Last year, Forisk published a blog about the questions Forisk’s Custom Market Forecast (CMF) can answer for firms making investment and operating decisions in the timber and forest industries. After a year of delivering CMFs for clients, we developed case studies highlighting how clients have used CMFs to support their businesses. This is the third post of a series with these cases (see Case Study 1 and Case Study 2). To learn more about the Custom Market Forecast, please contact Nick DiLuzio at ndiluzio@forisk.com.

Case Study: Supporting Mill Investments with Local Market Insights

THE CHALLENGE
A wood products team needed to evaluate the current and future availability of specific log sizes in their market, along with growth-to-drain dynamics in their wood basket. The analysis was needed to evaluate a proposed mill investment and to support board-level presentations justifying capital allocation decisions.

THE CMF APPROACH
Forisk developed a Custom Market Forecast built around a client-defined market delineated by counties, rather than statewide or predefined regions. The CMF and data package integrated growth, removals, and standing inventory with product-level supply projections and multiple scenarios, including a new mill scenario, which the client found particularly valuable.

WHAT STOOD OUT
The ability to analyze a truly customized market area was especially valuable and unique to the CMF, according to the client. Scenario analysis helped the team understand how additional wood-using capacity could influence log supply and pricing, while product-level forecasts highlighted increasing sawtimber availability alongside declining pulpwood supply in their wood basket.

KEY VALUE

• County-level, custom market delineation tailored to the client’s footprint;
• Product-level supply projections informing mill investment decisions;
• Scenario analysis, including impacts from a potential new mill; and
• Independent, third-party perspectives for internal board discussions.

THE RESULT
The CMF helped the team develop a clearer picture of near- and long-term supply trends, evaluate investment opportunities, and clearly communicate risks and assumptions to senior leadership and the Board. Unexpected price movements were identified and explained by the Forisk team, improving confidence in the forecast.