

Alaska region 2000 2004 2000 2004

– – – – mbf – – – – – – – Dollars – – –

Interior 96.0 248.0 27,360 89,280

South-central 24.5 153.5 6,983 55,260

Southeast 0 411.5 0 148,140

Total 120.5 813.0 34,343 292,680

a

 Does not include kilns that were idle at the time of data collection.

Includes only those kilns that were active in 2000 and remained active

through 2004.

b

 Based on reported values from Random Lengths (2002, 2004) for

kiln-dried coast hem-fir dimension lumber, average of 2 by 6 and 2 by

8 prices (2000 price = $285 per thousand board feet (mbf); 2004 price

= $360 per mbf).
GENERAL TECHNICAL REPORT PNW-GTR-683

8

Capital investment in dry kilns—

Dry kiln investment differed considerably by geographic region, and was greatest

in southeast Alaska for both total capital investment and average kiln cost (table

4), including one steam kiln and one vacuum kiln.

Average kiln costs in both south-central and interior Alaska were relatively low

(averaging less than $40,000 each kiln), owing to relatively small kiln sizes and

choice of kiln technology. These regions favored the use of dehumidification and

hot-water kilns, and also had a greater tendency for kiln owners to construct at least

a portion of the kiln on their own (versus use of kiln vendors). In south-central and

interior Alaska, several kilns primarily dry small quantities of birch lumber.

Employment—

Dry kiln employment growth mirrored that of capital investment, increasing substantially across all regions (tables 4 and 5). Our data indicate a statewide workforce of 37 workers (10 part-time and 27 full-time) dedicated to lumber drying.

The greatest increases, as well as the greatest overall employment, came within

southeast Alaska. We expect employment in this region to grow to approximately

5 part-time and 12 full-time workers upon completion of dry kilns in 2006. The

lowest regional employment was in interior Alaska. This region had the fewest dry

kilns, and also was characterized by smaller kilns primarily drying birch lumber.

Market destinations—

Most lumber dried in Alaska was sold locally (table 6). In 2000, local sales were

estimated to be more than 71 percent of total lumber sales (versus more than 80

percent in 2004). The south-central region had the greatest proportion of kiln-dried

lumber sold within Alaska (but outside of the local community), and southeast

Alaska had the greatest proportion of kiln-dried lumber sold outside of Alaska.

Interior Alaska had the greatest proportion of lumber sold locally, with close to

100 percent for both 2000 and 2004 (fig. 3). Because our data represent point-ofsale locations, it is possible that kiln-dried lumber later processed into gift and

craft products by Alaska firms could lead to higher sales to market destinations

outside of the state than is indicated by these results.

Dry kiln employment

growth mirrored that

of capital investment,

increasing substantially across all

regions.
Alaska’s Lumber-Drying Industry—Impacts From a Federal Grant Program

9

Table 4—Capital investmenta

 in dry kiln facilities, by geographic region (2004)

Number of kiln owners

Alaska region Regional total Facility average providing information

– – – – – Dollars – – – – –

Interior 128,000 32,000 4

South-central 184,000 36,800 5

Southeast 1,145,000 143,125 8

Total 1,457,000 85,706 17

a

 Includes construction of kiln buildings, kiln controls, and energy systems.

Table 5—Lumber dry kiln employment,a by geographic region

2004 2005

Alaska region Part timeb Full time Part timeb Full time

– – – – – Actual – – – – – – – Total expected c – –

Interior 1 2 2 5

South-central 2 4 3 7

Southeast 1 7 5 15

Total 4 13 10 27

a

 Includes only employment directly related to kiln-drying operations.

b

 Assumed to be approximately 20 hours per week.

c

 Expected total employment upon completion of dry kiln construction.

Table 6—Market destinations of lumber dried commercially in Alaska, by geographic region

2000a 2004

Percentage of total lumber salesb Percentage of total lumber salesb

Local, Nonlocal, Sales Local, Nonlocal, Sales

within within outside of within within outside of

Alaska region community Alaska Alaska community Alaska Alaska

Percent

Interior 96.7 3.3 0 100 0 0

South-central 77.5 22.5 0 79 20 1

Southeast 39.6 10.4 50 63.1 11.2 25.8

Average 71.3 12.1 16.7 80.7 10.4 8.9

a

 Includes only those kilns that were active in 2000 and remained active through 2004.

b

 Percentage use reported by respondent (i.e., small firms and large firms weighted equally).
GENERAL TECHNICAL REPORT PNW-GTR-683

10

Species composition—

The drying of softwood lumber exceeded hardwoods by a considerable margin

(table 7) (responding firms indicated the proportion of each that they dried, with

small and large firms weighted equally). Hardwoods were most significant in the

south-central region, owing to several mills processing birch; however, no hardwoods were reportedly dried in southeast Alaska. A minor shift occurred statewide

toward proportionately greater softwood drying between 2000 and 2004.

Figure 3—Kiln-dried Alaska birch lumber for

retail sale, interior Alaska.

Table 7—Species composition of lumber dried commercially in Alaska,

by geographic region

2000a 2004

Alaska region Hardwood Softwood Hardwood Softwood

Percent b

Interior 26.25 73.75 32.13 67.88

South-central 63.75 36.25 50 50

Southeast 0 100 0 100

Average 30 70 27.38 72.63

a

 Includes only those kilns that were active in 2000 and remained active through

2004.

b

 Percentage use reported by respondent (i.e., small firms and large firms weighted

equally).
Alaska’s Lumber-Drying Industry—Impacts From a Federal Grant Program

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Secondary processing equipment—

An estimated 39 planers and moulders are now processing lumber at Alaska dry

kiln facilities. Not included are secondary manufacturers (such as cabinet and

furniture producers) who may own similar processing equipment, but do not

own dry kilns. Our statewide data indicate a ratio of more than two secondary

processing machines for each dry kiln (table 8). The proportion of moulders

relative to other secondary equipment was greatest in southeast Alaska (where six

moulders were included with seven planers and nine dry kilns). The south-central

region had considerably more planers (14 total) than either of the other regions,

owing in part to a single facility having several planers. It should be noted that

small, single-surface planers were not considered separately from more

sophisticated equipment (such as planer/moulders) having much greater

production capabilities.

Primary heating source of dry kilns—

Most dry kilns were heated by either electricity (about 61 percent) or by wood

energy (about 33 percent), whereas only one kiln was heated by fuel oil (table 9).

Electric heat was used for all of the dehumidification kilns, and predominated in

the south-central region (heating five out of six kilns). Wood energy showed the

greatest use in the southeast region (heating three dry kilns), and all of these were

hot-water kilns. Anecdotally, several dry kiln owners have expressed an interest

in converting to wood manufacturing residues (e.g., sawdust, slabs, trim, and

edgings) as a continued fuel source. However, other energy options, including

fuel oil, are often pursued during kiln startup.

Table 8—Secondary processing equipment owned by firms in Alaska also having

commercial dry kiln facilities, by geographic region (2004)

Number of Number of Number of Total planers

Alaska region dry kilns planers mouldersa and moulders

Interior 4 5 2 7

South-central 6 14 5 19

Southeast 9 7 6 13

Total 19 26 13 39

a

 Includes machines having combined planing and moulding capability.

Several dry kiln

owners have expressed an interest

in converting to

wood manufacturing

residues as a continued fuel source.
GENERAL TECHNICAL REPORT PNW-GTR-683

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By Dry Kiln Type

Kiln capacity and lumber-drying methods—

Increases in kiln capacity were considerable across all types of dry kilns (table

10), and the most substantial increase in number of kilns was for dehumidification

kilns (10 kilns in 2005 versus just 3 in 2000). The most substantial gain in lumberdrying volume was with hot-water kilns (table 11), owing to several kilns in

different geographic regions that were in the startup phase during 2000, but are

now fully productive.

Potential Lumber-Drying Capacity

The estimated volume of lumber dried in Alaska during 2004 was about 800 mbf

(table 11), whereas potential annual capacity is estimated to be almost 6,600 mbf

(table 12). This indicates that Alaska producers are drying just over 12 percent of

their potential capacity. Similarly, actual statewide lumber value in 2004 (about

$293,000) is considerably less than potential value under a full production scenario

(about $2,778,000). The primary reason for this gap is that many of the kilns

operate only part-time.

As of late 2005, several kilns were still in the startup phase or under construction. Once these kilns become productive, the gap between actual and potential

production will narrow. However, there are still many barriers in Alaska to operating kilns at full production year-round, including weather-related factors, staffing

problems, and transportation uncertainties, especially during winter.

Another factor potentially limiting the production of kiln-dried lumber is sawmill capacity. Our study indicates that each kiln facility in Alaska is associated

with a sawmill providing green lumber to dry. In some cases, volume of lumber

dried might be constrained by the productive capacity of these sawmills. Under

this scenario, a sawmill could only provide lumber to dry kilns for intermittent

drying, rather than continuous operation, as assumed in table 12.

Table 9—Primary heating source for dry kilns,

by geographic region (2004)

Number of dry kilns heated

by fuel type

Alaska region Wood Electric Oil

Interior 2 2 0

South-central 1 5 0

Southeast 3 4 1

Total 6 11 1
Alaska’s Lumber-Drying Industry—Impacts From a Federal Grant Program

13

Table 10—Estimated statewide capacity and number of commercial dry kiln facilities

in Alaska, by kiln type

2000a 2004 2005b

Kiln Number Kiln Number Kiln Number

Kiln type capacity of kilns capacity of kilns capacity of kilns

mbf mbf mbf

Dehumidification 14.5 3 46.5 8 74.0 10

Hot water 34.0 3 59.0 5 71.0 5

Steam 0 0 0 0 20.0 1

Otherc 2.0 1 28.0 3 55.0 3

Total 50.5 7 160.5 16 220.0 19

Note: mbf = thousand board feet.

a

 Includes only those kilns that were active in 2000 and remained active through 2004.

b

 Includes dry kilns under construction that are expected to come on line by the end of 2005.

c

 Includes vacuum kilns and electrically heated kilns.

Table 11—Estimated volume and value of lumber dried in Alaska, by

kiln typea

Lumber volume Estimated lumber valueb

Kiln type 2000c 2004 2000c 2004

Thousand board feet Dollars

Dehumidification 24.5 140.0 6,983 50,400

Hot water 56.0 522.0 15,960 187,920

Steam 0 0 0 0

Otherd 40.0 151.0 11,400 54,360

Total 120.5 813.0 34,343 292,680

a

 Does not include kilns that were idle at the time of data collection.

b

 Based on reported values from Random Lengths (2002, 2004) for kiln-dried coast

hem-fir dimension lumber, average of 2 by 6 and 2 by 8 prices (2000 price = $285 per

thousand board feet (mbf); 2004 price = $360 per mbf).

c

 Includes only those kilns that were active in 2000 and remained active through 2004.

d

 Includes vacuum kilns and electrically heated kilns.
GENERAL TECHNICAL REPORT PNW-GTR-683

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Table 12—Potential annual lumber-drying capacity and lumber value in Alaska, by geographic region (2004)

Potential

Installed Average kiln Potential

Alaska drying drying cycles lumber Potential

region Site capacity Primary species timea per year volume lumber valueb

mbf Days Cycles mbf per Dollars per

year year

Interior 1 2 Birch 15 22 44 33,220

2 2 Birch 10 33 66 49,830

3 6 White spruce 14 24 144 51,840

4 24 White spruce 10 33 792 285,120

South-central 5 4 Birch 21 16 64 48,320

6 33 Birch 15 22 726 548,130

7 8.5 Birch 21 16 136 102,680

8 10 White spruce 14 24 240 86,400

9 4 White spruce 14 24 96 34,560

10 17.5 White spruce 14 24 420 151,200

Southeast 11 20 Sitka spruce, western hemlock 9 37 740 266,400

12 20 Sitka spruce, western hemlock 9 37 740 266,400

13 5 Sitka spruce, western hemlock 9 37 185 66,600

14 8 Sitka spruce, western hemlock 12 28 224 80,640

15 10 Sitka spruce, western hemlock 12 28 280 100,800

16 2 Sitka spruce, western hemlock 12 28 56 20,160

17 22 Sitka spruce, western hemlock 9 37 814 293,040

18 20 Sitka spruce, western hemlock 9 37 740 266,400

19 2 Sitka spruce, western hemlock 9 37 74 26,640

Total 220 6,581 2,778,380

Note: mbf = thousand board feet.

a Lumber drying times based on Dry Kiln Operators Manual (Simpson 1991). Drying schedules were from table 7-20, “Time schedules for

kiln drying softwood lumber at conventional temperatures.” Average drying times for lower and upper grades were determined for 4/4

hemlock, 4/4 Sitka spruce, 4/4 white spruce, 4/4 birch, and these times were further refined after conversations with select dry kiln owners.

Lumber loading and unloading time was assumed to total 1 day. Southeast Alaska producers assumed to dry 50 percent western hemlock

and 50 percent Sitka spruce. Down time for routine maintenance and other needs was assumed to be 4 weeks per year (leaving 337

productive drying days per year for lumber drying). These estimates are only for active kilns and do not apply to idle kilns. Lumber-drying

times for dehumidification kilns were assumed to be 33 percent longer than for hot-water kilns.

b Softwood lumber value was based on reported values from Random Lengths (2002, 2004) for kiln-dried coast hem-fir dimension lumber,

average of 2 by 6 and 2 by 8 prices (2004 price = $360 per mbf). Hardwood lumber value for birch was based on recent market prices for

4/4 kiln-dried, Number 2A Common grade lumber (2006 price = $755 per mbf) (Hardwood Market Report 2006).
Alaska’s Lumber-Drying Industry—Impacts From a Federal Grant Program

15

Discussion

The recent federal grant program in Alaska has resulted in increased ability to

produce dry lumber and value-added products. The full impacts of the program will

not be known until all funded projects are operational (expected some time during

2006). Still, during the past 5 years, many Alaska producers, including those who

had installed dry kilns during the 1990s, have advanced further up the “learning

curve,” becoming more efficient and productive operators.

Since 2000, there have been significant statewide advances in lumber-drying

capacity, number of dry kilns, volume and value of dried lumber, and employment.

Key measures of success between 2000 and 2004 include gains in installed lumberdrying capacity (multiplying more than threefold), and gains in dried lumber

volume (multiplying more than sixfold) (see tables 2 and 3). Softwood lumber

drying continues to predominate, representing more than two-thirds of statewide

volume; however, softwood generally has a lower value per board foot than hardwood lumber (see table 12).

These gains have been linked to the overall growth of the wood products

industry in all three of Alaska’s wood-producing regions. The following are noted

dry kiln successes by region:

In interior Alaska, firms are:

• Meeting strong demand for secondary products, such as tongue-and-groove

lumber, by drying and milling white spruce (Picea glauca (Moench) Voss)

lumber.

• Selling “Alaska spruce” grade-stamped lumber per Western Wood Products

Association grading rules for dried and surfaced lumber (fig. 4).

• Helping to enable a rapid expansion of their log cabin manufacturing business

by using a new storage facility and moulder.

In south-central Alaska, firms are:

• Drying birch lumber in increasing amounts for secondary products such as

flooring and interior moldings.

In southeast Alaska, firms are:

• Drying Sitka spruce (Picea sitchensis (Bong.) Carr.) mast and spar stock for

export to European markets.

• Entering markets for kiln-dried log cabin material.

• Leveraging the use of kiln-dried lumber (dried by other Alaska firms) for their

own operations, allowing them to hire five new employees.

Since 2000, there

have been significant

statewide advances in

lumber-drying capacity, number of dry

kilns, volume and

value of dried lumber,

and employment.
GENERAL TECHNICAL REPORT PNW-GTR-683

16

Several significant lumber-drying facilities in southeast Alaska (including

one steam kiln and one vacuum kiln) are now reaching full production, and are

expected to dry substantial amounts of lumber in coming years. The influence of

even a few larger kilns on statewide lumber production can be substantial.

Capital investment in secondary processing equipment has also surged during

this time. Recent additions include assorted planers, moulders, lumber storage

buildings, and wood-fired heating systems. These advances enable greater use of

kiln-dried lumber for secondary product manufacture while also stimulating

innovation for new classes of wood products now within the capabilities of many

Alaska firms. Newly installed planing equipment now allows for the local sale of

kiln-dried, surfaced lumber. New lumber-drying technologies in Alaska help

provide greater diversity in the types of lumber products dried while contributing

to greater lumber drying efficiency and product quality.

Figure 4—White spruce lumber, processed in Alaska, indicating

Western Wood Products Association “Alaska spruce” grade

stamp.
Alaska’s Lumber-Drying Industry—Impacts From a Federal Grant Program

17

Recent market-induced factors favoring greater value-added manufacturing

have driven lumber-drying advances in Alaska. For the first time, Alaska wood

products firms are now able to manufacture a range of value-added secondary

products, including kiln-dried, surfaced, graded lumber for sale within local

markets, the continental 48 states, or export markets. Greater drying and processing

capabilities may also lead to new development of specialty products including

glued-laminated beams or other engineered wood products.

As kiln owners in Alaska gain experience, they will likely explore new techniques to increase lumber quantity and quality. Some of these could include sorting

lumber based on moisture content (e.g., Milota and Wu 1997, Warren and Johnson

1997), thickness, or grade, and developing specialized drying schedules based on

species (e.g., Avramidis and Mackay 1988, Shupe et al. 1997, Simpson 1991).

Successful dry kiln facilities will then serve as examples for potential adopters. We

are already seeing evidence of this clustering effect across Alaska, where several

regions have two or more kilns within a 15-mile radius.

Alaska lumber-drying firms in 2004 can be compared to firms on similar

development paths in other regions of the country several decades ago. For example, the number of dry kilns in West Virginia increased by 230 percent between

1982 and 1992, and the annual volume of kiln-dried lumber increased by a factor

of 2.9 during this period (Armstrong and Pahl 1994). In both West Virginia and

Alaska, acceptance of new kiln drying technologies has been a key determinant of

success (Armstrong and Pahl 1994, Nicholls and Kilborn 2001).

Barriers still exist. The processing efficiency of the Alaska wood products

industry has traditionally been rated as poor (Kilborn 2002). Costs of labor, capital,

and raw materials are high when compared to other regions. All of these factors

relate to the unenviable competitive position of high-cost producers, often operating by necessity at the margins of profitability (Robertson and Brooks 2001). Other

challenges relevant to timber-dependent communities in Alaska include finding

suitable economic growth strategies that also provide a desired level of community

stability (Tsournos and Haynes 2004). Lastly, many smaller firms, notably hardwood lumber producers, are challenged to find suitable market arrangements that

are appropriate to the production levels commonly existing in Alaska (Nicholls

2001).

Despite these obstacles, recent positive changes in Alaska’s lumber-drying

sector are notable, and have been associated with the following statewide trends:

Greater drying and

processing capabilities may also lead

to new development

of specialty products

including gluedlaminated beams or

other engineered

wood products.
GENERAL TECHNICAL REPORT PNW-GTR-683

18

• The Ketchikan (Alaska) Wood Technology Center has completed an in-grade

lumber testing program, establishing new design values for Alaska species.

Testing has been completed for Alaska yellow-cedar (Chamaecyparis

nootkatensis (D. Don) Spach), western hemlock (Tsuga heterophylla (Raf.)

Sarg.), Sitka spruce, and white spruce. Widespread promotion and recognition

of these design values could result in increased opportunities, in both domestic

and foreign markets.

• Previously underutilized timber species such as paper birch (Betula papyrifera

Marsh.), Alaska yellow-cedar, western redcedar (Thuja plicata Donn ex D.

Don), and red alder (Alnus rubra Bong.) are gaining favor by Alaska

producers. Opportunities for using these species and others could lie primarily

in character-marked lumber, lower grades of lumber, and material from

standing-dead sources. (Donovan et al. 2003).

Considerations

Despite these gains and successes, more can be done to better use existing facilities

and infrastructure. We estimate that Alaska dry kilns are being used at only 12

percent of capacity, based on potential volume dried under a scenario of year-round

production. However, this ratio could soon improve as newly constructed kilns

come online, adding to Alaska’s lumber drying production. New kiln installations

are expected to have overall greater efficiency and higher operating rates than the

existing kilns, many of which are operated only part time. Also, increased use of

other Alaska hardwoods can cause greater production. Hardwood lumber drying

in Alaska has so far been limited to birch; however, red alder may soon become a

viable product. Recent lumber price increases provide incentives for using red

alder from southeast Alaska to complement Pacific Northwest sources.

Continuation of current trends can also positively impact Alaska’s lumberdrying industry. First, new design values, as established by the Ketchikan Wood

Technology Center, are expected to create new opportunities to market kiln-dried

lumber for local construction in Alaska, as well as increasing export opportunities.

The persistence of the cooperative effort among several federal, state, and private

organizations in Alaska has also helped promote development within the wood

products industry by providing technical assistance and facilitating the exchange of

knowledge and ideas. These partners include:

• USDA Forest Service, Pacific Northwest Research Station, Alaska Wood

Utilization Center

• USDA Forest Service, Alaska Region, State and Private Forestry

• Juneau Economic Development Council

• Ketchikan Wood Technology Center
Alaska’s Lumber-Drying Industry—Impacts From a Federal Grant Program

19

• University of Alaska-Fairbanks, Cooperative State Research, Education, and

Extension Service program

• Alaska Division of Forestry

In summary, several statewide trends can affect the future development of

Alaska’s dry kiln industry, including the ongoing impact of grant programs, the

learning curve of new dry kiln operators, the presence of several larger dry kiln

facilities, emerging markets for underutilized species, increasing demand for

locally dried lumber, a continuing supply of economically priced timber, the ability

of the industry to support a reasonably priced grading service for Alaska species,

the ability of producers to move value-added products to domestic and export

markets, and professional agency support among a diverse group of natural resource professionals in Alaska.

Glossary

board foot of lumber—A basic unit of measurement for lumber measuring 1 inch

by 1 inch by 12 inches. When calculating board footage, nominal measurements as

opposed to actual are used.

dehumidification kiln—A dry kiln in which lumber is dried by means of a dehumidification unit that draws moisture from the air within the kiln chamber. Most

dehumidification kilns are electrically heated.

dry kiln—A heated chamber in which cut lumber is dried and seasoned. Dry kilns

usually have temperature control, humidity control, and air control so that moisture

can be removed in a controlled manner.

hardwoods—The wood of a dicotyledonous tree. Includes woods such as birch,

red alder, maple, oak, and cherry.

hot-water kiln—A dry kiln in which hot water is distributed from an energy

facility to the drying chamber, acting as the heat source to facilitate drying.

planer—A machine tool that is used to smooth, shape, or finish the surfaces of

wood.

residual products—Products of minimal value that result from the lumber production process including bark, sawdust, chips, slabs, edgings, planer shavings, and

trimmed ends.

softwoods—The wood of a monocotyledonous tree. Includes woods such as

spruce, hemlock, cedar, and pine.

steam-heated dry kiln—A dry kiln in which steam is distributed from an energy

facility to the drying chamber, acting as the heat source to facilitate drying.
GENERAL TECHNICAL REPORT PNW-GTR-683

20

Acknowledgments

The authors wish to acknowledge Daniel Parrent (Juneau Economic Development

Council, Wood Products Development Service), Kay Fermann (USDA Forest

Service, Alaska Region, State and Private Forestry), and Dr. Michael R. Milota

(Oregon State University, Department of Wood Science and Engineering) for their

insights and helpful contributions to this paper. The authors also wish to thank

Maria Stiefel, technical writer and editor at the Alaska Wood Utilization Center,

for her assistance with manuscript preparation.

Metric Equivalents

When you know: Multiply by: To find:

Board feet, lumber scale 0.0024 Cubic meters, lumber

Inches 2.5 Centimeters

Miles 1.6 Kilometers

Literature Cited

Armstrong, J.P.; Pahl, T.L. 1994. Changes in the kiln-drying practices of the

forest products industry in West Virginia: 1982 to 1991. Forest Products

Journal. 44(9): 54-56.

Avramidis, S.; Mackay, J.F. 1988. Development of kiln schedules for 4-inch

by 4-inch Pacific Coast hemlock. Forest Products Journal. 38(9): 45-48.

Donovan, G.; Nicholls, D.L.; Roos, J. 2003. Marketing recommendations for

wood products from Alaska yellow-cedar, Alaska birch, and red alder. Gen.

Tech. Rep. PNW-GTR-589. Portland, OR: U.S. Department of Agriculture,

Forest Service, Pacific Northwest Research Station. 13 p.

Hardwood Market Report. 2006. 84(14): 9.

Kilborn, K. 2002. Lumber recovery studies of Alaska sawmills, 1997 to 1999.

Gen. Tech. Rep. PNW-GTR-544. Portland, OR: U.S. Department of Agriculture, Forest Service, Pacific Northwest Research Station. 15 p.

McDowell Group. 1998. The Alaska market for value-added lumber products.

Juneau, AK: McDowell Group; final report. Prepared for the Forest Products

Manufacturing Project. 70 p.

Milota, M.R.; Wu, Q. 1997. Postsorting of hem-fir: a mill study. Forest Products

Journal. 47(2): 49-56.

Morse, K. 1997. Southeast timber task force report. [Place of publication unknown]: The Southeast Regional Timber Industry Task Force. 58 p.
Alaska’s Lumber-Drying Industry—Impacts From a Federal Grant Program

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Nicholls, D.L. 2001. An evaluation of the retail market potential for locally produced paper birch lumber in Alaska. Gen. Tech. Rep. PNW-GTR-493. Portland, OR: U.S. Department of Agriculture, Forest Service, Pacific Northwest

Research Station. 27 p.

Nicholls, D.L.; Kilborn, K. 2001. An assessment of Alaska’s lumber drying

industry and current potential for value-added processing. Gen. Tech. Rep.

PNW-GTR-522. Portland, OR: U.S. Department of Agriculture, Forest Service,

Pacific Northwest Research Station. 20 p.

Random Lengths. 2002. Random Lengths yearbook. Forest products market

prices and statistics. Eugene, OR: Random Lengths Publications, Inc. 296 p.

Random Lengths. 2004. Lumber price guide. In: Random Lengths: weekly report

on North American forest products markets. Eugene, OR: Random Lengths

Publications, Inc. 60(53): 5.

Robertson, G.C.; Brooks, D.J. 2001. Assessment of the competitive position

of the forest products sector in southeast Alaska, 1985-94. Gen. Tech. Rep.

PNW-GTR-504. Portland, OR: U.S. Department of Agriculture, Forest

Service, Pacific Northwest Research Station. 29 p.

Shupe, T.F.; Harding, O.V.; Choong, E.T.; Mills, R.H. 1997. Effect of two

drying schedules on spruce pine lumber defects. Forest Products Journal.

47(1): 57-60.

Simpson, W.T., ed. 1991. Dry kiln operator’s manual. Agric. Handb. AH-188.

Madison, WI: U.S. Department of Agriculture, Forest Service, Forest Products

Laboratory. 274 p. http://www.fpl.fs.fed.us/documnts/usda/ah188/ah188.htm.

(August 15, 2005).

State of Alaska. 2006. Alaska by region [Political]. Juneau, AK: Department of Commerce, Community, and Economic Development. http://

www.dced.state.ak.us/oed/student_info/learn/region.htm. (February).

Tsournos, P.; Haynes, R.W. 2004. An assessment of growth and development

paths for southeast Alaska. Gen. Tech. Rep. PNW-GTR-620. Portland, OR:

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

Station. 27 p.

Warren, S.; Johnson, G. 1997. The economic benefits of sorting SPF lumber to

be kiln-dried on the basis of initial moisture content. Forest Products Journal.

47(3): 58-61.
GENERAL TECHNICAL REPORT PNW-GTR-683

22

Appendix

Questions asked of Alaska dry kiln facility owners

These questions were asked of the dry kiln owners, by phone, according to a

standard script:

1A. When did your dry kiln come online (i.e., start drying lumber commercially)?

Or

1B. When do you expect your kiln to come online (i.e., start drying lumber

commercially)?

2A. What was your total installed drying capacity in 2000? (mbf)

2B. What was your total installed drying capacity in 2004? (mbf)

Or

2C. What is your expected total installed drying capacity once your kiln comes

online in 2005 (mbf)?

3A. What volume of lumber did you dry in calendar year 2000? (mbf)

3B. What volume of lumber did you dry in calendar year 2004? (mbf)

4A. What was the total grade distribution of lumber dried in calendar year 2000?

4B. What was the total grade distribution of lumber dried in calendar year 2004?

5A. Is your lumber graded before being sold?

5B. If so, how is it graded? (i.e., visual appearance, National Hardwood Lumber

Association grades, Western Wood Products Association)

6A. What was your capital investment (dollars) in your dry kiln system? (including

kiln structure, heating system, and lumber storage area)

Or

6B. What was your expected capital investment (dollars) in your dry kiln system?

(including kiln structure, heating system, and lumber storage area)

7A. How many new employees have you added to your business as a result of the

new dry kiln system? (Include all new employees, full- and part-time.)

Or

7B. How many new employees do you expect to add to your business as a result of

the new dry kiln system? (Include all new employees, full- and part-time.)
Alaska’s Lumber-Drying Industry—Impacts From a Federal Grant Program

23

8A. Do you own a planer, moulder, or other secondary processing equipment? (If

yes, please specify which one(s).)

Or

8B. Do you plan to acquire a planer, moulder, or other secondary processing

equipment? (If yes, please specify which one(s).)

8C. What equipment (if any) was purchased with dry kiln grant funds?

9A. How many separate dry kilns (i.e., drying chambers) do you have?

Or

9B. How many separate dry kilns (i.e., drying chambers) do you expect to have?

10. What type of dry kiln do you have? (dehumidification, steam, hot-water, other)

11. How is your kiln heated? (electricity, wood/biomass, fuel oil, other)

12A. What proportion of your lumber dried in calendar year 2000 was sold in:

• Local markets? (percent)

• Within Alaska? (percent)

• Outside of Alaska? (percent)

12B. What proportion of your lumber dried in calendar year 2004 was sold in:

• Local markets? (percent)

• Within Alaska? (percent)

• Outside of Alaska? (percent)

13A. What proportion of total lumber dried in calendar year 2000 was hardwood

(versus softwood)?

• Hardwood (percent)

• Softwood (percent)

13B. What proportion of total lumber dried in calendar year 2004 was hardwood

(versus softwood)?

• Hardwood (percent)

• Softwood (percent)
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