Dwight Hair
DWIGHT HAIR is a senior economist dealing with national forestry questions at the United States Forest Service in Washington. D.C. This article is taken from a major Forest Service report entitled The prospective renewable resource situation in the United States completed in 1980.
The study of prospective demands on forests has a long history in the United States. It also has a long history of Congressional direction, beginning in 1876 - the Appropriations Act of that year contained $2000 for the employment of an expert to report upon forest conditions. The result was a three-volume work, Report on forestry, by Franklin Hough. (1) In the following decades there were a number of other Congressional directives for studies of the forest situation on an "as needed" basis.
In 1928 things changed with the passage of the McSweeney-McNary Act, which directed the Secretary of Agriculture to assess on a continuing basis the forest situation in the United States. More specifically, this Act directed the Secretary of Agriculture to cooperate with States, private owners and other agencies: "... in making and keeping current a comprehensive survey of the present and prospective requirements for timber and other forest products in the United States, and of timber supplies, including a determination of the present and potential productivity of forested land therein and of such other facts as may be necessary in the determination of ways and means to balance the timber budget of the United States."
Most of the past studies of the forest situation, including one published in 1973, were primarily concerned with the timber situation. This is natural enough in view of the importance of timber in the economy, especially in the nineteenth and early twentieth centuries, when it was a major source of industrial raw material and fuel. But gradually there came a change and, in recognition of this, Congress passed the Renewable Resources Planning Act of 1974 and the National Forest Management Act of 1976, which broadened the assessment provision of the McSweeney-McNary Act to include renewable resources of forest and range lands.
More specifically, this recent legislation directed the Secretary of Agriculture to prepare renewable resource assessments at 10-year intervals which would include:
"... An analysis of present and anticipated uses, demand for, and supply of the renewable resources of forest, range and other associated lands with consideration, and an emphasis on pertinent supply and demand and price relationship trends; an inventory, based on information developed by the Forest Service and other federal agencies, of present and potential renewable resources, and an evaluation of opportunities for improving their yield of tangible and intangible goods and services..."
Although this directive is recent, it is quite similar to that given in 1876 in terms of the basic intent. It seems quite clear, and it has been consistently interpreted in this way, that Congress was interested in a long-run assessment of the forest, and now of the range situation, which describes in an unbiased analytical way where we are headed and the opportunities to change direction if this appears to be desirable from the standpoint of society. This is, of course, a perfectly logical and reasonable objective and especially so when you consider that it takes a long time to bring about substantive changes in the output of most forest and range land products. It also seems very logical and reasonable when you consider the alternative of making decisions without the facts and analyses developed in the various studies of the forest situation.
Although the basic objectives have always been much the same, the assessments have over time become more formalized and structured. The material for this article is taken from a study by the US Forest Service which has recently been completed. (2) The study has four basic parts: first is the look into the future to see where we are headed. This is done by projecting long trends in demands and supplies for the major renewable resource products. The demand projections show the volume of forest and range land products that would be consumed under the given assumptions on future changes in population, economic activity, income, energy costs, technology, institutions, relative prices, and other determinants. The supply projections show the volume of renewable resource products that would be available for use if recent trends in investment, in management, utilization, research, and facilities continue through the projection period.
Comparisons of such demand-supply projections provide a means of identifying future imbalances between the volume of products that would be consumed under the given assumptions on demand determinants and the volume that would be available for use assuming that recent trends in investments continue. In addition, these projections provide a means of estimating prospective increases in relative prices of products such as timber and forage, the increases necessary to bring about an equilibrium between the projected demands and supplies. They also provide a measure of the unsatisfied demand for products where the price system does not act to bring about an equilibrium.
This information is the basis for the second major part of the assessment -the analysis of the economic, social, environmental and resource implications which would result from a continuation of recent trends in investments in management, research, assistance, and construction programmes. This analysis is the key to determining whether to continue existing policies and programmes or to change them in ways which are perceived to be desirable.
The third basic part consists of the description of the resource base - - its area, vegetation, productivity and ownership.
The fourth and final part illustrates the opportunities to manage this resource base in ways which will increase and extend supplies of forest and range land products. Since the assessment is intended as an unbiased analysis of the situation, free from programme advocacy, it does not contain specific recommendations for programme levels. However, the descriptive material on opportunities is used as the basis for the development of a Forest Service programme as required by the Renewable Resources Planning Act of 1974, as amended by the National Management Act of 1976, and for land management planning for the National Forest System lands. It can also be used in the development of renewable resource programmes by other federal agencies, states, and by other public and private interests concerned with the management of forest and range lands and inland waters.
Projections of demands and supplies for renewable resource products are based on a series of assumptions on the basic determinants of demand and supply, such as growth in population, economic activity and income; technological and institutional changes; energy costs; capital availability; and investments in management, utilization, assistance and research programmes.
Assumptions about these basic determinants are made while acknowledging that the long-run course of events may be quite different from what is assumed. However, trends in these determinants are the result of massive economic, social and political forces which are not easily or quickly changed. Barring major catastrophes, such as a world war, such trends seem likely to continue over a considerable period of time. Thus, it is reasonably certain that they provide a realistic basis for preparing an assessment for use in developing and guiding renewable resource policies and programmes in the 1980s. Near the end of that decade, and as required by the Renew able Resources Planning Act, another assessment will be prepared. At that time, the basic assumptions will be reevaluated and new expectations incorporated which will guide policies and programmes in the 1990s.
Since the late 1920s the population of the United States has increased by about 100 million people, to the present level of 220 million. The most recent projections of the Census Bureau indicate that the population is likely to continue to grow fairly rapidly during the next five decades. The Census Series II projection - the medium projection of the assessment - shows the population rising by another 80 million to 300 million. In line with recent trends, however, the annual rate of growth declines from about one percent in the last 1960s and early 1970s to 0.3 percent in the decade 2020-29.
The imbalance is growing between the quantity that people want of renewable products and their availability. Timber, water, forage, wildlife and recreation increasingly compete for the forest.
Between 1929 and 1978, the gross national product, measured in constant 1972 dollars, increased more than four times to $1386 billion. Projections prepared by the Bureau of Economic Analysis indicate a gross national product of $2690 billion (1972 dollars) in 2000 - about twice that of 1978. By 2030, it amounts to $5160 billion nearly four times that of 1978. The associated projection of per caput gross national product in 2030 rises to $17180 - close to triple the 1978 average.
Disposable personal income, that is, the income available for spending by the country's population, is projected to grow from about $966 billion in 1978 to $3610 billion in 2030 (1972 dollars).
Per caput disposable income rises to $12020 in 2030, almost three times the 1978 average. This growth means that the United States is faced not only with the task of meeting the resource demands of an additional 80 million people, but the demands of 300 million people with much greater purchasing power than today's population.
In response to past increases in population, economic activity and income, the consumption or use of nearly all products of forest and range lands, and associated inland waters, has risen rapidly. For example, the number of camping households has roughly quadrupled since the early 1960s and now totals around 15 million. Timber consumption has increased from a level of around 11.5 billion cubic feet to 13.6 billion cubic feet in 1977.
Projections, based on expected increases in population, economic activity and income, show that the demands for renewable resource products - outdoor recreation, wildlife, forage, timber and water - are likely to continue to grow rapidly in the decades ahead.
Although there are differences in the projections of demands for the major forest and range products, the increases are substantial for all products. On the other hand, the capacity to meet these demands, assuming a continuation of recent trends in investments in forest and range land and water programmes and facilities, shows slower increases.
The prospective imbalances between demands and supplies are largest for softwood timber. Projected demands on domestic forests for softwood rise from actual consumption of 9.2 billion cubic feet in 1976 to 13.8 billion by 2000 and 15.7 billion by 2030. Projected supplies of softwood roundwood from domestic forests show moderate increases from 9.2 billion cubic feet in 1976 to 11.1 billion in 2000 and 12.3 billion by 2030. The outlook for softwood sawtimber is similar - large increases in demand under the given assumptions and modest increases in supplies.
It is evident from these comparisons that a substantial rise in the relative prices of softwood stumpage and most softwood timber products beyond the levels assumed in preparing the base level projections discussed above will be necessary to balance demand and supplies in future decades.
Projections of indexes of regional equilibrium softwood stumpage prices, the prices necessary to bring about a balance between the projections of timber demands and supplies, show softwood stumpage prices rising substantially in all regions. In the southern regions, they rise at an annual rate of 2.5 percent per year between 1976 and 2030. This is above the rate of increase in the Douglas-fir region of the Pacific Northwest (1.8 percent) and that in the northern regions (1.9 percent). It is, however, below those in the other regions and especially in the Rocky Mountain section, where projected stumpage prices rise at an average rate of 3.8 percent per year.
In general, the demand-supply projections for hardwood - both roundwood and sawtimber - show a more favourable supply outlook than is the case for softwoods. It appears that supplies will be adequate in the next two or three decades to meet demands for most hardwood products. As a result, there may not be much increase in average hardwood stumpage prices in the years immediately ahead. Beyond the next few decades, however, base level demands begin to rise above base level supplies. As this occurs, stumpage prices will move upward, especially in the south-central region, where the competition for the available supplies is likely to be the most intense.
This outlook will be changed if there is an increase in demand for fuelwood or any other product much above the projected levels. Such an increase would be likely to fall primarily on the hardwood resource in the north. A relatively small increase could significantly alter the demand-supply balances in the northern regions and result in rising prices in the years immediately ahead. A large increase in demand would, of course, greatly intensify the competition for hardwood timber and cause rapid increases in prices.
The immediate outlook for larger-sized hardwood sawtimber of preferred species, such as select white and red oak, walnut and black cherry, is quite different to that for the smaller-sized lower-quality material. Removals of such timber have been close to or above net annual growth in recent decades, and continuing and large increases in stumpage prices have apparently reflected this situation. These trends seem likely to continue.
Increases in stumpage prices will be reflected in prices of timber products. For example, softwood lumber and plywood prices measured in 1967 dollars increase at an annual rate of 1.7 and 1.4 percent, respectively. The increases average about 1.2 percent per year for hardwood lumber and 0.7 percent for hardwood plywood. The projected increases in lumber prices are consistent with historical trends in relative lumber prices.
The general demand-supply outlook for other renewable resource products is similar. The demand for products, in response to projected increases in population, economic activity and income, is rising rapidly. The capacity to meet these demands, assuming a continuation of recent trends in investments in programmes and facilities, shows slower increases. Thus the United States is faced with a growing imbalance between the quantity of renewable products that people would like to consume and the supply.
This outlook has some important and adverse economic, social and environmental implications. For example, a growing economic scarcity of timber! and the associated increases in relative stumpage and timber product prices, will have significant adverse effects on primary timber-processing industries, timber inventories, consumers of wood products, and the environment.
Although there are substantive adverse impacts on the timber-processing industries and the timber resource, consumers of wood products would suffer the greatest losses from rising relative prices of timber products. Home buyers will be the most affected. The projected increase in softwood lumber prices would, by 2030, result in a 7 percent reduction in the output of dwelling units. In total, it is estimated that consumers in 2030 will pay some $7 billion more for wood products and competing materials because of the lack of enough softwood timber to maintain prices of softwood lumber and plywood at the 1977 level.
There are also likely to be widespread and significant effects on employment. It is estimated, for example, that timber industry employment in 2030 would be some 90000 man-years below the levels that would have existed if softwood timber supplies were large enough to meet demands. Impacts on total economy-wide employment would be much larger because of impacts on the trade, service and other industries. Such impacts are especially critical because of the high rates of unemployment frequently found in communities in forested rural areas.
The effects of rising relative stumpage and timber product prices on nonrenewable resources and the environment are also substantial. As prices rise, and more steel, aluminium, and plastics are substituted for timber products, there will be an acceleration in the rate of use of non-renewable resources, and particularly fuel and minerals. There will also be rising environmental costs, chiefly from higher emissions of air and water pollutants resulting from the mining, industrial processing and power generation associated with the greater use of substitute materials.
The outlook for forage and water is similar to that for timber in many respects - higher costs to consumers with the associated impact on the economy, the environment and society.
For users of wildlife, fish, and outdoor recreation resources, it will mean intensifying competition for the available supplies and a decline in ecological diversity. This situation could lead to shrinking wildlife and fish populations and a more restricted distribution; fewer and less satisfying outdoor recreation opportunities for such activities as camping, hunting, bird-watching, wilderness camping; and, overall, a gradual deterioration in the quality of life.
The widespread and adverse effects associated with the demand-supply outlook are not inevitable. There is a huge forest and range land and water base which can be used to meet demands for nearly all renewable resource products. In 1977, 1.7 billion acres, some 71 percent of the country's area, were classified as forest and range land and water. Of this total, 740 million acres were classified as forest land - land that is at least 10 percent stocked with forest trees, or formerly having such cover, and not currently developed for other uses. About 482 million acres were commercial timberland - land capable of producing in excess of 20 cubic feet of industrial wood per acre per year in natural stands and not withdrawn for other uses. A little over half of the forest and range land area, or some 820 million acres, was classified as range land. This land includes natural grasslands, savannahs, shrublands, most deserts, tundra, coastal marshes and wet meadows. The remaining area - some 107 million acres - was classified as water and consisted of lakes, reservoirs, ponds, streams, and estuaries.
Forest and commercial timberlands are widely distributed, and with the exception of the Great Plains and some of the southwest, compose a significant part of the area of each state. However, nearly three quarters of the commercial timberland in the west is concentrated in the Pacific Coast states of Oregon, Washington, and California; and in the Rocky Mountain states of Montana, Idaho, and Colorado.
Nearly three tenths of the rangeland, some 231 million acres, are in Alaska. Most of the remainder is in the states stretching westward from the Great Plains to the Pacific Coast. Relatively little is found in the island territories and possessions.
Some 381 million acres, or 46 percent, of the range land area in 1977 were in non-federal ownership, nearly all private. These lands are concentrated in the Rocky Mountain and Great Plains states and in Oregon and California. There are large acreages of range lands in federal ownership in such Rocky Mountain states as Nevada, Utah, Wyoming and Colorado. In addition, in Alaska nearly all of the range land - some 231 million acres - was in federal ownership.
Approximately 451 million acres (61 percent of the forest land) were under non-federal, mostly private, ownership. Much of this area is composed of productive sites and is close to markets for timber products. These private ownerships, consequently, have long been of major importance as a source of timber supplies for the wood-using industries.
The 286 million acres of forest land in public ownership, largely federal, are concentrated in the Rocky Mountains and on the Pacific Coast. Most of the commercial timberland in these sections is of relatively low site-quality and is located at higher elevations, but since a substantial part of these forests has never been harvested, they contain a large part of the nation's timber inventory somewhat more than half in the case of softwood sawtimber.
Production of forage, timber, wildlife, and water from forest and range lands varies widely as a result of differences in climate, soils, elevation and latitude. In 1976, for example, the production of range grazing in the continental United States was 217 million animal unit months, less than half of the biological potential. Production was much below the potential in all ecosystems and all ownerships.
The commercial timberland situation is illustrative. Average net annual timber growth per acre in 1976 was 49 cubic feet. This is only three fifths of what can be attained in fully stocked natural stands and far below what can be achieved with intensive management practices such as spacing control and the use of genetically improved stock and fertilizers. The potential for increasing timber growth exists in all regions and under all ownerships. The largest potential, however, is on the farms and other private ownerships which collectively include 58 percent of the nation's commercial timberlands. Most of these lands are advantageously located with respect to roads, processing facilities and the major timber markets.
A substantial part of the physical opportunities to increase growth are economic, in the sense of providing an acceptable rate of return on the investments necessary to bring them to realization.
A study of these economic opportunities shows that the potential exists for intensifying management on 168 million acres of commercial timberland - some 35 percent of the country's total. With treatment of these acres, net annual timber growth could be increased by 12.9 billion cubic feet, a volume roughly equal to total timber harvests in 1976 and to three fifths of the total net annual growth.
On an area basis nearly three quarters of the economic opportunities to increase timber growth involve regeneration of non-stocked acres, harvesting mature stands and regenerating the harvested tracts, and converting existing stands to more desired species. A majority of the economic opportunities, 74 percent, are under farmer and other private ownerships which collectively contain about 58 percent of the commercial timberland. Most of the remainder are on the 14 percent of the commercial timberland in forest industry ownership. All economic opportunities under the National Forests are currently scheduled or planned and are not included.
The economic opportunities for increasing timber growth are concentrated in the southern regions - 53 million acres in the southeast and 64 million acres in the south central. There are also substantial areas in the north - 35 million acres - and the Pacific Coast - 16 million acres.
Although rapid progress has been made in the utilization of timber removed from the forests, there are opportunities for further improvements through increased use of certain kinds of residues, increasing yields by more efficient harvesting and processing techniques, and extending use through more efficient construction and manufacturing practices. There are also opportunities for using more of the wood in tree-tops and branches, rough and rotten trees, dead trees, trees on forest lands incapable of producing 20 cubic feet of industrial wood per acre per year, and urban wastes.
Beyond the opportunities to increase and extend timber supplies, there is another set of opportunities - those which will reduce demand for timber products. Nearly all of these possibilities, short of rationing or other authoritarian controls, seem to involve the use of substitute materials and increases in imports. Such shifts would have the same undesirable economic, social and environmental effects as those resulting from rising relative prices discussed above. However, there does seem to be one way or opportunity to reduce demand which would have no adverse impacts - the proper maintenance and renovation of existing structures. If practiced on a more extensive scale, it could significantly lower demands for timber, and other materials as well, below the volumes needed for new replacement structures.
There is no quantitative way of comparing present production of outdoor recreation with the potential. However, the 1.7 billion acres of forest and range lands and the associated waters have the physical capacity to supply sites for picnicking, camping, hiking, skiing, bird-watching, canoeing, swimming, and most other types of outdoor recreation far in excess of foreseeable increases in demand.
Forest and range lands and waters also have the potential to support a greater diversity of wildlife species and increased numbers of some wildlife and fish species. Included are species of high recreational and commercial importance and some that are classified as endangered, threatened or rare by federal and state governments. Commercial stocks of fish and wildlife can support more jobs and provide protein for human consumption through improvements in habitats, appropriate harvest regulations, and other activities.
Research has shown that water yields from forest and range lands can be augmented by intensive management. Watershed management can also significantly improve water quality and reduce soil erosion including the associated sedimentation of streams.
In sum, it seems clear that the United States' 1.7 billion acres of forest and range land and waters have the physical potential to produce much larger quantities of renewable resource products - enough to meet the projected demands for nearly all products. The potential for increased output and use exists in all regions of the country, under all ownerships and for all products.
The increasing and extending of supplies of renewable products are technically feasible and can be done while maintaining the natural environment, but substantive progress in meeting prospective increases in demands will require large investments in a variety of programmes. Large expenditures will also be required to provide the necessary physical facilities and the plant and equipment needed to harvest, process, and use the additional supplies of products.
Various studies have shown that most private owners, who collectively control most of the country's forest and range lands, have diverse objectives, widely different characteristics and attitudes, a limited knowledge of existing management opportunities and varying willingness and capacity to make investments which will increase and extend supplies of forest and range products.
These problems have long been recognized as major impediments to increasing supplies of renewable resource products on the farms and other private ownerships. But what has not been adequately recognized is that many of the benefits of the investments in increasing supplies accrue to society generally. Lower prices of timber, for example, reduce the cost to consumers of goods such as houses and furniture, the environmental pollution associated with use of substitute materials, such as steel and plastics, dependence on foreign sources of supply and the rate of use of non-renewable resources.
These broad economic, social and environmental benefits, and the likelihood that even some direct benefits, such as income from product sales, will not accrue to many current owners because of short tenures or life expectancy, suggest two things. First, there is a strong justification for publicly supported cost-sharing and technical assistance programmes. Second, existing economic opportunities for management intensification on most private ownerships are not likely to be realized in any substantive way without such programmes.
Much can be done to increase and extend supplies of renewable resource products by better use of existing technology and by further research to develop new technology. Investments in management practices and facilities can also be made more efficient by expanding research.
Inevitably, in expanding programmes, to increase supplies of products, the point will be reached where increasing outputs will constrain or reduce the outputs of other products. Research is perhaps the best hope of developing ways of integrating and balancing multiple uses of forest and range lands and reducing the conflicts which are likely to result from rapidly expanding demands.
Finally, there is the need to explore further the economic, social and environmental implications of a future in which the demands for nearly all forest and range products are increasing more rapidly than supplies. This is a basic need - it is the societal basis for changing policies and programmes. The results of this research are likely to have profound impacts on the future management and use of the country's forest and range resources.
It was not possible in the assessment to evaluate the aggregate costs and benefits associated with moving forward to meet demands, but the partial analyses made indicate that when the economic, social, and environmental benefits are considered, the investments are likely to be profitable for both society and the economy. For example, by the end of the projection period, the savings in consumer costs in just two years would provide enough capital to implement nearly all of the economic opportunities to increase timber supplies. This, in turn, would increase timber supplies enough to meet projected demands and, at the same time, permit a reduction in imports of timber products or an expansion in exports.
Note
: The North American System of measurement has been retained in this article: e.g., acre (0.4047 ha), cubic feet (10 ft3 = 0.2832 m3), billion (thousand million), etc.
1. HOUGH, FRANKLIN B. 1882, Report upon forestry. US Government Printing Office, Washington, D.C; Vol. I, 650 P., 1878; Vol. II, 618 P., 1880; Vol. III, 318 P.
2. US DEPARTMENT OF AGRICULTURE, FOREST SERVICE. 1980, An assessment of the forest and range land situation in the United States. 630 P. Copies can be obtained from Forest Service, USDA, Room 843, South Building, P.O. BOX 2417, Washington, D.C. 20013.
