Forest Products

Changes in 2021 from 2020:

• U.S. total exports: Increased by $6.2 billion (18.6 percent) to $39.7 billion
  • U.S. domestic exports: Increased by $5.9 billion (18.2 percent) to $38.0 billion
  • U.S. re-exports: Increased by $363 million (26.9 percent) to $1.7 billion
• U.S. general imports: Increased by $16.5 billion (37.0 percent) to $61.1 billion

The value of U.S. domestic exports of forest products^[1] rose by $5.9 billion (18.2 percent) to $38.0 billion from 2020 to 2021.^[2] Although all forest products digests had increases in exports, the largest absolute increases, by value, were for wood pulp and recovered paper; lumber; logs in the rough; and industrial paper and paperboard. The increases were largely due to the recovery in global demand from the 2020 economic downturn caused by the COVID-19 pandemic’s initial slowdown as well as higher prices.^[3] Canada, Mexico, and China continued to be the largest destination markets for U.S. forest product exports (table FP.1).

The value of U.S. general imports of forest products grew by $16.5 billion (37.0 percent) to $61.1 billion from 2020 to 2021.^[4] While all forest products digests had increases in imports, the largest absolute increases, by value, were for lumber; wood veneer and wood panels; moldings, millwork, and joinery; and wood pulp and recovered paper. The increases were largely due to the recovery from the 2020 economic downturn caused by the COVID-19 pandemic’s initial slowdown, rising U.S. demand, higher prices, and the strong U.S. housing market which drew in building materials.^[5] Canada continued to be the largest supplier to the United States in the forest products sector, followed by China (table FP.2).

U.S. Domestic Exports

The growth in U.S. exports of forest products in 2021 represented a return to some normalcy from the large export declines of 2020, which were largely caused by COVID-19 pandemic-related shocks.^[6] Forest product exports rose significantly for the two largest U.S. markets (Canada and Mexico); the increase was $1.3 billion (14.5 percent) for Canada and $1.6 billion (31.5 percent) for Mexico. U.S. exports to China (the third-largest market), however, were basically flat, expanding by only 0.2 percent.

Wood pulp and recovered paper, in 2021, became the largest digest in terms of U.S. exports, surpassing industrial papers and paperboard. U.S. exports of goods in this digest increased by $2.0 billion or 27.4 percent to $9.5 billion, though the increase was largely a recovery to pre-pandemic levels.^[7] Although China continued to be the largest market for these U.S. exports, exports to China dropped to $1.9 billion from $2.2 billion. This was likely partially due to the continuation of the trend that began following China’s 2018 ban on imports of substandard recovered paper (recycled paper), which essentially barred certain classes of U.S. recovered paper from the Chinese market.^[8] India became the second-largest recipient of U.S. wood pulp and recovered paper, with a total that more than doubled in 2021 to $1.0 billion, as the country moved into the market vacuum left by China. India is becoming a larger consumer of recovered paper as it increases its production of downstream paper products.^[9]

The value of U.S. exports of lumber grew by $802 million (30.2 percent) to $3.5 billion in 2021.^[10] The value increase (30.2 percent) was significantly higher than the volume increase (15.0percent), demonstrating the impact of the rising prices. For example, the price of framing lumber increased from about $550 in 2020 to nearly $850 per thousand board feet in 2021.^[11] The dramatic rise in global lumber prices in 2021 was due to, among other reasons, heavy demand by the homebuilding industry and detrimental climate change impacts on forest sector output.^[12] As these dynamics particularly affected U.S. imports of lumber, they are discussed more extensively in the imports section below. The largest changes in value for destinations of U.S. exports of lumber were to Canada (up by $212 million or 42.0 percent), Mexico (up by $196 million or 76.0 percent), and China (up by $71 million or 8.5 percent). China, Canada, and Mexico, respectively, continued to be the largest importers of U.S. lumber.^[13]

Logs in the rough exports rose by $649 million (22.6 percent) to $3.5 billion.^[14] Logs in the rough are wood in its natural state before it is turned into different products, such as lumber, plywood, furniture, and paper. While export values for logs in the rough exceeded the totals of 2020 and 2019, the 2021 total was slightly less than the total in 2018. Logs in the rough increased in price significantly in 2020, largely due to the dramatic rise in lumber prices, extreme weather events that impacted supply, and growing demand for corrugated paper for which logs are a key upstream input.^[15] Saw timber prices increased substantially from the 50-year lows of summer 2020, but remained much lower than those of two decades ago.^[16] China, one of the world’s leading importers of logs and producers of downstream wood products, resumed its position as the largest recipient of U.S. exports of logs in the rough—a position it had last had in 2018—displacing the United Kingdom.

Industrial papers and paperboard exports grew by $624 million (7.2 percent) to $9.3 billion.^[17] Paperboard is thicker than paper and has many uses because of its sturdiness, including for packaging. Although most U.S. production of industrial papers and paperboard is consumed domestically, there was also increased demand internationally which contributed to the export increase for this digest. In particular, record global demand for e-commerce shipping boxes continued in 2021, which was a substantial driver for this digest. U.S. paper manufacturers in 2021 produced nearly 407 billion square feet of corrugated products, which was a 3.4 percent rise compared to 2020.^[18] Nevertheless, higher demand pushed the prices of packaging materials to record levels and created shortages. In addition to higher demand from online shopping, prices for packaging materials were pressured by labor shortages, shipping port disruptions, and higher costs for freight and raw materials.^[19] U.S. exports of industrial papers and paperboard increased to Mexico by $468 million (28.0 percent) and Canada by $171 million (5.8 percent) but dropped to China by $151 million (23.6 percent). Canada, Mexico, and China continued to be the first, second, and third positions, respectively, as the largest markets for U.S. exports of industrial papers and paperboard.

U.S. General Imports

The growth in U.S. imports of forest products in 2021 represented a reversal from the large COVID-19 pandemic-induced import declines of 2020. Forest product imports increased from the largest U.S. suppliers—Canada (up $9.3 billion), China (up $1.3 billion), Brazil (up 1.2 billion) and Mexico (up $334 million).

The value of U.S. imports of lumber rose by $5.7 billion (71.4 percent) to $13.7 billion in 2021.^[20] Lumber prices increased over 500 percent from April 2020 to May 2021. Although prices plummeted in the summer of 2021, they remained significantly elevated, and resumed a steady increase late in 2021.^[21] The rapid rise in lumber prices was especially driven by increased U.S. housing demand, as housing starts increased by 15.6 percent during 2020–21.^[22] Lumber prices have also been pushed higher by environmental damage—particularly flooding, wildfires, and pine beetle infestations, which scientists attribute to climate change—to Canadian forests, historically a major source of U.S. imports.^[23] The impact of price increases is further evidenced by the larger percentage rise in lumber imports by value compared to quantity. Whereas U.S imports of lumber grew by 71.4 percent by value, they increased by only 5.6 percent by volume.

In 2021, U.S. and Canadian lumber production continued to be insufficient to meet U.S. demand. Although Canada remains the dominant supplier of U.S. lumber imports, a significant portion of U.S. import increases came from outside Canada, particularly European Union (EU) member states Germany, Sweden, Austria, and Romania.^[24] Short-term, EU lumber supplies have increased partly due to the region’s own (but newer) beetle infestation problem that incentivized harvesting and exports while the EU lumber was still viable.^[25]

The value of U.S. imports of wood veneer and wood panels, as well as moldings, millwork, and joinery, significantly increased due to heightened U.S. housing starts, renovations, and remodeling, a dynamic that carried over from 2020. Imports of wood veneer and wood panels grew by $4.3 billion (68.1 percent) to $10.6 billion,^[26] while imports of moldings, millwork, and joinery increased by $1.2 billion (33.9 percent) to $4.7 billion.^[27] Imports of these products, which are largely used in the building industry, and the rise in prices for such products in turn contributed to the housing price increases.^[28] Canada continued to be the dominant supplier to the United States for products in both digests; imports from Canada for products in these two digests combined increased 73.9 percent by value.

U.S. imports of wood pulp and recovered paper increased by $1.1 billion (36.1 percent) to $4.0 billion.^[29] This was likely largely due to the economic recovery and the shortage of domestic supply for the inputs needed to make corrugated boxes. U.S. e-commerce, which depends on a steady supply of packing boxes, continued to thrive as consumers focused more on purchases of goods than services (such as travel, restaurants, and other leisure activities). E-commerce sales rose 14.2 percent in 2021 compared to the prior year.^[30] The two largest suppliers for products in this digest, Brazil and Canada, also had the largest absolute increases, with Brazil growing by $494 million and Canada growing by $433 million.