H.R. Josephson and Dwight Hair
H.R. Josephson, who retired as the director of the Division of Forest Economics and Marketing Research in the U.S. Forest Service on 30 June 1973, was the principal author of the new Forest Service appraisal. Dwight Hair, now the acting director of the same Division, was another major contributor to the study.
Demand will continue to run ahead of supply in the United States in the next quarter-century, according to a major U.S. Forest Service report. As summarized by two of its principal authors, product prices are expected to be generally higher, substantially so for softwood; substitution of materials will increase, but so will dependence upon imported resources.
This article aims at highlighting the findings of a comprehensive study of the present and prospective timber situation in the United States. This study, The outlook for timber in the United States¹ is the latest in a series of periodic appraisals of the timber situation, such as the Timber resource review of 1952 and Timber trends in the United States of 1962, prepared by the U.S. Forest Service. These, then, are the highlights of the new study.
¹ Copies are available without charge from the Division of Information and Education, Forest Service. U.S. Department of Agriculture, 14th and Independence Avenue, S.W., Washington D.C., 20250.
1. Demands for industrial timber products in the United States have been increasing steadily, with a 65 percent rise in use of these products during the past three decades (Fig. 1).
Consumption of industrial wood products - such as lumber, wood pulp, plywood, etc. - increased 65 percent between 1942 and 1972 to an annual total of 125 million tons. In this period consumption of industrial roundwood (that is, all roundwood products except fuelwood) required to produce these wood products increased about 56 percent to 13.7 billion² cubic feet in 1972. The difference in these trends for roundwood and industrial wood products consumption reflected more complete use of the timber harvested, with a resulting reduction of unused wood residues.
² U.S. billion = 1000 million.
In the 1942-72 period, lumber consumption rose 25 percent. Use of round pulpwood climbed 157 percent, and consumption of veneer and plywood over 438 percent. On the other hand, use of fuelwood and minor products such as poles and posts declined.
2. Further substantial increases in future demands for timber are expected.
Projections of potential future demands for timber vary widely with such factors as economic growth and relative prices of timber products. A "medium" projection of possible future demand was based on the assumptions:
(1) that the population of the United States will increase nearly 40 percent between 1970 and 2000 to 281 million people;(2) that real gross national product will grow at an average of 4.0 percent annually, or about 240 percent by 2000; and
(3) that recent trends in technology and institutional factors will continue.
1. CONSUMPTION OF INDUSTRIAL WOOD
With prices of timber products relative to other materials at 1970 levels, this medium projection of United States demand for roundwood rises from a 1970 level of 12.7 billion cubic feet to nearly 23 billion cubic feet by the year 2000. Potential demand for softwoods rises from 9.7 billion cubic feet in 1970 to 15.8 billion cubic feet by 2000. Demand for hardwoods is projected to rise from 3.0 billion cubic feet in 1970 to 7.0 billion cubic feet in 2000.
With higher relative prices of timber products in the future-which timber demand-supply comparisons indicate can be expected-projected demands for roundwood are correspondingly lower. Thus, with rising relative prices of 1.5 percent per year above the 1970 trend level of lumber and somewhat smaller price increases for plywood, wood pulp, and other items, projected total timber demand by the year 2000 approximates 19 billion cubic feet. This latter projection includes increases in demand of 5 percent for saw logs between 1970 and 2000, 58 percent for veneer logs, and 130 percent for round pulpwood.
In terms of softwood sawtimber - of primary importance for lumber and plywood used in housing and many other markets - projected demand at 1970 prices rises from 47.6 billion board feet in 1970 to 73 billion board feet by 2000 (Fig. 2). With the specified rising prices, however, projected demand reaches 55 billion board feet in 2000 - a rise of 16 percent.
Projected demand for hardwood sawtimber with rising prices increases from 12.3 billion board feet in 1970 to 19 billion board feet in 2000-a rise of 55 percent.
3. Timber growth in the United States has been increasing as a result of recent forestry programmes (Fig. 3).
The condition of timberlands in the United States has improved materially in recent decades, primarily because of expanding fire protection and some increase in tree planting and other forestry activities. As a result, net growth of both softwoods and hardwoods increased about one third between 1952 and 1970 to a total of 10.7 billion cubic feet of softwoods and 7.9 billion cubic feet of hardwoods.
Roughly 60 percent of this total net growth of softwoods in 1970, or about 40 billion board feet, consisted of softwood sawtimber suitable for lumber and plywood. Hardwood sawtimber growth totalled 20 billion board feet in 1970.
Removals of softwood sawtimber as a result of timber harvesting and other factors exceeded net growth in 1970 by 18 percent. In the east removals were less than net growth but this was more than offset by an excess of removals over net growth in the west. Removals of hardwood sawtimber in 1970, on the other hand, were 24 percent less than net growth.
4. Projected supplies of softwood sawtimber products potentially available from United States forests show limited increases with 1970 levels of management (Fig. 4).
Potential supplies of softwood timber from United States forests - assuming 1970 levels of management, timbercutting practices and policies similar to those in recent years and only minor reductions in areas of commercial timberland - are estimated to increase about 31 percent by 2000, from 8.8 billion cubic feet in 1970 to about 11.5 billion cubic feet. This is a technical potential which may not be fully realized, however, because of factors of operability and owners' willingness to sell timber.
Thus in the case of softwood sawtimber - of particular importance for lumber, plywood and various other products - projections of economically available future supplies show limited changes from the 1970 level of output. Assuming relative prices of timber products remained at 1970 levels, for example, estimates of economically available supplies of softwood sawtimber are only slightly above the actual harvest of about 46.9 billion board feet in 1970. With increased prices of softwood lumber and plywood averaging 50 percent above 1970, projected supplies increase to over 53 billion board feet over the next decade, but then decline below the 1970 level.
5. Supplies of hardwood timber are increasing although industrial use is limited by problems of quality and availability (Fig. 5).
The outlook for hardwoods is somewhat mixed in spite of the fact that removals of all sizes and species of hardwood timber in 1970 were some 25 percent less than total net growth.
Projections of available supplies of hardwood sawtimber over the next few decades - assuming 1970 levels of forest management and specified cutting rates - increase 66 percent, from an actual harvest of 12.3 billion board feet in 1970 to over 20 billion board feet by 2000. This approximates the projection of demand associated with 1970 prices.
3.a. TIMBER GROWTH AND REMOVALS, 1970 - GROWING STOCK
3.b. TIMBER GROWTH AND REMOVALS, 1970 - SAWTIMBER
Projected supplies of hardwood products, in cubic feet, under these same assumptions materially exceed potential demands at 1970 prices.
While these projections imply little or no increase in hardwood prices, there are practical limitations on amounts of timber available for sale and industrial use at any given time. To many owners of hardwood timberland use of the forest for recreation or other nontimber objectives is of primary importance. Problems of quality also are of special significance. Much of the growth and available supply of hardwoods are in small tree sizes or species for which markets are limited; whereas the larger sizes of preferred species are in short supply in most areas. Other factors that could produce a tighter supply situation and higher prices include possible substitution of hardwoods for softwoods in production of wood pulp and certain other timber items.
6. The outlook for timber supplies differs widely by ownerships and by regions.
Nationwide, private holdings account for the major part of the commercial timberlands, including 14 percent in forest industry and 59 percent in farm and miscellaneous private holdings. National forests include about 18 percent of the total commercial timberlands and other public holdings 9 percent.
Timber harvests in 1970 reflected this pattern of ownership, with 48 percent of the 12.2 billion cubic feet of total roundwood harvested from United States forests coming from farm and miscellaneous private holdings. Forest industry lands supplied 28 percent of the total, national forests 17 percent, and other public lands 7 percent. In the projections of supply the major changes in these proportions include a drop for forest industries and a corresponding increase for farm and miscellaneous private owners. Southern forests provided about 45 percent of the nation's timber harvests in 1970, compared with 32 percent for the Pacific coast, and 23 percent for other sections of the United States.
4. SOFTWOOD SAWTIMBER: DEMAND ON UNITED STATES FORESTS AND DOMESTIC SUPPLY
In the south progress in fire control and other forestry activities has improved the timber situation to the point where it appears that with 1970 levels of management, softwood timber harvests could be increased gradually on both national forests and other lands by roughly 50 percent over the next few decades.
On the Pacific coast, on the other hand, a marked decline in softwood sawtimber supplies of about 18 percent is projected in the 1970-2000 period as a result of reduced availability of timber from forest industry lands.
Sustained harvests of timber from western national forests and other public lands at levels close to 1970 estimates of allowable harvests appear possible for some decades, although only with timber prices significantly in excess of 1970 levels. Also, allowable harvests on national forests can be expected to drop shortly after the projection period, if not before, unless forest management and utilization of timber on these lands is intensified.
7. Substantial increases in softwood timber prices appear necessary to balance potential timber demands with available timber supplies.
With forest management continuing at 1970 levels, projected supplies of softwood sawtimber might balance the medium projection of timber demand with relative prices of softwood lumber and plywood in 1980 possibly 20 to 25 percent above the 1970 level, and possibly 50 to 60 percent higher in the year 2000. Related equilibrium prices for paper and board by 2000 are estimated to average roughly 15 to 20 percent above 1970.
Stumpage prices associated with these increases in prices of timber products, according to historical relationships, could be expected by 2000 to average more than double the level of prices in 1970.
Such prospective increases in prices for softwood lumber would be consistent with an average rise of 1.7 percent annually in lumber prices relative to the general price level over the past century (Fig. 6). Relative prices of lumber levelled off in the period 1950-67 - years marked by rapid improvements in productivity in logging and processing and by development of new sources of timber in western national forests and in British Columbia.
Relative prices of softwood plywood declined dramatically during this recent period with adoption of new technology and equipment. Relative prices of pulp, paper and board were quite stable. Nevertheless, the timber supply outlook with 1970 levels of management and utilization indicates new supply problems and shifts to higher price levels for all timber products.
8. Supply and price problems appear most critical for softwood lumber and plywood, but all forest industries will be affected.
Comparisons of projected timber demands and supplies indicate that problems of timber availability are likely to be most critical for softwood sawtimber used for lumber and plywood in housing, other construction, and various other markets.
The outlook for the pulp and paper industry is better than for lumber and plywood, largely because of the wide variety of species and qualities of timber that can be used for pulpwood. However, the tightening supply-demand situation for softwoods, and new developments such as installation of chipping headrigs, are leading to increased competition for available wood supplies and higher wood costs for all industries.
Producers of hardwood lumber and plywood who depend on the higher qualities and sizes of preferred species, such as white oak, walnut, maple, birch and gum, also face serious supply problems and prospective increases in timber prices. On the other hand, substantial supplies of timber are prospectively available for industries producing hardwood products such as pallets, construction timber, railroad ties or hardwood pulps.
9. Demands for nontimber products and services and for environmental protection are of growing importance in the timber situation.
Use of forest land for timber production is being increasingly affected by public desire for recreation and other nontimber uses. Sizable areas of public forest lands have been withdrawn from timber use for wilderness and scenic areas, although many of these are of relatively low site productivity for timber. Extensive areas of both private and public forest lands have been shifted to nontimber uses such as reservoirs, highways, airports, urban expansion and recreational developments. Still other areas, particularly fertile bottomlands capable of producing quality hardwoods, have been cleared for crops and pasture.
Until recently, reversion of abandoned agricultural lands to forests more than offset such losses. Between 1962 and 1970, however, areas classified as commercial timberland declined about 8.5 million acres to a total of 500 million acres. Some continuing net losses of commercial timberland, averaging possibly 5 million acres per decade, have been assumed in this analysis.
Lands remaining in the commercial timberland category also are increasingly called on to supply nontimber goods and services as well as timber harvests. These demands, as well as new concern over protection of the natural environment, are leading to numerous modifications in timber harvesting and other forestry practices, particularly on public lands. It seems clear that management of forests for combinations of products and uses will be increasingly essential.
Such constraints on land use and management on public lands, and to some extent on private forests, together with unforeseen transfers of forest lands to nontimber uses, could reduce timber harvests below the projections. Impacts on timber prices and supplies of wood products would be correspondingly intensified.
It is also possible that raw material shortages could in time seriously constrain growth of the nation's economy, or interfere with the achievement of social goals such as the improvement of housing. In such a situation, forest recreation and other nontimber uses could also suffer as a result of efforts to alleviate material shortages. Thus, success in supplying nontimber values and products may be influenced deeply by the effectiveness with which industrial raw material needs can be met. For such reasons, essentially all users of forest land have an interest in the timber outlook.
5. HARDWOOD TIMBER: DEMAND ON UNITED STATES FORESTS AND DOMESTIC SUPPLY
10. Prospective imbalances between timber demands and supplies have important implications. They mean higher consumer costs, increasing use of substitute materials, and growing dependence on foreign resources.
The prospective imbalance between timber demands and supplies, and the associated upward pressure on timber product prices, will lead to substantially higher costs to consumers of products such as houses and furniture made in part from wood. And although consumer incomes are expected to rise, the higher costs of products will necessarily have some adverse impacts on such things as the volume and quality of housing, and thus on consumer welfare.
Increases in relative prices of timber products will also induce builders and other users of wood to switch to substitute materials such as metals, concrete and plastics. Such a shift would have some adverse environmental impacts. The air, land and water pollution resulting from production of substitute materials such as steel, concrete products and aluminium is of greater magnitude than for timber products such as lumber and plywood. Such impacts apparently can often be reduced to acceptable levels, but the expenditures necessary to control pollution will tend to increase costs of these materials.
Energy requirements for processing substitute materials also are much higher than for timber products. It is estimated that use of steel framing for exterior walls in residential construction, for example, requires over three times the amount of processing energy needed to produce lumber for comparable installations. For aluminium and concrete blocks, energy requirements are estimated to average more than eight times the requirements for lumber. Similarly, the substantial differences in typical heating and cooling costs with alternative materials favour the use of wood products in housing construction.
6. RELATIVE WHOLESALE PRICE INDEX OF LUMBER 1800-1972. WITH PROJECTIONS TO 2000
The switch to substitute materials will also accelerate the rate of use of nonrenewable resources. Coal, petroleum and natural gas once used are gone forever, and minerals can only be extracted at rising real costs. Forests, on the other hand, are a renewable and expandable resource that can produce much larger crops of timber, and they can continue to do so indefinitely.
Finally, a switch to substitute materials will bring about increased dependence on foreign resources. Substantial portions of the aluminium and steel consumed in the United States are derived from foreign sources, and projections indicate the necessity of more and more dependence on foreign supplies of metals, petroleum and other materials. It will also mean increases in dependence on foreign forest resources.
11. A partial alternative in meeting prospective timber supply problems is to increase timber imports from Canada and other wood-surplus countries. Rising exports of timber products, however, have been offsetting a substantial part of the increase in timber imports.
About half a century ago the United States ceased to be self-sufficient in timber products and since then has depended increasingly on net imports from other countries. Imports of timber products reached a total of 2.9 billion cubic feet, roundwood equivalent, in 1972 (Fig. 7). This represented 19 percent of the total United States domestic and export demand for timber products.
Timber imports obtained largely from Canada made up about 19 percent of total supplies of lumber and 25 percent of total pulp and paper supplies in 1972. More than 60 percent of the hardwood plywood and veneer consumed in the United States was obtained from southeast Asia and other tropical areas.
With rising prices of timber, imports from Canada and from tropical areas have been assumed to increase substantially over the next three decades, mainly in the form of softwood lumber, pulp and paper, and hardwood veneer and plywood. In time, however, rising world demands for timber and a general tightening of the world timber supply situation seem likely to limit such import potentials.
Exports of forest products also have increased substantially in recent years, mainly as a result of large Japanese purchases of logs and pulp chips, expanding world markets for kraft pulp and liner board, and continued exports of lumber. In 1972, about 9 percent of the total United States supply of timber products, or 1.3 billion cubic feet roundwood equivalent, was exported to various parts of the world. Along with prospective increases in timber imports in future years, some further increases in exports from the United States have been assumed.
Net imports in 1972 of 1.6 billion cubic feet made up nearly 11 percent of the total consumption of timber products in the United States. Net imports have been estimated to increase to around 2.8 billion cubic feet, roundwood equivalent, by 2000, with prices of lumber, for example, rising 1.5 percent per year. But such dependence on other countries, while important, appears to offer only a partial means of meeting the growing demands for timber products in the United States.
12. Better utilization of available supplies is a partial answer to problems of timber supply.
Major progress has been made in recent years in the use of slabs, edgings, veneer cores and other, similar material from lumber and plywood operations for pulp, particle board and other products. In 1970, nearly three quarters of all such material produced at sawmills and other primary processing plants, plus some additional material from secondary manufacturing plants, was utilized in this way. Such byproducts comprised 35 percent of the 72 million cords of pulpwood used by United States pulpmills in 1972.
Despite the progress made, unused plant residues still represent a sizable resource. In 1970, unused chippable material at primary manufacturing plants amounted to 0.4 billion cubic feet and all residues to about 1 billion cubic feet (12.4 million cords). With prospective trends in timber prices and utilization practices, it has been assumed that most chippable residues and much of the fines will be utilized for pulp or particle board within the next decade or so.
Large additional quantities of wood fibre, chiefly suitable for pulping, are also left in the woods each year as logging residues, because of high costs of recovery and problems such as bark removal on limbs and fragmented material. In 1970 these residues included some 1.6 billion cubic feet of material from sound trees, plus at least this much material from other sources such as limbs, rough and rotten trees, and dead trees (a total of about 40 million cords). Environmental requirements and rising timber values can be expected to lead to the better clean-up and utilization of timber on harvested areas. But accelerated efforts to improve utilization on logging areas-along with expanded efforts to grow more timber-appear essential if rising pulpwood demands in future decades are to be met.
More of the timber killed by insects, fire and other destructive agents, although widely scattered for the most part, might also be salvaged with higher prices and improved forest access. Such losses in 1970 included 11 billion board feet of softwood sawtimber.
Improving efficiency of wood utilization in manufacturing plants would also help to extend timber supplies. It has been assumed on the basis of past trends that modernization of sawmills, for example, through better production methods and installation of newly available equipment such as high-strain thin-kerf saws, will result in increased lumber recovery from available logs of possibly 2 to 4 percent per decade. But much larger increases in recovery rates should be possible with rising timber values and faster application of improved technology.
7. IMPORTS AND EXPORTS OF TIMBER PRODUCTS, 1940-72, WITH PROJECTIONS ¹ TO 2000
Better sorting of logs to help ensure use for the most valuable end product - lumber, plywood or pulp - could similarly stretch available supplies of sawtimber for lumber and plywood.
Development and use of improved structural particle boards and some substitution of hardwoods for soft-woods could further extend softwood sawtimber supplies. Wood products could also be used more efficiently in construction by better design and construction methods.
13. Intensified forest management offers an important means of increasing timber supplies in the long run, while maintaining an acceptable forest environment.
Sizable increases in timber growth and future harvests could be achieved in United States forests by increased investments to expand tree planting, stand improvement, protection and other forestry practices. Most forest areas are not fully stocked with desirable timber and are growing at a much lower rate than is possible under intensified management. Fire, insects and other destructive agents also cause losses that in effect nullify about one fifth of total timber growth.
Opportunities for increasing future timber supplies by intensified management exist in all sections of the country and all classes of ownership (Fig. 8). In the south, for example, timber growth currently averages about 45 cubic feet per acre annually, including only 104 board feet of sawtimber sized material. Large areas of plantations are yielding more than double this amount of growth. There are millions of other acres where conversion from poor hardwood stands to pine stands, especially using genetically improved planting stock, would in time greatly increase available supplies of timber.
Similarly, on the west coast and in other parts of the country there are large additional areas in federal, state, industrial and other private ownerships where timber supplies could be greatly increased by reforestation and by other practices such as precommercial thinnings intermediate cutting in older age classes.
On nonindustrial private ownerships held by farmers and a wide variety of miscellaneous owners, timber-growing efforts other than fire protection have been limited. Yet several million of these owners hold 59 percent of the timberlands in the United States that are considered suitable and available for timber production. Most of these owner:, are unwilling to invest in timber growing and many are reluctant to sell timber because of conflicts with other purposes.
8. POTENTIAL AND CURRENT NET GROWTH PER ACRE
Capturing a larger part of the very great potential for timber growing on these numerous holdings is technically sound and economically feasible, but will require substantial investments. On many ownerships public cost sharing and technical assistance appear necessary to achieve the increased growth that is estimated to be economically feasible.
An initial analysis to illustrate management opportunities on national forests and farm and miscellaneous private holdings indicated that increased investments of about $69 million annually could increase annual harvests of softwood sawtimber by about 1.6 billion board feet by 1980, and by as much as 13 billion board feet by 2020. This analysis used as a criterion a minimum rate of return of 5 percent on additional investments, with prices of lumber and plywood assumed to average 30 percent above 1970 levels.
Additional promising opportunities for increased timber production also undoubtedly exist on other public and industrial ownerships, and in the use of genetically improved planting stock, fertilization or other new technology.
Environmental management, to assure balanced production for nontimber uses and protection of the environment as well as timber crops, will be essential, particularly on public forest lands and to an increasing degree on private lands as well.
14. A combination of efforts could help supply growing demands for timber products while simultaneously providing for nontimber uses and protection of the environment.
Summary
To summarize, if increased supplies of timber for a growing nation are desired, a number of things could be done, including:
- More complete utilization of logging residues, plant residues, and trees lost by mortality, and greater use of recycled fibres.- Greater use of available equipment and manufacturing processes to increase output of lumber and other products from available log supplies.
- Better allocation of available timber to ensure use for optimum end products.
- Some increase in dependence on imports of timber products.
- More intensive management of all classes of forest lands suitable for timber management, by road construction, commercial thinning and salvage, reforestation with genetically improved planting stock, timber stand improvement, use of fertilizers, and better protection against fire, insects and other destructive agents-while simultaneously managing lands to assure a balance with other uses and environmental protection.
- Continued development and application of new technology in timber growing, in processing of timber products, and in consumer use of wood products.
Substantial public and private investments will be necessary for such measures to increase timber supplies significantly, and to improve utilization of available timber supplies. Such measures are both technically and economically feasible. They can be carried out while maintaining a balance with environmental uses of the forest.
