grading their small output. The proportion of graded lumber increased 

 rapidly as the average yearly volume production rose. The exact level is 

 not known, but evidently an annual production of at least V-i million board 

 feet must be reached before standard grading is practicable. 



The small recovery of the upper grades — 17 percent No. 2 Common 

 and better — illustrates the well-recognized problem of selling the remain- 

 ing low grades. Fortunately, promotion of knotty pine paneling has been 

 quite successful and has, in effect, increased the average price received for 

 lumber which would otherwise be sold as No. 3 and No. 4 Common. 



Changes made in lumber-manufacturing practices at the sawmill level 

 during the last 5 years indicate efforts are being made to sell a better 

 product (Table 4). Over half of the sawmill owners made some changes in 

 their operation which increased production and marketing efficiency. 



Table 4. Changes in Manufacturing by Sawmill Owners Sampled, 1952-1957 



Changes in Manufacturing 1 Owners 



Number 



Saw more round-edge 4 



Saw more square-edge 19 



More planing 10 



Better sawing 15 



More grade sawing 8 



Other (installed planer, edger, etc.) 22 



Made one or more of the above changes 61 



Made none of the above changes 38 



1 More than one change per individual sawmill possible. The last two items are 

 included to eliminate double-counting. 



Marketing 



1. The Market Structure 



The previous section presented production data by size classes of saw- 

 mill ownerships. While such a classification is useful in describing lumber 

 output from the sawlog raw material, it evidently is not meaningful for 

 studying factors affecting the flow of lumber from sawmill to consumer. An 

 examination of the first sales by the 99 sawmill owners sampled shows 

 roughly 60 percent of the sale volumes going directly to consumers and 

 40 percent to middlemen for all sawmill owner size classes (Table 5). 

 Apparently there are no important market restrictions preventing small or 

 large sawmill ownerships from selling either directly to consumers or to 

 the middlemen, i.e., an owner's annual production does not determine his 

 position in the marketing chain. Choice of sales outlets is a reflection of 

 a firm's marketing classification as shown in Table 6. It should be noted, 

 however, that all classes of owners sold some volume to each type of sales 

 outlet. The smaller sawmill ownerships usually sell an informally graded 

 product to local users, which minimizes the intermediate assembling and 

 sorting functions. 



