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Logging Safety 1

Business Information

Logging Business Information

• Objectives▫ Status and recent history of Alabama’s logging

businesses▫ Identify logging business information

Logging Safety 2

Outline

• Harvest volume• Logging capacity • Pricing and prices• Government Business Resources

Harvest Volume

• Alabama Forestry Commission - Severance tax information

• US Forest Service - Timber Products Output

Logging Safety 3

AFC Severance• Timber production ▫ 1998 1.18 billion cubic feet (7.0 million cords)▫ 2007 1.24 bcf (+5%)

• Total stumpage value ▫ 1998 $1.03 billion▫ 2007 $0.79 billion (-23%)

• http://www.forestry.alabama.gov/PDFs/Forest_Resource_Report.pdf

Trends

14001400

Volume Stumpage

600

800

1000

1200

1400

600

800

1000

1200

1400

Valu

e (m

illio

n $)

olum

e (m

illio

n C

F)

400

600

400

600 V

Vo

Logging Safety 4

Trends

1400

Pine PW Pine ST Hardwood PW Hardwood ST

400

600

800

1000

1200

1400

olum

e (m

illio

n C

F)

0

200Vo

USDA Timber Products Output

• Generate individual reports▫ County▫ Region▫ State▫ Last year 2005

• Website▫ http://srsfia1.fia.srs.fs.fed.us/php/tpo2/tpo.php

Logging Safety 5

TPO Removals Alabama

1600000

Pine STPine PW

600000800000

1000000120000014000001600000

oval

Vol

ume

(MC

F)

Hardwood STHardwood PWtotal

0200000400000

1996 1998 2000 2002 2004 2006

Rem

o

Logging Capacity• Industry surveysy y• Labor Market Information

▫ www2.dir.state.al.us/▫ www2.dir.state.al.us/led/alatest.html

• Information▫ Employee number▫ New hires and departures▫ Average wages

Logging Safety 6

Industry Surveys

• APA/FRA pulpwood producer surveys▫ Mississippi State

• WSRI Reports▫ 2002▫ 2006▫ 2009

Southern Logging Production by Cords per Week

0-200 201-300 301-400 >400

40%

60%

80%

100%

cent

of c

rew

s

0%

20%

1979 1987 1993 2002

Perc

Logging Safety 7

Alabama Logging Employees

8000

firms employees

5000

6000

7000

8000

800

1100

1400

Empl

oyee

s

Firm

s

4000500

Wage Changes

130%

100%

110%

120%

130%

de

x (

20

02

= 1

00

)

80%

90%

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009

Wa

ge

in

d

Logging Safety 8

Logging Productivity Trends

400

200

250

300

350

ad

s* p

er

em

plo

yee

150

200

Lo

a

*800 cubic feet/load

Pricing and Prices

• Stumpage• Producer price index▫ Delivered prices▫ Contract rates▫ Costs

• Logging cost index

Logging Safety 9

Stumpage prices• Timbermart South▫ Subscription service▫ Website▫ www.tmart-south.com/tmart/

• Extension▫ Counties get quarterly reportsCounties get quarterly reports▫ Can not redistribute

Price Index• The index reports changes to the current year as p g y

a percentage of the base year• The base year equals 100%

Logging Safety 10

Cost IndexYear Cost Index Sample dollar valuep

Base year 1995 100 $10

Current year

2004 125 ($10 * (125/100)) = $12.50

Cost IndexYear Cost Index Sample dollar valuep

First year 1996 98 $10

Current year

2004 123 ($10 * (123/98)) = $12.55

Logging Safety 11

PPI Series – Income• Burea of Labor Statistics▫ www.bls.gov

• PPI▫ www.bls.gov/ppi/home.htm

• Choose industry information▫ Logging

Most are gatewood receiptsContract logging is just logging services

Logging - Price IndicesSW logs and bolts HW logs and bolts Pulpwood

Contract logging CPI

100

150

200

250

50

1982

1984

1986

1988

1990

1992

1994

1996

1998

2000

2002

2004

2006

2008

Logging Safety 12

PPI Series Costs• PPIPPI▫ www.bls.gov/ppi/home.htm

• Commodity Information▫ Diesel Fuel▫ Machinery

• Laborbl / / t/h ht▫ www.bls.gov/ncs/ect/home.htm

▫ Employment cost index

PPI Cost Trends

400

#2 Diesel All Machinery Labor wages

150

200

250

300

350

400

Pric

e In

dex

50

100

150

1982

1984

1986

1988

1990

1992

1994

1996

1998

2000

2002

2004

2006

2008

Logging Safety 13

WSRI Logging Cost StudyF d d j i tl b L O i ti Mill d USDA• Funded jointly by Loggers Organizations, Mills, and USDA

• Began in 1995• Today 42 loggers: Eastern US.• Loggers chosen for the study:▫ Have their books reviewed▫ Receive confidential reports

Cost index

• Cost indices are presented for▫ Total Cost▫ Cost Components

Equipment, Supplies, Labor, Contract services, Administrative, Overhead, and Insurance

Logging Safety 14

Cost Index CPI PPI Contract logging

Logging Cost/Ton Index

100

120

140

160

Index value

Cost Index CPI PPI - Contract logging

80

100

Cost Index CPI

Equipment Cost/Ton Index

100

120

140

Index value

80

Logging Safety 15

Consumable Cost/Ton Index

100

120

140

160

Index value

Cost Index CPI

80

100

Cost Index CPI

Labor Cost/Ton Index

100

120

140

Index value

80

Logging Safety 16

C I d CPI

Insurance Cost/Ton Index

100

120

140

Index value

Cost Index CPI

80

Admin. Cost/Ton Index

120140160180200

dex

valu

e

Cost Index CPI

80100120

Ind

Logging Safety 17

Cost Distribution 1995

34%

20%

34%

4%

21%

EquipmentSuppliesLaborInsurance

19%2%

ContractorsOverhead

Cost Distribution 2006

29% 3%

23%

3%

28%

EquipmentSuppliesLaborInsuranceContractors

192034421

14% 3%

ContractorsOverhead

212

Logging Safety 18

For more information

• Contact Bill Stuart or Laurie Grace▫ Phone: 662-325-8919▫ Email: [email protected]

National Logging Statistics

• Volume harvest▫ US Forest Service Estimates

• Employment▫ Business Census▫ Every 5 years

Logging Safety 19

Logging Labor and Wage Productivity Index

250%Employee productivity (units/emp) Wage productivity ($/unit)

100%

150%

200%

1976 = 100

0%

50%

1970 1975 1980 1985 1990 1995 2000 2005

Logging Labor and Wage Productivity Index

250% Logging employee productivity (units/emp)Logging wage productivity ($/unit)Durable goods employee productivity (unit/emp)

100%

150%

200%Durable goods employee productivity (unit/emp)Durable goods wage productivity ($/unit)

1976 = 1001992 = 100

0%

50%

1970 1975 1980 1985 1990 1995 2000 2005

Logging Safety 20

Small Business Administration• http://www.sba.gov/index.html• Quick links to government forms and

publications• Portal to SBA support• Publications on small business issues▫ Human resources▫ Human resources▫ Form of Business▫ Etc.

• Alabama Small Business Development Center▫ http://www.asbdc.org/

IRS

• www.irs.gov• Forms and publications• Guidance on tax and business organization and

accounting methods• Market Segment Specialization Program▫ http://www.irs.gov/pub/irs-mssp/hardwd.pdf

Logging Safety 21

Alabama Department of Industrial Relations• dir.alabama.gov/• State enforcement for labor issues▫ Wage and Hour▫ Workers Compensation▫ Unemployment Insurance▫ New hire law

• Labor market/industry information

Alabama New Hire Program • Why• Why▫ Prevent payment of unemployment compensation to

individuals who have returned to work.▫ Prevent individuals from receiving workers'

compensation while employed.▫ Recoup from unemployment compensation the cost of

over-issuance of food stamps.▫ Locate non-custodial parents who are delinquent in Locate non custodial parents who are delinquent in

legal child support obligations.• What▫ Report W4’s of newly hired or recalled employees

within 7 days• http://dir.alabama.gov/nh/default.aspx#facts

Logging Safety 22

AL Department of Revenue

• http://www.ador.state.al.us/• Income, Sales, and Business taxes• Severance taxes

AL Secretary of State

• http://www.sos.alabama.gov/• Form of Business Registration• Search for businesses and business filings