C. Hardwood Products and By-Products

(1) It is difficult to estimate hardwood lumber production due to the fragmented

nature of the industry. Some mills are part of major forest products corporations, but most are independent operations. With a few exceptions, most hardwood sawmills are smaller operations that use timber from a relatively small geographic area. However, larger mills may obtain timber from as far as 75 to 100 miles away.

(2) Hardwood lumber is manufactured for a variety of end uses. Each hardwood

species has its own characteristics and types of defects that require a specific type and amount of processing. These characteristics make each hardwood species more suitable for specific uses.

(3) To account for these variations in hardwoods and to provide a level of

product standardization, grading systems have been developed. The majority of hardwood lumber is sold under the factory grade rules developed by the National Hardwood Lumber Association (NHLA). Standard NHLA lumber grades and the general requirements of each can be found on the https://nhla.com/ website.

(4) Hardwood lumber traditionally is measured and sold by the thousand board

feet (MBF) (a board foot is the volume equivalent to a piece of wood 1"x1"x12"). There are 12 board feet in a cubic foot of wood. However, other units besides board feet may be used. Hardwood lumber may be sold green (with relatively high moisture content) or dried (kiln-dried or air-dried). Kiln drying is a process that uses a heat source to extract moisture from lumber in a relatively short time. Air drying allows the lumber to dry under ambient conditions over a longer period. Some hardwood end products require drying prior to final manufacture. Drying adds value to the lumber and may reduce shipping costs since the weight of the lumber is reduced. However, some buyers prefer to purchase green lumber and dry it themselves. Hardwood lumber also may be sold rough (the surfaces of the boards are unfinished) or surfaced by planning. As with drying, surfacing adds value but is not desired by all types of buyers.

(5) The furniture, cabinet, and pallet industries are major markets for hardwood

lumber. Hardwood dimension lumber is used to produce parts for furniture

and cabinets. Another hardwood product used in furniture and cabinets is veneer, which is sliced using sharp knives rather than sawn like lumber.

(6) The millwork industry is comprised of firms that primarily produce windows,

window parts, doors, door parts, and wood moldings. Softwoods are a large component of this industry, but hardwoods also are used.

(7) The furniture, cabinet, and millwork industries use high-grade lumber, and

the pallet industry uses low-grade lumber.

(8) There is also a significant export market, primarily in Europe and the Pacific

Rim, for high quality hardwood logs. Buyers in those markets generally prefer to make their own lumber or veneer from the logs rather than receiving lumber or veneer from the U.S.

(9) The use of hardwood lumber for flooring has varied over time with

fluctuations in popularity and growth in the housing market.

(10) Hardwoods also are used in the manufacture of railroad ties. However, the

use of railroad ties made out of composite materials such as recycled plastics and concrete is increasing.

(11) Sawmill by-products are also an important part of the industry. For example,

sawdust can be used to make charcoal, compressed fire logs, and compressed particle board. Bark slabs can be used for firewood. Mills also use byproducts to provide energy for the mill. Hardwood mills may sell their products directly to customers, or through brokers, or wholesalers.

(12) Hardwood lumber prices generally are negotiated between buyer and seller

based on the market conditions for different species, grades, and the end use.