Pulpwood prices in the South hit 40-year low as paper mills close

Timberland owners turn to solar leases and blueberry farms as pulpwood market vanishes

The collapse of the Southern pulpwood market is threatening the rural economy that forestry built over the past century. Prices for pulpwood — trees unsuitable for lumber but used to make cardboard and paper — are at their lowest in nearly 40 years before inflation, and in some parts of the region there is essentially no market at all, according to reporting by Ryan Dezember for The Wall Street Journal. Some growers, for the first time, are paying to have pulpwood removed.

The shift has come quickly. “We went from the best pulpwood market in the nation to the pits,” Bill Howard, whose family has operated a sawmill in Statesboro, Ga., since 1898, told the Journal. “Sixteen dollars a ton for it last year — that’s the number everyone talks about at the breakfast club. Now, it’s zero to $5.”

The Howard family employs roughly 300 people across a sawmill, two other plants and three builder-supply yards. The collapse now threatens a fifth generation working the family’s timberlands, Howard said.

International Paper’s Savannah and Riceboro closures added to a regional pulpwood-buyer shortage

International Paper’s closures of an 89-year-old containerboard mill in Savannah and a smaller mill in nearby Riceboro last year added to a regional pulpwood-buyer shortage, joining a wave of containerboard-mill shutdowns that collectively eliminated roughly 10% of U.S. containerboard capacity, according to The Wall Street Journal.

The closures reflect structural changes in how Americans package and ship goods. Recycled boxes, cheaper pulp imported from Brazilian eucalyptus plantations that fall outside recent tariffs, plastic mailers and paper envelopes have eroded demand for new containerboard. Amazon and other shippers have also reduced their use of cardboard, packing items in the smallest boxes possible and eliminating boxes packed inside other boxes. Per-capita U.S. containerboard demand peaked in 1999, according to Sakonnet Research, even as total box shipments set records during the pandemic-era e-commerce boom of 2021.

Rather than spend $300 million on a new roof and other repairs to keep the aging Savannah plant running, International Paper invested $250 million in a newer facility in Selma, Ala., to make the lighter-weight containerboard that shippers prefer. The company has listed the roughly 735-acre Savannah River site and the Riceboro property for sale.

Growers scale back replanting as prices discourage investment

Beyond the immediate price drop, the collapse is reshaping long-term decisions about whether to plant trees at all. ArborGen, one of the world’s largest suppliers of loblolly pine seedlings, said sales volume in the South has dropped more than 20% over its past two fiscal years. Howard told the Journal he is planting fewer seedlings per acre to reduce upfront costs and thinning. Some timberland owners, worried that planting could saddle their heirs with trees they cannot sell, are rethinking the future.

“If they’re not planting trees,” Howard said, “I’m not going to have anything to cut.”

Pine plantations take 25 to 30 years to mature into lumber-grade timber. The first big payday typically comes from thinning — removing some trees so the rest grow straight and knot-free — with pulpwood as the primary product sold. Now, for some timberland owners, thinning is one more bill.

Landowners diversify into solar, blueberries and engineered wood

With no pulpwood buyers and weak returns from timberland, some Southern landowners are converting or repurposing their holdings. Joe Hopkins, who manages 75,000 acres of pine in southeast Georgia, told the Journal he struggles to net a 1% return for shareholders in the timberland operations his great-uncle and grandfather established.

“The day a forest landowner becomes wealthy is the day he quits being a forest landowner,” Hopkins said. “That’s the day I call a stockbroker and say, ‘Hey, I’m good with 6% — that’s 600% more than I’ve been getting.’”

Others are leasing land for solar farms. Across the Okefenokee Swamp, family-owned Superior Pine Products has replaced some timber on its 110,000 acres with blueberries, growing Southern highbush varieties that reach supermarkets between the Florida and northern crops. Chief Executive Scott Griffin is also looking into solar and carbon markets. “There’s only so much you can diversify,” he told the Journal. “Timber has been our bread and butter for 100 years.”

Weyerhaeuser, the South’s largest timberland owner with about 6.6 million acres in 11 states, is spending hundreds of millions of dollars to build facilities in Arkansas and Mississippi that would turn pulpwood surpluses into engineered lumber and an alternative to metallurgical coal. Lobbyists are pushing for laws to encourage burning wood pellets to generate electricity. Cellulose-based jet fuel, battery materials and fabrics are all being promoted as potential new markets.

Frank Peeples, whose grandfather entered the timber business in South Carolina in the 1950s, described the situation bluntly to the Journal: “It’s an industry in crisis.” He and others in the timber industry and state and federal government are set to host European Union officials next month in hopes of convincing the trade bloc to lift its ban on sulfuryl fluoride, a fumigant, which would enable wood-chip exports to the EU.

“Without a pulpwood market,” Peeples said, “there is a real question about the long-term viability of our forest industry in the U.S. South.”

The collapse ends a century of pine-driven transformation

The current crisis represents a reversal of a transformation that reshaped the Southern economy and landscape. The region’s original longleaf forest was mostly logged out by the 1930s, when a Savannah scientist named Charles Herty discovered how to make paper from the young loblolly and slash pine sprouting on the cutover. Paper mills — which could not chase the receding forest the way mobile sawmills had — promoted timber as a crop to be replanted rather than a quarry to be mined.

With the boll weevil devastating cotton, paper producers’ “plant ‘em thick, cut ‘em quick” approach spread. From Virginia to north Florida and west to Texas, tens of millions of denuded acres were planted with rows of pine, restoring the canopy and creating a new asset class. The federal government encouraged pine planting through programs intended to reduce erosion and support crop prices by converting worn-out farmland.

Even after a quarter-century of declining paper markets, forestry and related manufacturing remain among the South’s largest industries. There are more than six million owners with at least 10 wooded acres in the region, according to academics and forestry consultants cited by the Journal. In Georgia, the top U.S. timber state, 88% of woodlands are owned by individuals and businesses.

Union Bag & Paper — later Union Camp — opened its Savannah mill in 1936. It became the world’s largest paper mill for a time and at its peak employed more than 5,000 people in the city, which tolerated the river pollution and the mill’s “smell of money.” The company encouraged pine planting in the hinterlands and counseled growers on how to manage their timber. International Paper bought Union in 1999.

The closures cut off those relationships. Lynda Beam and her grandson Will Wheat learned that International Paper was closing the Savannah mill while loggers were on their family’s land northwest of the city thinning a patch. With their pulpwood buyer gone, Beam and Wheat are now raking longleaf pine straw and selling it to garden centers while they wait for the market to improve.

“We’ll continue to rake and wait it out,” said Wheat, the fifth generation to run Guerry Lumber.