Around here (Vermont), we make paper from wood because there is a glut of poor quality timber in the woods which is cut to free up space for growing higher quality sawtimber. On my average job, the ratio of harvested pulpwood to sawtimber is typically around 2:1 and sometimes as high as 8:1. The low grade wood sent for pulp has uses, though it is virtually worthless to the landowner as the cost of extraction and trucking is so high that there is little money left to pay the landowner. The ultimate goal in the eastern forest is to cull the pulpwood at cost, then eventually harvest high grade wood at a profit. Pulpwood was once king of the eastern forest, but competition from industrial clear cutting in Canada, Siberia, and temperate regions of the southern hemisphere have driven the price of pulp to rock bottom.
While cellulose from agricultural waste should be a part of the supply for paper and other products, wood will hopefully always be a part of the equation ( or I'll be out of a job!).