Weyerhaeuser has broken ground on a $500 million plant in Arkansas to produce engineered lumber from the small trees that have piled up across the pine belt after the closure of many pulp and paper mills. It is a big bet on one of the most depressed commodities in America: pine trees that are too small, crooked or otherwise unfit for making lumber. The decline of pulp and paper mills has left some timberland owners with wood they can’t sell. Several ventures have sought to capitalize on the pulpwood glut, including burning it to generate electricity—locally and abroad—and manufacturing oriented...