New Economic Model for White Oak Markets

White oak (Quercus alba) grows across much of the South and beyond. The wood is used in furniture, flooring, and industrial markets, and demand is growing both domestically and abroad. In 2017, about 40% of U.S. hardwood lumber was exported. But across the U.S., foresters are facing an “oak bottleneck,” where oak seedlings die before reaching the sapling stage.

According to USDA Forest Service researcher Jesse Henderson, “The question now is, how can the supply keep up with the demand?”

To begin answering that question, Henderson and colleagues developed a new model for understanding hardwood markets. This tool is unique because it breaks down ten different species of hardwood, allowing researchers to account for species-specific market and forestry trends. Henderson explains, “Modeling hardwood markets is complicated. Before our work, existing economic models lumped all hardwoods into one group.”

By isolating the white oak market from the overall hardwood market, researchers are providing vital insights for industries that rely on white oak specifically.

For example, white oak has a unique cellular structure necessary to one beloved American industry: bourbon. As barrels, white oak allows liquid to cycle through the wood without soaking through, so as it ages, the bourbon better absorbs sugar and vanilla flavors from the barrel. The cooperage (barrel-making) and bourbon industries rely on mature, healthy oaks grown in good conditions to supply this special lumber.

But these trees are hard to find, and young oaks are declining. More than 99% of oak seedlings die before reaching five years old, a problem that researchers call the “oak bottleneck.”

Photo Credit Callie Schweitzer, USDA Forest Service

Oak seedlings across the central hardwood region are struggling to compete with more shade-tolerant species, creating a bottleneck that could affect future oak supply.

When oaks are seedlings, they emphasize root growth instead of stems and leaves. While this strategy is a valuable survival mechanism in some sites, it means they require more sunshine than they’re able to get in shady sites. As former fire suppression management has led to dense forests, shade-tolerant species like maple are thriving and out-competing the oaks.

In addition, oaks face ecosystems altered by climate change, invasive pests, over-harvesting, and declining planting. Even as high-grade oak, which can take 50-100 years to grow, commands very high prices, there is little market for small and low-quality oak. Therefore, landowners face a delayed payoff and often opt for trees with more versatile markets.

With their new market analysis model, Henderson and his team - including lead author Guarav Dhungel of North Carolina State University - explore these species-specific nuances. While they plan to continue building on this model as more data becomes available, the initial research provides valuable insights. The new paper is published by the Journal of Forestry, and researchers estimate how white oak demand growth will affect tipping points in the market. If demand growth remains below 1% per year, supply will continue climbing until at least 2100, giving foresters nearly 80 years to address the oak bottleneck before the market becomes unsustainable.

The USDA Forest Service has many researchers dedicated to the future of oaks, as well as partnerships with the University of Kentucky White Oak Initiative and the University of Tennessee Oak Symposium series. Current research includes various silvicultural practices, such as Femelschlag, the use of canopy gaps to provide more sunlight for oak regeneration.

Henderson’s new model provides a valuable estimate of the timeline available to these scientists and managers before supply begins to decline. By planning ahead, we can ensure a healthy future for white oak as well as the ecosystems and industries that rely on it.

For more information, email Jesse Henderson at jesse.henderson2@usda.gov.