From Commodity Supplier to Market Position

For 115 years, a steam whistle sounded at 7 a.m. and 3:30 p.m. in Canton, North Carolina. The paper mill on the Pigeon River started production in January 1908, and the market it created built the town around it. Canton had 230 residents in 1900 and nearly 1,400 a decade later.

In March 2023, Pactiv Evergreen announced in an earnings report that it was closing the mill. Roughly 1,100 people lost their jobs when production stopped that June, with an estimated 3,000 more affected among the loggers, timber dealers, and truckers who supplied it. The sulfur smell that residents grew up calling the smell of money is gone. Demolition crews are on the site now, and the mayor has arranged for the town to keep the whistle.

Canton shows how much a local economy can depend on a single buyer. When a mill closes, the demand supporting an entire forest supply chain can disappear with it.

The Limits of a Commodity Economy

Canton's exposure was built into the market it depended on. The forests around it fed a single buyer, and that buyer sold a commodity whose price was set far from the Pigeon River. Arrangements like that run through the whole Southern forest economy, and they are coming under strain.

At least eleven pulp and paper mills across seven Southern states closed or ceased production between 2023 and 2025. The result was not only lost jobs and manufacturing capacity, but a sharp loss of demand for the wood those mills once bought. Southern pine pulpwood prices fell well below their 2022 peak, and in some places landowners have delayed thinnings or reconsidered whether to replant after harvest.

That matters because about 86 percent of Southern forests are privately owned. Easements, cost-share programs, and other conservation tools remain important, but they cannot replace a viable market. Land is more likely to stay in forest when owners have a reasonable expectation that managing and replanting it will continue to pay.

Southern forests supply more than half of U.S. timber harvests and roughly a quarter of the world's pulpwood. Most of that wood enters the economy as pulpwood or sawtimber sold into commodity markets. Prices are shaped by volume, freight distance, and broader market conditions, while demand is concentrated among a relatively small number of processors.

That model built an enormous forest economy. It also leaves landowners and communities exposed. Commodity suppliers have little control over price, regions competing mainly on cost can be undercut elsewhere, and when a major purchaser closes, a large share of local demand can disappear with it.

Replacing one commodity buyer with another may restore some demand, but it does not resolve that underlying vulnerability. Keeping Forests is addressing the condition by helping the South build a differentiated market position that gives buyers a clearer reason to choose Southern wood on more than price alone.

Connecting Regional Assets to Market Advantage

Most forest-market development begins with a product, technology, or facility. Mass timber, bioenergy, new materials, or new processing capacity can create individual commercial opportunities, but none creates durable demand on its own. A market position gives buyers a clear reason to choose, gives manufacturers confidence about what to build around, and gives capital a basis for investment.

That position only becomes real when the rest of the market can act on it:

• Manufacturers need evidence that demand will justify new capacity.
• Buyers need confidence in price, performance, and reliable delivery.
• Investors want credible signs of both, while researchers may prove an application works years before those commercial conditions exist.

Economists describe this as a coordination problem: each participant's decision depends on decisions others have not yet made.

The South has abundant fiber, established manufacturing and transportation infrastructure, a skilled workforce, and deep research capacity. But it has not yet determined which qualities of Southern wood are distinctive, where its manufacturing base offers a genuine advantage, or which claims about sustainability, reliability, or performance are strong enough to influence a purchasing decision. Until it does, the region has a large supply base and a collection of possible uses, not a market position.

No individual company is positioned to define a market advantage for the region as a whole. The work is divided among product-specific efforts and a dense network of trade associations representing different parts of the sector—softwood, hardwood, pulp and paper, mass timber, biomass, and others. Each advances the interests of its own members or market segment. What is missing is a regional function that can look across those boundaries, determine which opportunities add up to a stronger Southern position, and coordinate the work across products, sectors, and state lines.

Forestry is not the only sector to face this problem. Some of the strongest regional market positions were built by institutions created to look beyond individual companies and organize a shared advantage over time. North Carolina's Research Triangle is one example. The Research Triangle Foundation, formed by business, university, and government leaders, spent decades coordinating investment, recruitment, research, and the region's external identity. Napa's wine position and Denmark's wind industry developed through similar long-term coordination. In each case, regional assets became a recognized market advantage because an institution was responsible for connecting the pieces.

Building a Southern Forest Market Position

Keeping Forests is serving as a neutral regional market intermediary for Southern forest products. It is developing a market architecture strategy to define where the South can hold a differentiated market position, identify the products and applications that could support it, and organize the buyers, manufacturers, researchers, investors, and public partners needed to build durable demand.

That direction emerged from years of systems mapping and collaborative work across the region. Again and again, partners reached the same conclusion. The South had strong institutions working in forestry, research, manufacturing, economic development, and conservation, but it lacked a shared process for determining where the region could hold an advantage in changing forest markets or what it would take to build one.

Through a structured market development process, we'll work with partners to ask and answer the following questions:

What can Southern forests offer that buyers will value beyond abundant, low-cost fiber? We're developing a Southern Forest Value Framework with partners to identify where the region has a credible advantage in areas such as performance, reliability, provenance, sustainability, manufacturing capacity, or supply security.

Which forest products and market applications could strengthen the South's position? Through a market landscape analysis, we will assess emerging and established opportunities against Southern species, infrastructure, production economics, workforce, buyer needs, and competition from other regions. We also have designed an innovation challenge to surface and test specific applications, particularly for materials such as small-diameter and underutilized wood that are losing traditional outlets.

What has to happen for the strongest opportunities to become functioning markets? We will bring manufacturers, buyers, researchers, investors, and public partners into the process early enough to shape the opportunity together. That work will test whether production is feasible, what would justify buyer commitment, whether the technical claims hold up, and whether the economics support commercial scale. It will also identify the workforce, infrastructure, and public conditions needed for production to take root and last.

The three parts inform one another. What buyers value affects which opportunities deserve attention. What manufacturers can produce affects the position the South can credibly claim. What the market requires determines which ideas can move beyond technical promise into durable demand.

What Success Looks Like

The immediate aim is a clearer, evidence-based market position for Southern forest products and a more disciplined basis for deciding where the region invests its attention. Over time, that can support a more varied demand base for Southern wood, stronger outlets for material losing its traditional buyers, greater investment in regional manufacturing, and more of the value created from Southern forests staying in Southern communities.

This will take time. Regional market positions are not built through a single program, product, or investment, and Keeping Forests cannot build one alone. The work will require sustained collaboration among industry, buyers, researchers, investors, public agencies, and economic-development partners, with enough patience to test assumptions, learn from the market, and adjust as conditions change.

The long-term measure is whether private forest ownership remains economically viable. No single industry will replace the pulp and paper economy, and none needs to. Landowners need enough demand, from enough sources, to manage, harvest, and replant with confidence that the next rotation will be worth something.

Canton's whistle is being preserved as part of the town's history. The market that gave it meaning is not coming back in the same form. The work ahead is to understand what can come next, where the South can compete on more than the price of its raw material, and what the region will have to build together to get there.