By Elle Soderberg, Wisconsin DNR Forest Products Specialist

Leaders from across the forest products industry, government agencies, research institutions and economic development organizations recently gathered in Madison for the U.S. Endowment’s Markets Matter Convening. The event focused on the central challenge facing the forest sector today: Developing sustainable markets for low-value wood fiber, including small-diameter timber and mill residues.

Throughout the convening, participants emphasized that while the forest products industry continues to face significant economic and market pressures, there are also growing opportunities for innovation, collaboration and investment.

Current Market Conditions And Industry Challenges

Presentations from consulting groups across the country highlighted the broader economic realities impacting the forest sector. Speakers noted continued uncertainty surrounding economic policy, low consumer confidence and ongoing challenges within the housing market, including elevated mortgage and inflation rates. Notes from the convening also pointed to a rising median age of first-time homebuyers, now around 40 years old, further impacting housing demand and construction activity.

The pulp and paper sector continues to undergo significant transformation. According to discussions during the event, U.S. pulp and paper capacity has declined substantially over the past decade, while aging infrastructure and global competition continue to pressure domestic facilities. Participants noted that many pulp mill closures have been tied to high operational costs and changing market conditions.

A recurring theme throughout the convening was that the issue is not necessarily a lack of available wood fiber, but rather a lack of markets capable of economically utilizing low-value material. Roy Anderson with the Beck group shared that millions of bone-dry tons of wood fiber remain underutilized annually despite existing infrastructure theoretically being capable of consuming significantly more material if fully utilized.

Supporting Existing Infrastructure While Expanding New Markets

Several speakers emphasized the importance of maintaining and supporting existing forest products infrastructure, particularly sawmills and pulp and paper mills, which were repeatedly referred to as “system anchors” for rural economies. These facilities not only provide direct employment, but also support logging contractors, trucking, land management and secondary manufacturing industries.

At the same time, participants discussed the need to diversify market opportunities for wood fiber. Increased interest in biomass energy, biochar, wood-based building materials and emerging carbon-focused products were highlighted as potential growth areas. Discussions also explored opportunities to expand wood use in non-residential construction and affordable housing initiatives.

Elvy Barton with the Salt River Project discussed what the company has done in terms of biomass utilization strategies in the western United States, highlighting efforts to diversify biomass markets through biochar production. Benefits discussed included scalability, environmental co-benefits and lower capital costs compared to some other technologies. Challenges, however, remain in developing supply chains, end-user markets and large-scale applications.

Learning From Successful State-Level Efforts

South Carolina’s Forestry Recovery Task Force was presented as an example of how states can respond proactively to market disruptions. After losing a significant portion of its fiber supply markets over a short period, the state focused on stabilizing remaining companies while pursuing innovation and new product opportunities. Participants stressed the importance of bringing together industry leaders, researchers, economic development organizations and elected officials to focus on realistic, actionable solutions.

Not only in this presentation but across the whole convening, a common theme seemed to be the importance of partnerships with universities, design professionals and organizations promoting wood utilization and mass timber construction.

Policy, Investment And Research Priorities

Breakout sessions on research, investment and policy generated extensive discussion around how to better align funding, innovation and market development efforts. Participants discussed the need for stronger commercialization pathways to help move new technologies and research “out of the lab” and into practical application.

There was also significant conversation around potential policy tools and funding mechanisms to support forest product markets. Ideas included loan guarantee programs, reinvestment of softwood tariff revenues into forest product infrastructure, incentives for domestic wood utilization and potential subsidies designed to reduce barriers for wood products in construction and energy markets.

Participants emphasized the importance of developing durable, long-term policies capable of supporting both existing infrastructure and emerging technologies. Several discussions also focused on the need for greater collaboration between public agencies, private industry, investors and research institutions. It was discussed throughout the convening that one clear message needs to be formed and backed by the industry as a whole.

 A Shared Message Moving Forward

One of the key messages throughout the convening was that maintaining healthy forests and strong forest product markets are closely connected. Speakers emphasized that conservation and production are not opposing ideas, but rather complementary goals that depend on sustainable management and active markets for forest products.

Participants also stressed the importance of broadening conversations beyond traditional industry stakeholders and continuing to bring new voices into discussions around forest management, biomass utilization and wood innovation. A lack of understanding and negative public perception were also often brought up and the need to reframe the education around forestry and wood-based products.

As the convening concluded, attendees and closer Chief Tom Shultz of the USFS reinforced the idea that supporting existing infrastructure while investing in innovation, collaboration and market diversification will be essential to strengthening the long-term resilience of the forest products industry. The event served as both a reflection on current market realities and a call to action for developing practical, collaborative solutions for the future of low-value wood fiber markets.