Use Of A Value-added Wood Products Extension Specialist

Figure 1. Louisiana Agricultural Commodity Economic Contribution (2006) (LSU AgCenter)

Figure 2. Lumber Value-added $/$1 of Log Input (2001) (U.S. Department of Commerce, Census of Manufacturers)

Figure 3. Furniture Value-added $/$1 of Raw Materials (2001) (U.S. Department of Commerce, Census of Manufacturers)

Value-added is the increased value at each stage of a manufacturing or assembly process.

Those activities or steps that add to or change a product or service as it goes through a process are the activities or steps that the market views as important and necessary. This is because they add net economic value. This value can be added through manufacturing and/or marketing.

Many people wonder what value-added wood products are. Secondary or value-added wood products are wood products that have been converted from lumber, plywood or other output from primary manufacturers.

This includes ANY further manufactured wood product such as pulp, paper, moldings, windows, cabinets, furniture, chairs, fixtures, bridges, bulkheads, docks, crafts, gazebos, boats, boat decks, cable spools, timbers, pilings and toys.

Characteristics of Value-added Forest Products

• Often targets “niche” markets, not mass markets
• Are often specialty products
• Create employment opportunities
• Have higher downstream multiplier effects than primary products
• Capture higher prices in the marketplace than commodities

Value-added wood products typically require more employees than primary products – leads to more jobs. They usually require more than one mill to complete the process – that means more companies. The added processing means higher-valued products – greater retention of resource value.

Outlook 

According to the Louisiana Forestry Association, there are approximately 14 million acres of forests, divided into pine (52%) and hardwoods (48%).

Industry is composed of 180 primary manufacturers and 750 secondary manufacturers. This represents Louisiana’s 2nd largest employer, creating 19,700 manufacturing jobs and 8,000 jobs in harvesting/transportation.

Figure 1 indicates the forestry sector’s economic contribution to the state of Louisiana. 
The forestry sector is by far the largest agricultural contributor to the state’s economy. At $4.9 billion, its contribution is nearly equal to all other sectors’ contributions combined ($5.5 billion).

Figure 2 shows the value added by the primary industry (in $/$1 of log input) for 10 Southern states.  The values in Figure 2 indicate that Louisiana’s primary industry is the most efficient at converting logs into primary (e.g. lumber).

Figure 3 compares the value added (in $/$ of raw materials) by the secondary industry for the same Southern states.  Figure 3 presents a different story to Louisiana’s secondary industry. Although timber is Louisiana’s number one agricultural crop, much is exported as lumber or even logs, resulting in a loss of potential value from not engaging in secondary manufacturing.

Opportunities

In light of the Louisiana’s historical performance in adding value to wood products, the importance of the forestry industry's economic contribution and the excellent technical resources, the LSU AgCenter took the initiative to create an extension specialist position that could facilitate technology transfer, improve manufacturing processes and guide industry towards marketing options that have not been fully developed.

Among the resources available to industry are the Louisiana Forest Products Development Center (LFPDC), which houses premier scientists and research facilities.

Louisiana’s geographic location gives it access to population centers through its extensive highway network, railways and the Mississippi River. This transportation network has been proven for products from the primary industry and it could effectively handle value-added wood products. On a broader scale, port access to Gulf of Mexico presents a perfect doorway for international trade.

What will this extension specialist do?

The main objective of the extension specialist it to assist existing industry adapt to changing market demands and conditions. To do so, he will use his wood science and industrial engineering knowledge and experience to:

• Improve processing techniques
• Link LFPDC research with Louisiana clients
• Work closely with LFPDC faculty members to disseminate information in client-appropriate venues and activities
• Coordinate activities with other extension faculty
• Forestry
• Natural resources
• 4-H/youth

Different people learn in different ways; therefore, in an attempt to reach the most diversified groups, efforts will be made to communicate using the following tools:

• Regional workshops and seminars
• On-site company visits
• Parish forestry meetings
• LFPDC newsletter contributions
• LFPDC publications
• LFPDC and AgCenter Web sites

The extension specialist’s role in adding value to Louisiana’s forest products is multi-faceted. He must:

• Understand current Louisiana manufacturer transformation processes
• Determine client needs from their perspective
• Understand the dynamics of the supply chain for Louisiana wood products
• Identify business opportunities for traditional and emerging forest products
• Communicate opportunities to clients using appropriate means of dissemination

Please feel free to contact me with any questions you might have concerning adding value to your wood products.