Price dynamics in Wisconsin woody biomass markets

• The study quantifies the potential impact of biofuel/bioenergy development on Wisconsin pulpwood market.
• Forest residues in Wisconsin are limited after satisfying the state RPS demand.
• Biofuel/bioenergy feedstock demand may spill over into the local pulpwood market.
• The impact is much greater if pulp and paper industry experienced an expansion.

This study quantifies the potential impact of biofuel/bioenergy development on the pulpwood market in Wisconsin. Important demand and supply factors to take into account when quantifying the potential spillover effects include: (i) availability of regional forest residues, (ii) forest biomass demand of the Renewable Portfolio Standard (RPS) mandated by the state, and (iii) the slack pulpwood supply due to the recent economic recession. The results indicate that given the limited amount of regional forest residues, demand for primary forest resources over 2.29 million dry Mg will likely spill over into local pulpwood market and have a pronounced impact on pulpwood prices. The price effect could be more substantial if the pulp and paper industry expands production capacity significantly over the same period.