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A market based study of how to use value-added processing of Alaska forest products to further benefit the Alaskan economy.
In spring 2006 and 2007, sawmill capacity and wood utilization information was collected for selected mills in southeast Alaska. The collected information is required to prepare information for compliance with Section 705(a) of the Tongass Timber Reform Act. The total estimated design capacity in the region (active and inactive mills) was 289,850 thousand board feet (mbf) Scribner log scale in calendar year (CY) 2005 and 284,350 mbf in CY 2006. The estimated design capacity of active mills was 259,850 mbf for CY 2005 and 247,850 mbf for CY 2006. This is a 2.9-percent decrease in active design capacity from CY 2004 (255,350 mbf) to CY 2006. The estimated volume of material processed during CY 2006 was 32,141 mbf Scribner log scale. This is a 3.6-percent increase over CY 2004 (31,027 mbf Scribner log scale).
Dichotomous choice contingent valuation survey techniques were used to estimate mean willingness to pay (WTP) a price premium for made-in-Alaska secondary wood products. Respondents were asked to compare two superficially identical end tables, one made in China and one made in Alaska. The surveys were administered at home shows in Anchorage, Fairbanks, and Sitka in March and April 2002. Results indicated that, on average, respondents were willing to pay an additional $82 for the Alaskamade table, above a base price of $50. The 95 percent confidence bounds on this estimate of mean WTP are $68.10 and $96.10. Survey design and sample demographics are discussed as possible upward biases on the mean WTP for the Alaskamade table. Despite these possible biases, we concluded that place of manufacture is a significant competitive advantage for Alaska secondary wood product manufacturers marketing their products in Alaska.
A survey determined that installed dry kiln capacity in Alaska more than doubled to an estimated 220 thousand board feet (mbf) within 4 years (2000-2004). This increased ability to produce dry lumber and value-added products resulted from industry efforts to obtain federal funding to support a dry kiln grant program. This report reviews grantees' progress in implementing grant supported projects and their impact on the production capabilities of the Alaska lumber drying industry. Data were collected in early 2005 by using a standard set of questions asked of 19 dry kiln owners. Much of the growth in drying and value-added processing capacity has been concentrated in southeast Alaska where there has been the greatest dry kiln investment. During 2004, the estimated volume of lumber dried in Alaska was 813 mbf, whereas potential annual capacity was estimated to be almost 6,600 mbf. This indicates that Alaska producers are drying just over 12 percent of their potential capacity. Factors that will increase the future production of value-added forest products in Alaska include a continuing supply of economically priced timber, the ability of the industry to support a reasonably priced grading service, and the ability of producers to move value-added products to domestic and export markets.