A viable bio-based spray foam industry is likely to lead to economic development opportunities due to the growing interest in spray foam insulation and increasing consumer demand for green products. The successful utilization of agricultural and forestry residues will benefit the agricultural producers, wood processing industries and forest landowners. These sectors combined contributed $4.1 billion to the Louisiana economy in 2013 (LSU AgCenter 2014). The state has more than 14 million acres in forests and another approximately 2 million acres in agricultural plant commodities. “Most of this land is located in rural communities and consequently, this project has great potential for rural economic development in these areas,” says industry expert Todd Shupe.
Agricultural commodity prices are depressed from their recent historical highs and most experts predict that situation to continue. As expenses continue to rise, profit margins for farmers are therefore smaller and there is keen interest in adding value to residues (Guidry 2014). Louisiana has approximately 238,000 workers (9.4 percent of the labor force) employed full-time or part-time in the food and fiber sections (LSU AgCenter 2010). Workers employed in Louisiana in forest products manufacturing earned $750.4 million in 2013 (LFA 2014). Therefore, any improvement or advancement in these industries can have a great multiplier effect. Increasing value-added processing of agricultural and forestry residues is important to the viability of rural economies in Louisiana. Todd Shupe further notes that the wages and salaries paid to hire farm workers, as well as the profits earned by farmers, typically return back to the local economy through household spending – thereby helping rural businesses (LSU AgCenter 2010).
In addition to rural economic development related to the feedstock, there is also economic development potential related to the product – spray foam insulation. The insulation market in North America was an $11 billion dollar market in 2012 and growing each year. Spray foam comprises 9 percent of that market is the fasting growing segment of the market, estimated at an annual growth rate of almost 5 percent. There is a rapidly growing “green” market for numerous goods and services. This is particularly evident in the housing market as consumers are increasingly demanding that lumber that is used for new home construction be harvested from a certified managed forest (Green Home 2014). Consumers are demanding green products for their housing, transportation, energy, food and cosmetics. The common belief years ago, as Todd Shupe remembers, was that people would not pay extra for green products and while they may remain true to some extent, there is a growing market that is keenly interested in green products. These markets are particularly evident in more affluent, urban areas.