Sustainable Natural Resources Task Force - Status of Indiana’s Forest Resources

December 8, 2011

William L. Hoover, PhD, Professor of ForestryPurdue School of Agriculture, Department of Forestry and

Natural Resources

Underlying Conditions

• Forests are a dynamic resource – Must be described in dynamic terms as complex

ecosystems integrated into landscapes.• Forests are resilient • Status is determined by – Site quality (soil and climate), – Vegetation– How it is used/managed by owners.

Underlying Conditions

• Maximization of financial returns requires “intensive” management

• Woodland is a buffering land use,

– Goes in and out in response to changes in the agricultural economy,

– Goes out with urbanization and leapfrog residential development.

Area of “Forest Land” and % of Total Land Area

Strengths

• Excellent growing conditions for temperate hardwoods

• Timber is readily accessible and close to competitive markets

• Classified Forest Act reduces carrying cost, providing an incentive to hold forest land.

Strengths

• Competitive network of private consultants to meet needs of private landowners

• Network of NGO’s on call to work with private owners desiring to protect their land in perpetuity.

Strengths

• Division of Forestry has statutory and administrative authority to manage state forests for the revenue needed to sustain services to private landowners, manage and expand state forest lands, and support research.

• State-based research and education programs provide scientific basis for management and utilization of forest resource.

Strengths

• Aesthetic and intrinsic values make it a desirable asset for many families, especially those who want to make their homes (houses) in the woods.– Such ownership should be considered part of the

forest land base, they are the future.– Programs need to be adapted to meet their

desires for their forests.

Weaknesses

• Environmental services provided by forests and “wildland” in general are: – Not traded in a private market, – Nor, are owners otherwise incentivized to

maximize their provision of these services• Publically funded incentive programs will

never have more than marginal impact on the ground

Weaknesses

• Fragmentation of tracts– Increased number of diverse decision makers,– No economies of scale for management,• Excludes Indiana’s woodland from national and

international timberland markets for investment grade timberland

– Owners of smaller tracts are passive owners,• Focused on minimizing expenses.

Acreage by Tract Size and Age of Owners (U. S. Forest Service estimate for 2010)

Number of Owners by Age and Tract Size Class (U. S. Forest Service estimate for 2010)

Acres

Tract Size Class, Acreage Covered, Number of Owners, and Average Tract Size per Owner

100

A >

Weaknesses

• Increased acreage undergoing inter-generational transfer or liquidation – New set of decision makers,– Exposure to land uses change when woodland is

not the highest and best use • Invasive species are reducing reproduction of

trees and changing ecology of forest floor.

Weaknesses

• Reduced disturbances, including intensive harvesting, have reduced regeneration of species needing direct sunlight to reproduce

• Management decisions are based primarily on need to minimize expenses, not maximize potential future time revenue.

Weaknesses

• Long-term downward trend in hardwood lumber production has moderated timber price increases, – Reducing further the likelihood that on the basis

of discounted cash flow analyses timber production is competitive with other land uses.

U. S. Hardwood Lumber Production

Value of logs in average stand of timber: nominal, deflated, and trend-line price series, 1957- to 2011.