Wood Use: U.S. Competitiveness and TechnologyÑVol. I · eign markets. Past Government and private sector con-cerns regarding a possible domestic timber shortfall no longer seem justified.Future

Wood Use: U.S. Competitiveness andTechnology—Vol. I

August 1983

NTIS order #PB84-109925

Wood Use U.S. Competitiveness and Technology

*==. ______ ---1 ~

Recommended Citation:Wood Use: U.S. Competitiveness and Technology (Washington, D. C.: U.S. Congress,Office of Technology Assessment, OTA-ITE-21O, August 1983).

Library of Congress Catalog Card Number 83-600567

For sale by the Superintendent of Documents,U.S. Government Printing Office, Washington, D.C, 20402

Foreword

The Office of Technology Assessment has conducted an assessment of the roleof technology in the U.S. forest products industry. It was undertaken at the requestof Senator Mark Hatfield, Chairman of the Senate Committee on Appropriations,and Senator Thad Cochran, Chairman of the Subcommittee on Agriculture, RuralDevelopment, and Related Agencies. Representative James Weaver, Chairman ofthe Subcommittee on Forests, Family Farms, and Energy, joined in support of theassessment in the House of Representatives.

This assessment surveys the contribution of the forest products industry to theU.S. economy, the ability of the industry and the U.S. forest resource to satisfyexpected domestic demands for wood, the competitiveness of U.S. forest productson world markets, and the role of technology in stretching the U.S. forest resourceand providing products that satisfy domestic needs as well as international markets.It discusses the relationship of various levels of government and the forest prod-ucts industry in providing for future wood products needs, Finally, it presents policyoptions designed to enhance the advantages of U.S. producers in international mar-kets, to provide research and development in forest management, environmentaleffects of forestry, and wood materials science, and to improve the productivityof U.S. forests.

JOHN H. GIBBONSDirector

. .///

Wood Use: U.S. Competitiveness and Technology Advisory PanelLarry Tombaugh, Chairman

Department of Forestry, Michigan State University

Darius Adams Carter KiethleyDepartment of Forest Management Wood Heating AllianceOregon State University Peter KirbyClark S. Binkley The Wilderness SocietySchool of Forestry and Environmental

Studies, Yale University

Carroll BrockM. G. Brock & Sons

Merle ConkinNational Forest ProductsAssociation*

M. Rupert CutlerNational Audubon

Ormand DanfordTree Farmer

Society

Dudley KircherMead Corp.

Bruce LippkeWeyerhaeuser Co.

Norma PaceAmerican Paper Institute

Carl ReidelUniversity of Vermont

John WardNational Forest Products Association*

Henry WebsterRobert D. DayRenewable Natural Resources Foundation

Michigan Department of Natural Resources

Kirk EwartJohn Zivnuska

Boise Cascade Corp.University of California

R. Rodney FoilMississippi Agricultural and Forestry

Experiment Station

Wood Science and Technology Working GroupR. Rodney FoilMississippi Agricultural and Forestry

Experiment Station

Dean EinspahrInstitute of Paper Chemistry

John HaygreenDepartment of Forest ProductsUniversity of Minnesota

John KoningForest Products LaboratoryUSDA Forest Service

Alfred H. NissanConsultant

Jerome SaemanEnergy Research CenterUniversity of Wisconsin

Jay Johnson NecmiWeyerhaeuser Co. Forest

T. Kent KirkUSDA

Forest Products Laboratory VanceUSDA Forest Service Forest

USDA

Kenneth SkogForest Products LaboratoryUSDA Forest Service

Robert N. StoneForest Products LaboratoryUSDA Forest Service

Bruce ThomanInternational Paper Co.

Sanyer John WhiteProducts Laboratory Cooperative Forestry StaffForest Service USDA Forest Service

SetterholmProducts LaboratoryForest Service

*John Ward replaced Merle Conkin on the OTA advisory panel in October 1982.NOTE: OTA is grateful for the assistance of its project advisory panel, chaired by Larry Tombaugh, and the members of its Wood Science and Technology

Working Group and for the advice of numerous reviewers in agencies of the U. S. Government, academia, and industry. However, OTA assumesfull responsibility for its report, which does not necessarily represent the views of individual members of its advisory panel or working group.

iv

OTA Wood Use: U.S. Competitiveness and Technology Project Staff

Lionel S, Johns, Assistant Director, 0TAEnergy, Materials, and International Security Division

Audrey Buyrn, Industry, Technology, and Employment Program Manager

James W. Curlin, Project Director

Julie Fox Gorte, Assistant Project Director

W. Wendell Fletcher

Kathryn Hutcherson Robie

Nicholas A. Sundt*

William F. Davidson*

Kathleen D. Frakes, Research Assistant

Kathryn White, Editor

Lynn Mohn Powers, Editor

Robert N. Stone, detailee from the USDA Forest ServiceForest Products Laboratory, February 1983

John Nordberg, detailee from the U.S. Geological Survey,Department of the Interior, January-March 1982

Administrative Staff

Carol A. Drohan, Administrative Assistant

Patricia A.. Canavan, Secretary

Project Contractors

Envirosphere Co.George W. Banzhaf & Co.Resource Issues, Inc.Jean Moorefield, ContractorEnvironmental Awareness Center,

University of Wisconsin

OTA Publishing Staff

George Brown, Oregon State UniversityDeborah Cichon, ContractorRussell Boulding, Contractor

John C. Holmes, Publishing Officer

John Bergling Kathie S. Boss Debra M. Datcher Joe Henson

Glenda Lawing Linda Leahy Donna Young

“ OTA Contractor.

Acknowledgments

This report was prepared by the staff of the Industry, Technology, and Employment Program of theOffice of Technology Assessment. The staff wishes to acknowledge the contribution of OTA’s contractorsin the collection, analysis, and preparation of material for the report and to thank the following individualsand Government agencies for their generous assistance:

USDA Forest Service James Lyons, Society of American ForestersBrock Evans, National Audubon Society George Marra, USDA Forest ServiceRichard Haynes, USDA Forest Service Jerome Saeman, University of WisconsinJay Johnson, Weyerhaeuser Co. Ross Whaley, USDA Forest ServiceHerbert Knight, USDA Forest Service Robert Wolf, Congressional Research ServiceWilliam Lange, National Forest Products

Association

vi

Organization of the Assessment

Volume I of the assessment is organized as follows:

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●

●

Chapter I provides an overview and summary of the report and a tabulationof key issues and legislative options for congressional consideration.Chapter II contains a more detailed discussion of these issues and options.Chapter III discusses international trade in wood products and summarizesthe implications of world demand and supply for the U.S. timber resourceand the forest products industry.Chapter IV describes the range of uses of wood and forest products in theU.S. economy and evaluates the impacts that current trends may have ondomestic wood demand and supply in the future.Chapter V reviews the technologies available for increasing the growth andproductivity of American forests and assesses the potential for harvestingtechnologies to expand supply by recovering larger proportions of timberat harvest. It also summarizes the status of manufacturing technologies thatare covered in detail in volume II.Chapter VI reviews the U.S. forest resource base and weighs constraints forensuring that future wood demands are met.The appendix to volume I includes a glossary of terms which the reader mayfind useful in understanding forestry terminology.

Volume II of this report contains a detailed review and assessment of manufac-turing technologies and trends in end-use design for wood products.

vii

Contents

Chapter Page

I. Overview . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3

11. Policy Analysis and Legislative Options . . . . . . . . . . . . . . . . . . . . . . . . . . . 29

III. World Markets for U.S. Wood Products . . . . . . . . . . . . . . . . . . . . . . . . . . . 49

IV. Wood Use in the United States . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 73

V. Technologies for Growing, Harvesting, and Using Wood . . . . . . . . . . . . 105

VI. The Forest Resource Base . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 143

Appendix: Glossary of Terms . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 193

Index . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 199

CHAPTER 1

Overview

—————

Contents

Page

Summary .. ... . . . . . .. . . . . . . .. . . .. . . . . . . . . . . . . . . . . .. 3

Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4

Federal Forest Management and Policy ... . . . . . .. . . . .. . . . .. . . . . . . . . . . 5

Forest Products Industry ... . . . . . . . . . . .. . . . . . . . . . . . . . . ... 6Structure of the Industry . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7Future Role of Forest Products . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8

Forest Resources .. . . . .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. . 8Technological Opportunities To Extend Timber Resources . . . . . . . . . . . . . . . . . . . . 10Land Use and Ownership Trends . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10Public and Private Sector Involvement in Timber Resource Development, . . . . . . . 12

Domestic Production and International Trade . . . . . . . . . . . . . . . . . . . . . . . . . 13Domestic Demand for Forest Products . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13U.S. Imports of Forest Products . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15U.S. Exports of Forest Products . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15

Future Potential ... . . . . . . . . . . . . . . . . . . . . . . .. . . . . . . . . . . . . 16Future Domestic Demand . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16Future Domestic Supply . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17Opportunities To Exand Exports . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18

Policy Considerations ● ... . . . . . . . . . . . . . . . . .. . . . . . . . . .... . 19National Goals . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19U.S. Timber Supply . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19International Trade . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20Research and Development . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20Private Nonindustrial Timber Management . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21

List of Tables

Table No.l. Representative Uses for Wood.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Z. Countries With Largest Forested Areas . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .3. Major World Producers of Selected Wood Products . . . . . . . . . . . . . . . . . . . . . . . .4. Summary of Policy Considerations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

List of Figures

Figure No.l. Relative Importance of Industrial Raw Materials. 1920-77 . . . . . . . . . . . . . . . . . . .

Page79

1323

6 —

CHAPTER I

Overview

Summary

The United States could greatly expand itsrole in world forest products trade over thenext decade and could become a net exporterof solid wood and paper products before IWO .For the past 30 years, the United States typical-ly has imported more forest products than ithas exported. Because exports have grown fast-er than imports, the trade deficit has narrowed.This trend is likely to continue.

Global demand for a wide range of forestproducts is growing rapidly, but the best tradeopportunities for U.S. producers appear to bein the paper markets of other industrialized na-tions, particularly Western Europe and Japan.In contrast to many basic U.S. industries, theforest products industry has distinct advan-tages over its foreign competitors. The U.S. for-est products industry is the most productiveand among the most efficient in the world, andit benefits from a vast and highly productivedomestic forest resource.

The United States and Canada are expectedto remain the world’s largest mutual tradingpartners in wood products, continuing to ex-change those products for which one countryhas a competitive advantage over the other.Continued imports of Canadian low-value lum-ber and newsprint may result in greater oppor-tunities for U.S. producers to export productssuch as linerboard and high-value lumberwhere the U.S. competitive edge is greatest.

To capitalize on international trade oppor-tunities, the forest products industry and theFederal Government probably will have tomake concerted efforts to promote exports.Although responsibility for developing foreignmarkets rests primarily with the private sec-tor, government action will be needed to over-come trade barriers that currently inhibit thecompetitiveness of U.S. wood products in for-eign markets.

Past Government and private sector con-cerns regarding a possible domestic timbershortfall no longer seem justified. F u t u r etimber needs, especially for housing but alsofor other products, probably have been over-estimated. The effects of intensive timber man-agement and the ability of wood utilizationtechnology to stretch the wood resource haveprobably been underestimated.

If current trends toward more intensive for-est management continue, domestic needs forwood probably can be met without dramaticprice increases. However, substantial invest-ments in forest management would be re-quired to increase wood production beyondthe levels expected to result from currenttrends. U.S. timber harvests can be more thandoubled over the long term through increasedapplication of intensive forest managementtechnologies such as applied genetics, fertiliza-tion, and improved harvesting systems. Toachieve the full economic potential of U.S. for-estlands, an estimated investment of $10 bil-lion to $15 billion would be needed over thenext 30 to 50 years.

Existing and emerging technologies enablea broad range of wood products to be manu-factured from currently underutilized hard-wood species and from waste wood material.For example, high-strength papers now aremade from hardwoods, once considered im-possible. Many manufacturing technologies areavailable which have not been commercialized,but future economic conditions probably willwarrant commercialization of many of these,and research and development (R&D) will con-tinue to play an important role in the introduc-tion of new products.

Several factors could affect future timberavailability. However, none is expected to bea serious future limitation to wood supply,

3

4 ● Wood Use: U.S. Competitiveness and Technology

unless demand increases dramatically with-out adoption of intensive forest managementand wood utilization technologies. These fac-tors include a shrinking forestland base, a largeportion of U.S. forests in private nonindustrialownership that may not be managed for com-mercial timber production, and the recenttrend toward significantly increased use ofwood fuel.

Commercial timber production is only oneof many uses for U.S. forestland. Other usesinclude wildlife habitat, rangeland, watershedprotection, wilderness, and recreation. Achiev-ing a balance among many forest uses, espe-cially on Federal lands, is a fundamental partof U.S. public lands policy. Broad-scale inten-sive forest management may result in increasedsoil loss, altered wildlife habitat, reduced waterquality, and lower soil productivity. The en-vironmental impacts of intensive forestry arenot well understood, and further research onits effects may be needed.

Significant changes in Federal programs andpolicies probably are not required to ensurethat future domestic forest products needs aremet. However, OTA has identified several pol-icy options which, if implemented, could helpto increase the competitiveness of the forestproducts industry, There are five general typesof options:

1.

2.

3.

4.

5.

Establish national objectives for manage-ment and use of the Nation’s forest re-sources.Encourage research, development, andtransfer of forestry-related and wood utili-zation technologies.Increase international competitiveness ofU.S. forest products.Improve the quality of information neededfor forest policy formulation.Improve systems for identifying timbermanagement needs.

Introduction

The Senate Committee on Appropriations re-quested that the Office of Technology Assess-ment (OTA) undertake an assessment of tech-nologies related to the growth and use of U.S.timber resources. OTA found that the technol-ogies were tied closely to the economic condi-tions affecting the forest products industry andthe resource base. With the concurrence of thecommittee, OTA broadened its assessment toinclude an evaluation of the role of wood inthe U.S. economy. Subsequently, the HouseSubcommittee on Forests, Family Farms, andEnergy wrote to OTA affirming its interest inthe assessment.

In response to this congressional interest,OTA undertook a study to answer the follow-ing

●

general questions:

What is the status of technology for in-creasing the efficiency of wood use in themanufacturing process, for increasing theproductivity of U.S. forestlands, and for re-

●

●

●

●

covering a larger proportion of timber dur-ing harvesting?Do Forest Service projections of demandand supply accurately reflect the future po-tential of technology?What is the status of worldwide timber de-mand and supply, and how will global con-ditions affect U.S. wood futures?Is the manufacturing capacity of the U.S.forest products industry adequate to meetfuture needs?Is U.S. R&D balanced and adequateenough to achieve national goals in thegrowth, harvesting, and utilization of thetimber resource?

To answer these questions, OTA first re-viewed in detail the existing, emerging, andpossible future technologies for convertingtimber into commercial wood products. Sec-ond, technologies for increasing the growthand productivity of the resource and for har-

Ch. I—Overview . 5— ——-. - — . . . —

vesting timber and transporting it to mills were Finally, projected domestic and foreign de-assessed. Third, based on the potential for tech- mand for wood products was compared to thenology to increase the capacity to grow timber ability of various timber-producing nations toand manufacture wood products, OTA as- meet future global needs.sessed the status of the U.S. timber resource.

Federal Forest Management and Policy

The(USDA

U.S. Department of Agriculture’sForest Service has primary responsi-

timber production may not beareas where other resource

bility within the Federal Government (or ad-ministering programs affecting forest re-sources and wood utilization. The Forest Serv-ice manages the National Forest System, whichencompasses 190 million acres of forestlandlocated primarily in the West. Approximatelyhalf the acreage in national forests is con-sidered to be suitable for commercial timberproduction, The National Forest System is theNation’s largest single reserve of standing saw-timber and represents about 41 percent of thetotal U.S. sawtimber resource, consisting main-ly of high-value softwood species, Because itis so large, the National Forest System providesnearly one-fourth of the softwood sawtimberconsumed annually in the United States. Themanagement of Forest Service lands must a c-commodate a broad range of uses; therefore

maximized invalues compete.

Other agencies within USDA also share re-sponsibility with the Forest Service for forestry-related activities. These include the Soil Con-servation Service, the Agricultural Stabilizationand Conservation Service, the Foreign Agricul-tural Service, the Cooperative Extension Serv-ice, the Science and Education Administration,and the Federal Crop Insurance Corporation.The Bureau of Land Management in the De-partment of the Interior manages forestlandsprimarily in Oregon, and the Tennessee ValleyAuthority undertakes cooperative forestry pro-grams with States and private agencies in theTennessee Valley region.

Several other Federal agencies also couldplay prospective roles in facilitating the furtherdevelopment of domestic and international

Photo credit U S Forest Service

Wildlife and recreation are part of a range of multiple-use management on the National Forest System

6 . Wood Use: U.S. Competitiveness and Technology. — . —

markets for U.S. forest products, including theDepartments of Treasury, Commerce, andState, and the Office of the U.S. Trade Repre-sentative. Most of these agencies have fromtime to time been involved in forest products-related issues, but not in a focused, coordinatedmanner.

During the past decade, Congress establisheda comprehensive assessment and reporting sys-tem for forest resources, reaffirming a commit-ment to resource evaluation articulated in theMcSweeney-McNary Act of 1928. The Forestand Rangeland Renewable Resources PlanningAct (RPA) of 1974 (Public Law 93-378), asamended by the National Forest ManagementAct (NFMA) of 1976 (public Law 94-585),

directs the Forest Service to assess timbersupply and resource requirements every 10years. Based on each assessment, the ForestService is directed to formulate 5-year pro-grams that present strategies for achieving na-tional goals. Each assessment and program areused in the Federal budgeting process andserve as guides for the administration of ForestService programs. However, NFMA’s em-phasis on the National Forest System limits theusefulness of the RPA assessment and programfor guiding national efforts to expand and usetimber resources, although there are modestFederal programs to increase forest productivi-ty in the private sector.

Forest Products Industry

Wood was the single most important indus-trial material in the early development of theU.S. economy. It was essential to most formsof construction and manufacturing and as fuel.After 1920, its role began to decline, so thatwood now accounts for only about 26 percentof the value of major industrial raw materials[fig. 1). Despite its smaller contribution totoday’s economy, the volume of wood used forindustrial purposes since the beginning of thecentury has increased from approximately 8billion cubic feet (ft3) to more than 13 billionft3 annually due to population expansion andeconomic growth.

The U.S. consumes more forest products,nearly 70 ft 3 per capita per year, than anycountry in the world and accounts for aboutone-fourth of total world consumption. It isalso the leading industrial source of forestproducts, producing 35 percent of the world’spaper, 45 percent of its plywood, and 20 per-cent of its softwood lumber. The properties ofwood make it adaptable to a wide variety ofuses (table 1), with domestic production linked

Figure 1.— Relative Importance of IndustrialRaw Materials, 1920-77

Agricultural nonfood, and wildlife productsa

Timber products- - - -

1 1 1 1 I 11920 1940 1960 1980

Year

alncludes cotton arlcl other fabrics, oils, rubber, furs, hides, and other slmllar~products

Includes mineral construction materials, metal ores, chemical and fert!llzermaterials, abrasives, and other minerals

SOURCE U S Department of Agriculture, Forest Service, An Ana/ys/s of the Tim.ber S/fuat/on In Ihe Urrited States, 1952-2030 (Washington, D C U SGovernment Printing Office, 1982), p 3

Table 1.— Representative Uses for Wood

Uses/Examples

Construction:Residential housing construction and upkeep, mobilehomes, and light commercial structures; arches andbeams for sports arenas, convention centers, etc.

Communications:Newsprint, printing papers, and other paper products

Packaging:Bags, sacks, containers

Furniture manufacturing:Household and commercial furniture

Shipping:Pallets, containers, dunnage, blocking, and bracing

Transportation:Railroad ties, manufacture of railroad cars, boats, andlight airframes

Wood fuel:Fuelwood, woodchips, mill residues, etc.:

Residential home heating and cooking, forestproducts industry process energy, electricitygeneration

Liquid and gaseous fuels:Potential supplement for petroleum and natural gasas a fuel or alternative petrochemical feedstock

Chemicals and cellulosic fibers:Rayon and cellulose acetate:

Clothing fibers, tires, conveyor and transmissionbelts, ribbons, films, etc.

Silvichemicals (naval stores and pulping byproducts):Used in production of synthetic rubber, chewinggum, rosin bags, inks, adhesives, paints, soaps,detergents, solvents, odorants, bactericide, drillingmud thinners, dispersants, leather tanning agents,water treatment, pharmaceuticals, etc.

Food and feed products:Feed molasses, animal fodder, vanillin flavoring, foodgrade yeast products

Miscellaneous and specialty products:Utility poles, pilings, fencing, mine props, cooperage,activated carbon, sporting goods, musical instruments,pencils, caskets, signs and displays, etc.

SOURCE Office of Technology Assessment

closely to construction, packaging, and com-munications requirements:

● About 60 percent of solid wood products(lumber, plywood, and panels) was usedin construction in 1976, chiefly in newhomes but also for home restoration andremodeling and nonresidential construc-tion. Significant volumes of solid woodproducts also are used for shipping palletsand containers and in furniture and cab-inets.

● The pulp and paper sector produces aboutequal amounts of paper and paperboard(cardboard, linerboard, and other stiff,

Ch. l—Overview ● 7

thick papers). High-volume paper uses in-clude printing and writing papers (51 per-cent), newsprint (17 percent), tissues (14.5percent), and packaging (17.7 percent).Packaging materials (both paper andpaperboard) accounted for about 60 per-cent of domestic paper and paperboardproduction in 1981,

Fuelwood for residential use recently has re-emerged as a major, high-volume timber use.Most residential fuelwood is cut for personaluse by homeowners and is not considered anindustrial forest product in this report.

Structure of the Industry

The two major divisions of the forest prod-ucts industry—the pulp and paper sector andthe solid wood (lumber and panel) productssector—display significantly different char-acteristics and performance:

●

•

●

The solid wood products sector employsmore people. The value added to productsin manufacture is greater in the capital-intensive pulp and paper sector.Demand for paper products is dependenton general economic conditions, while de-mand for lumber and panels is dependenton highly cyclical new home construction,which consumes nearly 40 percent of solidwood products.The pulp and paper sector is more concen-trate-d than the solid wood products sec-tor, with the 10 largest firms accountingfor more than half the pulp, paper, andpaperboard products manufactured inNorth America; the lumber industry (themost competitive subgroup of the solidwood sector) is far less concentrated, with50 percent of its output produced by 800firms.

Primary processing of forest products—log-ging, lumber and panel manufacture, pulping,and papermaking—is concentrated near abun-dant timber supplies, mostly softwoods in theSouth and Pacific Northwest. Secondary proc-essing (manufacture into finished products)tends to take place close to markets.

8 ● Wood Use: U.S. Competitiveness and Technology-. —

The South is the major pulping region of theUnited States, accounting for two-thirds of pro-duction in 1976. The remaining productionwas about equally divided between the West(17 percent) and the North (14 percent). Sixtypercent of secondary paper manufacture (con-verted paper products such as containers, bags,sanitary products, and stationery) is locatednear major markets in New England and theNorth Central and Middle Atlantic States.

Most lumber and panel manufacture occursin the West and the South, where softwoodtimber is most available. The West accounts formore than two-thirds of lumber production,with the South producing most of the remain-ing one-third. The West also accounts for mostpanel production, although the South hasgained rapidly since the early 1960’s. Manufac-ture of panel products—e,g., waferboard andoriented strand board—is located in the NorthCentral and Northeastern regions, and virtuallyall expansion is expected to occur in theseregions.

Future Role of Forest Products

Most basic industries are in economic trou-ble as a result of high labor costs, foreign com-

petition, aging plant equipment, low produc-tivity, lagging innovation, and, in some cases,dwindling raw materials. The forest productsindustry is an exception. Although it was hithard by the recent recession, conditions arefavorable for the industry to enlarge its con-tribution to the domestic and internationaleconomy because:

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●

World demand for forest products is ex-pected to grow in the decades to come,presenting U.S. firms with opportunitiesto develop new markets.Supplies of competitive products fromsome foreign countries are expected to de-cline, particularly in Southeast Asia.The U.S. timber supply picture is on thewhole optimistic, with increased levels oftimber production anticipated in the fu-ture. Many international competitors areconfronted with tighter supplies.Most important timber production regionsin the United States already have well-de-veloped transportation and manufacturingfacilities. Other countries (Brazil, theU. S. S. R., and Canada) have equal or great-er timber supplies, but these are not as ac-cessible or as easily exploitable.

Forest Resources

The United States ranks third among nationsin exploitable forest area and first in industrialtimber production (table z). U.S. timber growsrapidly, especially in the South where finan-cially mature softwoods can be grown in 30 to40 years, compared with two to three timeslonger in many parts of Canada, the SovietUnion, and some parts of the Western UnitedStates. Transportation and manufacturing sys-tems are well developed in many heavily for-ested regions of the country, unlike the U.S.S.R.and most of the developing nations, whereroads, railroads, or water transportation sys-tems must be built before interior forests canbe harvested.

National timber supplies are likely to besufficent to meet probable domestic wood de-

mand for the foreseeable future, given cur-rent trends in intensive forest management(see ch. V). Beyond this, with increased forestproductivity, the United States also can sup-ply a larger share of world wood needs andmeet unexpected domestic demand should itarise. There are many opportunities to expandtimber supplies significantly through wide-spread use of existing intensive managementtechnologies for growing, harvesting, and proc-essing timber,

Forestland availability is not likely to becomea serious limitation unless wood demand in-creases dramatically without adoption of tech-nologies capable of increasing timber suppliesand improving the efficiency of wood use (see

Ch. l—Overview • 9

Table 2.—Countries With Largest Forested Areas

IndustrialExploitable Growing stock harvestforest area (million meters3 over bark)c

(billion ft3)(million ha)a b Tota l Coniferous Broadleaved 1977

U.S.S.R. . . . . . . . . . . . . . . . . . . 389 74,710 62,000 12,710 10.0Brazil . . . . . . . . . . . . . . . . . . . . 305 47,088 98 46,990 1.5United States . . . . . . . . . . . . . 195 20,132 12,906 7,226 11.5Canada . . . . . . . . . . . . . . . . . . 191 19,645 15,571 4,074 5.1aEX@~{labl~ forest definitl~n~ differ by ~~untry, some ~~”ntries such as Canada have restrictive definitions that reSult In

conservative estimates of exploitable forestland. Volume estimates for the U.S S R, include growing stock on some 110 milllonacres (44.5 million ha) considered to be unproductive forest land.

%0 convert hectares to acres, multlply by 2471.CTO convert cubic meters to cubic feet, multiply by 35.31.

SOURCES: United Nations Food and Agricultural Organization, Vearkolr of Forest Products, 1979( Rome, 1981), G M Bonner,Canada’s Forest hrverrtory 1981 (Environment Canada, 1982); United Nations Environment Program/Food and Agri-cultural Organization, Los Recorsos Foresta/es de la American Tropical (Rome, 1981); United Nations Econom!cCommission for Europe, European Timber Trerrds and Prospects, 1950 to 2030 (Geneva, 1976), U.S. Departmentof Agriculture Forest Service, An Ana/ys/s of the Timber Situation in the Urr/ted Sfates, 1952-2030 (Washington,D C : 1982)

Photo credit U S Forest Service

Intensive forest management can significantly expandU.S. timber supplies

ch. V and vol. II). Nevertheless, several trendscould affect future timber availability:

● The U.S. forestland base probably willshrink in the future because of conversion

●

●

●

for agriculture and development and be-cause of allocation of additional Federaltimberland to wilderness and other re-stricted uses.

Private nonindustrial forests (PNIFs) arenot owned chiefly to produce timber in-come. With the forest products industryowning only 14 percent of the timberlands,it will have to increasingly rely on PNIFlands for future resources. Timber supplyin some areas could be reduced by de-mands for wildlife habitat, recreation, andamenities or for fuelwood.

Continued growth in residential fuel-wood consumption could be a specialconcern, because it potentially couldcompete with the forest products in-dustry for commercial wood supplies.Current fuelwood consumption has beenseveral times higher than anticipated, butavailable information is not sufficient todetermine the extent to which fuelwoodmay be depleting future timber reserves.

State-level survey data on forest acreageand timber inventories is collected infre-quently, averaging once every 12 years. Asa result, data at the national level usedby the Forest Service in its RPA assess-ments is based in part on estimated up-dates and therefore may reduce the ac-curacy of projected resource trends.

10 • Wood Use: U.S. Competitiveness and Technology. — —

Technological Opportunities To ExtendTimber Resources

Trends in domestic timber growth are on thewhole favorable, although less so for softwoodspecies and the sizes of trees in highest de-mand. U.S. timber inventories have been in-creasing for at least three decades, a rever-sal of an earlier trend towards decline (see ch,VI). Growing stock on commercial forestlandincreased from 603 billion ft3 in 1952 to 711billion ft3 in 1976. Net annual growth in 1976was 21.6 billion ft3 compared to 13.9 billion ft3

in 1952, Most of the increase has been in hard-wood species, which could afford major op-portunities for expanded wood use for prod-ucts and fuel. Hardwoods comprise about one-third of the growing stock inventory, but ac-count for only about one-fourth of the nationaltimber harvest.

Two-thirds of the inventory is in softwoods,which are preferred for many high-volumeuses. Softwood stock has increased slowly dueto greater demand and liquidation of old-growth timber in the West. Old-growth standshave enormous volumes of standing timber, butgrow very slowly if at all; replacement standshave less volume and smaller trees but growrapidly,

Existing technologies for growing, harvest-ing, and processing timber could significant-ly extend wood resources if widely adopted(see ch. V). Existing processing technologiesare able to manufacture high-performanceproducts from wood previously considered toosmall, unsuitable, or defective. This capabilitycould increase the market for low-demand, lessexpensive hardwoods and permit the greaterutilization of residual or defective materialsnow left on harvested sites.

The development of harvesting technologiesand systems capable of economically recover-ing previously wasted material in an environ-mentally sound manner could increase theamount of timber removed from harvest sitesand open some additional areas that are nowoff limits for environmental reasons. Key needsinclude the development of small t ractharvesting equipment targeted to the needs ofsmall landowners; the training of wood-

workers in productively efficient, safe, and en-vironmentally sound harvesting operations;and a systems approach to harvesting to in-tegrate the growing, harvesting, and manufac-ture of wood products. To date, the FederalGovernment generally has given harvestingtechnologies low priority in forestry R&D ac-tivities.

Opportunities exist to expand long-termtimber supplies through intensive forest man-agement systems (application of plannedtreatments to forestland to increase growth ofindustrial-quality timber), Compared to crop-land, most U.S. forestland is managed wellbelow the current state of the art of manage-ment technology, but this is consistent withforestry’s historical role as a residual use ofland. Despite the increase in inventories thathas occurred in recent years, net growth aver-ages only 60 percent of growth levels that couldbe achieved if all stands were stocked for op-timal growth. Over time, far greater growthrates could be achieved if harvested standsare replaced with rapidly growing, geneti-cally improved seedlings managed under in-tensive silvicultural regimes.

Intensive timber management is expensive,however, with costs of planting alone often ex-ceeding $100 per acre. Economic oppor -tunities for timber management investmentsmay exist on 139 million to 168 million acresin 25 States. The net annual growth incre-ment (net growth attributable to management)could be 11 billion to 13 billion ft3 annuallyif all these investments were made—at a costof approximately $10 billion to $15 billionover the course of a rotation (30 to 50 years)(see ch. V).

Land Use and Ownership Trends

Most forestland in the United States is notowned exclusively for timber production. Itoften is owned for various other purposes, in-cluding recreation, wildlife, or speculation. ofthe 482 million acres of “commercial” forest-land (forestland considered capable of supply-ing industrial timber on a sustained basis butnot necessarily so used), 58 percent is ownedby 7.8 million PNIF owners, most of whom are

Ch. 1— Overview ● 11

Photo credit: Soil Conservation Service

Much of the forestland in the Eastern United States is privately owned in small lots

not chiefly concerned with growing timber.PNIF owners nevertheless contribute about47 percent of all timber produced domestical-ly and about 35 percent of the softwood tim-ber. Their share is expected to increase sig-nificantly in coming decades.

Twenty-eight percent of the commercial baseis owned by public agencies, usually for multi-ple uses. The forest products industry owns theremaining 14 percent, Industry lands con-tribute disproportionately more to supplies(over 30 percent in 1976) because they tendto be better suited to timber growing thanother lands.

According to the Forest Service, commercialacreage declined 5 percent between 1962 and1977, Most of the decline occurred on PNIFland and is attributed largely to diversion offorestland to agriculture and development.Wilderness areas set aside on Federal lands ac-counted for approximately 30 percent of thedecline, but much of the land reserved as

wilderness is not highly productive timber-land (see ch. VI).

Future forestland trends are difficult to fore-see, but the Forest Service anticipates thatonly modest declines in commercial forest-land are expected over the next 50 years, asagricultural pressures ease. But agricultural re-quirements probably will continue to exert apowerful influence on future forestland trends.If farmland requirements expand, as was thecase in the 1970’s, greater declines in forestacreage may be expected, especially in theSouth, which contains 20 million acres offorestland with crop potential , If recent(1980-83) crop surpluses continue for a pro-tracted period, more land may revert to forestthan is cleared for agriculture. If so, new op-portunities may arise to establish managedplantations on unneeded cropland, as was thecase in the late 1950’s and early 1960’s.

Ownership patterns could complicate the de-velopment of timber resources, due to the smallsize of many private holdings and the diverse

12 . Wood Use: U.S. Competitiveness and Technology—

objectives of their owners. Over 20 percent ofall private forestland is in tracts of 100 acresor less—a size generally too small to capturefully economies of scale in management andharvesting (see ch. VI). Most PNIF land is nowowned by nonfarmers, some of whom have lit-tle interest in timber production, Owners oflarge PNIF tracts may be investors interestedin timber management, although data to sub-stantiate this is fragmentary. The most promis-ing PNIF lands for intensified management arethe larger tracts in important timber produc-tion areas.

Forest industry holdings are expected to in-crease only modestly in the future, but thesemay be some of the most cost-effective landsfor investing in timber management, A key fac-tor that makes industry and some nonindustrialprivate lands prime areas for increased timberproductivity is continuity of ownership. Otherfactors that make forestry investments on theselands attractive are their large tract size, highnatural productivity, proximity to processingfacilities, and the commitment of their ownersto grow timber.

Public and Private Sector Involvement inTimber Resource Development

The Federal Government owns about one-fifth of the Nation’s commercial timberlandand has established several programs to en-courage timber management on private lands.Federal lands available for timber productionare managed under a multiple-use sustained-yield framework established by statute by theCongress. Temporary increases in harvest lev-els are permitted in some limited circum-stances, but changes in existing law probablywould be needed to significantly increase har-vest levels beyond those included in currentFederal planning. Over the long-term, intensivemanagement of Federal lands could” increasegrowth greatly on land available for timber pro-duction, but this would require increases in theForest Service budget to upgrade timber man-agement and to ensure careful attention to im-pacts on other multiple-use resources.

Forest management activities on privatelands are encouraged by a variety of Federaland State programs related to cooperative fire,pest, and insect control programs; research,education, and technical assistance; and finan-cial assistance through tax incentives and di-rect cost-sharing of management practices withsmall landowners, Capital gains taxation oftimber income is perhaps the greatest singleFederal inducement for timber management,although it does not require landowners to usetax savings on management. Several USDAagencies in addition to the Forest Service, in-cluding the Soil Conservation Service, the Agri-cultural Stabilization and Conservation Serv-ice, and the Cooperative Extension Service,play roles in providing assistance to forestlandowners.

Since the early 1970’s, several State govern-ments have expanded their forestry assistanceprograms. Many States offer preferential taxlaws for forest owners, and a few provide lim-ited cost-sharing assistance, either to supple-ment Federal funds or on an independentbasis, Some States are developing State forestplans to establish overall goals for forestry ac-tivities and have integrated forest products intotheir overall industrial development plans.Most States also have forest practices acts, pro-viding guidelines or, in some cases, regulationsfor harvesting and reforestation,

Because of limited Federal and State budgets,however, private sector interests will be pivotalin determining future levels of management onprivate nonindustrial lands. Fortunately, anumber of forest products firms sponsor land-owner assistance programs aimed at the PNIFowner, and efforts of this kind may warrant ex-pansion if government funds are cut back. Pri-vate financial institutions recently have begunoffering limited partnerships and other ar-rangements to attract investors to forestlandmanagement opportunities. Although thistrend is too recent to be assessed adequately,it could be an important future source ofcapital for upgrading timber management.

Ch. l—Overview . 1 3

Domestic Production and International TradeThe U.S. forest products industry is the

most productive in the world. In 1980, theUnited States ranked first in paper and paper-board, industrial roundwood, nontropicalhardwood lumber, plywood, pulpwood, andchip production, and second in softwood lum-ber production (table 3). Several factors makethis leadership possible. Although the UnitedStates has only about half of the exploitableforestland that the Soviet Union has, its forestsare far more productive due to more favorableclimate, terrain, and soils. U.S. forests general-ly are more accessible than those of most othernations, and the forest products manufactur-ing capacity of the United States is unsur-passed. The United States also has an enor-mous demand for forest products, with con-sumption expected to increase. However, thereseems to be no reason that increased domesticconsumption would significantly limit U.S. ex-ports of forest products. American forests cansupport much larger harvests, and technologiescapable of increasing timber productivity andmanufacturing efficiency are available. There-fore, the United States is well positioned tosatisfy both domestic and a major share offuture global forest product requirements (seech. III).

By taking advantage of existing opportuni-ties, the United States probably can becomea net exporter of forest products before 1990.The United States is currently a net importerof forest products, but during the last 20 yearsits exports have grown much faster than its im-ports. This trend probably will persist. It is like-ly, however, that Canadian wood products willcontinue to account for large portions of U.S.

consumption. Canada’s lower productioncosts, good transportation systems, and near-by softwood forests give Canadian producersan advantage in providing lower grade soft-wood lumber, woodpulp, and newsprint forAmericans. Continued use of these Canadianproducts increases the opportunities for U.S.producers to export forest products where theU.S. competitive edge is greatest—in paper,panels, hardwood products, and high-qualitysoftwood lumber (see ch. III).

Domestic Demand for Forest ProductsThe high productive capacity of the U.S. for-

est products industry has emerged in responseto substantial domestic demands. The UnitedStates is the world’s number one consumerof most industrial wood products. Per capitaconsumption of lumber, panels, paper, andpaperboard in North America is greater thanin any other region of the world. The UnitedStates consumes almost 25 percent more paperand paperboard per capita than Sweden, whichranks second in per capita use.

U.S. consumption of forest products aver-aged 12 billion to 13 billion ft3 per year in thepast decade, growing slowly from 8 billion ft3

at the beginning of the 20th century. Aboutthree-quarters of this consumption consistedof softwoods, which are used for most lumberand panels and many types of paper.

Domestic consumption of forest productsis expected to nearly double by 2030, accord-ing to the Forest Service (see box A). WhileU.S. forests are capable of supporting muchlarger harvests than they currently do, a 1980Forest Service analysis projects that this in-

Table 3.—Major World Producers of Selected Wood Products

Industrial Sawn Sawn Pulpwood Paperroundwood softwood hardwood Plywood and chips a and board

United States . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 308 58 17 16 109 57U.S.S.R. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 278 87 12 2 38 9Canada . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 156 41 — 2 39 13Sweden . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49 — — — 26 6Finland . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44 — — — 19 6Japan. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — 31 6 8 18People’s Republic of Chinab . . . . . . . . . . . . . . . . . . . —

—13 8 – — 5

Brazil . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — — 6 — — 3Korea. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — — — 2 — 2apulp ~~~du~ti~n figures are in millions of rnetrlc tons All other products are In milllon cubic meters

SOURCES FAO Yearbook, 1960; National Forest Products Association and the U S Foreign Agricultural Service, Wood for tfre World, Today and Tomorrow, n d ,and M Bayl!ss, L Haas, and S Reid, “Basically Good Production But a Weak Economy Marked 1960 Record,” Pu/p and Paper (August 1981), p 67

14 . Wood Use: U.S. Competitiveness and— . .

Box

Technology— —

A.—Timber Demand and Supply

Figures for future timber supply and demand used in this report differ from some of the fig-ures cited in the Forest Service 1980 projections because the Forest Service prepares two differentforecasts. One is called the equilibrium level forecast (cited in this report), and the other the baselevel forecast.

The base level forecast assumes that timber prices will continue to rise at the same rates asin the past (1950 to 1976) and projects timber demand and supply at these assumed prices. Be-cause projected timber demand rises faster than projected supply, these forecasts show a gap be-tween demand and supply (see table below). As a result, the base level forecasting technique isoften referred to as the “gap model.”

The equilibrium level forecast projects what could happen in a free competitive economy, wherethe interaction of buyers and sellers determines timber prices. Under equilibrium level forecasts,therefore, demand and supply are the same, and timber price is allowed to increase in order toachieve this equality.

Comparison of Base Level andEquilibrium Forecasts, 2030

Base level Equilibrium level(billion ft3) (billion ft3)

Timber demand . . . . . . . . . . 28.3 r - 25.5 “Timber Supply . . . . . . . . . . . 24.4 25.5

. . . . . . . . . . . . . 21.2 23.0Imports . . . . . . . . . . . . . . . 4.5 3.8

Exports . . . . . . . . . . . . . . . . .Gap. . . . . . . . . . . . . . . . . . . . 3.9 0.0SOURCE: U.S. Depertnwmt of Arwlculture, Foreet Setvloe, An Ane&e/8 of the Thn-

berS/tuaWn M the Ufi/ted Stdea fWZ03Q Fore8t Reeouroe ReportNo. 23 (VVeehln@on, D.C.: U.S. Government Prlntlng Office, 19S2), pp.Xxi, 203, 211.

crease in consumption will have significantadverse effects on the economy and the en-vironment as timber becomes more scarce.OTA found, however, that there is reason todoubt that the Forest Service projections areaccurate. More than likely, Forest Serviceforecasts of timber demand are overstated. Fu-ture domestic demand for wood products prob-ably will grow, but it is unlikely to reach theprojected levels unless there is a major upturnin the housing market or government interven-tion to stimulate wood fuel use (see ch. IV).Conversely, the Forest Service forecasts of tim-ber supply are conservative, particularly on for-est industry lands, and probably underestimatethe ability and willingness of landowners to in-crease timber production, However, recentdata indicate that softwoods on nonindustrialprivate ownerships are likely to be in shorter

supply in the South before 2000 due to a short-fall in softwood reforestation. In addition, theForest Service projections probably under-state the ability of technology to stretch U.S.wood supplies. There are many technologiescurrently available that can improve wood utili-zation in the forest, in the mill, and in end use.

During the next few decades, the consump-tion of forest products is expected to grow. Asdemand rises, increasing pressure on the forestresource probably will bring an increase instumpage prices, and this, in turn, may moti-vate landowners and the industry to investmore money in intensive timber managementand more efficient facilities. Should thesechanges occur, they could result in the greateravailability of forest products at reasonableprices and the increased competitiveness of

U.S. wood products on world markets. Manyindustrial and nonindustrial private ownersalready are making substantial investments inintensive timber management, and the forestindustry is upgrading the efficiency of itsplants and equipment.

U.S. Imports of Forest

While the United States isproducer of forest products,

Products

the world’s topit is also one of

the largest importers. The majority of U.S.imports are from Canada and consist main-ly of lower grade softwood lumber, woodpulp,and newsprint (see ch. 111), In 1981, the valueof imports from Canada totaled over $7 billionand accounted for over two-thirds of U.S. im-ports of wood products. The United States alsoimports substantial amounts of tropical hard-wood veneer and plywood from the Far East.

The United States and Canada are mutual-ly dependent for forest products. Canada’sshare of U.S. lumber markets has grown steadi-ly for over 30 years and currently accounts fornearly one-third of U.S. lumber consumption.In 1981, the United States consumed approx-imately two-thirds of Canada’s production ofsoftwood lumber, pulp, paper, and paperboard.Although Canada imports smaller quantities ofwood products than does the United States(about 1 billion dollars’ worth in 1981), theUnited States is its major foreign source.

Current exchange rates between U.S. and Ca-nadian currencies favor Canadian exports. TheCanadian dollar is worth about 0.8 $U.S., mak-ing Canadian products more attractive toAmerican consumers. Although Canadianwood manufacturing costs are rising fasterthan those in the United States, a situationwhich may offset some of Canada’s advantagein the future, imports of wood products fromCanada are likely to continue to account forsignificant portions of U.S. consumption.

U.S. Exports of Forest Products

Imports of Canadian lumber and newsprintto offset some increases in domestic demand,combined with the productive capacity of the

Ch. l—Overview ● 1 5

U.S. forest products industry, probably willenable the United States to expand its forestproducts exports. Although the United Statesstill has a balance-of-payments deficit in woodproducts trade, the deficit has narrowed in thepast decade. In 1982, the United States was anet exporter of solid wood products. Overall,U.S. producers have an unprecedented oppor-tunity to expand their exports for three reasons.First, world demand for forest products, par-ticularly paper, is expected to grow rapidly,possibly increasing by 50 percent by 2000 ac-cording to some estimates. Second, at the sametime, many countries that have been traditionalsources of wood products are unable to expandproduction significantly because of raw mate-rials limits and lack of installed manufactur-ing capacity; some regions may even face de-clining production before the turn of the cen-tury. Third, North American producers haveboth the manufacturing capacity and access toproductive forests and skilled labor that couldenable them to expand production and capturea growing share of world markets. U.S. forestproducts can be manufactured at costs thatare competitive throughout the world, an ad-vantage that is probably sustainable for theforeseeable future.

However, other factors diminish the com-petitive position of the United States in worldmarkets. The most important of these areglobal economic and financial conditions (seech. III). The recent world recession adverselyaffected U.S. exporters in general, includingthe forest products industry, which in 1982 ex-perienced a decline in exports from 1981 levels.Spurring the decline was the increasedstrength of the U.S. dollar relative to other cur-rencies. The U.S. balance-of-payments deficitwould have been expected to cause some de-valuation of the dollar, but this adjustment hasnot occurred, primarily because of the enor-mous Eurodollar market and high U.S. interestrates.

Tariffs, quotas, and nontariff barriers alsodepress offshore markets for U.S. forest prod-ucts. Nontariff barriers probably are the mostimportant. The most deleterious nontariff bar-riers affecting U.S. forest products exports cur-

16 . Wood Use: U.S. Competitiveness and Technology

rently are product standards, nontariff chargesor taxes on imports, preferential trade agree-ments, and discriminatory ocean freight rates.In the future, preferential trade agreementsmay have an even greater impact on the abili-ty of U.S. producers to maintain and penetrate

world markets. Countertrade, a form of barterbetween nations, may be particularly trouble-some unless the U.S. Government or producersalso are willing to engage in countertradeagreements.

Future Potential

The latest assessment required by RPA wasprepared by the Forest Service in 1980. Be-cause it projected domestic wood demand toincrease more rapidly than timber supply, the1980 assessment forecasted that timber willbecome more expensive relative to other prod-ucts. Although this future is possible, it maynot be the most probable. Forest Service de-mand projections are likely to be overstated,and timber supply adjustments that would beexpected as a result of increasing timber con-sumption are not given adequate consid-eration.

In the 1980 assessment, the Forest Serviceconcluded that increased efforts to expand tim-ber production and increase manufacturing ef-ficiency may be needed to meet domesticneeds. OTA has concluded that domestic needsprobably can be met without major changes inpolicies affecting timber production. However,it appears that there may be unprecedentedopportunities for U.S. producers to expandforest products exports in the next few dec-ades as well as satisfying domestic needs (seech. IV).

Future Domestic Demand

Forest Service projections of future timberdemand are based largely on projections ofoverall economic growth and demographicshifts. Future demand for all forest productsexcept those used in housing is tied to a pro-jection of future economic growth, while fore-casts of forest products used in new home con-struction are prepared independently by theForest Service.

Forest Service estimates of future timberneeds for housing are probably too optimistic.Its estimates of future housing replacement aremuch higher than historical levels, and the ef-fects of increased housing prices are not givenadequate emphasis. Housing size may risemore slowly than forecasted, or it may stabilizeor decrease in the future. Also, multifamilyunits, manufactured housing, and mobilehomes may become more desirable, particular-ly if housing does not become more affordable.The Forest Service recently has revised itshousing forecasts downward in recognition ofsome of these factors.

Although projected wood needs for housinghave been reduced, Forest Service forecasts oftimber demand have not changed significant-ly, probably due to increased projection of de-mand for fuelwood. This increase in fuelwooddemand offsets declines in softwood demandresulting from lowered projected housing fore-casts. These projections show fuelwood de-mand roughly quadrupling by 2020, from over40 million cords to 180 million cords per year,primarily for industrial power generationalThis projection is based on scanty data andshort-term trends that probably should be re-garded as tentative.

Forest Service forecasts of demand for otherforest products generally are linked to the grossnational product, which is projected to in-

IThese projections are contained in U.S. Department of Agri-culture, Forest Service, “America’s Renewable Resources: A Sup-plement to the 1979 Assessment of the Forest and RangelandSituation in the United States, ” review draft, Feb. 4, 1983. Thedraft report does not specify what proportion of the increaseis attributable to residential, commercial, or industrial uses,

Ch. l—Overview . 1 7—

crease by 2,0 to 3.7 percent in the future. Whilethis rate of growth is consistent with historicaltrends, it may change appreciably if the econ-omy undergoes structural reorganization (e.g.,decreased activity in some basic industries andincreased activity in high-technology and serv-ice sectors). Forest Service forecasts provideno information about the possible effect of dif-ferent rates of economic growth on timber de-mand, nor is there detailed analysis of factorsthat affect wood products use other than demo-graphic shifts and economic activity. For ex-ample, expanding use of electronic communi-cation and data processing may have signifi-cant impacts on future amounts and types ofpaper used, although it is difficult to predicteither the magnitude or the direction of likelylong-term changes.

Future Domestic Supply

Forest Service forecasts of future timbersupply probably underestimate the productiv-ity of U.S. forests, particularly if timberprices rise (see ch. IV). This underestimate isprimarily a result of failure to include the ef-fects of improved technology and more inten-sive timber management on future timber sup-ply.

However, the 1980 assessment probablyoverestimates future softwood timber growthon private nonindustrial land in the South, duemainly to a shortfall in softwood reforestationduring the last 20 years, Even with increasingtimber management intensity, southern soft-woods may be scarcer than projections show,beginning in the 1990’s, Conversely, softwoodsupplies in the Pacific Northwest may be some-what more abundant than the 1980 assessmentshows, according to more recent timber surveyinformation, although not enough to offset thelikely reduction in southern softwood supply,assuming no increase in timber managementintensity.

Forest conditions can change significantlybetween Forest Service State surveys, whichare usually conducted every 10 to 15 years, orevery 12 years on the average. Outdated surveyinformation is a continuing problem for timber

resource forecasters. There are, however, otheruncertainties in timber supply forecasting. Themanner in which the Forest Service treatsthese uncertainties probably leads to conserv-ative forecasts of future timber supply (see ch.IV). There are two sources of bias in the sup-ply forecasts—conservative assumptions aboutfuture timber management intensity and con-servative assumptions about the ability of tech-nology to stretch the wood resource.

Short-run supply curves show that even largeincreases in stumpage prices produce onlymodest increases in timber harvest. This typeof increase is reasonable, because timber cropsusually require three or more decades to ma-ture. In the long run, however, there are manyadjustments that probably would be made inresponse to increased stumpage prices,

One result of increased stumpage pricesprobably would be increased levels of forestmanagement, As timber values increase, abroader range of investments in timber produc-tion is economically possible, and it is likelythat these investments will be made, particular-ly on forest industry lands. The 1980 assess-ment assumes no increase in timber manage-ment intensity for the next 50 years, even withrapidly rising stumpage prices. (Alternativeprojections showing the effect of increasinglevels of management intensity have beenmade, but they have not been given adequateattention. ) Even under the current stumpageprice structure, increased investment in inten-sive forest management is occurring.

The role of changing technology in stretchingthe wood resource also is treated conservative-ly in the 1980 assessment. A variety of tech-nologies is currently available that can increasemanufacturing efficiency as well as promoteconservation in end uses (see vol. II). In-vestments in more efficient manufacturing arebeing made by the forest industry, and risingstumpage prices are likely to increase the useof these technologies. More efficient manufac-ture is a key factor in keeping forest productprices from increasing at the same rate thatstumpage prices increase,

18 . Wood Use: U.S. Competitiveness and Technology— —

Opportunities To Expand Exports

U.S. producers have an opportunity to sig-nificantly expand exports of forest products,particularly paper. This opportunity is emerg-ing because world demand for forest productsis growing, possibly increasing by 50 percentby 2000. Also, many traditional world timbersupply regions are not capable of expandingproduction to meet this demand—some mayeven face declining production as a result ofdeforestation. Furthermore, the United Stateshas a large, modern, efficient manufacturingcapacity, forests that can support larger har-vests, and access to skilled labor and materials.

The value of U.S. forest products exportshas more than quadrupled in the last 20 years,while the value of imports has almost doubled(see ch. III). Although the United States con-sistently has been a net importer of forest prod-ucts, the trade deficit has declined, This isprimarily due to increased exports of wood-pulp and paper products, export of high-valueproducts and imports of lower value products,and, in the last few years, decreased lumberimports. Lumber imports probably will rise asthe U.S. economy and homebuilding industryrecover from recession. International eco-nomic recovery, which is likely to parallel thatof the United States, probably will mean ex-panded international markets for U.S. forestproducts.

Most of the increased consumption of forestproducts is likely to come from industrializednations, particularly Western Europe andJapan. Both are already major purchasers ofU.S. woodpulp and paper products and prob-ably will buy more in the future. This isbecause Scandinavia, which supplies largequantities of paper to Western Europe, is fac-ing limits on its forest resource as well as ris-ing pulpwood costs and may be unable to com-pete with less expensive U.S. paper products,such as linerboard. Also, Japan imports largenumbers of logs from Southeast Asia to makepaper and other products, but harvest rates inSoutheast Asia may not be sustainable through

2000, A cooperative effort between the ForeignAgricultural Service (FAS) and the NationalForest Products Association (NFPA) is under-way to promote exports of U.S. lumber andpanel products to fill these developing needs.

There are several trade barriers that limitthe ability of U.S. producers to expand woodproducts exports. The most important of theseare world economic and financial conditions.For several years, global recession has damp-ened demand for wood while the dollar has re-mained strong relative to other currencies dueto its enormous stocks in Eurodollar marketsand high U.S. interest rates. Improvements inthese conditions undoubtedly would stimulateU.S. wood exports in spite of other trade bar-riers.

Trade barriers limit U.S. exports of proc-essed wood products, but not raw materials.The United States probably will have no trou-ble exporting logs, chips, and pulp in the fu-ture, but will need to seek reductions of bar-riers on processed lumber, panels, and paperproducts. FAS and NFPA are cooperating innegotiations with foreign producers and gov-ernments to reduce tariff and nontariff barriersaffecting lumber and panels, Part of this effortis devoted to market promotion, primarily togain wider acceptance of U.S. homebuildingtechniques in order to stimulate demand forAmerican building products.

Lumber and panels are often specialty prod-ucts, but most U.S. papers are commoditieson world markets. Reduction of tariffs onpaper products such as linerboard could stim-ulate U.S. paper exports. particularly in West-ern Europe, although Scandinavian producersalready have free access to these markets dueto lower tariffs. While both the Foreign Com-mercial Service of the Department of Com-merce and FAS are authorized to—and do—provide assistance to the U.S. paper industryin easing trade barriers, specific efforts com-parable to the FAS/NFPA initiative in solidwood products do not exist.

Ch. 1— Overview ● 19—. — — ——. —

Policy Considerations

Federal policies toward forestry and the for-est products industry are found in numerouslaws that authorize programs and expenditureswithin the Departments of Agriculture, In-terior, Commerce, and Treasury, and withinthe independent Environmental ProtectionAgency, Office of the U.S. Trade Represent-ative, and TVA. General statutes, such as theNational Environmental Policy Act [NEPA) of1969 (Public Law 91-190), Wilderness Act of1964 (Public Law 88-577), Clean Air Act (42U.S.C. 7401 et seq.), the Clean Water Act (33U.S.C. 1251 et seq.), and others, also affecttimber production. State timber policies oftenare patterned after Federal statutes.

The Federal laws that most directly affectlong-term forest management are the Forestand Rangeland Renewable Resources PlanningAct (RPA) and its amendment, the NationalForest Management Act (NFMA). These stat-utes are the basis for formulating policies af-fecting the timber supply, R&D, and the Na-tional Forest System.

National Goals

Although RPA and NFMA direct the ForestService to prepare a comprehensive assess-ment every 10 years and a national programevery 5 years, the acts provide no clearly statedlong-term goals to guide the Forest Service inpolicy development. In this vacuum, the pro-gram and the Forest Service’s annual reporthave become the basis for budget requests andappropriations.

Under NFMA, the Forest Service concen-trates heavily on National Forest System policyand programs. In the absence of congressionalguidance, however, the Forest Service tends toprovide little analysis of policies and programsthat it does not specifically administer or thatdo not pertain to the National Forest System,although there is no limitation on its authori-ty to do so. This emphasis does not address theroles of other Federal and State agencies and

the private sector in national timber produc-tion.

Thus, while the Forest Service is responsi-ble for overseeing the Nation’s wood future, itconcentrates primarily on land and forest man-agement. Little attention is given to those eco-nomic factors that affect the business practicesof the forest products industry.

“There have been a number of proposals byprivate groups that Congress establish a nation-al timber production policy. Proponents of bet-ter defined goals note that RPA has enabled theForest Service to assemble a comprehensivedata base on U.S. timber resources and future,demand, but RPA does not provide congres-sional guidance for national strategic planning.RPA’s focus on Forest Service programs tendsto be of limited use to the private sector andthe States, reducing it to little more than abudget justification for Federal activities,

With 10 years of RPA data available, Con-gress has a great deal of reliable informationon which to base decisions on the future roleof wood in the U.S. economy. In consideringan overall national industrial policy, Congressmay wish to foster and promote the forest prod-ucts industry. Among U.S. basic industries, itis the only one* that has a sustainable resourcebase; adequate, modern, and efficient plantcapacity; expanding international markets; anda competitive edge over most other exportingnations.

U.S. Timber Supply

National timber famines have been predictedrepeatedly since the turn of the century, Nonehas occurred to the extent that the nationaleconomy has suffered appreciably, While therehave been regional migrations by the forestproducts industry as certain types of timberhave been depleted, major shortages have been

*[J ,S, agriculture shares man} of the same ad~anta~t;s, hut isnot considered a n industrial sector.


avoided through changing technologies, eco-nomic adjustments, substitution of other ma-terials, increased production in other regions,and imports. Government programs, such asorganized fire protection, also have helped.

The Forest Service’s 1980 RPA assessment,like forecasts of the past, anticipates increas-ing timber scarcity in the future. Major uncer-tainties are inherent in these projections, how-ever, particularly in their assumptions aboutfuture economic conditions, consumer demand(especially housing), timber growth, and tech-nological change.

Because timber demand-supply forecastscontinue to be more an art than a science, wideranges in future timber resource and consump-tion estimates should be expected. Timberassessment models may be used most effective-ly in showing how changes in future conditionsaffect wood demand and supply and in iden-tifying those factors most critical to policy deci-sions. By generating alternative scenariosbased on different economic and resource as-sumptions, the Forest Service projections couldaid Congress in more fully analyzing a varietyof options. The majority of the analysis in the1980 assessment, however, is based only onone scenario.

International Trade

To benefit from opportunities to export itsgoods, the forest products industry will haveto mount a concerted effort to expand foreigntrade. In the past, U.S. firms have concentratedon the vast domestic wood market, with theirinterest in offshore markets picking up onlywhen U.S. demand slackened. As a result, theU.S. forest products industry has gained inter-national notoriety as a somewhat unreliablesupplier. This reputation will have to improveif the U.S. industry is to take full advantage offoreign markets. This change already hasstarted. The solid wood sector of the industryand FAS recently began working on foreignmarket development and trade barrier reduc-tion.

While the private sector has primary respon-sibility for export market development, the Fed-eral Government must ensure that as few tradebarriers as possible exist between the UnitedStates and potential importing nations. Al-though the U.S. forest products industry is ina strong competitive position internationally,protective tariffs and nontariff trade barriersput U.S. forest products at a disadvantage ina number of major consuming countries. Thissituation is not unique to forest products, butif U.S. industry is to successfully maintain andpenetrate major foreign markets, it will be nec-essary to overcome these impediments.

Of all forest products, the United States isprobably competitively strongest in pulp andpaper. Markets for high-strength paper (liner-board) for shipping containers are expected toexpand rapidly, and U.S. industry has the cur-rent capacity and future potential for supply-ing them. At the moment, however, FAS is notpromoting paper products as actively as it issolid wood products. The Foreign CommercialService also is authorized to undertake exportpromotion, but its promotional activities forforest products are minimal,

In 1982, Congress passed the Export TradingCompany Act (Public Law 97-290) that author-ized the creation of overseas export tradingcompanies with exemptions from certain pro-visions of the antitrust and banking laws. Cur-rently, the Department of Justice is formulatingregulations to govern the operation of thesecompanies. The Japanese have had outstandingsuccess with this concept. Whether U.S. firmscan duplicate the Japanese experience will par-tially depend on how the Justice Departmentstructures its regulations and how skillfully theU.S. industry uses trading companies to ex-pand foreign markets.

Research and Development

Government, academia, and the private sec-tor share responsibility for conducting forestryresearch. Traditionally, the Federal Govern-ment has played a major part. In general, the

.

Ch. l—Overview • 21

Government concentrates on funding basic re-search and performing R&D functions of along-term, high-risk nature that are unlikely tobe undertaken by the forest products industryin response to market forces. This strong Gov-ernment involvement is based on the premisethat a large portion of the wood-using industryand forestland owners represent small, diverseunits with limited capital and knowledge andthat the results of such research generallywould benefit this group.

Under RPA, the Forest Service has set pri-orities for research activities. Over 70 percentof the recommended Forest Service R&D budg-et is devoted to growing, protecting, and inven-torying trees. Less than 3 percent is aimed atharvesting technologies, yet, as OTA has con-cluded in this study, improved harvesting tech-nologies offer important opportunities forstretching the Nation’s timber supply.

The forest products industry appears to lagbehind other basic industries in research ex-penditures. It is difficult, however, to obtainreliable data on forest firms’ R&D investmentsbecause of the proprietary nature of this infor-mation. In addition, related industries, such asforestry equipment suppliers, also do someR&D to benefit their customers, but data isunavailable. Antitrust fears undoubtedly havelimited joint research programs. There are in-dications that the Justice Department is becom-ing more lenient toward cooperative industrialresearch efforts, but in the absence of clarify-ing language in the antitrust statutes, the forestproducts industry is unlikely to move more ag-gressively.

Private Nonindustrial Timber Management

Private nonindustrial forests account for 58percent of the commercial timberland base andsupplies about 47 percent of industrial round-wood. These lands, 90 percent of which arelocated in the East, are accumulating timberinventories—especially hardwoods—at a rapidrate, Timber supplied from PNIF lands is ex-pected to increase significantly, both in volumeand as a proportion of total national timbersupplies.

At the moment, limited Federal assistance inthe form of tax benefits and direct cost-shar-ing for management expenditures is availableto PNIF owners. A key issue in U.S. forest pol-icy is whether the public interest would beserved by additional incentives for intensivetimber management on private holdings orwhether this should be the responsibility of theprivate sector, The Forest Service and the for-est products industry estimate that, over thenext few decades, investments of between $6billion and $9 billion in forest managementmay be needed on PNIF lands to meet futurewood demands. There are cogent argumentsboth for and against extensive public supportof such investments.

Those opposed to extensive government in-volvement in private timber management notethat private nonindustrial landowners alreadyprovide a major portion of U.S. timber suppliesand that prospects for further increases aregood, provided management is upgraded. If de-mand does not rise rapidly, they say, the costeffectiveness of public incentives for privatetimber management is questionable. If demanddoes rise quickly, they claim, the attractivenessof timber management investments will be in-creasingly recognized by the private sector andinvestments will follow in response to the mar-ket.

Those favoring more government involve-ment assert that PNIF landowners may be un-able or unwilling to assume all the risks in-volved in timber management and that broaderpublic objectives (e. g., the national commit-ment to affordable housing) justify substantialFederal commitment to ensuring an availablesupply of softwood in the next 50 years. Sinceinvestments must be made decades in advanceof demand, proponents of extensive govern-ment programs say that current public deci-sions on assistance should provide for in-vesting more heavily in intensive timber man-agement to prepare for future timber require-ments.

Government involvement in private nonin-dustrial forestry is not limited to financialassistance for management. A variety of re-search, education, extension, and technical as-

22 ● Wood Use: U.S. Competitiveness and Technology—

sistance programs have been authorized byCongress in the past to assist private land-owners. While the Forest Service leads inassistance to State and private forestry, on-the-ground delivery of forestry assistance is acooperative effort between several USDA agen-cies, State forestry agencies, county agricul-tural stabilization committees, and soil andwater conservation districts.

State and private forestry programs entail abroad range of objectives and concerns, in-cluding noncommodity and nonmarket valuesof importance to both landowners and thepublic. For this reason, it is difficult to separatethe commodity production profit motive fromthat of land stewardship that benefits the publicat large. Thus, forestry assistance is traditional-ly less commodity-oriented than is agriculturalpolicy,

Since the early 1970’s, Congress has enactedseveral laws to boost private nonindustrial for-estry, These include the Forestry IncentivesProgram (Public Law 93-86), passed in 1974,and the Cooperative Forestry Assistance Act(Public Law 95-313), the Forest and RangelandRenewable Resources Research Act (PublicLaw 95-307), and the Renewable Resources Ex-tension Act (Public Law 95-306), all passed in1978,

Although budgetary constraints have limitedthe implementation of these laws, the currentforestry assistance policy framework focusesmore on commodity aspects of private forest-land management through:

• Increased emphasis on renewable re-source research, technology transfer, and

expanded extension services to privatenonindustrial forestry. Although fundedmodestly, these efforts in time could resultin more rapid on-the-ground implementa-tion of research findings in much the sameway as agricultural research findings havebeen disseminated effectively to farmers,Changes in the tax law that ease inher-itance tax burdens on forest land ownersand provide favorable treatment of refor-estation expenses on a limited basis.Potential establishment of crop insuranceprograms. In 1980, through the FederalCrop Insurance Act (Public Law 96-365),Congress authorized the Federal Crop In-surance Corporation to develop, in coop-eration with the Forest Service, an all-riskinsurance program for timber crops on apilot project basis. The pilot program, ex-pected to be launched in late 1983, willcover pine species in selected southerncounties, It is similar to other agriculturalcrop insurance programs.

major problem in government landownerassistance ‘is how to target the limited fundsavailable to those lands with the highest poten-tial for cost-effective management. Tracts ofless than 100 acres often are too small to cap-ture economies of scale in timber management,yet 47 percent of the acres treated with Federalforestry incentive cost-sharing assistance in1979 were in tracts of 40 acres or less.

As a result of its assessment, OTA identifieda range of congressional options to deal withall of the major issues discussed in this chapter(table 4) and in greater detail in chapter II.

— ’

Table 4.—Summary of Policy Considerations

Option Action required

Policy Issue A: Establishing objectives for the management and use of the Nation’s forest resources1. Create a commission to recommend a series of Establish a committee representing timber,

objectives for national timber production for recreation, wildlife, range, water, andcongressional adoption consumer interests

2. Formulate congressional objectives for national Amend the Forest and Rangeland Renewabletimber production Resources Planning Act

3. Direct the administration to formulate specific Administrative action by all relevant agencieslong-range goals for the Nation’s forests, to implement national goals establishedincluding a comprehensive approach to link the by Congressresources of government and the private sector

Policy Issue B: Encouraging research, development, and transfer of forestry-related technologies1. Require periodic assessment of the Forest Amend the Forest and Rangeland Renewable

Service R&D Program for congressional review Resources Research Act of 1978

2. Direct the administration to issue rules, Issue adminstrative rules, regulations, andregulations, and guidelines to exempt joint guidelinesresearch among private firms from antitrustlaws

3. Direct USDA to place greater emphasis on Greater funding for Cooperative Extensionforestry technology transfer under the Service forestry activities, and technologyframework provided by the Forest and transfer functions of the Forest ServiceRangeland Renewable Resources Research Act,the Renewable Resources Extension Act, andthe Cooperative Forestry Assistance Act

4. Establish two or three centers of excellence at Legislation creating the regional researchuniversities to focus on improved utilization of centerswood and wood materials

5. Allocate more research funds to the effects of Greater funding of environmental componentsintensified forest management (including of the Forest and Rangeland Renewableharvesting technology) on the environment, soil Resources Research Act related to timbernutrient levels, wildlife, and other resources management and harvesting

Policy Issue C: Enhancing the role of the United States in international trade of wood products1. Clearly establish the authority, responsibility Administrative directives or legislative action to

and capacity in USDA’s Foreign Agricultural assign responsibility and provide for assistingService (FAS) or the Commerce Department’s in export of paper productsForeign Commercial Service (FCS) to assist theprivate sector in developing internationalmarkets and removing foreign trade barriers inpaper products

2. Direct the U.S. Trade Representative to give Congressional directive which may requirepriority to identification and negotiation of legislative action or statutory amendmentsreductions of tariffs and quotas that restrictU.S. exports of forest products

Impact of option— .

Would provide recommendations to Congress asa basis for establishing national timberproduction goals and objectives and abenchmark for timber managementappropriations

Would provide targets for USDA’s ForestService to develop programs for timberproduction, provide guidance for other Federalagencies to achieve national goals, and helpthe private sector integrate its activities withGovernment action

Would extend Government planninf for timberproduction and forest products trade to allrelevant agencies, not just the Forest Service

Would enable Congress to evaluate the Federalresearch budget with respect to nationaltimber production objectives

Would permit private firms to participate in jointresearch ventures aimed at implementingnational timber production and wood productstrade objectives

Would accelerate on-the-ground implementationof recent research findings and technologicaldevelopments through the education,information, and demonstration servicesprovided by the cooperative extension system,and the Forest Service

Would provide R&D support for improving woodmaterials

Would facilitate development of environmentallysound management practices, and provide abetter information base about environmentaleffects of silvicultural activities

Would provide assistance to the U.S. pulp andpaper industry in expanding exports of paperproducts (FAS is already responsible forpromotion of solid wood products)

Would focus the trade representatives’ attentionon export problems of the U.S. forestproducts industry

Table 4. —Summary of Policy Considerations (continued)

3.

4.

Option Action required lmpact of option

Direct the administration to improve Administrative action to upgrade statisticalrecordkeeping and statistics on tariffs, quotas, collection and reporting of trade statistics andand other barriers affecting international trade identification of trade barriersin U.S. forest productsAssign responsibility to a specific agency in the Congressional directive or legislativeDepartments of Agriculture or Commerce to amendment, followed by administrative actionmonitor the performance of export tradingcompanies with respect to wood products andrecommend needed changes in the legislationor regulations

Policy Issue D: Improving RPA information for formulating forest policy1.

2.

3.

4.

Direct the Secretary of Agriculture to givepriority to forest inventories in important timberproducing States, and to establish priorityschedules for inventorying important regions

Direct the Secretary of Agriculture to improvethe coordination of the RPA and RCA planningprocesses among agencies of USDADirect USDA to expand its efforts to monitorfuelwood use and landownership patterns atregional and National levels to improve thereliability of RPA data

Direct the Forest Service to provide alternativeprojections of future timber supply and demandas part of the RPA planning process, andidentify the impacts of changes in key variableson demand, supply, and price

Policy Issue E: Identifying timber management needs

Congressional directive and administrativeaction, including budget adjustments

Congressional directive or amendments toRPA and RCA

Congressional directive and administrativeaction

Congressional directive and administrativeaction

1.

2.

Direct the Forest Service to place greater Congressional directive and administrativeemphasis on hardwood management action to emphasize intermediate standopportunities treatment and hardwood silviculture

Direct USDA to undertake a “potential Congressional directive and administrativeforestland study” to identify extent of marginal, actionerosive, or reverting agricultural land that maybe better suited for timber production than cropor other agricultural uses

Policy Issue F: Establishing public and private management priorities

the

1. Direct the Department of Treasury, in Congressional directive to the Secretary of thecooperation with the Forest Service, to report to Treasury, and possible amendments to theCongress on effectiveness of current tax Internal Revenue Codetreatments in encouraging timber management

Would systematically identify and report onexisting and developing barriers to” U.S. forestproducts

Would enable Congress to evaluate theeffectiveness of the Export Trading CompanyAct in strengthening the U.S. position ininternational trade in wood products

Would provide timely information in States withlarge and changing inventories, therebyimproving the data base for Forest Serviceprojections and timber management programsand budgets

Would ensure that uniform treatment andemphasis is given to forest lands by agenciesof USDA in planning documents

Would provide information about theconsumption and impact of fuelwoodremovals and landownership changes on thetimber resource and implications of thesetrends for public policy

Would provide Congress with information thatreflects a range of possible futures on whichto formulate policies, rather than single-pointestimates or “most-likely scenarios” as isnow the case

Would provide for incremental gains in timber.quality and quantity on private lands withoutmajor expenditures required for intensivemanagement or species conversion. Wouldprovide information needed to “target” publicand private assistance to those lands mostsuitable for intensive management in cost-effective fashion

Would provide better information for formulationof national policies related to agriculture,conservation and forestry assistance onprivate lands

Would establish the extent to which the currenttax system supports timber managementinvestments, and would assess impacts,costs, and desirability of alternative systems

Table 4.–Summary of Policy Considerations (continued)

2.

3.

4.

5.

6.

Option Action required

on private lands, and on alternative strategies(e.g., tax credits to replace capital gainstreatment of timber income and tax incentivesto industry to expand private forestry incentiveprograms)Emphasize Federal assistance programs relatedto research, education, extension, and technicalassistance associated with private nonindustrialforestry

Focus Federal cost-sharing for tree planting toagricultural land that should be retired fromproduction for a protracted period due toerosion; relinquish most other cost-sharingassistance to the private sectorIf general cost-sharing is maintained, direct theSecretary of Agriculture to focus Governmentcost-sharing programs on those private landswhose potential for producing timber is greatestDirect the administration to intensify timbermanagement on suitable Federal landsInvestigate alternative timber management andtimber sales procedures for Federal lands whichwould provide industry with incentives to assureincreased responsibility for intensivemanagement

Appropriations to the Forest Service, theExtension Service, the Soil ConservationService, and other agencies providing forestryrelated information, education, and technicalassistance to private owners

New legislation or amendments to theCooperative Forestry Assistance Act, and theSoil Conservation and Domestic Allotment Actof 1936

Congressional directive and/or legislativeamendments to the Cooperative ForestryAssistance Act and the Soil Conservation andDomestic Allotment Act of 1936

Increased appropriations and congressionaldirectives

Congressional hearings and deliberations,leading to possible legislative enactments andassociated administrative action

SOURCE Office of Technology Assessment

Impact of option

Would place increased emphasis on programsof broad application, leaving the private sectorto determine financial investmentrequirements

Would channel limited Federal funds for cost-sharing to areas where timber productionwould serve multiple public objectives suchas erosion prevention and water pollutioncontrol

Would ensure that Government investments bemade in lands best suited for efficient timberproduction, and that such investments wi l lcontribute to future timber supply

Would accelerate timber growth on suitableFederal lands and increase future yields

Would transfer more responsibility for Federaltimberland management to the private sector,subject to Federal guidelines, policies, andplanning requirements

CHAPTER II

Policy Analysis and Legislative Options

Page

Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29

Possible Congressional Strategies . . . . . . . . . . . . . . . . . . . . . ... 29

Policy Issues ● .. . . . . . . . . . . . . . . . . . . . . . . . 31Policy Issue A: Establishing Goals for the Management

and Use of the Nation’s Forest Resources . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31Policy Issue B: Encouraging Research, Development,

and Transfer of Forestry-Related Technology . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33Policy Issue C: Enhancing the Role of the United States

in International Trade of Wood Products . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35Policy Issue D: Improving RPA Information for Formulating Forest Policy . . . . . . 37Policy Issue E: Identifying Timber Management Needs . . . . . . . . . . . . . . . . . . . . . . . 40Policy Issue F: Establishing Public and Private Management Priorities . . . . . . . . . . 42

CHAPTER II

Policy Analysis and Legislative Options

Introduction

U.S. forest policy has changed dramaticallysince the turn of the century. To counteract thedestructive exploitation of the Nation’s foreststhat resulted from the “cut-out and get-out” log-ging practices of the 1800’s, the Federal Gov-ernment began setting aside forest preservesof uncut timber that later formed the nucleusof what is now the National Forest System.Since then, Federal and State Governmentsalso have become instrumental in conservationprograms aimed at improving the managementof private forests. Since World War II, theforest products industry in particular hasassumed increasing responsibility for promot-ing, advancing, and practicing sound timbermanagement. The private sector’s initiative indeveloping the Nation’s timber resources hasthrust it into a position of leadership in expand-ing the contribution of forest products to theAmerican economy.

Nevertheless, despite the private sector’s as-cendance, Federal and State forest policiescontinue to focus primarily on timber manage-ment and secondarily on economic issues cru-

cial to the forest products industry beyondthose related to timber supply Several FederalGovernment departments and agencies admin-ister programs dealing with resource utiliza-tion, employment, environmental quality,transportation, housing, finance, and interna-tional trade, all of which directly and indirectlyaffect the forest products industry. National-ly, the Forest and Rangeland Renewable Re-sources Planning Act (R PA) of 1974 (PublicLaw 93-378) and its amendment, the NationalForest Management Act (NFmA) of 1976 (Pub-lic Law 94-585), now address timber manage-ment objectives in a broad multiresourceframework. RPA and NFMA, however, con-centrate on land management—as Congressintended—and deal mainly with the U.S.Department of Agriculture’s (USDA) ForestService programs and responsibilities. As aresult, the broader role of forest products in theNation’s economy and in its industrial basecontinues to receive attention in a piecemeal,incidental, and uncoordinated manner.

Possible Congressional Strategies

Two excellent positions—the favorable out-look for domestic timber supplies and theU.S. ’S strong potential for increased worldtrade in wood—together give Congress a rangeof legislative alternatives for revising forestpolicies, Congress may choose from amongfour general strategies to:

1. Relinquish responsibility for nationaltimber supplies and industry developmentto the private sector to meet domestic de-mands so that little government involve-ment and no special incentives are needed. 2,It is assumed that timber supplies are ade-

quate and probably will remain so. Thisstrategy would require modification ofportions of RPA that authorize projectionsof timber supply and demand, reductionsin Forest Service program levels, and nospecial Federal emphasis on increasingforest products exports. Timber manage-ment on Federal lands would revert to itsstatus before the enactment of the NFMA,and the market would determine privateinvestments in timber management andplant expansion,Maintain the status quo, accepting currentlimitations and uncertainties concerning

29

30 ● Wood Use: U.S. Competitiveness and Technology— —

3<

4.,

information in RPA, and make no specialeffort to induce expansion of the forestproducts industry beyond present programlevels. Under this strategy, ongoing effortsfor timber management on Federal andprivate lands would continue, possiblywith incremental changes, but would notbe broadened or significantly changed.Continue to rely on the planning processestablished by RPA as the general guidefor Federal policy, but upgrade the infor-mation base, forest inventory, and timberinventory to support the development ofa wider range of program alternatives andprogram plans.Identify national goals for developing for-est resources to take advantage of futureinternational markets by:●

●

●

improving RPA as indicated in Strategy#3 above,providing aggressive Federal support tothe forest products industry in its effortsto expand its role in world markets, andexpanding U.S. timber supplies throughincreased support of research and tech-nical assistance to private forestry andthrough intensified management of Fed-eral lands.

The degree of congressional action and Fed-eral involvement increases from Strategy #1,which would dismantle the current ForestService planning system and return to theformer decentralized management system, toStrategy #4, which would require more positiveFederal support and commitment to expandingU.S. timber potential and increasing interna-tional trade in forest products.

The magnitude of the economic and socialimpacts of a national strategy to strengthen andexpand the U.S. role in world trade of forestproducts is difficult to forecast accurately, butthe direction of such changes can be antici-pated, Significant expansion of forest produc-tion, improved wood utilization, and modern-ization of old mills and construction of new ef-ficient plants probably would bring increasedprices for forest products in the short run. Inthe long run, however, higher prices couldstimulate more investment in efficient manu-

facturing, forest management, and researchthan would be undertaken under the existingprice structure. As producers shift to more ef-ficient production facilities and more intensivemanagement and harvesting practices, forestproduct prices could be forced downward. Theeffects of price increases on consumers is oftenslight. Wood products in general account forless than 15 percent of the price of the averagehome, with structural lumber and panels inparticular accounting for only 7 percent.1 Thesame is true for many other consumer goods—wood is often only a small portion of the price.

The forest products industry currently em-ploys about 1.7 percent of the full-time laborforce. Expanding production to meet world de-mand for forest Products could increase em-ployment in the industry. The increase maybemodest, however, because modern mills are be-coming less labor-intensive as the industrymoves toward mechanized technologies. Also,employment in the solid wood (lumber andpanel) products sector is subject to wideswings, since production depends on the cy-clical homebuilding industry. Increased par-ticipation in world markets possibly couldcushion this oscillation somewhat, but, as in-ternational economies become more closelylinked through commerce and banking, so haveworldwide economic trends. An expandedU.S. forest products industry role in worldtrade may not significantly buffer its employeesfrom the shocks of recurring recession. In-creased international trade could result in bet-ter price stability for forest products prices,which often dramatically increase as produc-tion attempts to meet pent up demand duringeconomic recoveries.

Expanded production could have environ-mental effects, too. Some observers say that ex-panded export markets could result in “export-ing” the Nation’s soil, fisheries, and wildlifeas well as forest products if good forest prac-tices are not adhered to. If not conducted prop-erly, timber harvesting and intensive forest

1U.S. Congress, Congressional Budget Office, ‘‘Forest TimberSales: Their Effect on Wood Product Prices, ” background paper,May 1980.

Ch. II—Policy Analysis and Legislative Options ● 3 1—. — — . —

management often may change wildlife habi-tats, affect the availability of forage forlivestock, cause erosion, and decrease waterquality. Shorter rotations and greater utiliza-tion of forest residue may deplete soil nutrientsover an extended period of time that could pos-sibly affect future productivity of forest sites,Some timber management practices are incom-patible with some forms of outdoor recreation.While severe environmental damage can beavoided in increased management intensityand residue utilization, some negative effectsprobably are inevitable.

In summary, a program to increase the roleof U.S. forest products in international trademay:

Policy

Discussed below are six policy issues. Undereach are presented key findings, a brief sum-mary of current policy status, and selected leg-islative options for congressional considera-tion.

Policy Issue AEstablishing Goals for the Management and Use

of the Nation’s Forest Resources

There are no clearly stated long-term national goals to guideFederal and State Governments and the private sector in long-range planning for the use and management of the Nation’sforests.

Findings●

●

RPA, as amended in 1976 (NFMA), does notset forth general long-range national goalsfor timber production; it does not require theexecutive branch to develop specific nationalgoals, except for the National Forest System.

In the absence of specific national goals, theRPA planning process lacks a referencepoint for program revision (required by theact every 5 years) and fails to measure suc-cess in improving the use of the Nation’sforest resources.

• increase the supply of timber available toU.S. producers as well as internationalmarkets,

• result in slightly higher employment in theforest products industry,

● increase the U.S. role as an exporter of for-est products, thus improving the balanceof trade,

• slightly increase the price of housing andother consumer products whose produc-tion depends on forest products, and

• cause some deterioration in the environ-mental quality of U.S. forests.

Issues

Ž In addition to the U.S. Department of Agri-culture, (USDA) numerous Federal depart-ments and agencies and State and private in-stitutions play important roles in nationalprograms to improve the management anduse of the Nation’s forests. Among theseagencies and institutions are those that dealwith finance, housing, environmental quali-ty, international trade, and resource manage-ment. Clear national goals are needed toguide these institutions in providing supportfor USDA.

Current Policy Status

The framework for national long-range forestresources planning is based on two statutes,RPA of 1974 and a 1976 amendment to RPA,NFMA.

RPA directs the Secretary of Agriculture toprepare a comprehensive assessment of renew-able resources through 2030, including timber,range, water, fish, wildlife, outdoor recreation,and wilderness, and to update it every 10 years.The Secretary also is directed to formulate aprogram based on the assessment recommend-ing levels of Forest Service activities and to up-date it every 5 years. The assessment and pro-gram serve as guides for Forest Service plan-


ning and aid in the development of annualbudget proposals. Once accepted by Congress,the program becomes the basis for Forest Serv-ice annual reports that accompany the Presi-dent’s budget submissions to Congress. Eachannual report includes a quantitative and qual-itative appraisal of how the administration’sproposed budget meets the needs of the pro-gram. If the budget does not support the policyobjectives or activity levels that the programprescribes, the President is directed to specifythe reasons for proposing different policies orcutting programs, NFMA establishes an elab-orate planning process for the National ForestSystem.

In sum, RPA as amended d i rec t s theSecretary of Agriculture to make an assessmentof the present and future state of the Nation’sforest resources and to formulate a programaccordingly. However, Congress has not pro-vided specific goals to be used in carrying outthis directive. The original RPA containedneither a statement of policy nor congressionalfindings, Findings set forth by NFMA andmore recent policies stated in the Forest Serv-ice’s 1982 Annual Report are very broad andfail to provide clear direction for implementa-tion of RPA’s mandate.

In the absence of congressional guidance, theForest Service has interpreted RPA programrequirements narrowly by focusing on Na-tional Forest System planning and Forest Serv-ice programs. This emphasis has obscured thepotential role of other Government agenciesand of non-Federal lands, which compriseabout 80 percent of the Nation’s commercialforest, in meeting future U.S. economic andsocial needs, In addition, little attention isgiven to public policies that may affect theprivate sector’s ability to compete in worldmarkets, obtain capital to develop timber re-sources, and develop more efficient forestmanagement and wood production techniques,

In short, the business of increasing the Na-tion’s ability to maximize benefits from its im-mense endowment of timber resources tran-scends the Forest Service, yet the responsibility

for assessing and planning for these resourcesis assigned largely to that agency. If the ForestService is to take the lead in advancing U.S.timber production, it must go beyond Federalresource management activities and concernitself with the broader economic issues facingthe forest products industry, as well as withsocial issues that could arise.

As a result of RPA, the Forest Service hasboth an extensive forest resource data base andthe capacity to project future timber needs, Thenext logical step is to use this information toformulate a national strategy for maximizingpotential domestic and world trade benefits af-forded by the U.S. economic position and for-est resource endowment.

A variety of organizations have proposedgoal-setting to foster increased timber produc-tion from U.S. forests. In 1980, the Forest In-dustries Council recommended establishmentof “a national timber productivity goal” aimedat reducing consumer costs and building atrade surplus in wood products. Similarly, arecent conference sponsored by the AmericanForestry Association and 23 other organiza-tions proposed a “national goal for timber,” in-cluding numerical goals for fiber productionto be set through the RPA process.

Congressional Options

Several options are available to Congressshould it determine that national timber pro-duction goals are desirable to promote domes-tic economic, social, and international tradedevelopment,.It could:

1,

2.

3.

Create a commission to recommend goalsfor adoption by Congress as U.S. policy forthe management, use, and economic con-tribution of the Nation’s forests,Formulate clear congressional goals for in-corporation into RPA.Direct the administration to formulatespecific long-range goals for the Nation’sforests, including a comprehensive ap-proach to link the resources of governmentand the private sector.

. . ——

Ch. II—Policy Analysis and Legislative Options . 3 3

Policy Issue BEncouraging Research, Development, and Transfer

of Forestry-Related Technology

Improved harvesting systems could increase the amountof timber recovered from the Nation’s forests.

Findings●

●

●

●

●

●

Research and deve lopment (R&D) inharvesting systems offer great potential forimmediately increasing the amount of woodavailable to the forest products industry.

Nearly 100 percent of the wood brought intomodern mills is utilized, either for productsor energy, but many old mills currently donot achieve optimal use of materials. As ex-isting mills are replaced with technologicallyadvanced facilities, further improvements inproduct yields and energy efficiency areprobable, even though overall utilization ofraw materials cannot increase appreciably.

Expanded research in the utilization of hard-woods and defective timber could further ex-tend U.S. wood supplies.

Additional basic research in wood chemis-try, structure, and mechanical and engineer-ing properties could increase wood’s long-term competitive position relative to othermaterials.

Prior research in silviculture, forest manage-ment, and wood utilization has provided anabundance of on-the-shelf technologies, butmany have not been applied extensively inpractice. Economic factors, resistance tochange, and capital limitations are some ofthe barriers that limit commercialization ofnew technologies. The technology transfersystem for forestry research is not well de-veloped when compared to agriculture, al-though a basic framework to achieve thiswas established by Congress in 1978.

The forest products industry lags behindother basic industries when its R&D fundingis compared to sales volume and outputvalue.

● Inadequate consideration has been given torecent significant increases in the use ofwood fuel and their impacts on traditionalwood products, existing timber stands, andfuture silvicultural practices.


Responsibility for forestry and wood prod-ucts R&D is shared by Federal and StateGovernments, academia, and the private sec-tor. Lines of responsibility are often blurred,however, and one sector’s role is not separatedfrom another. Public agencies and academiagenerally undertake basic and applied re-search, although industry does a considerableamount of basic research as well. Public agen-cies venture into developmental areas wherebroad social gains may be realized and thedevelopment is long term, high risk, and un-likely to attract private research investment,Sometimes public agencies undertake appliedR&D when the commercial sector consists ofsmall enterprises without technical and fund-ing capacity or when R&D will benefit “publicgoods” such as wildlife or recreation,

A major barrier to improved R&D coopera-tion among companies are antitrust statutes.While antitrust laws permit joint research ven-tures that are approved and monitored by theDepartment of Justice, many firms are wary ofworking with competitors for fear of subse-quently being judged in restraint of trade, Thepulp and paper sector is particularly hesitantto join research ventures because of the spateof antitrust suits brought against some majorproducers in the past. While firms in someindustries—such as electronics—have joinedsuccessfully in research consortia, uncertain-ties about Justice Department interpretationcontinue to dampen industries’ enthusiasm forcooperative R&D.

The 1980 RPA assessment proposed $196million for R&D planning for the fiscal year1984 Forest Service budget. Forty-four percentof the funding would be directed toward grow-ing and protecting timber, 27 percent toward


inventory and economic research, 14 percenttoward forest products utilization, and lessthan 3 percent toward harvesting and engineer-ing. The remaining 12 percent would be dis-tributed among recreation, fish and wildlife,watershed management, and surface environ-ment. While appropriations for Forest ServiceR&D have been much lower than the RPAtarget, funding apportionment has followedRPA recommendations closely. In recent years,Forest Service research budgets have declinedfrom $112 million in fiscal year 1982 to $105million in fiscal year 1983. A budget of $101million is requested for fiscal year 1984.

The Forest Service research budget clearlyemphasizes growing, protecting, and inven-torying trees (7 I percent of the proposed RPAR&D budget). While silviculture, management,and forest protection are important means toincrease timber production, improved harvest-ing systems may provide the greatest immedi-ate payoff in extending the Nation’s timbersupply. The RPA assessment seems to under-estimate the potential gains from harvestingand engineering R&D and recommends that itcomprise only 2,8 percent of the Forest Serviceresearch budget.

In 1976, an estimated 1.4 billion cubic feet(ft 3) of usable wood residues were left in theforest after logging, plus an additional 3 billionto 6 billion ft3 of tops, branches, and defectivetimber. These unused residues constitute ap-proximately one-fourth to one-half of the vol-ume harvested, Wood on other sites remainsunused because the land is too environmentallysensitive to harvest with existing technologyand must be discounted from the national tim-ber base, Approximately 185,000 acres of theNational Forest System in the Pacific North-west are in this category. Additional acreagemay be excluded because it is not economicallyfeasible to harvest,

Improved harvesting systems could facilitatethe economical harvest of small tracts and theremoval of small logs. Manufacturing technol-ogies continue to advance, and previously un-usable wood materials and tree species nowcan be turned into products or used for energy.

Historically, harvest system development inthe United States has been isolated from R&Defforts aimed at growing timber and process-ing forest products and has not been adequate-ly supported by either private or public fund-ing. In contrast, Western European and Scan-dinavian countries have developed innovativeha rves t ing t echno logy as a result of well-funded efforts coordinated among the publicand private sectors.

In the absence of a comprehensive R&D pro-gram, the United States has focused largely onindividual machines rather than on integratedharvesting systems designed to fit the timberresource, harvesting requirements, and man-ufacturing processes. Private sector effortsprimarily have taken place by trial and error,in small job shops, and by adaptation of agri-cultural equipment. Increased research on theenvironmental impacts of harvesting can helpguide the future development of machineryand harvesting systems. Research on wildlifeimpacts and possible effects on soil nutrientlevels may be especially critical in the designof systems that remove most woody biomassfrom sites.

Technology transfer is an important but oftenoverlooked component of public R&D pro-grams. Transfer of forestry technology hasreceived less attention than it has in agricul-ture where new innovations are implementedrapidly by farmers through the information,education, and demonstration programs of theCooperative Extension Service. The extensionsystem also is used to disseminate forestryresearch findings, but with comparatively lit-tle funding.

In 1978, Congress strengthened the frame-work for forestry technology transfer by en-acting three laws to further the general policiesand direction set by RPA—the Cooperative For-estry Assistance Act (Public Law 95-313), theForest and Rangeland Renewable ResourcesResearch Act (Public Law 95-307), and the Re-newable Resources Extension Act (Public Law95-306),

These statutes were intended to give technol-ogy transfer and forestry extension higher

priority within USDA structure and amongState and local agencies involved with forestryand agriculture. The laws emphasize rapidcommunication of forestry research and tech-nological information through USDA channelsand through upgrading of Federal assistanceto State and county extension agencies. Fund-ing has been at a low level, however. The Re-newable Resources Extension Program, for ex-ample, was authorized at $15 million annual-ly, but initial funding of $2 million was not pro-vided to the Cooperative Extension Service un-til fiscal year 1982 and it has been cut from theadministration’s proposed fiscal year 1984budget, A small amount of general-purposecooperative extension funds is used for forestryactivities.


Should Congress determine that further ac-tion to encourage R&D and transfer of forestrytechnology is desirable, various options areavailable. Congress could:

1.

2.

3.

4.

5.

Amend either the Forest and RangelandRenewable Resources Research Act orRPA to require periodic assessment of theForest Service R&D program for congres-sional review.Direct the administration to issue regula-tions and guidelines to expressly permitjoint research efforts among firms withoutinterference from antitrust restrictions.Direct the Secretary of Agriculture to placegreater emphasis on forestry technologytransfer under the framework provided bythe Forest and Rangeland Renewable Re-sources Research Act, the Renewable Re-sources Extension Act, and the Coopera-tive Forestry Assistance Act.Establish two or three national researchcenters of excellence aimed at improvedutilization of wood and wood materials.The laboratories could be located at uni-versities with strong supporting depart-ments and could emphasize collaborativeresearch among academia, industry, andgovernment.Allocate more funds to the examination ofthe effects of intensified forest manage-

Ch. II—Policy Analysis and Legislative Options ● 3 5

ment (including harvesting technology) onthe environment, soil nutrient levels, wild-life, and other resources.

Policy Issue CEnhancing the Role of the United Statesin International Trade of Wood Products

The United States has an opportunity to expand its exportsof solid wood and paper products, but a number of trade bar-riers must be eliminated or eased if the U.S. wood productsindustry is to successfully increase its share of world trade.

Findings●

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Rapidly growing global demand and thecomparative advantage of U.S. producersgive the United States a unique opportunityto expand its role as a supplier of forest prod-ucts to world markets. The U.S. advantageis particularly great in pulp and paper.

The character of world trade is changing,and many of the changes place U.S. pro-ducers of all goods and services at a disad-vantage. The growing use by many countriesof nontariff trade barriers and foreign gov-ernment assistance to exporters are detri-mental to U.S. exporters of pulp and paperand solid wood products. Although their usehas declined over the past three decades,many traditional quotas and tariffs remain,and these also hinder U.S. exporters.

World economic condit ions also haveeroded the advantages of U.S. products. Inparticular, the recent global recession andthe strength of the dollar relative to othercurrencies have adversely affected U.S. ex-ports.

Many importing nations see the U.S. solidwood sector of the forest products industryas an unreliable supplier because of its tend-ency to lose interest in foreign markets whendomestic recessions abate.

Foreign perception of the United States asan unreliable trading partner is reinforcedby the U.S. Government’s use of trade sanc-tions and embargoes as a foreign policyweapon.


● Tariffs, quotas, and nontariff barriers inhibitthe increased export of pulp and paper andsolid wood products, but nontariff barriersprobably are the most damaging.


The United Nations Food and AgricultureOrganization (FAO) projects that world de-mand for industrial forest products could be50-percent higher by the end of the century.The United States is one of only a few nationsthat is well positioned to satisfy this demand,but its ability to do so is hampered by a numberof factors, ranging from monetary and foreignpolicies of the Federal Government to productstandards, While the commitment to expandinternational markets for U.S. wood productsmust come primarily from the forest productsindustry, there are a number of ways theGovernment may assist the private sector.

The forest products industry is one of fewbasic industries with a sustainable competitiveadvantantage over foreign producers. Whilethe domestic steel and automotive industrieshave lost their edge in international marketsto Western European and Japanese producers,U.S. wood and paper products are becomingmore competitive. There are several reasonsfor

●

●

●

this: -

U.S. producers can tap abundant renew-able sources of wood that are cheaper thanthose of most other nations;the U.S. wood products industry enjoyslower production costs than most foreignfirms due to lower energy costs, availableskilled labor, and advances in energy effi-ciency; andU.S. manufacturing capacity and access toforests are well developed, - in contrast tomany competitors with remote forests.

However, the ability of the U.S. forest prod-ucts industry to exploit this advantage is lim-ited by world economic conditions, domesticgovernment policies, past industry behavior,and trade barriers, including tariffs, quotas,and nontariff impediments. The most severeand least controllable limitations are world-wide recessions and the strength of the dollarrelative to foreign currencies. The U.S. Govern-

ment’s past use of trade sanctions and embar-goes as instruments of foreign policy also hastended to undermine world confidence in theUnited States as a reliable dealer. Few of thesefactors affect forest products any more thanthey do other exports, but in some cases tariffs,quotas, and nontariff barriers specificallyreduce the competitiveness of the forestindustry.

The U.S. solid wood products sector is con-sidered a rather fickle trader by many foreigncustomers. Historically, U.S. suppliers havetended to lose interest in foreign buyers whendomestic demand for lumber and panels in-creases. While the sector is becoming more ag-gressive in developing foreign markets for solidwood products, the strength of its commitmentduring a sustained economic recovery remainsuntested.

The removal or reduction of tariffs, quotas,and nontariff barriers could provide a long-term stimulus for U.S. forest products exports,Although tariffs and traditional quotas havebeen reduced since the formation of the Gen-eral Agreement on Tariffs and Trade (GATT),many barriers remain. Nearly every majorcountry that imports U.S. wood products leviestariffs or quotas, but these almost always af-fect processed products more than raw mate-rials, Without tariff and quota reductions, theUnited States can expand exports of logs,woodpulp, and rough lumber, but similar ex-pansion of finished lumber, panel products,and paper exports may be more limited.

Negotiation of tariffs and quotas is dealt within GATT by the U.S. Trade Representative. In-creasingly, GATT negotiations have focused onnontariff barriers, too, but GATT codes onthese barriers are often vague and difficult toenforce. Nontariff barriers, however, may bea more potent deterrent to increased U.S. woodproducts exports than tariffs and quotas. Re-duction of nontariff barriers probably can behandled best through bilateral negotiationswith specific nations or trading associationsand will require both government and industryinvolvement. The National Forest Products As-sociation recently began a cooperative effortwith the USDA Foreign Agricultural Service

Ch. II—Policy Analysis and Legislative Options ● 3 7—.——. —

(FAS) to improve market acceptance and re-duce trade barriers for U.S. lumber and panelproducts. There is no comparable program forpulp and paper products, although both FASand the Department of Commerce’s ForeignCommercial Service are permitted to providethis assistance.

The formation of export trading companies,authorized by the Export Trading CompanyAct of 1982 (Public Law 97-290), may improvethe competitive position of the U.S. forest prod-ucts industry in international markets. The actallows certain exemptions from antitrust lawto permit American firms, including banks, toband together to export overseas. Some westcoast forest products firms have expressed in-terest in forming export trading companies, butwhether U.S. producers will be able to dupli-cate the success of the Japanese is unknown.


Several options are available to Congressshould it determine that expansion of U.S.wood products exports is in the national in-terest. It could:

1.

2.

3.

4.

Clearly establish authority, responsibility,and capacity within FAS or the ForeignCommercial Service to assist the privatesector in market development and reduc-tion of nontariff barriers to trade in pulpand paper products.Direct the U.S. Trade Representative togive high priority to identifying andnegotiat ing reductions in tar iffs andquotas that most severely limit increasedU.S. exports of wood products.Direct the FAS, Foreign Commercial Serv-ice, Forest Service, or other agency tomaintain current information on tariffs,quotas, and nontariff barriers affectingtrade in wood products.Direct the Forest Service, FAS, ForeignCommercial Service, or other agency tomonitor the effect of regulations under theExport Trading Company Act and to iden-tify legislative changes needed to makeU.S. wood products export trading com-panies competitive in world markets.

Policy Issue DImproving RPA Information

for Formulating Forest Policy

The formulation of forest policy requires up-to-date nationallevel information about forest acreage, inventories, and growthtrends and realistic assumptions about future demands. Im-provement in the current system for projecting timber sup-ply and demand is needed if decisionmakers are to have ade-quate information for the design and funding of timber man-agement programs and assistance to private landowners.

Findings●

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More frequent inventories are needed iftimely, reliable forest information is to beprovided to Congress in RPA assessments.Each State is surveyed on the average ofonce each 12 years, but in some importanttimber-producing States the survey cycle islonger, As a result, national information isbased substantially on estimates rather thanactual, up-to-date field data.

Inventories and growth trends for U.S. for-ests may be different in reality than thoseshown in the 1980 RPA assessment becauseof outdated survey information. Past na-tional assessments consistently have under-estimated growth and inventories, both inthe national aggregate and on a per-acrebasis. Uncertainties surround current andprojected growth trends and inventories inthe 1980 RPA assessment. In some regionsand for some tree species, estimates may beoverstated; in others, understated.

A major uncertainty concerns the revivaland rapid increase of wood used for fuel—es-pecially for residential home heating. Thephenomenon is so recent that adequate dataon consumption, sources, and trends is lack-ing. Recent Forest Service and Departmentof Energy surveys indicate that residentialfuelwood use increased several times morerapidIy in the late 1970’s than was antici-pated. The proportion of fuelwood that camefrom industrially important growing stockis not clear.

Several trends in landownership patternsmay affect future timber production. Farm-


ers own a declining proportion of the for-estland base, while “miscellaneous” privateowners are increasing in numbers. Less than30 percent of the private forestland has beenheld by the same owner for 30 years or more.Also, about one-fifth of all private forests isin parcels that are economically less efficientto manage. Ownership data is improving,but significant gaps remain, especially in theSouth where much of the private forestlandis located.

Better information about the on-the-groundeffectiveness of USDA private landownerassistance is needed to evaluate Governmentpolicies and assess agency programs. SeveralUSDA programs are oriented toward farm-ers, who own a declining proportion of theforestland base.

Forest Service projections of timber supplyand demand may overstate the future scar-city of timber. These projections are madeusing survey data and extrapolations of pasttimber growth, landowner behavior, and therelationship of demand for wood productsto general levels of economic activity andpopulation. More complete analysis of thesensitivity of these projections to changes inkey variables is needed for Congress to eval-uate proposed Forest Service timber man-agement programs and budgets.


The collection and compilation of forestresource information has been a continuingfunction of the Forest Service since 1928,through congressionally authorized cooper-ative forest surveys in all States. Informationrequirements have increased in recent yearsdue to the passage of RPA.

Through the Forest and Rangeland Renew-able Resources Research Act, Congress ex-plicitly acknowledged the need to “ensure ade-quate data and scientific information” in thedevelopment of RPA assessments. It directedthe Secretary of Agriculture to “make and keepcurrent a comprehensive survey and analysisof the present and prospective conditions ofand requirements for renewable resources of

the forests and rangelands of the UnitedStates . . . .“

Provision of up-to-date national forestlandstatistics and identification of trends areperplexing problems for the Forest Servicebecause of the timing of State surveys. Forestsurveys are statistically reliable, but they areconducted only periodically and irregularly inmany States. As a result, the 1980 RPA assess-ment was based in part on adjusted field data,since 22 State surveys were compiled before1970. Scheduling of forest surveys acceleratedtemporarily after the 1978 Research Act, butrecent budget cutbacks have again slowed theinventory schedule.

Up-to-date survey information is crucial,especially in States where non-Federal landsmake an important contribution to timber sup-plies, particularly in the South and the East.Private forestlands comprise 72 percent of thecommercial forestland base and 80 percent oftimber supplies and are expected to play an in-creasingly important role in future forest pro-duction, Most of this land is not owned by theforest products industry, and is subject togreater fluctuation in use and ownership thanare public and industrial lands. The RPA esti-mates that, between 1962 and 1977, privatenonindustrial lands declined by 26 millionacres and forest industry holdings increasedby 7 million acres, The net decline in privatelands was 19 million acres. In some States,State and county lands also play an importantrole, particularly in the North Central andNortheastern regions.

Better land ownership data could assist informulating and evaluating the effectiveness offorest resource policy. The Forest Service ob-tained national and regional information aboutforestland owners incidentally from a 1978USDA rural land ownership survey, but thestudy was not aimed at forest owners and, asa consequence, provided insufficient informa-tion on owner motives and financial capabili-ty. As a result, comprehensive ownership datais available from only 11 Northeastern andMiddle Atlantic States where the Forest Serv-ice has undertaken detailed surveys, Whileownership information has improved, critical

Ch. II—Policy Analysis and Legislative Options ● 3 9

gaps remain, particularly in parts of the Southwhere nonindustrial lands predominate,

Upgraded information about wood fuel usealso is needed, since it now accounts for morethan half of the wood consumed in the UnitedStates. The forest products industry burnsabout two-thirds, obtained primarily frommanufacturing byproducts such as residuesand pulping liquors. However, use of residen-tial fuelwood has increased dramatically andnow amounts annually to over 40 million oven-dry tons. Much of this tonnage probably comesfrom industrially inconsequential sources,although data is fragmentary. If fuelwood usecontinues to grow, however, consumers couldcompete with industrial markets in some areas,unless steps are taken to integrate wood fueluse into forest management and industrialwood systems,

Because of the overriding importance of non-Federal lands, closer coordination and greaterconsistency are needed between the RPAassessment process and a parallel USDAassessment and program conducted under theSoil and Water Resource Conservation Act(RCA) of 1978 (Public Law 95-192). RCA islimited to non-Federal lands and is orientedtowards agricultural activities, but privateforestlands are included under both RPA andRCA. Moreover, some key elements of Federallandowner assistance programs are providedby agricultural agencies such as the Soil Con-servation Service, the Agricultural Conserva-tion and Stabilization Service, and the Coop-erative Extension Service.

Because of the recent origin of the RPA andRCA processes, it is not surprising that incon-sistencies in their initial assessments have oc-curred. The Forest Service and the Soil Con-servation Service have different missions andtherefore different orientations and purposesin compiling forestland information. However,estimates of non-Federal forestland providedto Congress in the 1980 RPA assessment andthe initial RCA assessment differed by tens ofmillions of acres—a discrepancy too big to beignored. Most of this discrepancy is attribut-able to different land classification systems

used by the two agencies, but some of it prob-ably reflects the timing of field surveys—all ofthe Soil Conservation Service data was col-lected during 1976-77, when only part of theForest Service data was current. USDA plansto use common non-Federal forestland figuresin future assessments, and the two agencies areworking to resolve the discrepancy.

Forest Service planning and budget requestsfor timber management programs on publicand private lands are affected by projectionsof future need for wood. The most recent For-est Service projection made in the late 1970’sshows increasing scarcity of timber in the next50 years. This forecast is based partly on out-dated (or adjusted] survey information, extrap-olations of past trends in landowner behaviorand timber management, and a wide range ofassumptions regarding future economic con-ditions that are subject to significant change,particularly over the long time periods used inthe forecast. Some analysts argue that theseprojections overestimate demand largely as aresult of assumed high demand for housing andan overstatement of the gross national prod-uct growth, Timber growth trends are uncer-tain. Budget requests based on these projec-tions may, as a result, place undue emphasison timber management. Because it is difficultto forecast future demand and supply with anyaccuracy, projections based on a single set ofassumptions are of limited value,


Several options are available to the Congressif it decides that improrved information isneeded for policy formulation. It could:

1.

2.

Direct the Secretary of Agriculture toschedule State forest surveys to ensure thatcurrent information is available in key for-estry States (those with a predominance oftimber and changing conditions) for RPAassessments. Direct the responsible USDAagencies to identify options and costs forupdating information on forestland con-

ditions prior to production of an RPAassessment.Direct the Secretary of Agriculture to iden-tify and evaluate options for coordinating


3.

4.

and improving consistency of RCA andRPA assessments and programs affectingnon-Federal forestland.Direct USDA to expand its efforts tomonitor fuelwood use and landownershippatterns at regional and national levels toimprove the reliability of RPA data.Direct the Forest Service to provide alter-native projections of future timber supplyand demand and to identify the effects ofchanges in key variables on projectedtimber demand, supply, and prices.

Policy Issue EIdentifying Timber Management Needs

U.S. timber supplies can meet probable demand for forestproducts through 2030 if current management trends con-tinue. Application of existing management technologies couldincrease timber growth far beyond current levels, but institu-tional, technical, and financial barriers must be overcome first.

Findings

Timber harvest levels 50 percent greaterthan those of the high-demand period of the1970’s can be sustained for several decadeswithout major changes in existing manage-ment technologies for growing, harvesting,and processing wood according to ForestService base-level supply projections.

While timber growth presently is increasingat a steady rate, other factors could signifi-cantly alter the future supply situation. Onefactor is wood fuel consumption, which re-cently has risen dramatically, although cur-rent data is inadequate to assess the implica-tions for industrial timber supplies. Anotherfactor is forestland conversion to nontimberuses. Most acreage losses have been on pri-vate lands as a result of shifts to agriculturaland urban uses, USDA statistics vary signif-icantly as to the exact magnitude of the shift.Wilderness set-asides on Federal lands havecontributed somewhat to the decline in com-mercially available timberland, but wilder-ness areas generally consist of less produc-tive, inaccessible sites, so that economical-ly exploitable timber volumes are small inrelation to the acreage removed from pro-duction.

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Timber management practices applied todaywill not have an appreciable effect on timbersupplies until after 2010. Management pro-posals to reduce projected scarcities will re-quire capital investments in the range of$10 billion to $15 billion over a 50-yearperiod, mostly for softwood reforestation onprivate nonindustrial lands.

In the absence of production goals for U.S.forestry, the need for investments of thismagnitude is not well established, ForestService models of long-range timber demandand supply predict increasing timber scar-cities, particularly for softwoods, but themodels use liberal demand assumptions andconservative supply assumptions, Uncer-tainty about future wood demand is a ma-jor constraint to private investment and castsdoubt, too, on the need for public expendi-ture.

Management programs to increase softwoodsupplies may need to be reevaluated so thatless costly alternatives (e.g., improvedmanagement of existing hardwoods) receivemore consideration for private nonindustrialforest (PNIF) lands.


Increasing the productivity of U.S. forestshas been the major purpose of forest policy fornearly 80 years. Fears of possible timber faminehave not panned out, in part because of the suc-cess of public programs and private initiativesto conserve supplies, reduce the hazards of fire,insects, and disease, and improve the utiliza-tion and management of forestland. U.S. for-estland today provides more wood for indus-trial use than that of any other nation, eventhough the United States ranks third in exploit-able growing stock.

The domestic timber supply situation has im-proved dramatically over time, It probably willcontinue to improve, affording opportunitiesto expand the contribution of U.S. forests tothe economy. Growth trends are highly favor-able for greater production, even assuming thecontinuation of present management practices,Increased timber harvests over the current

Ch. II—Policy Analysis and Legislative Options ● 4 1—

level of about 13 billion ft3 per year are bio-logically possible on a sustained basis. Net an-nual roundwood growth, now over 20 billionf t3 has been increasin g since 1952, althoughthis is expected to taper off in the decades tocome unless appropriate management prac-tices intervene. Standing inventories are in-creasing rapidly, from 600 billion ft3 in 1952to 711 billion ft3 in 1976, and are expected tocontinue to increase. Supplies of preferredspecies, especially high-quality softwoods, aretighter, however, and there are important re-gional differences.

Technological advances also favor increasedproduction and have contributed to the im-proved timber supply situation. More efficientmanufacturing processes have broadened therange of usable materials to include lessvaluable and underutilized species such as low-grade hardwoods and habe enhanced the pros-pects for use of “nongrowing stock materials”[timber not counted in the standing inventoriescited above). I n addition, developments in har-vesting technology’ have improved recovery ofmaterials previously’ left on harvest sites,although comparatively low levels of R&D) havehindered progress toward integrated harvest-ing systems.

Although timber supply prospects are on thewhole optimistic, there are some importantcaveats, For example, residential fuelwoodconsumption skyrocketed during the 1970’s.Most fuelwood is thought to come fromsources that are not important to the industry,but high levels of fuelwood removal for a pro-tracted period could tighten industrial suppliesif appropriate management strategies are notadopted. Commercial forest acreage has de-clined recently, mainly because of the conver-sion of forestland to agriculture and develop-mental uses; continued decline is anticipated.Moreover, PNIF land, on which the industryincreasingly depends for supplies, typically isnot owned primarily for timber production,and some of this land is in parcels too smallto benefit from “economies of scale” in man-agement and harvest.

Management technologies applied to U.S.forests could greatly increase growth, but thisis a long-term proposition because of the longgrowing cycle of trees. Most of the 482 millionacres of commercial forestland in the UnitedStates is not managed primarily for timbergrowth; intensive timber management (applica-tion of planned treatments to forestland to in-crease production of industrial roundwood) isincreasing but it is not widely applied.

Because tree crops take at least 30 years togrow, investment decisions must be made sev-eral decades before harvest amid uncertaintyabout future timber markets and the futurestate of technology. Intensive timber manage-ment opportunities currently identified by theForest Service were sought in response to pro-jections of increased timber scarcity (primari-ly softwoods) over the next 50 years.

To reduce the projected scarcity, “economicopportunities for management intensification, ”or lands where investments would yield 4 to10 percent or more in constant 1977 dollars,have been identified on 30 to 35 percent of thecommercial forestland base. These opportuni-ties will be expensive to take advantage ofbecause they would require a total investmentof $10 billion to $15 billion over a 30- to 50-yearperiod, but they could increase growth signif-icantly on treated lands 30 to 50 years fromnow. Nearly all of the identified opportunitiesinvolve reforestation or conversion of hard-wood timber stands to softwood, mostly onPNIF lands.

Shifts of land between agriculture and for-estry are important but difficult to assess interms of acreage available for timber manage-ment. During the 1970’s, agricultural land re-quirements grew so quickly that USDA con-ducted a study identifying “potential crop-land’’–land not used for crops that could beeconomically brought into crop production, in-cluding about 31 million acres of private for-estland thought to have a high or medium po-tential for crop use. A similar assessment ofmarginal or highly erosive cropland that could


be more suitably used for timber growing thancrop production has not been undertaken ona comprehensive basis, but it could help deter-mine long-term priorities for agriculture con-servation programs if current grain surplusesand cropland set-aside programs continue. Inaddition, some marginal agricultural landreverts naturally to forestland each year but isusually poorly stocked with commercial spe-cies for quite some time, Because tree plantingon agricultural land usually is cheaper than onharvested sites, determining the extent of suchacreage and its management opportunitieswould be useful.

Management needs are difficult to establishwithout clarifying the role that wood can,could, or should play in the domestic and inter-national economy. Economic models, such asthose the Forest Service uses to project futuresupply and demand for wood, may be moreuseful for identifying alternative strategies forachieving goals once goals are set, than for es-tablishing the goals themselves. The ForestService demand projections, for example, havebeen criticized for overstating likely future de-mand for wood and for understating likely sup-ply—and therefore may not provide a suffi-ciently accurate basis for formulating poli-cies for timber management programs and forbudgeting public or private expenditures.


If more refined information about timbermanagement needs is considered an importantobjective, Congress could:

1.

2.

Direct the Forest Service to supplement itsprevious assessment of “economic oppor-tunities” for timber management with aseparately conducted analysis of hard-wood management opportunities to gainincremental improvement in timber quan-tity and quality without the need for ex-pensive stand conversion and planting ofsoftwood species.

Direct USDA to undertake a “potentialforestland” management study to deter-mine the extent of marginal or erosive agri-cultural land that may be better suited for

timber production than crop or other agri-culture uses.

Policy Issue FEstablishing Public and Private

Management Priorities

Timber growth and harvest can be increased on all forestland ownerships. However, the potential for increased out-put and the means for stimulating production differ amongthe three major ownership groups.

Findings

Government incentives for increased timberproduction on PNIF lands are modest andtheir results are complicated by diverse land-owner attitudes, financial capabilities, andobjectives. Greater emphasis on small-scaleforestry research, technical assistance, ed-ucation, and information programs probablywould provide a broader stimulus to produc-tivity than increased financial assistance,given the limited Federal funds available.

The private sector will play the key role infunding timber management on its land, al-though government incentives may continueto supplement private efforts. The forestproducts industry contributes significantlyto encouraging PNIF management throughtechnical assistance programs and leasingarrangements; industry efforts of this sortcould accelerate if Federal funding remainslow, Several financial institutions now offertimberland investment programs that maychannel additional capital into forest man-agement,

To help ensure adequate future wood sup-plies, the forest products industry could in-tensify management on its own lands, whichgenerally are located near mills and arehighly productive, Existing tax laws allow-ing capital gains treatment of timber incomeseem to have encouraged the industry to un-dertake more intensive management of itslands, although a conclusive cause-effectrelationship between this tax incentive andmanagement intensity has not been estab-

Ch. II—-Policy Analysis and Legislative Options • 4 3

lished. Many nonwood-based corporationshave substantial forest holdings that also af-ford added management opportunities.

• Timber production on Federal lands couldbe increased in the long run through moreintensive management of lands allocated tothis purpose, The RPA program endorsed byCongress proposed upgraded managementon productive national forest land by 2030,but its implementation will depend onwhether adequate Federal funds are appro-priated.


U.S. timber inventories have been increas-ing for several decades and will probably con-tinue to do so under current levels of manage-ment. Supplies could be increased more rapid-ly, however, through greater implementationof existing intensive management technologies.Opportunities for achieving more intensivemanagement vary among the three major own-ership groups—private nonindustrial, forestproducts industry and Federal–because of dif-fering ownership objectives, financial re-sources, and land characteristics such as poten-tial productivity, tract size, and location,

PNIF lands comprise 58 percent of the com-mercial timberland in the United States andcontribute nearly half of the raw material usedby the forest products industry. In the East,where 90 percent of the PNIF lands are located,they contribute an even larger portion of timbersupplies,

Prospects are good for increased productionfrom PNIF lands, Growth on these lands is in-creasing more rapidly than on other owner-ships, and PNIFs generally can be expected toenlarge their contribution to timber suppliesunder current levels of management, Substan-tially greater timber supplies from PNIFs couldbe achieved in the long term through more in-tensive management, “Economic opportunitiesfor management intensification” have beenidentified on 79 million to 124 million acres ofPNIF lands, but these opportunities would beexpensive ($6 billion to $9 billion) to imple-ment. In addition, impediments such as market

uncertainties, diverse landowner objectives,lack of awareness about investment opportu-nities, and small tract size may inhibit manage-ment investment.

Federal assistance to PNIF landowners in-cludes research, education, technical assist-ance, and direct financial assistance throughtax incentives and cost-sharing programs. Sev-eral USDA agencies in addition to the ForestService provide service—i.e., the AgriculturalStabilization and Conservation Service, the SoilConservation Service, the Cooperative Exten-sion Service, and the Farmers Home Admin-istrat ion, Some programs channel aid toprivate owners through State forestry agencies.An interagency agreement on forestry definesindividual agency responsibilities and coor-dination of forestry-related assistance.

“The three 1978 laws that placed increasedemphasis on State and private forestry were theCooperative Forestry Assistance Act, the For-est and Rangeland Renewable Resources Re-search Act, and the Renewable Resources Ex-tension Act. Still, the executive branch hasgiven State and private forestry a low priori-ty, proposing a 60-percent budget reduction forfiscal year 1984 in Forest Service support forState and private activities.

Several Federal tax provisions and cost-sharing programs provide t imber-relatedbenefits to PNIF owners. Capital gains treat-ment of timber income is by far the biggest ofthese (entailing a subsidy of about $180 millionto individuals in fiscal year 1983) but does notrequire tax savings to be reinvested in manage-ment. Other tax incentives, such as tax creditsfor reforestation costs, explicitly require man-agement, but on a limited basis and at far lessFederal cost ($10 million to individuals in fiscalyear 1983).

Direct cost-sharing is provided by the For-estry Incentives Program (cut from the pro-posed fiscal year 1984 budget) and the Agricul-tural Conservation Program, administered bythe Agricultural Stabilization and ConservationService in conjunction with the Forest Service.A criticism of these cost-sharing programs isthat they may be used by people who would


undertake t imber management activit ieswhether or not Federal funds were available.

Historically, the cost-sharing program thathad the greatest impact on private nonindus-trial tree planting was not a forestry program,but USDA agricultural program called the soilbank. Established by Congress in 1954, the nowdefunct soil bank paid farmers to keep someof their land out of production for at least 10years and also provided cost-sharing assistancefor tree planting. Although not a forestry pro-gram per se in that its key purpose was to re-duce erosion and grain surpluses, PNIF landplanted in trees during the high point of thesoil bank era (1958-62) has never been sur-passed. Soil bank plantations currently arereaching maturity in the South and are impor-tant to the region’s timber supplies.

The present agricultural situation may be op-timal for retiring some land from crop pro-duction for a protracted period. Grain sur-pluses are enormous, and erosion levels onsome land are very high, especially on vulner-able cropland brought into production duringthe high demand years of the 1970’s. In March1983, USDA announced that farmers had en-rolled 82 million acres of cropland for conser-vation use in its Payment-in-Kind (PIK) Pro-gram. The program is temporary, but longerterm conservation programs are under consid-eration. Thus, there may be opportunities tomeet national objectives related to farm in-come, soil conservation, and forestry throughan extended program to encourage farmers toplant trees on highly erosive cropland bettersuited for timber production. Planting costs onidled cropland are less than on harvested areaswhere stand preparation must be conducted,but annual payments to farmers under the soilbank program were high. From a timber man-agement perspective, a soil bank approachwould not be cost efficient, but the cost maybe more acceptable if other public objectivesare taken into consideration. Alternative sys-tems for cost-effective agricultural land retire-ment now under consideration do not neces-sarily entail annual payments to farmers.

The private sector may provide more assist-ance to PNIF owners in the future if Federalbudgets stay low, Many forest products firmsconduct programs to expand wood supplies intheir procurement areas by providing advisory,financial, and operational services to localnonindustrial landowners. Some firms leasePNIF lands under long-term contracts that pro-vide owners with regular income while theirlands are managed for timber production.

More recently, financial institutions havebegun marketing limited partnerships thatcould raise investment capital for timbermanagement on private lands while providingtax shelters and future income to the investors.The effect of these limited partnerships onprivate forestland productivity is not yetknown.

The forest products industry owns 14 per-cent of the Nation’s commercial forestland and44 percent of the highly productive commer-cial land—more than any other ownershipgroup. Industry lands provide about one-thirdof the Nation’s commercial harvest. Industriallands have important potential for increasingU.S. timber production because they have highnatural productivity, lie in large contiguousparcels, and tend to be located near mills. Fur-thermore, the large forest products firms thatown the most industry land generally have ac-cess to investment capital, and timber produc-tion is the major landownership objective ofthese firms. Evidence suggests that industrylands are being managed more and more in-tensively, but a significant portion are stillnominally managed or unmanaged altogether.

Capital gains treatment of timber income,which cost the Department of the Treasury$225 million in foregone corporate taxes infiscal year 1983, may have encouraged indus-try investments in timber management. How-ever, a direct cause-effect relationship is notclear since beneficiaries of the provision arenot required to reinvest their tax savings inmanagement, Other factors may have also con-tributed to the increase.

Ch. II— Policy Analysis and Legislative Options ● 4 5

Federally owned lands comprise 18 percentof the Nation’s total commercial forestland andprovide about 15 percent of the timber har-vested. Not all public lands classified as ‘‘com-mercial” are managed for timber production.Some have been allocated to other uses suchas recreation or wildlife habitat. In addition,wilderness set-asides have removed 10. z mil-lion acres of Federal commercial acreage fromtimber production, and management activitiesare restricted on additional acres that are be-ing considered for wilderness. The law allowssome flexibility for temporary increases intimber harvest on Federal commercial lands,but statutory changes would be needed to al-locate more land to timber production undermultiple use planning processes.

The Forest Service maintains that all eco-nomic opportunities for management intensi-fication on national forest land are currentlyscheduled or planned, Although details havenot been provided, such management wouldincrease timber production on Federal landsin the future, but would require a significantincrease in funding for planting and timberstand improvement.


Numerous options are available to Congressshould it determine that Federal incentives fortimber management need to focus on the mostcost-effective lands. Congress could:

1. Direct the Department of the Treasury, incooperation with USDA, to report on theimpact and effectiveness of current taxtreatments and tax incentives in encour-aging timber management and on alterna-tive tax approaches for congressional con-

2.

3.

4.

5.

6.

sideration, Alternative approaches couldinclude expanded ‘‘intensive manage-ment investment tax credits to replace orsupplement current capital gains treat-ment of timber income or tax incentivesto encourage expansion of private sectorlandowner assistance programs.Increase Federal PNIF assistance pro-grams for research, education, extension,and technical assistance programs that aregeneral in application,Focus Government programs for directFederal cost-sharing to landowners whereimportant conservation objectives wouldbe served by tree planting, such as onerosive or marginal cropland ill-suited forcrop production, while relinquishing mostcost-sharing assistance on other lands tothe forest industry and financial institu-tions that are better able to determine costeffectiveness,If general cost-sharing programs are main-tained, direct USDA to establish prioritiesfor Federal cost-sharing assistance to PNIFlandowners based on factors such as tractsize, potential productivity, and proximi-ty to timber markets,Direct the administration to intensifytimber management on Federal lands al-located to timber production. Appropriatethe funds required to implement intensi-fied management programs,Initiate hearings and other deliberationsto investigate alternative timber manage-ment and timber sales procedures for Fed-eral lands, such as a greater industry rolein timber management activities in returnfor harvesting privileges.

CHAPTER Ill

World Markets for U.S. Wood Products

—

Contents

PageSummary . . . . . . . . .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49

World Markets for U.S. Forest Products .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. 50Established Markets for Pulp and Paper Products . . . . . . . . . . . . . . . . . . . . . . . . . . . . 52Established Markets for Solid Wood Products and Raw Materials . . . . . . . . . . . . . . 57Barriers to U.S. Trade in Wood Products . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 60Tariffs and Traditional Quotas . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 60Nontariff Barriers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 62Other Factors Affecting Exports of Wood Products . . . . . . . . . . . . . . . . . . . . . . . ... 64U.S. Imports of Forest Products ..... ...... . . . . . . . . . . . . . . . . . 66Solid Wood Products . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 67Pulp and Paper Products . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 68

List of Tables

Table No. Page

6. Pulp and Paper Trade Patterns, by U.S. Region, 1976 . . . . . . . . . . . . . . . . . . . . . . . 516. Solid Wood Trade Patterns, by U.S. Region, 1976 . . . . . . . . . . . . . . . . . . . . . . . . . . 517. U.S. Exports of Solid Wood Products, 1981. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 578. U.S. Imports of Solid Wood Products, 1982 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 679. U.S. Imports of Pulp and Paper Products, 1982 . . . . . . . . . . . . . . . . . . . . . . . . . . . . 68

List of Figures

Figure No.2.3.4.5.

6.

7.8.9.

U.S.Us.

Value of U.S. Exports of Wood Products,U.S. Balance of Trade in Wood Products,Woodpulp Exports by Area of Destination . . . . . . . . .Paper, Paperboard, and Converted

of Destination . . . . . . . . . . . . . . . . . . . . . .Pulpwood Cost at Mill Site by Volume,

1964-80 . . . . . . ., 1964-80 . . . . . . .

Products Exports,. . . . . . . . . . . . . . . .Under Bark Basis,

Ovvhead, Estimated at 5 Percent, Included . . . . . . . . . . . .Tonnage of U.S. Wood Imports, by Product, 1950-79 . . . .Value of U.S. WoodRelative Importance

. . . . . .

. . . . . . . . . . . . . . .

. . . . . . . . . . . . . . .by Area.... . . . . . . . .Current General. . . . . . . . . . . . . . .. . . . . . . . . . . . . . ... . . . . . . . .Products Imports, 1964-80 . . . . . . . . .

ofCanadian Softwood Lumber Imports, 1950-82 . . . . .

. . . ,

. . . .

. . . .

. . . .

. . .

. . . .

. . . .

. . . .

Page515253

54

55666767

CHAPTER Ill

World Markets for U.S. Wood Products

Summary

The United States is a major importer andexporter of wood products. Since 1950, U.S.exports of forest products, in constant (de -flated) dollars, have risen 400 percent, whileimports have increased by roughly 75 per-cent. Although the United States is still a netimporter of forest products, the balance-of-pay-ments deficit has narrowed, particularly since1978. This is due primarily to increased exportsof pulp and paper products and decreased im-ports of lumber caused by a precipitous declinein the housing market.

Growth in world demand for forest prod-ucts may result in a 50-percent increase inconsumption by 2000. In the next several dec-ades, therefore, the United States has m a n yunique opportunities to increase its exports,particularly in paper products. It has both themanufacturing capacity and the forest resourceneeded to expand production, and, unlike thatof many traditional wood-producing nations,its inventory is increasing and accessible. Thisgives the U.S. forest products industry a sus-tainable advantage in world markets. Many ofthe world’s forests, especially in Latin Americaand the eastern Soviet Union, are remote andinaccessible, and the investment needed tobring these forests into commercial productionmay be prohibitive, Southeast Asia, anothermajor wood-producing area, has been heavilydeforested, and harvesting rates that prevailedin the 1970’s probably are not sustainable.

Most of the world’s increased forest prod-ucts consumption probably will come f romindustrialized nations. Major foreign marketsfor U.S. forest products in the future are West-ern Europe and Japan, which will probably rely

more heavily on U.S. woodpulp and paper. Pro-motion of U.S. homebuilding techniques maybe instrumental in expanding markets for lum-ber and panel products as well. U.S. producerswill have little trouble increasing exports ofraw materials such as logs, wood chips, wastepaper, and woodpulp, The United States alsois in a favorable position to expand its exports

of linerboard.

A wide variety of trade barriers, however,will limit the ability of the United States t oexpand its exports of processed products suchas lumber, panels, and paper. Efforts to easeor eliminate some of these barriers are under-way, although there is little likelihood that theUnited States will gain free access to WesternEuropean and Japanese markets. In addition,U.S. exporters are at a disadvantage on worldmarkets due to the overvaluation (strength) ofthe dollar against foreign currencies andworldwide recession, Improvements in thesefinancial conditions probably will stimulate ex-ports of wood products even without substan-tial progress in reducing trade barriers. Theformation of export trading companies, nowpermitted under U.S. law, also may improvethe competitive position of U.S. exporters,

The United States probably will continueto import substantial quantities of lumber ,woodpulp, and newsprint from Canada.Canada’s proximity to major consumingregions of the United States, the availability oflow-cost transportation, and the distribution ofthe Canadian softwood resource combine tomake Canadian products competitive in U.S.markets.

49


World Markets for U.S. Forest Products

The United States has an unprecedented op-portunity to expand its exports of many forestproducts. There are three principal reasons forthis: 1) world demand for paper and solid woodproducts are expected to grow rapidly, 2) manyestablished wood-producing nations are con-fronted with diminishing wood supplies, and3) the United States has both an abundant woodresource and a highly developed manufactur-ing capacity compared with most other coun-tries.

The United Nations Food and AgricultureOrganization (FAO) projects that world de-mand for industrial roundwood will grow byabout 2 percent per year for the next 20 years.1

According to FAO, consumption of paper andpaperboard is expected to increase by 75 per-cent, wood-based panels by 55 percent, andlumber by 25 percent between 1980 and 2000.2

Although these projections are not necessari-ly accurate, they do point out prospects forgrowth in world forest products consumption.Much of this increase is expected to occur inthe developed countries of Western Europe,North America, and Japan, although demandfor paper and solid wood products in develop-ing nations is expected to increase as well.

Regional trends in industrial roundwood pro-duction suggest that traditional suppliers can-not continue to increase production at pastrates, and some probably will not even be ableto maintain present rates. Wood supplies fromthe western Soviet Union, which are importantto Eastern and Western Europe, declined dur-ing the 1970’s and probably will continue todecline. While the U.S.S.R. has vast softwoodforests in Siberia, much of this area is inac-cessible and manufacturing capacity is lacking.Western Europe, which has depended on theSoviet Union for some of its wood, can expandits timber harvests somewhat, but probably not

1 ~ i ted i n E nl’ i ron men t C a n a da, }Jo]jcj’ s’ta ~eme~ t: AFrame~~rork fc)r Forest Renewal, Ottawa, Canada: Sept. 2, 1982,p. 2.

‘Cited i n ‘‘A Forest Sector Strateg~ for Canada, ’ discussionpaper Sept. 30, 1981, p. 7.

enough to compensate for declining Soviet sup-plies coupled with rising demand. Timber re-sources in the Far East, which supply the ma-jority of Japanese wood imports, are shrinking.Recent hardwood production levels in FarEastern countries outside Japan probably can-not be sustained through 2000, and some ofthese nations are beginning to restrict log ex-ports.

Many Far Eastern countries, especially Ja-pan, will become more dependent on importsfrom other regions to satisfy growing demandfor forest products. Although Latin Americahas vast acreages of forests, it will probably notbecome a major competitor with U.S. forestproducts on world markets before the turn ofthe century. The situation in South Americais similar to the Soviet Union’s—forests areremote and inaccessible, and the capacity toprocess more than a fraction of the potentialharvest does not exist. Some past efforts toestablish forest products manufacturing indus-tries in Brazil have failed, and the enormouscapital requirements to build South Americaas a major world supplier of forest products(other than pulp) by 2000 are almost certainlybeyond the means of these developing nations.

In contrast, the forest resource of the UnitedStates is increasing. Between 1952 and 1977,growing stock on its commercial forestland in-creased nearly 20 percent.3 Harvest levels havebeen remarkably stable, from 10 billion to14 billion cubic feet (ft3) per year since the early1900’s. U.S. forests can support substantiallylarger harvests, even with increasing domesticdemand.

U.S. trade in forest products has different ef-fects in different areas of the country, depend-ing on the availability of supplies from foreignand domestic forests and on manufacturing ca-pacity (tables 5 and 6), In 1976, the Great Lakes

3U, S. Department of Agriculture, Forest Service, ArI Analysisof the 7’imber Situation in the Undited States, 1952-2030, ForestResource Report No. 23 (Washington, D. C.: U.S. GovernmentPrinting Office, December 1982), p. 113.

Ch. Ill— World Markets for U.S. Wood Products . 51—

Table 5.—Pulp and Papera Trade Patterns, by U.S. Region, 1976

Imports Major Exports Major Trade balanceRegion (millions of dollars) supplier (millions of dollars) customer (millions of dollars)

Pacific Northwest. ., . 141 Canada 309 Japan 168South Atlantic . . . . . . . 15 Western Europe 449 Western Europe 434Gulf . . . . . . . . . . . . . . . . 26 Western Europe 485 Western Europe 459North Atlantic . . . . 341 Canada 354 Western Europe 13South Pacific . . . 23 Japan 117 Asia 94Great Lakes . . . . . . . . . 755 Canada 238 Canada -517North Central . . . . . . . 158 Canada 19 Canada 139South Central . . . . . . .

—— — 9 Mexico 9

Alaska . . . . . . . . . . . . . — — 67 Japan 67aExcludlng waste PaperSOURCE” Sedjo and Radcllffe, Postwar Trends (n U S Forest Products Trade (Washington, D.C. Resources for the Future, 1980)

Table 6.—Solid Wood Trade Patterns, by U.S. Region, 1976

Imports Major Exports Major Trade balanceRegion (millions of dollars) supplier (millions of dollars) customer (millions of dollars)

Pacific Northwest . . . . . . . . . . . . . . . . 422 Canada 1,246 Japan 824South Atlantic . . . . . . . . . . . . . . . . . . . 103 Far East 40 Europe - 6 3Gulf . . . . . . . . . . . . . . . . . . . . . . . . . . . . 130 Far East 54 Europe - 7 6North Atlantic . . . . . . . . . . . . . . . . . . . 342 Canada 126 Europe -216South Pacific. . . . . . . . . . . . . . . . . . . . 82 Far East 90 Japan 8Great Lakes . . . . . . . . . . . . . . . . . . . . . 627 Canada 173 Canada -454North Central . . . . . . . . . . . . . . . . . . . 230 Canada 36 Canada -194South Central . . . . . . . . . . . . . . . . . . . 1 Mexico 6 Mexico 5Alaska. . . . . . . . . . . . . . . . . . . . . . . . . . 1 Canada 77 Japan 76aExcluding waste Paper

SOURCE Sedjo and Radcllffe, Postwar Trends In U S Forest Products Trade (Washington, DC Resources for the Future, 1980)

States and the North Central region were netimporters of paper and pulp, most of whichcame from Canada, while other regions werenet exporters. Conversely, the Pacific North-west, Alaska, and the South Central regionwere net exporters of solid wood products, al-though the trade surplus in the Pacific North-west is much larger than the deficit in anyother single region. Efforts to increase exportsare likely to benefit the Pacific Northwest,Alaska, and the Southern regions (South Atlan-tic, Gulf, and South Central States). The GreatLakes States and the North Central region,which are close to cheap water transportationand Canadian softwood forests, probably willremain net importers of most forest products.

For at least the past two decades, U.S. ex-ports of forest products have increased (fig. 2),but in general, the United States still is a netimporter. This may be changing, Since 1978,

Figure 2.— Value of U.S. Exports of WoodProducts, a 1964.80

aWood products here Include waste paper and paperboard, and do not includeconverted products (numbers for waste paper exports obtained by phone con-versation with API representative)

SOURCES: United Nations Food and Agriculture Organization, 1980 Yearbookof Forest Products and 1975 Yearbook of Forest Products AmericanPaper Institute, personal communication.

30

52 • Wood Use: U.S. Competitiveness and Technology

the U.S. deficit in forest products trade has nar-rowed sharply, primarily due to an increase inexports of pulp and paper products (fig. 3).

In 1982, the United States exported forestproducts (paper, paperboard, logs, lumber,railroad ties, wood-based panels, woodpulp,and wood chips) valued at $7.3 billion. Thelargest markets for these products wereWestern Europe, Canada, and Japan, marketsthat can expand considerably. There are alsoopportunities to develop totally new markets.

While world markets offer the United Statesan opportunity to sustain a positive balance oftrade in forest products, it is unlikely that theUnited States will reduce or curtail its imports.The United States is a major importer of soft-wood lumber, newsprint, and woodpulp, mostof which comes from Canada. Reliance on in-expensive Canadian products, in fact, enablesthe United States to develop greater exportcapacity in other product lines, such as liner-board, clear lumber, panels, printing and writ-ing papers, and converted paper products,many of which have higher value added thanimports,

Established Markets for Pulpand Paper Products

In 1979, international exports of forest prod-ucts amounted to about $46 billion, nearly3 percent of total world trade. Roughly one-third of this involved paper and paperboard.In 1982, U.S. exports of pulp and paper totaled$4.3 billion. In deflated dollars, this was slightlylower than 1980 levels, reflecting worldwiderecession, the strength of the dollar againstforeign currencies, and, in some cases, protec-tionist pressures. 4 Between 1972 and 1981,however, the tonnage of U.S. exports of wood-pulp has increased 63 percent and paper, pa-perboard, and converted products by 50 per-cent, Waste paper exports increased 450 per-cent between 1971 and 1981.

U.S. pulp and paper producers are in a bet-ter position to expand exports than are pro-ducers of lumber, panels, and other solid woodproducts for several reasons. Demand for pulp— .

4American Paper Institute, International Department, “Exportsof Pulp, Paper, Paperboard, and Converted Products to WorldMarkets–1981” (New York: American Paper Institute, 1981].

Figure 3.—U.S. Balance of Trade in Wood Products,a 1964-80

6t

1964 1866 1966 1970 1972 1974 1976 1978 1960Year

Wxlct pmduata ham hcluda -to wand p@OrbWd and do not lnatudaconWtOdPC%hms. Wlttl ma OxcOptbn d WmtoWW-1 H - - W * - f-r componmt d product$ 1$ IncludMt In totat tonnage. In tha caae of wuM. paPU mdpapubmd, othar oandituants auch * day fillora m lncludad.

SOURCES: U.S. Department of Agriculture, Forest Service, U.S. Timber Productlorr, Trade, Consurnptlorr, and Price Statistics,19501980, p 10; and United Nations, Food and Agriculture Organization, Yearbook of Forest Products, 1980,

pp. 359, 361 and Yearbook of Forest Products, 1975, pp. 301, 303. American Paper Institute.

Ch. Ill— World Markets for U.S.—

and paper is intrinsically less cyclic than de-mand for solid wood products. Moreover, thepulp and paper sector of the forest productsindustry is highly capital intensive, productionis large-scale, and the sector must operate veryclose to capacity to maintain profit margins.This situation provides strong incentives tomaintain lasting agreements with all custom-ers, domestic or foreign. In addition, marketpulp and many types of paper are commodity(or standard) products in world markets, whilelumber and panel products tend to be special-ties overseas. Producers of lumber and panelsoften must devote substantial effort to createforeign demand through the promotion of U.S.building techniques and product specificationsand performance. In contrast, demand for mostU.S. paper products already exists, Finally, dueto a combination of labor and resource availa-

Wood Products ● 5 3

bility, energy costs, and production efficiency,U.S. pulp and paper are fully cost competitivein world markets. s

Western Europe

Western Europe is the largest single marketfor U.S. pulp and paper products. It accountedfor 49 percent of U.S. exports of woodpulp and21 percent of U.S. exports of paper, paper-board, and converted products, Over the pastdecade, however, Western Europe’s imports ofU.S. paper, paperboard, and converted prod-ucts have declined in both percentage and ton-nage, while woodpulp imports have increased(figs, 4 and 5), This shift is probably a result

5American Paper Institute, ‘(The American Paper Industry:An International Profile, ” paper submitted to the Industry Sec-tor Advisor} Committee No, 12, Aug. 12, 1982, p. 6,

Figure 4.—Woodpulp Exports by Area of Destination

Europe Canada Mexico Central South Middle East Japan Oceania Other

America America andAfrica

1972 1981

I 1SOURCE American Paper Institute, “Exports of Pulp, Paper, Paperboard, and Converted Products to World Markets— 1981, ” New York API International Department,

n d , p XXIV

54 ● Wood Use: U.S. Competitiveness and Technology— — —

Figure 5.—U.S. Paper, Paperboard, and Converted Products Exports, by Area of Destination

1,400 -

1,200

1,000

800

600

400

200

0Central South Middle East JapanEurope Canada MexicoAmerica America and

Africa

Oceania Other

1972

I 11981

SOURCE’ American Paper Institute, “Exports of: Pulp, Paper, Paperboard, and Converted Products to World Markets–1981 ,“ New York: API International Department,n.d , p. xxv

of decreased exports of woodpulp from Scan-dinavia to other Western European countries.Scandinavian woodpulp prices have been ris-ing because major producers are paying muchhigher prices for pulpwood than their NorthAmerican counterparts (fig. 6). As a result,Scandinavian producers are facing losses ofWestern European pulp markets. In addition,Scandinavian production costs are consider-ably higher than those of North American com-petitors, and many marginal Scandinavianmills are closing.6 Scandinavian producers areincreasing their papermaking capacity in in-tegrated mills which are efficient enough toproduce paper at prices competitive in theEuropean Community, displacing imported pa-

‘J.w. carriwn “International Outlook for Pulp, Paper andPaperboard Products, ” Paper Trade Journa], 165(6): p. 22,Mar. 30, 1981.

per from other sources. The trend toward in-tegration has focused on high value products,which will probably force higher reliance onNorth American kraft linerboard as well aspulp. In the short run, Scandinavian paperprobably will continue to satisfy a large partof Western Europe’s paper demand, but thecapacity to increase production is limited. Inthe long run, particularly with an economicrecovery, Western Europe is expected to in-crease its reliance on North America for paperproducts. 7 8 9 10

7“The Battle is on for Control of Europe’s Paper Market,”Workl Business Weekly, June 15, 1981, pp. 22-23.

O“North America Newsprint Exports: Today and Tomorrow, ”Paper, May 10, 1982, p. 48.

@Kenneth E. Smith, “SPC1 Focuses on World Fiber Deficit,Competition From North America, ” Pulp and Paper, August1981, pp. 179-185.

I“’’World Review,” Pulp and Paper, August 1981, p. 66.

Ch. Ill— World Markets for U.S. Wood Products ● 55

Figure 6.— Pulpwood Cost (Softwood) at Mill Site by Volume, Under Bark Basis, Current General Overhead,Estimated at 5 Percent, Included

Sweden (pulpwood-morg volume)

Finland (pulpwood)

Sweden (pulpwood-base volume)Canada BC - coast (chips)

United States-South (pulpwood)Canada-East (pulpwood and chips)Brazil (pulpwood)Canada BC - interior (chips)

1971 1972 1973 1974 1975 1976 1977 1978 1979 1980Year

aNOt available before 1975

SOURCE Jaako Poyry Interforest Prospectus for the 1982 edition of Avaf/ab///fy and Cos( of Wood in Major Forest Producf Reg/ons 19701990, 1 %33, Finland, p 1 I

While the tonnage of all paper, paperboard,and converted products exported to WesternEurope has fallen in the last decade, the mixof products has changed significantly. WesternEurope now is importing larger amounts ofprinting and writing papers and bleachedpaperboard than in 1972, while imports of un-bleached kraft linerboard (primarily used inmaking corrugated boxes) have fallen. In thefuture, Western Europe is expected to increaseits imports of paper in which woodpulp ac-counts for relatively large shares of the productvalue, such as in newsprint and linerboard.

Canada

In 1981, Canada imported 15 percent, oralmost 700,000 short tons, of the U.S. paper,paperboard, and converted products and asmaller percentage of its woodpulp. Exportsof paper products to Canada have increased65 percent since 1972 and are expected to con-tinue to rise. Over halfprinting, writing, and

98-8290-83-8

of these exports areconverted products

(paper which has been converted to productform, such as envelopes, corrugated and otherboxes, tissues, and paperboard cartons anddrums).

Although Canada is a major paper produceritself, well equipped to compete in worldmarkets for paper products based on soft-woods, it lacks a hardwood resource. As aresult, Canada is expected to rely on its NorthAmerican neighbor for paper products that re-quire significant amounts of hardwood pulp.In addition, Canadian pulp, newsprint, andother writing papers are cost competitive withU.S. products.

Japan and the Far East

In the past decade, U.S. exports of paper,paperboard, and converted products to Japanand the Far East have tripled (fig. 3). Most ofthis 1arge increase was due to an expansion ofJapanese imports of unbleached kraft liner-board, bleached paperboard (for which Japan


has almost no domestic production capacity),and newsprint (largely due to U.S.-Japan jointventures).

Japan is a major paper producer, It ranks sec-ond in paper and paperboard and third in pulpworldwide. However, it is facing increasingcosts for raw materials, energy, and pollutioncontrols that threaten to place many grades ofJapanese paper among the world’s most expen-s ive .l1 12 Exports of paper, paperboard, andconverted products to Japan alone have in-creased almost 14 times in the last decade, ac-counting for most of the expansion into FarEastern markets for U.S. paper. This increasereflects Japanese difficulties in obtaining inex-pensive raw materials for their pulp and papermills and an unfavorable climate for invest-ment in milling capacity. l3 As a result, theJapanese have relied more heavily on importedpulp and paper to satisfy growing demand forpaper and paperboard products. l4 15

About half of the raw material used in Japa-nese pulpmills is hardwood pulpwood and logprocessing residues, with most hardwood logsimported from other Far Eastern countries.The levels of hardwood harvesting prevalentin the 1970’s in these countries probably arenot sustainable through the end of this century.This looming problem, combined with a grow-ing tendency for some Far Eastern nations toshift exports from logs to processed products,means that the Japanese probably will relymore heavily on North America for woodchips, woodpulp, and paper in the future. *eCompetition among the United States, Canada,Oceania, Southeast Asia, and Chile for Japa-

11’’ The American Paper Industry: An International Profile,”op. cit., p. 14.

“’’World Review,” p. 66.NU. S. Department of Agriculture, Forest Service, Alaska

Region, Timber Supply and Lkmand 1981, mimeograph draftreport to Congress in compliance with the Alaska National In-terest Lands Conservation Act, Apr. 1, 1982, p. 39-40.

14Y. Shioti, and A. p. ~hnie~nd, “RWent Tmn& in the WodIndustry of Japan, ” Forest Products Journal June 1980, p. 23.

Warrigan, “International Outlook,” op. cit., p. 23,~eTti~r SUpply and Demand op. cit., P. 42.

nese pulp and paperbe quite intense. l7 18

markets, however, may

Countries in the Far East and Oceania, otherthan Japan, imported 11 percent of U.S. paper,paperboard, and converted products exportsin 1981, up from 9 percent in 1972, In tonnage,exports to these countries increased by 80 per-cent in the last decade. Woodpulp exports toFar Eastern countries other than Japan haveremained stable in terms of percentage, ac-counting for just over 10 percent of U.S. wood-pulp exports during the last decade (fig. 5).

China may become a major market for U.S.paper products within the next decade, too,particularly in packaging material. In 1980,much of China’s linerboard came from Japan,but lower cost U.S. linerboard may becomemore competitive in the Chinese market. l9

Other Markets

The United States sold nearly 16 percent ofits woodpulp and 40 percent of its paper, pa-perboard, and converted products to Mexico,Central America and the Caribbean, SouthAmerica, the Middle East, and Africa in 1981(figs. 4 and 5). These percentages have re-mained fairly stable over the last decade,al though woodpulp exports fel l s l ight ly,primarily due to fewer sales to South America.

Mexico’s value share of U.S. paper, paper-board, and converted products exports doubledand the tonnage tripled (fig. 4). These large in-creases occurred despite stricter licensing re-quirements and import duties that cut Mexico’simports of U.S. packaging and industrial con-verting grades of paper. Nevertheless, Mexicoremains the biggest single purchaser of U.S.printing, writing, and tissue paper, while im-

171 bid., pp. 4546.IODavid R. Darr, “The Impacts of International Trade on

Domestic Markets,” Proceedings, The Impact of Change on theManagement of Private Forest Lands in the Northwest Portland,oreg., Mar. 29-31, 1978, pp. 30-31.

IOTim& supply and Demand op. Cit., p. 45.

Ch. III— World Markets for U.S. Wood Products ● 57—

porting large amounts of other kinds of paperand paperboard as well.

South America, with over 13 billion acres ofexploitable forest, became a net exporter ofwoodpulp during the past decade. On the otherhand, its imports of U.S. paper, paperboard,and converted products increased by nearly 50percent, The immense forest resource of SouthAmerica could become a major world sourceof wood, but this is not likely to happen in thenear future. The continent does not have thetransportation and manufacturing capacity tosupport increased production of processedwood products, and the amount of capital re-quired to develop this capacity is probablybeyond the immediate means of these nations.Technologies for using South American mixedhardwoods exist, but substantial investmentsmust be made before these forests can be fullyexploited. South American markets for U.S. pa-per and paperboard may continue to be fairlystrong for the next few decades.

The United States also should have a strongcompetitive position in supplying paper to theCaribbean, Africa, and the Middle East in thefuture. Caribbean markets have the advantageof proximity to the highly productive forestsof the American South, which means amplesupplies and lower transportation costs. Ex-ports of both woodpulp and paper products tothis region probably will expand, Africa and

the Middle East have little forest area and lackthe capacity to exploit what few trees do ex-ist, Africa and the Middle East accounted for12 percent of U.S. paper and paperboard ex-ports in 1981, up from 9 percent in 1972. Con-tinued economic growth in this region prob-ably will mean expanding markets for all prod-ucts,

Established Markets for Solid WoodProducts and Raw Materials

In 1982, the U.S. exported solid wood prod-ucts* valued at $2,6 billion—down from$3.2 billion in 1979–reflecting the effects ofworldwide economic recession.20 Over 40 per-cent of the 1981 value was in logs and timber,of which 75 percent was softwood logs ex-ported to Japan. Lumber and railroad ties ac-counted for 34 percent of solid wood productexports, and the remainder was divided amongpulpwood, wood chips, wood wastes and fuels,and wood-based panels (table 7). The majormarket areas are Western Europe, Canada, andJapan..

*Logs, timber, pulpwood, wood chips, waste and fuels, lumberand railroad ties, and wood-based panels.

ZOThe figure for 1979 differs from the $3.8 billion that the Na-tional Forest Products Association cites in increased Wood Prod-ucts Exports: A Bonus for the Industry and Nation, InternationalTrade Committee (Washington, DC.: National Forest ProductsAssociation). OTA figures are based on unpublished data fromthe U.S. Department of Commerce, International Trade Com-mission. NFPA also cites Department of Commerce data, butit is not disaggregated to permit detailed comparison.

Table 7.— U.S. Exports of Solid Wood Products, 1981

Quantity Value PercentProduct (thousands) (thousands of dollars) of value

Logs and timber (board ft) . . . . . . . . . . . . . . . . 2,534,224 $1,094,716 40.760/oHardwood . . . . . . . . . . . . . . . . . . . . . . . . . . . . 157,125 91,868 3.42Softwood . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,377,099 1,002,848 37.34

Pulpwood (cords) . . . . . . . . . . . . . . . . . . . . . . . . 176 9,911 0.37Wood chips (short tons) . . . . . . . . . . . . . . . . . . 3,546 290,184 10.80Wood waste, wood fuel . . . . . . . . . . . . . . . . . . . NA 12,894 0.48Lumber and railroad ties (board ft) . . . . . . . . 2,374,055 923,784 34.40

Hardwood lumber. . . . . . . . . . . . . . . . . . . . . 381,481 243,026 9.05Softwood lumber . . . . . . . . . . . . . . . . . . . . . . 1,903,809 655,544 24.41Railroad ties . . . . . . . . . . . . . . . . . . . . . . . . . . 88,765 25,214 0.94

Wood-based panels . . . . . . . . . . . . . . . . . . . . . . NA 354,293 13.19Softwood plywood and veneer. . . . . . . . . . . NA 189,727 7.06Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . NA 164,566 6.13

Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — 2,685,782 100.0SOURCE U S International Trade Commission


The United States exports substantially larg-er quantities of raw materials (e.g., logs andchips) than most other exporters of solid woodproducts. There is some pressure, particular-ly on the American west coast, to limit log ex-ports in favor of lumber and panels. However,while log exports may create fewer jobs perunit of volume in the United States than ex-ports of processed products, the average dollarvalue of softwood logs exported to Japan ishigher than the average value of exported soft-wood lumber, * Log exports, therefore, aremore valuable in creating foreign exchangeand help to maximize the value the UnitedStates realizes on its raw materials.

Western Europe

Twelve percent of U.S. softwood lumber ex-ports in 1981 went to Western Europe. Al-though this portion is substantially smaller thanin the preceding decade, for the past 30 yearssoftwood lumber exports to this area have beenincreasing slowly, though erratically. WesternEurope historically has imported clear Doug-las-fir and southern pine lumber, but the in-creasing popularity of platform frame (2 x 4)construction in some countries may open mar-kets to a wider range of sizes and grades ofthese softwood materials.

The most important market for U.S. hard-wood lumber is Western Europe, which is amajor customer for hardwood logs and veneer.U.S. exports of these products to the EuropeanCommunity and Spain have tripled since 1977.Given Western European tastes for fine furni-ture, markets for hardwood lumber and logs,particularly high-quality logs suitable forveneer, may be larger in the future .2l Present-ly, however, some countries are concernedabout oak wilt, a U.S. oak fungus which report-edly does not exist there, which could be trans-

—-. -_———“There are several reasons why the Japanese pay higher prices

for U.S. logs than for U.S. lumber. Some Japanese log importsare high value species. Also, the Japanese lumber manufactur-ing process produces higher value lumber than most U.S.manufacturers.

“Harold W. Wisdom, “The Export Market for Hardwoods, ”June 1978, p. 14-18, paper presented at the Society of AmericanForesters Annual Convention, Sept. 20-22, 1982, Cincinnati,Ohio, p. 14.

mitted in imported goods.22 Solving this prob-lem could pave the way for more U.S. hard-wood exports.

Western Europe is the biggest buyer of U.S.panel products, mostly softwood plywood. Thetrend toward platform frame construction al-ready visible in the United Kingdom, is ex-pected to create even larger markets for U.S.plywood, 23 The potential for this expansion isstrong, particularly if efforts to reduce oreliminate Western European tariffs on ply-wood are successful.24

Canada

Between 1950 and 1981, Canada’s imports oflumber from the U.S. increased over sevenfold,with most of the growth in softwood lumber.Much of the lumber exported to Canada con-sists of species, grades, or sizes not availablethere—redwood, for example. In 1979, Canadaaccounted for 30 percent of U.S. lumber ex-ports. Log exports to Canada, which have in-creased almost tenfold since 1950, account forabout 10 percent of the logs that the UnitedStates sells abroad.25

With Canada so near, some U.S. producerscan supply products to local Canadian markets,which in some cases may be cheaper than Can-ada’s own goods. This situation probably willnot change, but the United States undoubted-ly will continue to import more solid woodproducts from Canada than it exports there inthe foreseeable future. The United States prob-ably will remain reliant on cheaper Canadianlumber for quite some time.

Japan

Japan is by far the biggest Far Eastern buyerfor U.S. solid wood products. Most of these im-

Z~Nationa) Forest products Association and the U ,S. ForeignAgricultural Service, Forest Products Industry FAWNFPAForeign Market Development Plan FY 82 (Washington, D, C.: Na-tional Forest Products Association, Internatiorml Trade Division,Sept. 1, 1981), p. 2,

~$’’British Columbia Fights Back,” Timber Trade Journal, Oc-tober 1982, pp. 19-21.

aiNational Forest products Association and the U,S. ForeignAgricultural Service, Foreign Market Development Plan,pp. 1-40.

aBAnalysis of the Timber Situation, op. cit., pp. 317-331.

Ch. Ill— World Markets for U.S. Wood Products Ž 59— —. —— —

ports are softwood logs, for which the UnitedStates is the largest supplier and the SovietUnion is the second largest.28 The United Statesalso exports substantial quantities of woodchips, woodpulp, and softwood lumber to Ja-pan, along with a variety of other products, in-cluding hardwood logs and lumber, wood pan-els, waste paper, and pulpwood. Between 1979and 1981, U.S. log exports to Japan, whichrepresent over half the value of all U.S. solidwood products sent there, decreased 13 per-cent, while exports of all other solid woodproducts increased. The outlook for continuedlog and wood chip exports to Japan is favor-able, although other suppliers in New Zealand,Canada, the eastern Soviet Union, and Chileprobably will compete.

There is great potential to expand lumber ex-ports to Japan to satisfy the nation’s growinghousing needs, North American standard sizesand grades of lumber, however, are not wellsuited to Japanese construction standards andmethods, but while both the United States andCanada are aggressively promoting NorthAmerican platform frame construction, onlya small fraction of Japanese homes are built thisway. Traditionally, the Japanese use wood asboth decorative and structural components oftheir houses by leaving wood framing membersexposed for esthetic appeal. U.S. constructiongrade lumber usually is not suitable for thesepurposes. There has been some progress inadapting Japanese inspections and standardsto U.S. products, and some industry analystssee this as a promising development for in-creased exports of U.S. lumber to Japan .27Canada has been quite active in courtingJapanese lumber markets, too, although asignificant portion of the lumber Canada sendsthere consists of squared logs that are sawn tofinal dimensions at their destination. In thefuture, Canada probably will provide strongcompetition to U.S. producers. Furthermore,Canadian producers have been more willingthan their U.S. counterparts to saw lumber tothe metric sizes preferred in Japanese (andother world) markets.

Zelllcrease(] WrOOd Produ[:ts E,xports, O p . c i t . , P . 27.

ZT1bid,, p. 28.

The availability of logs to Japan is anotherfactor that could limit progress in promotingexports of U.S. lumber. Japanese lumber is pro-tected by tariffs, but logs are imported duty-free. Japan may continue to import mainly logsas long as it has access to them, even if it adoptsWestern construction methods using U.S. lum-ber grades. 28 29

There are also opportunities for increasedsoftwood plywood exports to Japan. These op-portunities, like opportunities to export soft-wood lumber, depend to some extent on Japa-nese acceptance of platform frame construc-tion. The Japanese plywood industry, whichproduces mainly hardwood plywood, is thesecond largest in the world and is protectedby a number of tariff and nontariff barriersdiscussed in more detail below,

Other Markets

Other encouraging markets for U.S. solidwood products exist elsewhere. Increasedtrade in these products shows promise in theFar East, particularly China. Exports of soft-wood logs to China have increased, whichsome analysts see as the first step to openingChinese markets for other wood products. soTrade with mainland China is diff icult ,however, and conditions uncertain, HongKong, South Korea, Taiwan, and Singapore, allrapidly growing and industrializing, lack ade-quate forest resources, Australia and New Zea-land are attractive markets for U.S. solid woodproducts because these countries have highpurchasing power and similar business prac-tices. Australia may offer particular near-termpotential for U.S. exporters, but it has a policyencouraging self-sufficiency in forest products.New Zealand is and probably will continue tobe a net exporter of wood products,

Many South American nations are heavilyforested and probably will continue to protect

Z8John V, Ward, Director, International Trade, National ForestProducts Association, letter to I,ouis Murphy, U.S. Departmentof Commerce, Office of International Sector Polic}’ \\’ith at-tachments, Sept. 19, 1981.

zSDarr, op. cit., pp. 29-30.Sopersona] communication with John V. Ward, Director, I In-

ternational Trade, National Forest Products Association.


their own forest industries. Many of the peo-ple of South America are extremely poor, andthere is a limited clientele among those wealthyenough to afford foreign goods. Even as afflu-ence increases, cultural preferences may notstimulate much demand for wood. In Chile, forexample, a wooden house is seen as a sign ofpoverty.

The most promising South American mar-kets are probably Argentina and Venezuela,Argentina has a European-like culture withEuropean housing tastes. Venezuela, strength-ened by its petroleum exports, has a high stand-ard of living and ambitious development plans.Its current housing shortage is tremendous.However, the recent drop in world oil priceshave hurt Venezuela, and its potential as a ma-jor importer of U.S. solid wood products prob-ably depends on recovery of oil markets.31 The

~’Hugh Love, “Latin America Emerges as Big Market for U.S.Wood Products,” Foreign Agriculture, December 1982, p. 8.

Caribbean and Mexico also may become moreimportant customers for the United States.

Enriched by oil export revenues, Egypt,Saudi Arabia, and the other oil exporting coun-tries of the Arabian peninsula, have set off ahuge construction boom. There is potential forgrowth in this Middle East market in modularor prefabricated buildings and building com-ponents as well as lumber, plywood, panels,and other solid wood products.32 These coun-tries have almost no forest resources or in-dustries of their own, but they do have liberaltrade policies, Their populations are small,however, and it is possible that these marketscan be saturated quickly. They, too, have beenhurt by falling oil prices, which could limittheir near-term potential as solid wood im-porters.

sZJ[)hn R. Forrest, world Trade Opportunities in Wood Prod-ucts, presented to Forest Industries Advisory Council, February1982, p. 8.

Barriers to U.S. Trade in Wood Products

World trade in forest products is shaped notonly by the general forces of supply and de-mand but also by tariffs and traditional quotas,nontariff barriers or distortions, and economicand governmental performance. Since WorldWar II, the General Agreement on Tariffs andTrade (GATT) has been very effective in reduc-ing its members’ tariffs and traditional quotas, *and the subsequent growth of internationalcommerce has been impressive. However, theuse of nontariff barriers (NTBs) also has grownand often poses a more potent threat to freetrade than tariffs and quotas. Governmentalpolicies and worldwide economic conditionsalso exert a powerful influence, as the recentglobal recession illustrates.

Tariffs and Traditional Quotas

GATT, both a treaty and an organization,was established in the postwar years to provide

*Traditional quotas are formal quotas which are public andusually codified into law.

a set of negotiated rules to govern world trade.The United States, the principal creator ofGATT, always has seen it as a vehicle for re-ducing tariffs, quotas, and other trade barriersand GATT has been successful indeed in eas-ing both tariffs and traditional quotas ofmember nations. Many tariffs and quotas re-main, however, and these can be very influen-tial in determining the character of trade inforest products.

In general, tariffs and traditional quotasrestrict imports of processed products, such aslumber, plywood, paper, paperboard, and pan-els, more than raw materials. Even nationswhose forest resources are small or nonexist-ent often restrict imports of processed prod-ucts, preferring to import raw materials suchas logs, pulpwood, wood chips, and woodpulp,to capture the value added employment inprocessing them.

While GATT has effectively reduced the gen-eral level of tariffs, it does permit preferential

Ch. III— World Markets for U.S. Wood Products • 61.

trade agreements. These can be particularlytroublesome for forest products exporters inthe United States. Preferential trade agree-ments include customs unions, common mar-kets, and free trade associations, and providefor the reduction or elimination of tariffs orquotas from participating countries, Importsfrom nonparticipants are subject to quotas orregular most favored nation (MFN) rates, pre-venting nonmembers from competing fully inpreferential areas. This is particularly impor-tant in Western Europe, where countries of theEuropean Economic Community (EEC, orCommon Market) and the European Free Trad-ing Association (EFTA) are better able to com-pete in Western European markets for solidwood and paper products than the UnitedStates. Swedish papers, for example, are as-sessed lower tariffs in the European Communi-ty (EC) than U.S. or Canadian paper products,and as of 1984 will be assessed no tariff at all,While this places the United States at a com-parative disadvantage, restructuring of West-ern European paper markets is expected to leadto expanded markets for North American kraftlinerboard and kraft pulp .33 Opportunities forincreased U.S. exports of all types of paper andpaperboard depend on implementation of re-cently negotiated tariff reductions and WesternEuropean ability and willingness to resistgrowing protectionist tendencies in its ownpaper industry, Pulp exports are not subjectedto any significant tariff in the EC.

Japan also maintains tariffs on paper and pa-perboard. Under the latest round of GATTnegotiations in the 1970’s (the so-called TokyoRound of Multilateral Trade Negotiations), theJapanese agreed to lower some tariff rates by1987. Under strong pressure from the UnitedStates, some of these tariff reductions were ac-celerated. In January 1983, the Japanese cuttariffs slightly on kraft paper and paperboard,while most other wood and paper tariffs wentunchanged.

The Canadian situation on paper and paper-board products is still awaiting resolution.

‘s’’ The American Paper Industry: An International Profile,”op. cit., p. 12.

Under the so-called Kennedy Round of Multi-lateral Trade Negotiations in the late 1960’s,Canada and the United States agreed to cer-tain tariff reductions for paper products. As aresult, the United States eliminated its duty onprinting and writing paper and lowered tariffson other products. Canada reduced its tariffson printing and writing papers, but failed tobring tariffs on linerboard, bleached board, andrecycled paperboard to the same level.34 Fur-thermore, the two countries disagree on tariffreductions on other types of paper. These dis-agreements currently are being negotiated.

U.S. solid wood products also are affectedby tariffs and quotas in the European Com-munity. Technically, softwood plywood isduty-free but subject to a restrictive quota.Above the amount allowed by the quota, Euro-pean Economic Community tariffs on soft-wood plywood are 11.6 percent. Recently, theFrench Government petitioned for a quota onimported softwood lumber, but this quota prob-ably would be temporary if enacted. 35 T h eTokyo Round was successful in easing someWestern European barriers to solid wood prod-ucts trade. By 1987, the EC’s tariffs on woodproducts will be sharply reduced, with no tariffon logs or most types of rough lumber, a 4 per-cent tariff on finished lumber, and a 6 percenttariff on most veneer. Softwood plywood, how-ever, still will be subject to a duty over quota.

Japanese tariffs on plywood and lumber areof more concern. While Japan welcomes im-ports of logs and some types of rough lumberduty-free, it collects tariffs on finished lumber,some veneers, plywood, millwork and molding,and particleboard ranging from 9 to 20 percent.Japan’s system of small decentralized sawmillsand finishing plants is one of its industries“targeted” for special protection, and progressin achieving tariff reductions probably will re-quire some concessions from the United States.While many U.S. producers do not considerlumber tariffs a major problem, plywood duties

341 bid., pp. 15-16.ssp~rsonal communication by Julie Gorte, OTA, with William

Hoffmeier, Agricultural Economist, Forest Products staff, U.S.Department of Agriculture, Foreign Agricultural Service, January1983.


are higher, and many producers prefer thatthey be cut.

Other Far Eastern nations also levy tariffsthat are generally higher on processed productsthan on raw materials.

Mexico, which is not a member of GATT,maintains strong protectionist measures andenforces high tariffs and import licensing re-quirements, with tariffs on forest productsranging from 10 percent on lumber to 70 per-cent on particleboard. Tariff barriers also tendto be strong in South America. Brazil, in orderto protect its developing forest industry, main-tains tariffs ranging from 45 percent on pulp-wood logs to 160 percent on plywood. Whilesome other South American tariffs are not asstringent as Brazil’s, they are still high, andother import regulations often discouragewood product imports. Chile, with a 10 percentacross-the-board tariff, maintains the lowestrates, but Chile is a net exporter of wood.

Nontariff Barriers

NTBs or distortions are growing in impor-tance, but they are often difficult to identify.The effects of NTBs are equally difficult tomeasure, but there is little debate aboutwhether they are potent hindrances to trade inforest products, Recent additions to GATTrules established some codes of conduct re-garding some NTBs, but the new codes are notcomprehensive and will be hard to enforce,

Some NTBs, such as product standards, haveaffected forest products exports significantly,Others have been less important, but may havemore impact in the future as the use of NTBsexpands. There are seven types of NTBs—quantitative restrictions, nontariff charges onimports, government intervention in trade,product standards, administrative practices,discriminatory ocean freight rates, and restric-tions on export-related services.

Quantitative Restrictions

New-style quantitative restrictions or infor-mal quotas on trade take many forms and havebecome more popular in recent years. The

most frequently used types are new forms ofquotas, embargoes, orderly marketing agree-ments, and voluntary export restraints. Forforest products, many countries use embar-goes, particularly to protect domestic resourcesand processing industries. Indonesia, Malay-sia, and the Philippines place major restrictionson exports of hardwood logs in an effort to con-serve stocks. The United States does not per-mit exports of logs harvested from NationalForest System land or the substitution of Na-tional Forest System logs for exported logs pro-duced from private lands.

Nontariff Charges on Imports

Nontariff charges on imports often take theform of taxes levied at various points in theproduct’s distribution channel. Both WesternEuropeans and the Japanese levy value addedtaxes. In Sweden and Norway, where tariffsare fairly low, stiff value added taxes are leviedon both domestic and foreign forest products.

Government Participation in Trade

Government participation in trade can in-volve countertrade (a form of barter), purchasesby national enterprises or trading companies,and government procurement policies. Noneof these is a significant barrier to U.S. forestproducts exports at present, but countertradein particular could become much more impor-tant in the future. Countertrade consists ofagreements, usually between nations, to pur-chase certain quantities and types of productsfrom each other, These arrangements are be-coming much more common in East-Westtrade, and many Communist countries prefercountertrade arrangements to other types oftrade. A countertrade agreement between Ja-pan and the Soviet Union includes the ex-change of Japanese construction machinery forSiberian timber. The Chinese have shown apreference for countertrade as well and maywant to link future imports of forest productsto exports of Chinese goods. The Japanese andWestern Europeans have been willing to en-gage in countertrade agreements with Commu-nist nations, while the United States has not.Since countertrade agreements often freeze out

Ch. Ill— World Markets for U.S. Wood Products ● 6 3

other suppliers, increasing use of this tech-nique could deter U.S. exports of solid woodand pulp and paper products.

Product Standards

Health, safety, and other product standardsoften limit imports, although not all productstandards are developed and used specificallyto block imports. This type of NTB is particu-larly important in forest products. Standardscan inhibit trade in many ways, Some are dif-ficult or expensive for foreign producers tomeet; some countries enforce standards, butdo not publish them. Some change standardsfrequently, creating uncertainty for foreignproducers interested in exporting, Finally,some standards are simply interpreted in ar-bitrary ways. The Japanese generally are ac-knowledged to use product standard barriersmuch more frequently than most other nations.

Plywood is one of the U.S. products most ad-versely affected by current standards. For ex-ample, German standards on preservatives re-strict the types of plywood that are importedfrom the United States. Japanese standards forplywood knots, adhesive strength, and “whitepockets’’—fungus remnants in Douglas-fir ply-wood—have dampened U.S. plywood sales.These standards recently have been loosened,but they still may limit U.S. plywood exportsto Japan. Significant reduction of these ply-wood trade barriers could benefit substantial-ly both Pacific Northwestern and Southern pro-ducers.

Standards also are troublesome for U.S. pa-per producers. EEC has agreed, under theMultilateral Trade Negotiations, to reducetariffs on kraft linerboard, but will not applythe reduction if the product contains 20 per-cent or more hardwood pulp. Most U.S. liner-board currently meets this ceiling, but industrytrends have led to greater use of hardwoodpulp. As a result, this standard may be morerestrictive in the future,

Administrative Practices

The rules that a countryas barriers to trade, as can

establishes can actthe way these rules

are implemented and enforced. The most com-mon types of administrative practices that canhinder trade include arbitrary methods of cus-toms valuation, arbitrary product classifica-tion, inspection procedures, and licensing pro-cedures. These barriers, which are used bynearly all nations, undoubtedly affect forestproducts trade. Mexico, for example, recentlyimposed new licensing requirements which ef-fectively reduce imports of U.S. paper prod-ucts. Recent revisions to GATT include codeson customs valuation, product classification,and import licensing procedures, but the de-tails of these rules are not yet developed andtheir eventual impact is unknown.

Ocean Freight Rates

One-way ocean freight rates for certain com-modities usually are set by conferences of na-tions, Many U.S. producers maintain that theserates discriminate against them. In fact, theAmerican Paper Institute lists higher U.S. ship-ping costs as a disincentive to exporting cer-tain grades of paper, particularly printing,writing, and specialty papers. so

Recent proposed changes in the regulationof ocean-liner conferences also concern U.S.paper producers. The 98th Congress is consid-ering legislation that would largely exemptocean-liner conferences from antitrust lawsand which, if enacted, might result in signifi-cantly higher shipping rates in the view ofsome U.S. analysts.

Restrictions on Export-Related Services

Exporters require a broad range of servicesif they are to market their products successfullyin overseas markets. Many countries have bar-riers against American banks and insurancecompanies and also may limit the ability offoreign firms to get local financing and insur-ance. While these barriers do not necessarilydiscriminate against any particular country orproduct, their existence may inhibit U.S. ex-ports of solid wood and paper products.

@’The American Paper Industry: An International Profile, ”op. cit., p. 10.


Other Factors Affecting Exports of Wood Products

Tariffs, quotas, and NTBs undoubtedly curbthe ability of U.S. producers to export solidwood and pulp and paper products, but, whileremoval of these distortions would alter thenature of international commerce, the mostdramatic stimulus to trade would be the im-provement of the global economy. In all, thereare five important factors that affect the volumeand type of products traded—global economicconditions, currency exchange rates, privatebusiness attitudes, government policies thathinder exports, and government assistance toexporters.

Global Economic Conditions

In recent history, it has become increasing-ly difficult for nations to maintain separateeconomic identities. One-seventh of all U.S.jobs now depend on exports, and the situationis similar in most of the world’s developedeconomies. The current global recession hasdamaged nearly all segments of the wood in-dustry (although exports of most paper prod-ucts have performed remarkably well undersuch adverse conditions) and has probably hurtU.S. wood exports far more than have NTBs,Economic recovery is likely to stimulate off-shore demand for U.S. forest products muchmore than the removal or reduction of anytrade barrier, although this is not meant tominimize the importance of efforts aimed ateasing those barriers.

The recession is complicated further by theworld financial situation. High interest rates,largely a function of U.S. monetary and fiscalpolicy, mean that Third World countries heavi-ly in debt are having serious problems refinanc-ing those debts. Many are turning for help tothe International Monetary Fund, which willimpose austerity programs in return for finan-cial assistance. While this makes a certaindegree of sense, it also makes it harder for thesecountries to import goods or to stimulate theirown economies. It also makes it more difficultfor U.S. producers to penetrate these markets.

Currency Exchange Rates

The value of the dollar relative to other cur-rencies affects the prices and competitivenessof American goods overseas, For the past fewyears, the dollar has been very strong on worldmarkets, rising sharply against the yen, thedeutsche mark, and the franc between June1980 and November 1982. Although it has fall-en slightly since then, the dollar still is highlyvalued, particularly against the yen, consider-ing the U.S. trade deficit with Japan,

The dollar is likely to remain strong as longas U.S. interest rates are significantly higherthan foreign interest rates. Prolonged balance-of-payments deficits in the United States or-dinarily would lead to devaluation of the dollaragainst other currencies, but this has not hap-pened. High interest rates in the United Statesand the huge Eurodollar market have over-whelmed other currency adjustments, and, un-til these adjustments are made, U.S. exporterswill have a disadvantage on world markets.U.S. interest rates are particularly high com-pared with those in Japan, which keeps its owninterest rates low by preventing foreign entryinto Japanese financial markets. 37

Private Business Attitudes

World perceptions of private U.S. businessattitudes can have a major impact on trade. Un-til recently, the U.S. forest products industrywas believed to be somewhat unreliable or un-willing to make long-term commitments thatmany importers want. According to one analy-sis, the U.S. forest products industry has nevermade a concerted effort to export its products,but is now beginning to see offshore marketsas a strategy for survival.38 Responding primar-ily to the enormous demands of the domesticmarket for forest products, the industry hastended to view exports as something to do withits products during downturns in the business

9TNorman Gall, “Black Ships Are Coming?” ~01’k5, Ian. 31,1983, p. 75.

s8Kath]een K. Wiegner, “Forest Products,” Forbes, Jan. 3, 1983,p. 110.

—.

Ch. III— Wood Markets for U.S. Wood Products ● 65—

cycle,39 and has gained a reputation for losing

interest in offshore customers when domesticdemand picks up. In part, foreign protectionistpractices limit imports of U.S. products, espe-cially during downturns, but the reputation ofU.S. producers still persists.

This “American Market Syndrome” ischanging. The National Forest ProductsAssociation, representing a large portion of theNation’s solid wood products sector, haslaunched a cooperative effort to developforeign markets for lumber, plywood, andpanels with the U.S. Department of Agricul-ture’s [USDA) Foreign Agricultural Service(FAS). The project largely involves workingwith foreign governments in removing or re-ducing NTBs to trade in solid wood and pro-moting the use of U.S. wood products abroad.Over the last three decades, FAS has had anexcellent record in promoting agricultural ex-ports and its success bodes well for the futureof exports of solid wood products.

A key element in U.S. producers’ establishingtheir reliability as world suppliers of forestproducts is their performance when domesticdemand rises, The commitment of these pro-ducers to foreign markets has yet to be fullytested, As the U.S. economy recovers and do-mestic demand for wood products increases,the behavior of U.S. firms that have expressedinterest in foreign trade will be watched care-fully,

Government Policies That Hinder Exports

Government as well as industry shapes worldperceptions of the United States an unreliabletrading partner, Increasing willingness by theU.S. Government to use export controls—em-bargoes, sanctions, and other export bans—hashurt U.S. producers. While the Federal Govern-ment has not applied trade sanctions specifical-ly in forest products, its readiness to use themas an instrument of foreign policy (or as aweapon) probably has harmed all U.S. export-ers to some degree.

sg]nc,rease~ LVOOd [+otio[; is E.\ports, OP. cit., P. 3.

Taxation of foreign earned income also mayhamper the ability of U.S. producers to pro-mote products overseas. The United States isthe only major industrial country that taxes onthe basis of citizenship rather than residence.Nationals of other countries generally are taxedonly in the country where they live, BecauseAmerican citizens must pay U.S. taxes on in-come earned abroad, it is very expensive forU.S. companies to keep American executivesoverseas, and to maintain marketing supportin foreign countries,

Uncertainty over the interpretation of theForeign Corrupt Practices Act may also hinderexports.

Government Assistance to Exporters

Several U.S. Government agencies affecttrade policies and offer assistance to export-ers, They include:

●

●

●

●

●

●

●

the Office of the U.S. Trade Represent-ative, a cabinet-level official who repre-sents the United States in both GATT andbilateral trade negotiations;the Department of State, which is involvedin trade negotiations;the Department of Commerce, whichmaintains the Foreign Commercial Serviceand otherwise assists U.S. exporters andwhich also administers export controls;USDA, which maintains FAS, now assist-ing wood products exporters;the Department of Treasury, which helpsset international economic and monetarypolicy;the National Security Council and the De-partment of Defense, both of whom playan active role in policies on export con-trols; andothers who provide assistance, includingthe Export-Import Bank, the Small Busi-ness Administration, the Overseas PrivateInvestment Corporation, and USDA’sCommodity Credit Corporation.

As noted, FAS recently has been authorizedto help solid wood products exporters. How-ever, there is no comparable assistance at pres-ent available to U.S. paper producers. The For-


eign Commercial Service, while it is em-powered to provide this service, is organizedalong regional rather than commodity lines andprobably is unable to provide the type of ex-port assistance offered by FAS. While there isno legal restraint on FAS offering assistanceto U.S. paper producers, the agency is current-ly too understaffed both in the United Statesand abroad to provide this additional service.Nevertheless, the paper industry has shownlittle interest in FAS assistance to date.

The U.S. Government does not provide thelevel of export assistance that some othergovernments do. Assistance from the U.S.Trade Representative and the Departments ofCommerce and Agriculture are available, butno agency provides the kind of comprehensiveinformation and assistance given, for example,by the Japan External Trade Relations Orga-nization (JETRO). Generally, the U.S. Govern-ment does not confer direct export subsidiesthat would be acceptable within the GATTframework. More common than direct finan-

cial assistance are certain forms of tax assist-ance. One such program, the Domestic Inter-national Sales Corporation (DISC), providesspecial subsidies for export sales that allow cor-porations to defer some taxes. This programhas been found illegal by a GATT tribunalunder the Tokyo Round subsidies code, and theReagan administration has committed itself toa reappraisal of the program as a result. Aboli-tion or dilution of DISC, according to theAmerican Paper Institute, could hinder futureplans for exports.40

Another program that can aid U.S. producersin expanding exports is a new law allowingAmerican firms, including banks, to form ex-port trading companies. It is intended to helpsmall and medium-sized companies band to-gether in order to export. Certain exemptionsfrom current antitrust law may permit newforms of cooperation, but it is too early toassess the impact of this program.

@’The American Paper Industry: An International Profile,”op. cit., p. 8.

U.S. Imports of Forest Products

The tonnage of U.S. imports of forest prod-ucts has increased over 250 percent since 1950(fig. 7). The constant (deflated) value of woodimports has increased by 75 percent since 1964(fig. 8). While the United States has been a netimporter of forest products for at least 20 years,the balance-of-payments deficit has narrowedsharply. In 1979, the deficit was over $2.6 bil-lion, but dropped to less than $1.7 billion in1982. In 1982, for the first time in recent his-tory, the United States became a net exporterof solid wood products (roundwood, sawwood,and panels), primarily because the value of im-ports dropped more than the value of U.S. ex-ports during the recent recessional The UnitedStates remained a net importer of pulp andpaper, although the trade deficit in pulp andpaper dropped by more than $400 million.

41U .s, Department of Commerce, International Trade Com-mission, unpublished data, 1983.

Figure 7.—Tonnage of U.S. Wood Imports,by Product, 1950.79

o 14

201950 1954 1958 1962 1966 1970 1974 1978

SOURCE: U.S. Department of Agriculture, Forest Service, An Ana/ysis of theThntxw S/tuaf/on in the Unlfed States 1952-2030, Forest ResourceReport No, 23 (Washington, D. C.: U.S. Government Printing Office,December 1982), pp. 302-303.

Ch. Ill— World Markets for U.S. Wood Products ● 6 7

Figure 8.—Value of U.S. Wood Products Imports,1964-80

5,000 -

4,500

4,000 —

3,500 —

3,000 -

2,500

2,000 “

1,500 -

Solid Wood Products

In 1982, the value of U.S. imports of solidwood products* totaled nearly $2.3 billion,down from over $3.5 billion in 1979, withalmost 70 percent of 1982 imports of solidwood products consisting of softwood lumberfrom Canada (table 8). For over 30 years, im-ported Canadian lumber has accounted for agrowing share of the volume of U.S. lumberconsumption, rising from less than 7 percentin the early 1950’s to over 30 percent in 1982

— ——* Logs and timber, pulpwood (including chips), wood wastes

and fuels, lumber and railroad ties, and wood-based panels.

(fig. 9), although the tonnage decreases duringdownturns in U.S. homebuilding activities.

The current recession has caused the volumeof all imported lumber to drop from 11.6 billionboard ft in 1978 to 8.9 billion board ft in 1982.Declining lumber imports between 1981 and1982 accounted for over 70 percent of the totaldecrease in U.S. imports of solid wood prod-ucts.

The U.S. probably will continue to be a ma-jor

m

importer of solid wood products. No sig-

Figure 9.— Relative Importance of CanadianSoftwood Lumber Imports, 1950-82

5

1950 1955 1960 1965 1970 1975 1980 1985SOURCES: U.S. Department of Agriculture, Forest Service, An Ana/ysLs of the

T/m&?r Situation in the Un/ted States 1952-XXK/ Forest Resource Re-port No. 23 (Washington, D. C.: Forest Sewice, December 1982). Na-tional Forest Products Assoclatlon, personal communication inter-national Trade Commission, personal communication.

Table 8.—U.S. Imports of Solid Wood Products, 1982

Quantity Value Percent ofProduct (mbfa) (thousands of dollars) total value

Logs and timber . . . . . . . . . . . . . . . . . . . . . 117,032 $26,430 1 .2 ”/0Hardwood . . . . . . . . . . . . . . . . . . . . . . . . 18,268 3,500 0.2Softwood . . . . . . . . . . . . . . . . . . . . . . . . . 98,764 22,930 1.0

Pulpwood (including chips) . . . . . . . . . . . NA 56,248 2.5Wood waste, fuel . . . . . . . . . . . . . . . . . . . . NA 8,446 0.4Lumber and railroad ties . . . . . . . . . . . . . . 9,200,075 1,665,312 73.2

Sof twood lumber . . . . . . . . . . . . . . . . . .8 ,973,652 1,567,931 68.9Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . 226,423 97,381 4.3

Wood-based panels . . . . . . . . . . . . . . . . . . NA 519,585 22,8Hardwood veneer and plywood . . . . . . NA 402,798 17.7Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . NA 116,787 5.1

Total . . . . . . . . . . . . . . . . . . . . . . . . . . . $2,276,021 100.0 ”/0ambf ~ mtll!on board feet

SOURCE U S International Trade Commission

68 • Wood Use: U.S. Competitiveness and Technology.

nificant changes in patterns of U.S. imports areforeseen, 42 although the declining availabilityof tropical veneer species from Southeast Asiamay limit U.S. hardwood imports before theend of the century.

Pulp and Paper Products

In 1982, the United States imported wood-pulp and paper products worth $5.3 billion,and its balance-of-payments deficit in theseproducts was over $1 billion, considerably lessthan in 1979 when net imports were over $1.4billion, Imports of fine papers (mainly news-

42An~]ys;s Of ~he ~jrnber Sjtua tjorl, Op. Cit., p. 102.

print) accounted for over 60 percent of U.S.pulp and paper imports in 1982, and woodpulpaccounted for almost 30 percent (table 9).About 90 percent of all pulp and paper importscame from Canada.

No major changes in the patterns of U.S. im-ports of pulp and paper are expected. Althoughthe United States also is exporting increasingamounts of woodpulp and paper, many Statesof the Northeast, the Great Lakes, and theMidwest are deficient in softwoods needed tomanufacture newsprint. The proximity of Que-bec and Ontario, with large softwood re-sources, gives Canadian producers advantagesin exporting these products to needy U.S.markets,

Table 9.—U.S. Imports of Pulp and Paper Products, 1982

Quantity Value Percent ofProduct (sta) (thousands of dollars) total value

Woodpulp . . . . . . . . . . . . . . . . . . . . . . 3,656Paper products . . . . . . . . . . . . . . . . . . NA

Waste paper . . . . . . . . . . . . . . . . . . 132Building paper . . . . . . . . . . . . . . . . 187Industrial

Paperboard . . . . . . . . . . . . . . . . . 76Fine papers . . . . . . . . . . . . . . . . . . . NAMiscellaneous b . . . . . . . . . . . . . . . . NA

Total . . . . . . . . . . . . . . . . . . . . . . .a~t . ~h~~ t~”.sblndustflal papers, packaging, and mlscellafleous PaWr

SOURCE. US International Trade Commission.

$1,493,2413,826,595

24,29144,099

23,1733,328,696

406,336

$5,319,985

28.1 0/071.90.50.8

0.462.6

7.6

1 00.00/0

Ch.

III—

World

Markets

for U

.S.

Wood

Products

● 6

9

0

In % of coniferous volume

Hardwood 0 0 - <25%

Mlxedwood 0 25 - <75%

SoftWOOd. 75 - 100%

NOTE Produced for the Forestry Statistics and Systems Branch, Canadian Forestry Service, by the Geocartographlcs Sub-DIvISion, Statistics

~

~ ~:J

.~

Canada, 1982 Photo credit: Canadian Forestry Service, Forestry Statistics and Systems Bmnch, "Canada's Forest Inventory, 1981," Department of the Environment, Chalk River, Ontario

Canada's softwood forests are well located satisfy many Northeastern U.S. wood markets

CHAPTER IV

Wood Use in the United States

Contents

Summary . . . . . . . . . . . . . . . . . . . . . . . .

History of Wood Use . . . . . . . . . . . . . . . . . . . . . . . . .

uses of wood . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Wood for Energy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Prospects for Further Growth in Wood Fuel Use . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Wood in Construction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Pulp and Paper Products . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Other Wood Products . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Advanced Wood Materials . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Projected U.S. Consumption ofTimber and Wood Products . . . . . . . . . . . . . . . . . .Demand Projections . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Supply Projections . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Timber Consumption Projections . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

The Forest Products Industry . . . . . . . . . . . . . . .. . . . . . . . . Contribution to the Domestic Economy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Structure and Performance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Regional Distribution.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

List of Tables

Table No.10. Representative Uses for Wood.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .11. Taxonomy of Major Forest Products. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .12. OTA Calculations of Wood Fuel Removals, 1980 . . . . . . . . . . . . . . . . . . . . . . . . . .13. Domestic Consumption of Lumber and Panel Products, 1976 . . . . . . . . . . . . . . .14. U.S. Production of Paper and Paperboard in 1981 and Projected for 1984 . . . .15. Production and Value of Silvichemicals in the United States in 1977. . . . . . . . .16. Number of Employees, Value Added, and Value of Shipments for Primary

and Secondary Forest Products Industry in 1977 . . . . . . . . . . . . . . . . . . . . . . . . . .

List of Figures

Figure No.10. Relative Importance of Industrial Raw Materials, 1920-77 . . . . . . . . . . . . . . . . . .11. Domestic Timber Consumption, 1952-2030 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .12. Softwood Timber Production: Regional Distribution, 1976 and 203013. Hardwood Timber Production: Regional Distribution, 1976 and 2030

..*,... . .. . . . . . . .

14. Softwood Timber Production: Distribution by Ownership, 1976 and 2030... . .15. Schematic of the Forest Products Industry . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .16. U.S. Lumber Production by Region, 1952-76 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .17. Softwood Plywood Production by Region, 1952-76 . . . . . . . . . . . . . . . . . . . . . . . . .18. Regional Wood Fuel Consumption in 1981 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Page73

76

78787981838586

88899191

94959799

Page767779828587

96

Page739292939495

100101102

CHAPTER IV

Wood Use in the United States

Summary

Americans currently consume about one-fourth of the world’s forest products and havethe highest per capita consumption in theworld. At the same time, the United States isthe world’s largest producer of wood products,accounting for about 35 percent of total globaloutput of paper, 45 percent of all plywood, and20 percent of softwood lumber.1

While the contribution of wood to the domes-tic economy has been declining over the past50 years (fig, 10), it continues to be valuable inconstruction, shipping, packaging, and com-munications. Wood’s future role in the nationalmaterials mix is difficult to forecast, but woodshould continue to be an important raw mate-rial in the foreseeable future. Whether its con-tribution to the economy expands or decreaseswill depend on several factors:

●

●

●

●

●

the relative availability and price of woodcompared to alternative materials,technological advances affecting uses forwood and other materials,the business acumen of the forest productsindustry compared to its competitors,government policies that encourage or in-hibit use of wood relative to other materi-als, andconsumer preferences.

Wood is made into thousands of products,but a few uses dominate today’s market, Onceagain, after a period of decline, energy is thehighest volume use for wood in the UnitedStates. Over half of the wood removed from for-ests in the early 1980’s ultimately was burnedfor energy. Much of this consisted of pulpmillwastes, but a growing percentage was fuel-wood used for residential heat and commer-

Figure 10— Relative Importance of IndustrialRaw Materials, 1920-77

100 r Agricultural nonfood, and wildlife productsa

1920 1940 1960 1980Year

alncludes cotton and other fibers, oils, rubber, furs, hides, and other Slmllarproducts

blnciudes miner~ construction materials, metal ores, chemical and fertilizer rna-terlals, abrasives, and other minerals

SOURCE U S Department of Agriculture, Forest Service, An Ana/ys/s of the TIrn-bar S/tuat/on In the United States, 1952.2030 (Washington, D C U S.Government Printing Off Ice, 19f32), p 3

cial power, * The forest products industry,which uses waste wood and residues for fuel,accounts for about 65 percent of wood energyuse, while the remaining 35 percent is burnedfor home heating. Future levels of fuelwood useare difficult to predict; however, continued butprobably slower growth in residential andcommercial use of wood energy is likely inthe Eastern United States for at least the nextdecade.

Over half of the solid wood products con-sumed, including lumber and plywood and

1 Roger Sed jo and Samuel Radcliffe, t% tm’ar ‘1’rerI cfs I’n L’, S,

Forest Produf;t.s Trade. Resources for the Future Research f]apcrR-22 (Washin@on, DC,: Kew}urces for the Future 1$)80), p. 5F15,

*Wood consumption for other forest products decreased in1981 because of the economic recession while fuelw’ood con-sum pt ion cent i nued at a high rate,

73


other panels, are used in construction, mostlysingle-family housing. After World War II, atrend toward building large detached homesdeveloped and increased the demand for wood,even though construction methods becamemore efficient. In the future, growth in hous-ing and related demand for wood may slow dueto the higher cost of homeownership, shrink-ing household size, and possibly an increasingproportion of multifamily dwellings.

Demand for pulp and paper products hasgrown dramatically in recent decades, andprospects are good for continued growth, How-ever, paper products face increasing competi-tion from other materials, particularly plastics.Electronic communications may alter paperconsumption patterns in the future, but themagnitude and direction of possible shifts areuncertain. The immediate effect of computers,word processors, and office copying equip-ment has been to increase demand for sometypes of paper.

Forest products have a variety of uses inmanufacturing, shipping, and heavy industry.With the exception of pallets, demand formajor industrial products made from woodhave either leveled off or declined as usage haschanged or as other materials have replacedwood. Nevertheless, wood will continue to bevaluable for a wide range of minor industrialand specialized applications.

Chemicals and cellulosic fibers are also pro-duced from wood. The $1.5 billion cellulosicfiber industry, which makes rayon and acetate,uses refined wood cellulose as a basic rawmaterial. over $500 million in other silvichem-icals are also produced from wood each year.These silvichemicals include lignin byprod-ucts, food additives and flavorings, and navalstores. Wood also can be used to make manyproducts now made with petrochemicals. Pro-duction of chemicals as byproducts of woodmanufacturing probably will continue, butwidespread replacement of chemicals nowmade from petroleum is unlikely. However, in-tensified research on wood chemicals, partic-ularly lignin, could lead to new products ofconsiderable value.

Although the United States is the world’slargest producer and consumer of wood prod-ucts, with demand increasing since 1950,wood’s importance to the domestic economyhas declined. The value of timber products asa proportion of the value of all industrial rawmaterials has been dropping for more than 5 0years, from about 40 percent of the total in 1920to about 27 percent in 1977. In part, this isbecause some traditional uses for wood havedecreased in importance and because nonre-newable products, such as plastics and metals,are competing successfully in forest productsmarkets. The rising value of nonrenewable rawmaterials may be other factors accounting forthe decline. An expanding role for wood inthe economy is possible if the price and avail-ability of nonrenewable materials becomeless competitive. Otherwise, industrial usesfor wood are not likely to expand signifi-cantly.

Wood’s future also may depend on the de-velopment of new wood products to competewith nonwood products as well as the devel-opment of composites that combine wood andnonwood materials. For example, new woodbuilding materials are available which couldexpand current wood markets or open othersin the coming years. New super-strength paperand paperboard products, currently in devel-opmental stages, also could have some struc-tural applications. Composite materials madeof wood in combination with fiberglass, plas-tics, or metal have demonstrated superior per-formance for some applications, but current-ly are not widespread in use.

In 1980, the Forest Service issued projectionsof future timber demand, supply, and con-sumption as part of an assessment process re-quired by the Forest and Rangeland RenewableResources Planning Act of 1974. These projec-tions, which are the basis for many Forest Serv-ice timber management programs, show rapid-ly rising timber consumption in the next 5 0years, accompanied by rising timber prices anddeclining softwood timber inventories after20100

Ch. IV— Wood Use in the United States ● 75

According to the projections, timber con-sumption from domestic forests will rise fromover 12 billion cubic feet (ft3) in 1976 to nearly23 billion ft3 in 2030. Consumption of hard-woods is expected to rise somewhat faster thanconsumption of softwoods, Hardwood con-sumption, which accounted for less than one-third of the 1976 timber harvest, is expectedto reach nearly 40 percent by 2030.

Another change shown in the projections isa substantial shift of harvest from the PacificNorthwest to the South, The South’s share ofthe softwood harvest is projected to increasefrom 45 percent in 1976 to 53 percent in 2030,and its share of the hardwood harvest from 51to 59 percent during the same period, Recentdata, however, shows larger inventories andfaster growth in the Pacific Northwest than theolder data indicate, a difference that probablywill dampen the regional shift.

The 1980 projections may overstate futuret imber consumption and price r ises duemainly to possible overestimates of demandand underestimates of timber growth. T h elarge projected increase in timber demand inthe future stems primarily from assumptionsabout economic activity, housing starts, andhome characteristics that many analysts thinkare too optimistic, Future timber supply esti-mates are based on static forest managementand short-term supply assumptions that prob-ably understate future growth potential. How-ever, because projections of southern softwoodinventories are being revised downward toconform with more recent survey information,the future supply picture is somewhat uncer-tain. underestimates of future supply also maybe offset somewhat by possible overestimatesof commercial timber acreage.

The forest products industry employs almost2 percent of the Nations’s full-time work force

and contributes almost 2 percent of the grossnational product (GNP). The industry containstwo major sectors: 1) pulp and paper, and2) lumber and panels (solid wood), The lumberand panels sector employs more people thandoes the pulp and paper sector, but pulp andpaper contributes a higher value added.

Historically, primary processing operations,including logging, lumber and panel manufac-ture, pulping, and papermaking have been con-centrated where inventories of raw materialsare greatest, mostly near the abundant soft-wood forests of the Pacific coast and the South.Secondary processing (the manufacture ofgoods such as boxes, cartons, paper products,trusses, and furniture) tends to be locatedcloser to markets, mainly in the Eastern UnitedStates.

The financial performance of the forest prod-ucts industry has been roughly equal to that ofother industries over the long term. However,in periods of recession, the lumber and panelproducts sector has been particularly vulner-able because of its heavy dependence on highlycyclical homebuilding activity.

The forest products industry is fairly com-petitive, but there are several leading com-panies. In 1978, the top four firms accountedfor nearly 15 percent of sales. One of the majorfactors that appears to correlate with industrydominance is landownership. The top 40 firmsin sales own 80 percent of all forest industryland, which totals 68.8 million acres or about14 percent of all U.S. commercial forestland.Another factor associated with industry leader-ship is diversification. The largest firms oftenproduce both paper and solid wood products,while smaller firms are more likely to special-ize. Neither landownership nor diversification,however, is necessarily a determinant of indus-try dominance.


History of Wood Use*

Wood is probably the most versatile of all ma-terials, adaptable to a broad range of uses andfunctions (table 10). For millenia, wood in itsmost rudimentary forms—firewood and logs-provided humanity with fuel, water transpor-tation, shelter, and food. Ancient peoples in-

ZInformation on the history of wood use can be found in RobertL. Youngs, “Every Age, the Age of Wood,” InterdisciplinaryScience Reviews, vol. 7, No. 3, 1982, pp. 211-219; and in ElgonGlesinger, ~~e Coming Age of Wood (New York: Simon &Schuster, 1949).

Table 10.—Representative Uses for Wood

Uses/Examples

Construction:Residential housing construction and upkeep, mobilehomes, and light commercial structures; arches andbeams for sports arenas, convention centers, etc.

Communications:Newsprint, printing papers, and other paper products

Packaging:Bags, sacks, containers

Furniture manufacturing:Household and commercial furniture

Shipping:Pallets, containers, dunnage, blocking, and bracing

Transportation:Railroad ties, manufacture of railroad cars, boats, andlight airframes

Wood fuel:Fuelwood, woodchips, mill residues, etc.:

Residential home heating and cooking, forestproducts industry process energy, electricitygeneration

Liquid and gaseous fuels:Potential supplement for petroleum and natural gasas a fuel or alternative petrochemical feedstock

Chemicals and cellulosic fibers:Rayon and cellulose acetate:

Clothing fibers, tires, conveyor and transmissionbelts, ribbons, films, etc.

Silvichemicals (naval stores and pulping byproducts):Used in production of synthetic rubber, chewinggum, rosin bags, inks, adhesives, paints, soaps,detergents, solvents, odorants, bactericide, drillingmud thinners, dispersants, leather tanning agents,water treatment, pharmaceuticals, etc.

Food and feed products:Feed molasses, animal fodder, vanillin flavoring, foodgrade yeast products

Miscellaneous and specialty products:Utility poles, pilings, fencing, mine props, cooperage,activated carbon, sporting goods, musical instruments,pencils, caskets, signs and displays, etc.

SOURCE: Off Ice of Technology Assessment.

vented ways to extract natural chemicals fromit, such as resins, oils, and medicines. Thebasics of producing paper were known to theChinese by the first century A. D., and similarprocesses, developed separately, apparentlywere known to the Mayas and Incas, In the19th century, papermaking machines becamecommon in Europe and the United States, en-abling high-volume production. Wood’s abun-dance or scarcity among nations has been acontributing impetus to warfare for hundredsof years. For example, colonial resentment ofBritain’s earmarking of “crown timbers” forshipbuilding is said to have exacerbated ten-sions leading to the American Revolution.3

Other instances have occurred as recently asWorld War 11,4

The extensive forests of colonial Americawere considered to be an obstacle to agricul-ture and settlement. Nonetheless, the super-abundance, low cost, and workability of woodpermitted its easy substitution for more suit-able, durable, and as-yet unavailable butscarcer materials for shelter, transportation,and tools. The U.S. industrial revolution de-pended on wood for fuel and tools until fossilfuels, iron and steel replaced it.

Wood was the most important source of en-ergy in the United States a century ago, pro-viding an estimated two-thirds of industrial andresidential fuel needs. When the advantages offossil fuels to an increasingly urbanized andindustrialized society became obvious, woodfuel use began to decline, both in proportionto total energy use and in absolute quantities.It recently has increased again as a way to beatrising energy prices.

Wood served an important but temporaryfunction in the development of the early U.S.

——SAS discussed in Robert F, Albion, Forests and Sea Power: The

Timber Problem of the Royal Navy (Cambridge, Mass.: HarvardUniversity Press, 1926), pp. 231-280.

4The role of wood in World War 11 is discussed in Elgon Gles-inger, Nazis in the Woodpile: Hitler Plot for Essential RawMaterial (Indianapolis and New York: Bobbs-Merrill, 1942).

network of roads, bridges, and railroads. s Insome areas, wooden roads were formed by lay-ing logs in a corduroy pattern; planks or woodblocks also served as road pavement. Thetracks, not just the ties, of early railroads werebuilt of wood. In 1910, at the high point ofrailroad expansion, an estimated one-fourth ofall wood consumed in the United States wasfor railroad ties,6

‘See Don H. Berkebile, “Wooden Roads, ” Lee H. Nelson, “TheColossus of Philadelphia, ” and John H. Nelson, “Railroads: Woodto Burn, ” In Alaterial Culture of the It’ooden Age, Brrmke Hindle(cd.) (Tarrjrtown, N.}’.: Sleep} Hollow Press, 1981), for a discus-sion of wood role in earlj’ U.S. transportation.

‘Glesinger, The Corning Age of Wood, op. cit.

Ch. IV— Wood Use in the United States ● 7 7

Advances in technology over the past 100years have resulted in many new wood prod-ucts (table 11), a variety of reconstituted struc-tural wood products, and composite productsthat join wood with other materials to improveits strength. Many of these products have com-parable or superior performance to lumber, yetallow fuller recovery of the resource, Much ofthe paper and paperboard now produced inthis country is made from southern pine spe-cies, which were considered unsuitable forpapermaking before adaptation of the kraftsulfate process in the 1930’s. Now, hardwoodsare used increasingly throughout the industryas technology expands to take advantage ofthese cheap and abundant materials.

Table 11 .—Taxonomy of Major Forest Products

Status ofProduct Description Iifecycle Major end use

Lumber type productsBoardsa

Dimension a lumber

Timbers

Parallel laminatedveneer (PLV)

Utility poles

Panel type productsPlywood

Hardwood

Particleboard

Medium-densityfiberboard

Semirigid insulationboard

Rigid insulationboard

Waferboard

Oriented strandboard (OSB)

Corn-Ply

1“ thick, 4“ to 16’, > 1“ wide2“ to < 5“ thick, > 2“ wide, usually 4’ to 16’long solid wood, sometimes edge glued

5 +‘ thick, > 4“ wide, various lengths;solid or laminated wood

Usually same dimensions as lumber andtimbers, made from wood veneerslaminated with parallel grains

9“ to 14” diameter, 50’ to 80(

Flat panels, usually 4’ x 8’, less than 1.5”thick, made from wood veneers laminatedwith grains of adjacent veneersperpendicular. Usually 3 to 5 plies (veneers)

Flat panels made of individual wood fibers,usually glued together

Flat panels, less than 1.5” thick, cut tosize of 4’ x 8’, composed of very smallwood particles glued together

Same as hardboard, with extremely flat,smooth surface and edges

Flat panels made of individual wood fibers,usually loosely matted, fibers bonded byinterfelting

Same as semirigid insulation board

Flat plywood-like panels made with flat,nonalined wafers or large chips of woodglued and pressed together

Flat plywood-like panels made with alignedstrands or ribbon-shaped pieces of wood.Sometimes crossbanded (strands indifferent layers oriented perpendicular toadjacent layers), sometimes veneered

Flat plywood-like panels or lumber-likepieces, with particleboard cores andwood veneer faces

MM

M

G

M

M

M

M

M

D

D

G

G

General purposeStructural framing

Structural framing beams, and largesupports

Structural framing and supports. Can alsobe used in millwork and molding

Transmission lines

Structural sheathing, flooring, and a varietyof semistructural uses

Floor underpayment, facing for architecturalconcrete, wall linings, door inserts, stereo,radio and TV cabinetry, and furniture

Underpayment, furniture core

Furniture, wall siding

Insulation, cushioning

Interior walls and ceilings, exterior sheathing

Paneling, substitute for plywood instructural use, wallboard

Same as plywood

B Same as lumber and plywood

78 . Wood Use: U.S. Competitiveness and Technology—— — —— — - . —- —

Table 11 .—Taxonomy of Major Forest Products (continued)

Status ofProduct Description Iifecycle Major end use

Paper productsUnbleachedkraft paper

Bleachedkraft paper

Newsprint andground woodprinting papers

Corrugating medium

Linerboard

Paperboard

Coated paper

Specialty papers

Tissue paper

Other productsRayon

Acetate

Cellulosic films

Brown, somewhat coarse, stiff papermanufactured primarily by the kraft sulfateprocess from hardwoods and softwoods

White fine textured paper manufactured byeither the kraft sulfite process or the kraftsulfate process from either softwoods orhardwoods. The better papers areprovided from softwoods

Coarse textured paper of low strength andlimited durability, which tends to yellowwith age. It is manufactured frommechanical and semimechanical (particularlychemically treated) pulp, which uses eitherhardwoods or softwoods

Coarse, low-strength paper producedprimarily from sulfite pulping of hardwoods

Stiff, durable, thick paper made primarilyfrom unbleached kraft paper made by thesulfate process

Stiff paper of moderate thickness madeprimarily from bleached sulfate kraft pulp

Printing papers that have been coated withmaterials that improve printability andphoto reproduction

Diverse group of products ranging fromthin filter papers to stiff card stock

Thin, soft, absorbent papers manufacturedprimarily from chemical groundwood pulps

Synthetic fiber produced by the viscoseprocess using pure cellulose produced bythe dissolving pulp process. Rayon hasproperties similar to cotton

Synthetic fibers produced from dissolvingpulp-like rayon, but further chemicaltreatment make them water resistant withproperties more like nylon or orlon

Film made from dissolving pulp by therayon and acetate processes, butextruded as sheets of various thicknesses

M

M

M

M

M

M

M

M

M

M

M

D

Heavy packaging, bags, and sacks

Fine writing and printing papers andpaperboard for packaging

Printing of newspaper and for otherprinting uses not requiring durability

Corrugated boxes as dividers andstiffeners between the paperboard liners

Heavy duty shipping containers andcorrugated boxes

Milk cartons, folding boxes, and individualpackaging

Magazines, annual reports, and books

Cigarettes, filter papers, bonded papers(with cotton fibers) index cards, tags, filefolders, and postcards

Toweling, tissues, and hygenic products

Woven cloth as a cotton substitute

Woven cloth as a substitute for nylon andother petroleum-derived synthetic fibers

Packaging (cellophane) protectivecoverings, photographic applications,transparent drafting and graphic materials

NOTE B = beginntng; G = growing; M = mature; D = declintnga N o m l n a l d~menslons, i . e . , 1

“ nominal = 3/4” actual.

SOURCE: Office of Technology Assessment

Uses of Wood

Wood for Energy from U.S. forests that year. Wood fuel is usedprimarily by the forest products industry,

Since the 1973 oil embargo, wood has re- which meets a high proportion of its energyemerged as an important domestic source of needs by burning wood wastes, and by home-energy. Energy extracted from wood in 1981, owners for residential heating. The potentialincluding milling and pulping wastes, repre- of wood as an energy source is analyzed in thesented more than half of all wood removed 1980 Office of Technology Assessment (OTA)

Ch. IV— Wood Use in the United States ● 7 9

report, Energy From Biological Processes. 7

New information on wood energy use recent-ly became available, due to independent sur-veys conducted by the Department of Energy(DOE) and the Forest Service, Both the DOEsurvey and the preliminary Forest Servicesurvey show that residential fuelwood use isfar greater than previously reported.

Over 130 million dry tons (1 dry ton = 1 cord)of wood were burned for fuel in 1980, accord-ing to a DOE survey.8 This tonnage representsabout 2.2 quadrillion Btu (2.2 Quads) ofenergy—about 3 percent of total domesticenergy consumption.9 On the basis of the moreconservative Forest Service estimate of resi-dential fuelwood use, OTA estimates that about55 percent of all wood removals in the United

7Energy From Biological Processes, vols, I-III (Washington,D. C.: U.S. Congress, Office of Technology Assessment, OTA-E-124, 1980).

‘U.S. Department of Energy, Estimates of U.S. Wood EnergyConsumption From 1949 to 1981, stock No. 061-003 -00266-8

(Washington, D. C.: U.S. Government Printing Office, August1982),

‘Derived from the U.S. Department of Energ}, fvfonthl~’ ~nerg~r

Rel’iew, November 1982.

Table 12.—OTA Calculations

States in 1980 were consumed for fuel pur-poses (table 12). *

About 60 percent (81 million short tons) ofall wood energy was used by the forest prod-ucts industry in manufacturing. The remain-ing 42 million to 48 million short tons wereused primarily for residential home heating.

Prospects for Further Growth in Wood Fuel Use

Since the forest products industry alreadyderives a large percentage of its energy re-quirements from wood, the areas where woodfuel use grows the most in the future probablywill be in residential and commercial (e.g., hos-pital and nonwood manufacturing) applica-tions.

In contrast to wood fuel byproducts used bythe forest products industry, residential fuel-wood use almost always involves removal of——- ——

*In 1981 and 1982, the proportion of removals used as woodfuel probabl~r exceeded 55 percent, due to continued growth inresidential fuelwood use and a decline in forest products industr~’removals resulting from the economic recession.

of Wood Fuel Removals, 1980

Million tons of1980 quantitites of wood removed oven-dried wood

Wood (bark excluded) for forest products industry (estimated at11.6 billion cubic feet) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 160

Bark portion of forest products industry removals . . . . . . . . . . . . . . . . . . . . . . 21Residential fuelwood (quantity harvested for use in 1980-81 heating

season: 42 million cords, at approximately 1 ton each). . . . . . . . . . . . . . . . 42

Total 1980 quantity of wood removed . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 223

Million tons of oven-dry woodneeded to produce the

1980 wood fuel consumption Quads equivalent amount of energy

Industrial (including mill residues, andspent pulping liquors) . . . . . . . . . . . . . . . . . . 1.4 . . . . . . . . . . 81

Residential . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.8. . . . . . . . . . 42

Total 1980 wood fuel consumption . . . . . . . 2.2 123NOTE: The ratio of the 1960 wood fuel consumption to the 1960 quantity of wood removed is 123/223 or 55 percent This figure

is based on very crude estimates and calcuIations and provides only a rough approximation of the importance of woodfuels It furthermore is subject to wide fluctuations correpsonding to changes in annual removals of industrial round.wood In 1961, for example, the ratio certainly increased, as removals declined and wood fuel consumption cent i n uedto increase

SOURCES’ Estmafes of US. Wood Energy Corrsurnption from 1949 to 1981 (Washington, D.C. U S Department of Energy,1%32), p 95, Kenneth E Skog and Irene A Watterson, Residential Fue/wood Use irr the Un/ted States. 198081 (draftreport), U S. Departmen! of Agriculture, Forest Service, Forest Products Laboratory, March 1963, p 1, p 17, andtable 4, conversation with Robert B Phelps, Research Forester, Demand Price and Trade Analysls, Forest ResourceEconomics Research Staff, U S. Department of Agriculture, Forest Serwce, May 26, 1963, letter from John GHaygreen, Professor and Head, Kauferf Laboratory, Department of Forest Products, College of Forestry, Universityof Minnesota, to James W Curl in, Project Director, Off Ice of Technology Assessment, U.S Congress, letter datedNov 1962, and conversations with Kenneth E Skog, Research Forester, Englneerlng and Economics Research,U.S Department of Agriculture, Forest Service, Forest Products Laborato~, Madison, Wls


wood from forests specifically for fuel. Manyvariables will influence trends in this area, in-cluding the abundance and accessibility of fuel-wood, the relative price and availability of non-wood fuels, and personal preferences of home-owners. In the short term, all of these variablesappear to favor increased fuelwood utilization,although probably not at the rapid rate of in-crease of the late 1970’s.

Current residential fuelwood use is signifi-cantly above levels projected by the ForestService in its 1980 assessment under the Forestand Rangeland Renewable Resources PlanningAct of 1974 (Public Law 93-378). The projec-tions said that residential fuelwood use wouldgrow progressively from an estimated 6 millioncords in 1976 to 26 million cords in 2030, Re-cently, however, the Forest Service revised itsforecast to reflect new evidence of rapidly in-creasing consumption. The new forecasts, is-sued in a draft supplement to the 1980 supple-ment, show wood fuel use quadrupling withinthe next 50 years, reaching nearly 200 millioncords annually. Much of this increase may re-flect rapid growth in commercial use of woodfuels as well as residential fuelwood. Whilethese projections cannot be made with certain-ty, it does seem probable that wood fuel usewill significantly exceed the Forest Service pro-jections made in 1980, even if it falls short ofthe revised estimates.10

Demographic and technological trends favorcontinued growth in fuelwood use for residen-tial home heating, although probably at slowerrates than in the 1970’s. In forested regions,fuelwood is easily accessible to the increasingproportion of the population living in subur-ban and rural communities.

The availability of highly efficient woodburning stoves, inexpensive chain saws, andlog splitters makes it possible for many rural

IOThe initita] estimate and forecast are contained in U.S. De-partment of Agriculture, Forest Service, An Analysis of the Timb-er Situation in the United States 1952-2030 (Washington, D. C.:U.S. Government Printing Office, 1982), p. 67; the revised pro-jections are contained in the Forest Service’s Review Draft;America Renewable Resources: A Supphment to the 1979 As-sessment of the Forest and Rangeland Situation in the UnitedStates, preliminary draft subject to revision, Feb. 4, 1983, p. 15.

and suburban residents to meet a high propor-tion of their home heating needs from nearbywoodlands. In some instances, as in the caseof national forests, firewood is provided at lit-tle or no cost to people willing to remove it.There has been a tenfold increase in firewoodpermits issued for national forests since 1971,representing a rise in wood removal from about400,000 cords per year to about 4 millioncords. * Other arrangements such as fuelwoodpurchasing cooperatives can reduce firewoodcosts below what individual purchasers mustpay.

Increased wood fuel utilization by small non-wood industrial and commercial firms is alsoprobable. Such firms currently account for asmall portion of wood fuel consumption, butincreasing numbers of companies in regionswith abundant wood supplies find wood com-petitive with petroleum and natural gas fuels.11

Wood also has certain economic advantagesover coal, since wood boilers generally requirelower capital investment for air pollution con-trols. Use of wood fuel in industrial processesand for electricity by public utilities is occur-ring in some areas,

Wood Fuel Use by the Forest Products Industry

Between 1972 and 1981, wood fuel use by theenergy-intensive pulp and paper sector in-creased from about 40 to 47 percent of the totalenergy consumed by this part of the forestproducts industry. Wood fuel provided about73 percent of the solid wood industry’s energyneeds in 1981.12

Because it already uses most pulping and millresidues, the forest products industry will findit more difficult to burn much more wood,Much of the remaining residues not burned for——

*information on fuelwood removals from national forests pro-vided by the Forest Service.

llsee char]= E. HeWett ancl William ‘r. Gladden, Jr., ikfarketPressures to Use Wood as an Energy Resource (Hanover, N. H.:Dartmouth College, Thayer School of Engineering and ResourcePolicy Center, June 1982) for regional prices of wood and otherfuels on a Btu equivalent basis.

IZNationa] Forest Products Association, “Industrial EnergyConservation Program 1981 Report for Lumber and Wood Prod-ucts” (Washington, D. C.: National Forest Products Association,June 24, 1982),

energy are used to make composite wood prod-ucts or silvichemicals. Further increases inenergy self-sufficiency may require the recov-ery of logging residues now left in the forests,harvesting of wood specifically for fuel use,and the development of more energy-efficientprocessing methods.

To date, nearly all wood energy is derivedfrom the direct combustion of wood and woodbyproducts. Wood also can be gasified or con-verted to liquid alcohol fuels that could sub-stitute directly for fossil fuels. Several small-scale technologies for wood gasification arecommercially available at this time althoughthe Btu content of the gas is low. To date, nocommercial facilities to produce alchohol fuelsfrom wood have been constructed. One tech-nological barrier to commercialization is theinability to convert economically large quan-tities of lignocellulosic materials. 13

Wood in Construction

With the exception of fuel, more wood isused for construction than for any other singleapplication. In 1976, construction accountedfor about 60 percent of the lumber and two-thirds of the plywood consumed in the UnitedStates. Major demand comes from the home-building industry, followed by residentialupkeep and repair, and nonresidential con-struction (table 13).

The relationship between new constructionand demand for wood has both positive andnegative implications for the solid wood prod-ucts sector. The industry has benefited fromthe increase in the number and size of newsingle family homes which has occurred sinceWorld War II, because they use more woodthan multiunit or manufactured housing. How-ever, residential construction is highly cyclical,with more pronounced highs and lows in eco-nomic activity than most other industries. Asa result, the solid wood products sector some-times is strained to meet demand during peakbuilding years, such as the peak between 1972

13u ,S. Depaflrneni of Energ}’, Report of the Akohol ~’uek pol-

ic~’ Review (Washington, D. C.: U.S. Government Printing Of-fice, 1979),

Ch. IV—Wood Use in the United States ● 8 1

and 1976 when housing starts exceeded 2 mil-lion annually. On the other hand, it sometimesis severely depressed, as has been the casesince 1981 when housing starts fell to about 1million per year. *

The amount of wood used in each housingunit varies according to construction materialsand methods, the structure’s type and size, ar-chitectural design, building codes, and region.Major changes in residential building materialshave occurred since 1950, including greateruse of plastics, metals, and masonry as substi-tutes for wood. Modern construction tech-niques, including use of prefabricated rooftrusses and floor joist systems and factoryprepared doors, windows, and cabinets, alsotend to reduce the amount of wood used perunit of floor space.

Wood nonetheless remains the dominant ma-terial for homebuilding. Although wood use persquare foot has declined, the overall size ofsingle family houses has increased rapidly in

*The 1970-82 period saw both the high and low” points in ne~~home construction in the post World War 11 period. In 5 yearsduring the 1970’s, housing starts exceeded 2 million per ~ear(1971, 1972, 1973, 1977, and 1978), Post-Wor]d W’ar 11 low pointswere in 1975 (1.2 million starts), 1981 (1.1 mi]]ion), and 1982 (1.1million).

*

Photo credit’ U S Forest Service

New home construction is the most important single useof solid wood products


. . .. . .. . .

the post-World War II era. As a result, theamount of wood used per unit has increasedslightly over the last two decades. l4

Floor area of the average new single familyhouse has increased over 70 percent between1950 and 1979.15 The proportion of new singlefamily homes with garages increased from 40percent in 1950 to 76 percent in 1980, includingover 60 percent with room for two or morecars. l6 The exterior walls of 42 percent of allnew single-family houses were wood in 1980as compared to 32 percent in 1959.17 These ar-chitectural trends have been offset somewhatby other trends that reduce wood use, such asmore split-level and two-story houses andfewer porch and roof overhangs.

Long-term trends in housing demand dependon several interrelated factors, including:

. demography,• general economic conditions and per cap-

ita income,• national housing and financial policies,● housing affordability, and• cultural and personal housing preferences,

Throughout the 1970’s, many housing ex-perts projected a continued upward swing inhousing starts through 1990 and perhaps to2000. The expected increase in housing de-mand was linked more to the “baby boom” gen-eration reaching prime home-buying age thanto economic factors and government policiesthat affect construction and affordability, Thedemographic demand for housing in the 1980’sand 1990’s theoretically should be high. Thenumber of Americans in prime household for-mation ages (24 to 35) will peak around 1985and will continue at near record levels until1990 before tapering off. l8

14(J n i \,erslt}, of Wisconsin Extension, Environmental Aware-ness Center, Housing and Wood Products Assessment, finalreport to the LJ, S, Congress, office of Technology Assessment,Dec. 10, 1982, p. 21ff.

151 bid., p. ZZ, It should bc noted that square feet of finishedfloor area declined slightly in 1980.

‘61hi(i,, p. 24,171hirl,, I). 32,la[~rt;s iden t‘s (;o nl m iss io n o n H ou si Ilg, ~eport Of ~he ~JW.Sj-

cjen t‘s (,’omm ~s.sjon on Hou,sjng IWashington, E). (;,: [J, S. (jo\rern-ment Printing office, 1 982), p. 67,


The length and severity of the housing down-turn in the early 1980’s, however, has resultedin reevaluation of these projections. Some ana-lysts anticipate new home construction to re-bound to record levels when economic condi-tions improve, as it did in the seven previoushousing cycles after World War II. Others,more pessimistic, say that a profound changeis occurring in the U.S. housing market be-cause the cost of homeownership is risingfaster than family income, Such conditions arelikely to limit the construction of detachedsingle-family homes, and residential housingneeds increasingly may be met through rehabil-itation of older units, conversion of existingsingle-family units to multiple units, more newmultifamily units, and manufactured housing,These events would reduce projected wood usein new construction but also could expandmarkets for wood in home improvement.

Pulp and Paper Products

The United States reports the world’s highestper capita consumption of paper and paper-board products at 600 pounds per person peryear. U.S. production of paper and paperboardamounted to about 64 million short tons in1981, while domestic consumption amountedto 68 million short tons. l9

Woodpulp is the primary raw material for allbut a small portion of paper products, displac-ing cotton and other raw materials that dom-inated in the past. Annual woodpulp produc-tion has increased steadily, from about 15million short tons in 1945 to about 53 millionshort tons in 1981.20 Still, the United States im-ports slightly more pulp than it exports, andit manufactured 53.6 million short tons of pulpinto paper and paperboard products in 1981.

Pulp and paper manufacture has grown moreefficient as wood prices have risen. Early pulp-

IBAmerican paper Institute, Statistics of Paper, Paperboard and

Wood Pu]p— 1982, data through 1981 (New York; AmericanPaper Institute, 1982), table 1.

ZO1 981 figure is from Ibid., p. 52; 1945 figure is from U.S. De-partment of Agriculture, Forest Senice, .4n Anal~sLs of the Tin-ber Situation in the United Sta(es, 1$?.52-20.?0, Forest ResourceReport No. 23 (Washington, D. C.: LJ.S. Government Printing of-fice, December 1982), p. 61.


ing processes were limited in the tree speciesthey could use as raw material, but over timethe industry has developed processes that canexploit a wider variety of species. Over the past40 years, for example, hardwood use has in-creased so that it now accounts for over a quar-ter of the pulpwood utilized. The industry alsorelies heavily on chips and sawmill residuesthat are the byproducts of solid wood productmanufacture, to the extent that they compriseover 40 percent of the wood used for pulping.Fifteen million short tons of recycled waste-paper were used in domestic pulp and paperproduction in 1981, compared to 12 millionshort tons in 1970.21

Research has expanded the number of prod-ucts that can be made from paper. Several thou-sand different kinds of paper and paperboard(a stiff, heavy paper) can be manufactured.These range from fluffy absorbent tissues to ex-tremely stiff board-like materials and exper-imental super-strength papers that match thestrength and/or weight characteristics of somelight structural metals.

Woodpulp use is evenly split between paperand paperboard production. The most impor-tant paper products include printing and writ-ing papers (51 percent), newsprint (17 percent),tissues (14.5 percent), and packaging (17.7 per-cent) (table 14). Linerboard, a kraft paperboardused for boxes, shipping containers, and pack-aging, accounted for 46.4 percent of the paper-board produced in 1981. Packaging is a rapid-...—

21 American paper lnsti~te, Statistics of Rper, Paperboard andWood PIJ]p-1982, p. 50.

ly growing market, comprising nearly 60 per-cent of domestic paper and paperboard pro-duction in 1981.

Increasing domestic and worldwide demandfor paper and paperboard are anticipated. TheDepartment of Commerce, for instance, fore-casts a 3 percent annual growth rate through

Photo credit: U.S. Forest Service

Researchers at the USDA Forest Products Laboratory areinvestigating new papermaking technologies


Table 14.—U.S. Production of Paper and Paperboardin 1981 and Projected for 1984 (thousand tons)

1981 1984a

Paperboard . . . . . . . . . . . . . . . . . . . . . . . . . . . 14,558 15,360Kraft fiberboard . . . . . . . . . . . . . . . . . . . . . 1,067 1,140Other kraft paperboard . . . . . . . . . . . . . . . 4,717 5,070Bleached paperboard . . . . . . . . . . . . . . . . . 3,926 4,100Recycled paperboard.. . . . . . . . . . . . . . . . 7,070 7,150

Tota l paperboard . . . . . . . . . . . . . . . . . .31,338 33,020Paper

Uncoated free sheet . . . . . . . . . . . . . . . . . 7,882 8,720Coated free sheet and groundwood . . . . 4,951 5,340Uncoated groundwood . . . . . . . . . . . . . . . 1,440 1,540Bristols and other . . . . . . . . . . . . . . . . . . . 1,530 1,580

Total printing and writing . ..........15,803 17,180Newsprint . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5,238 5,730Unbleached kraft . . . . . . . . . . . . . . . . . . . . . . 3,891 3,760Bleached regular and industrial. . . . . . . . . . 1,603 1,670Tissue . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4,485 4,730

Total paper . . . . . . . . . . . . . . . . . . . . . . .. .31,020 33,070Total paperboard and paper . ..........62,358 66,090

aMOrgan Stanley Estimates.

SOURCE Thomas P. Clephane and Jeanne Carroll, Linerboard krdustry Out./ook (New York Morgan Stanley & Co , 1982), p. 25

1986.22 Linerboard and high-quality printingpapers are expected to have especially promis-ing potential, with anticipated growth ratesthat are twice that of the paper sector as awhole. particularly high prospects for growthlie in the export markets, especially in the ex-panding industrial economies of Asia. Con-tinuation of the adverse economic conditionsof 1982, however, could dampen these pros-pects.

Some experts believe that paperboard will ac-count for a larger share of paper sector pro-duction due to increased paperboard demandand slower growth in other paper (nonpaper-board) markets. For example, paper has lostpart of the packaging market to plastics, al-though in some instances plastics have beencombined with paper to produce compositeproducts. Electronic communications and in-formation processing ultimately may displacesome paper now used in writing, copying,printing, and business forms. To date, how-ever, electronic communications have pro-vided high-volume markets for paper use in of-fice copiers and word processing equipment.

ZZU.S. Department of Commerce, Bureau of Industrial Econom-ics, 1982 U.S. Industrial Uutlook (Washington, D, C.: U.S. Govern-ment Printing Office, 1982), p. 43.

Other Wood Products

Furniture and Other Manufactured Products

Wood is an important manufacturing mate-rial, Furniture and other products accountedfor about 10 percent of lumber, veneer, andplywood and 40 percent of hardboard and par-ticleboard used in 1976.23 Furniture alone ac-counted for well over half the wood used inmanufacturing, with the remainder used for avariety of small volume items, including signs,displays, sporting goods, musical instruments,boats, tools, and coffins.

After rising during the previous decade, thevolume of wood used in furniture and othermanufactured goods began to decline duringthe early 1970’s due to the increased use ofmaterials such as metals and plastics, more ef-ficient use of wood in manufacturing, and thesmall number of new products made fromwood. Wood use in furniture also depends onconsumer preferences. During the 1960’s and1970’s, plastics and metals were substituted forwood in some popular styles of furniture, butbetween 1972 and 1977, wood apparently re-gained popularity .24

Shipping and Industrial Uses

During the past 15 years, the production ofwooden pallets to store and ship materials hasexpanded. This growth reflects the increaseduse of palletized materials handling systemsand the increased volume of manufacturedgoods shipped. The expanded use of pallets hasoffset the rapid decline in wood used in ship-ping containers and crates, which have beenrapidly replaced by plastic containers andmetal barrels. Further increases in pallet pro-duction are expected by the Forest Service.25

Other industrial markets have declined sig-nificantly due to the substitution of othermaterials and the development of better woodpreservatives. Railroad ties, once one of thehighest volume uses for wood, accounted foronly about 1.5 billion board feet of lumber in

23An Ana]J,SiS of f~e ~i~&r s~~ua ~ion, op. C it,, p. 33.ZaIbid., p. 35.ZSIbid., p. 37-38.


1976.26 Nonetheless, demand for railroad tieshas edged upwards since the 1960’s. Futuretrends in railroad tie use will depend on thecompetitiveness of alternatives such as con-crete ties and public and private commitmentto maintaining, improving or expanding do-mestic railroads. Other uses for wood, such astelephone poles, pilings, barrel staves, andmine timbers, have declined by about one-thirdsince 1952, to 379 million ft3 in 1977.

Chemicals and Cellulosic Fibers From Wood

Wood is the primary raw material fromwhich highly refined cellulose is taken to makerayon and cellulose acetate filaments. Rayonand acetate are found in many products, in-cluding automobile tires, lacquers, and ex-plosives,

The volume of cellulosic fiber productionpeaked in 1969,27 and shipments in 1981 werevalued at $1.5 billion.28 Although the marketis now dominated by noncellulosic fibers suchas polyester, some analysts believe that wood-based rayon and acetate will become morecompetitive with noncellulosic fibers producedfrom petrochemicals i f energy costs in-crease. Cotton is another major competitorwith rayon, but the degree to which rayon candisplace it will depend on worldwide demandand the supply of cotton. The success of rayonand acetate will depend, too, on improvementsmade in these fabrics.

The forest products industry also producessilvichemicals valued at over $500 million peryear (table 15). Primary silvichemicals includenaval stores (e.g., rosin, pine oils, and turpen-tine) and a variety of byproducts from pulping,including lignin products and vanillin.29

Technologies exist for wood to replace vir-tually all of the chemicals and plastics madefrom petrochemicals, although the most like-ly near-term substitute for petroleum is coal.

ZeIbid., p. 30,Z’Ibid,, p. 57.N 198.2 U.S. Industrial Out]ook op. cit., p. s 1 J.2QAn Ana]ysjs of the Timber Situation, op. cit., p. 64-67.

Some researchers consider wood’s potentialto be great for providing unique chemicals notnow available. Lignin, now primarily burnedfor energy during the pulping process, may beespecially promising. While lignin can be usedto make a variety of organic chemicals, it is dif-ficult to process and less than 3 percent re-maining after pulping is recoverable for chem-ical production. Additional research on lignin’scomplex molecular structure, which is not wellunderstood, is needed before the potential oflignin can be realized. Advances in biotechnol-ogy also may increase chemical productionfrom wood.30

Nutritional Products

Wood fermented by yeasteral high protein products toto supplement human diets.products include:

can produce sev-feed livestock andThese nutritional

roughage used in animal and some humanfoods;wood molasses, a sugar substitute;single-cell protein for animal and humannutrition; andflavorings, such as vanillin.

The value of wood-based feed and food prod-ucts in 1977 was about $40 million. Vanillin,which is used as a substitute for vanilla beansin ice cream and other products, accounted forthree-fourths of this total. al

Advanced Wood Materials

Research by the U.S. Forest Products Labora-tory has shown the feasibility of producingpaper that is stronger than the wood fromwhich it is made, In fact, this “superpaper”substantially exceeds the specific strength- andstiffness-to-weight ratios of all common struc-tural materials. If such high-strength papersalso can be made moisture resistant, maintain-ing their stiffness and dimensional stability,they could be used for a wide range of applica-tions now served by solid wood, plastics, and

gosee Henry R. Bungay, “Biomass Refining, ” Science, Nov.12, 1982, pp. 643-646, for a discussion of recent developments.

slAn Ana&sjs of the Timber Situation, op. cit., table 3.36, p. 64.

Ch. IV— Wood Use in the United States . 87——

Table 15.—Production and Value of Silvichemicals in the United States in 1977

Average annualgrowth in

Average Annual productionProduct ion price a value (1963-77)

Product Unit (millions of units) ($/unit) ( m i l l i o n s o f d o l l a r s ) (percent)Naval storesb

Gum rosin . . . . . . . . . . . . . . . . . . . . . . lbSteam-distilled rosin . . . . . . . . . . . . . lbGum turpentine . . . . . . . . . . . . . . . . . galSteam-distilled turpentine . . . . . . . . galPine oil. . . . . . . . . . . . . . . . . . . . . . . . . galOther terpenes . . . . . . . . . . . . . . . . . . gal

Subtotal . . . . . . . . . . . . . . . . . . . . . .Sulfate mill products

Crude tall oil . . . . . . . . . . . . . . . . . . . . lbCrude tall oil, used as such

or sold . . . . . . . . . . . . . . . . . . . . . . . lbDistilled tall oild . . . . . . . . . . . . . . . . lbTall oil rosin . . . . . . . . . . . . . . . . . . . . lbTall oil fatty acids . . . . . . . . . . . . . . . lbSulfate turpentine (refined). . . . . . . . galHeads fraction, pitch . . . . . . . . . . . . . lbSulfate Iignin . . . . . . . . . . . . . . . . . . . lbDimethylsulfide . . . . . . . . . . . . . . . . . lbDimethylsulfoxide . . . . . . . . . . . . . . . lb

Subtotal . . . . . . . . . . . . . . . . . . . . . .Sulfite mill products

Lignosulfonate, Ca-base . . . . . . . . . . lbLignosulfonate, Na-base . . . . . . . . . . lbLignosulfonate, otherf . . . . . . . . . . . . lb

Lignosulfonate, totalf . . . . . . . . . . . . . . lbEthyl alcohol, 190-proof . . . . . . . . . . galVanillin . . . . . . . . . . . . . . . . . . . . . . . . . lbTorula food yeast, dry . . . . . . . . . . . . lbAcetic acid, glacialg. . . . . . . . . . . . . . lb

Subtotal . . . . . . . . . . . . . . . . . . . . . .Miscellaneous products

Arabinogalactan . . . . . . . . . . . . . . . . .Charcoal briquettes . . . . . . . . . . . . . . lbActive carbon, from wood . . . . . . . . lbHemicellulose extract . . . . . . . . . . . . galWax, from bark . . . . . . . . . . . . . . . . . . lbExtracted bark powder . . . . . . . . . . . lb

Subtotal . . . . . . . . . . . . . . . . . . . . . .Grand totoal . . . . . . . . . . . . . . . .

NA = Not applicable%arload or wholesale price, f.o.b millbNaval stores data pertain to crop year, April 1 to March 31cvalue accounted for under other headingsdlncludulng acid-refined tall Oil.elncluding Ii gnosul fonates made from su I fate I i9ni n‘EstimatedgMade from NSSC spent pulping liquors

26246

0.732.549.492.32

0.270.231.501.252.001.00

$7.056.6

1.03.2

19.02.1

$89.2

- 15“/0- 6- 1 5- 8

0

1,518

214103406359

20.61300e

60e

8e

1e

534109516

1,16055.6

168

NA1,100

50e

21.2

35

0.09 (c) + 3.1

0.090.190.200.271.100.05e

0.05e

0.370.54

0.050.060.040.061,005.350.400,20

NA0.060.250.090.220.06

19.319.681.296.922.715.0e3.0e

3.00.5e

$261.2

26.76.5

20.6(c)

5.030.0

6.4

$96.8

NA66.012.5e

0.20.3

$81.1$528.3

+ 1.6+ 2.8+ 3,0+ 0.7

+ 7.6+ 2.6+ 10.4+ 5.1

0

+ 1.5

SOURCE Lars C. Bratt, “Wood Derived Chemicals Trends in Production in the U.S. ,“ Pulp and Paper, June 1979

metals. When coupled with design innovationsfor paper-based structural materials, they even-tually may play a role in residential construc-tion. However, considerably more researchand development are needed before super-strength paper can be marketed.

Solid wood products have been designed tocompete directly with structural steel and con-

crete in some uses. Large laminated beams andarches, frequently bent into various shapes,have entered new markets, including the con-struction of large indoor sports arenas, conven-tion centers, churches, and domes,

In addition, all-weather wood foundationsand underfloor plenum systems can competewith masonry, block or cast-in-place concrete


in new homes. The all-weather wood founda-tion is made of preservative-treated plywoodand lumber placed partially below groundlevel, The underfloor plenum system providesa sub-floor area through which warm or coolair can be distributed throughout the house forheating or air-conditioning, thus eliminatingductwork. Properly constructed, the plenum isrot- and insect-resistant.32 Widespread use ofeither system would significantly increasewood use in home construction; e.g., the un-derfloor plenum system requires 20 percentmore wood compared to slab built houses.33

Though wood foundations are cost competi-tive with conventional foundations, they arenot yet widely accepted. Reasons for this maybe related to a conservative building construc-tion industry, buyer reservation, and the reluc-tance of building tradespeople to adopt newtechnologies.

Many new wood products displace more tra-ditional wood products such as plywood orlumber rather than competing with other ma-terials. These products may help maintaintraditional wood markets but do not usuallyopen new ones. Often the net effect is to reducethe volume of wood used. Prefabricated rooftrusses, for example, have not expanded woodmarkets significantly but have replaced largerdimension lumber in light frame construction.

alNationa] Association of Homebuilders Research Foundation,Plen-Wood System: A Design/Construction Manual (Rockville,Md.: National Association of Homebuilders Research Founda-’tion).

asNationa] Association of Homebuilders Research Foundation,personal communication with W. Davidson, contractor, OTA,January 1983.

Medium-density fiberboard, first producedin the mid-1970’s, has rapidly expanded intofurniture markets formerly held by particle-board and other panels. New types of particle-board include panels made from strands (thinshavings or slivers of wood), flakes or wafers,sometimes with veneer faces. These panels,first introduced in the United States andCanada in the mid-1970’s, compete with soft-wood plywood in structural uses.

New panel products made from reconsti-tuted wood are expected to replace plywoodfor sheathing and underpayment (floors). Thesame trend seems to have occurred in furnituremanufacturing where plywood and particle-board have replaced lumber as furniture core-stock, and medium-density fiberboard, in turn,has replaced much of the plywood and particle-board. Shipping pallets are replacing woodboxes and containers for materials handling.New types of pallets, made with plywood deck-ing, particleboard, or medium-density fiber-board, may replace some hardwood pallets inthe future.

Composites that combine wood with othermaterials are not common, but their use isgrowing. Composites made by laminating plas-tic or metal skins to a wood core are currentlyused in a number of industrial applicationscalling for strong, durable, corrosion-resistantmaterials. Cement board made from wood andcement and insulation made from wood andfoam are two other applications of composites.Advanced materials, such as dimension lumbersubstitutes made from wood particles and hightensile strength glass fibers, could furtherbroaden the range of wood composites.

Projected U.S. Consumption of Timber and Wood Products

For nearly a century, the Forest Service pe- of renewable resources every 10 years. Underriodically has analyzed the U.S. timber situa- the National Forest Management Act of 1976tion. The Forest and Rangeland Renewable Re- (Public Law 94-585), the Forest Service alsosources Planning Act of 1974 directs the Sec- prepares a national renewable resource pro-retary of Agriculture to prepare an assessment gram updated at 5-year intervals. The latest


assessment, issued in 1980, presents projec-tions of timber demand, supply, and pricesthrough 2030.

From each assessment, alternative programsfor the use and management of the Nation’srenewable resources are prepared, and thesein turn form the basis for formulating Federalbudgets. The 1980 assessment forecasts in-creasing timber scarcity coupled with risingprices and demand for timber products duringthe next 50 years. This scarcity, according tothe Forest Service, will have “significantadverse effects on primary timber processingindustries, timber inventories, consumers ofwood products, and the environment.”34

The 1980 projections probably overstate thefuture scarcity of timber, primarily because ofoverestimated demand.35 The forecasts that ap-pear in the 1980 assessment were prepared inthe late 1970’s, and many significant changesin the Nation’s economic outlook have oc-curred since then that alter expectations abouttimber demand and other assumptions used inthe model. Recognizing these changes, theForest Service currently is modifying both the1980 forecasts and the forecasting process toinclude updated assumptions about future con-ditions and to provide a range of future out-comes.

While it is useful for planning purposes toproject future timber demand and supply, it isimportant to recognize the shortcomings ofmathematical modeling when it is applied topublic administration and public policy. Thecomplexity and sophistication of the econ-ometric models used in forecasting often givethe illusion of certainty and accuracy, whilein fact the most complex models may provideinformation that is no more reliable than off-the-cuff estimates or professional intuition, Theprimary value of modeling maybe less in pre-dicting future conditions than in evaluating therelationships between certain economic con-ditions and the timber situation, The usefulnessof the Forest Service’s projections for policy-

siAn An~jYS~S of tk Timber Situation, op. Cit., P. Xxiii.aspersona] communication from Bruce R. Lippke, Weyer-

haeuser Co., to R, Max Peterson, Chief, Forest Service, Mar. 17,1983.

making will be greatly enhanced by consider-ing a range of assumed conditions in develop-ing estimates of future timber situations, ratherthan merely providing specific estimates oftimber demand and supply based on a singleor narrow set of assumptions.

The next assessment by the Forest Serviceprobably will describe a broader range of possi-ble futures, The 1980 assessment reflects littlerecognition and analysis of factors that af-fect timber consumption and presents only asingle most-likely-case scenario—that timberwill become more scarce, based on demand ris-ing faster than supply. While this projection iswithin the range of possible futures, there aretwo reasons to doubt that it is the most likelyoutcome: 1) estimates of future economicgrowth and demand for timber products aretoo optimistic and are much more likely to beoverest imated than underest imated, and2) while the long-term national timber supplymay be understated, projections of supplies ofsoftwoods from certain regions may be over-estimated.

Demand Projections

Projections of demand for wood cover a widerange of products, including lumber, panels,fuel, pulp, and paper. Future consumption forall products is linked to the level of generaleconomic activity, and demand for many goodsis estimated by indexing product use to theGNP. Demand for wood products used in hous-ing is forecast separately.

Housing Demand

The Forest Service’s 1980 assessment fore-casts rapidly rising consumption of lumber andplywood as a result of projected high levels ofnew home construction like those of the earlyand mid-1970’s. Since these projections weremade, however, there have been significantchanges in the housing market that may havea long-term impact on the strength of futuredemand, home size and type, and consequentlythe amount of wood products used in construc-tion. These changes and several others, allpoint to future consumption of wood products

90 Ž Wood Use: U.S. Competitiveness and Technology

below the levels forecasted in the 1980 assess-ment. A downward revision of Forest Serviceprojections therefore is justified because:

●

●

●

●

In the Forest Service model, a substantialportion of future new construction is “re-placement” housing, i.e., those units builtwhen existing houses are abandoned orrazed. However, the model assumes re-placement rates will be sustained at levelsmuch higher than in the past, except dur-ing the 1960’s when a larger proportion ofwartime housing was replaced. Unless re-pair and remodeling decrease dramatical-ly, it is likely that future replacement rateswill be much lower than forecasts indicate.Since housing unit replacements accountfor nearly half of all future homebuildingused in Forest Service forecasts, adjust-ment of the replacement rate will substan-tially effect the projected pace of construc-tion,Housing affordability affects housing de-mand, unit type, and home size, but it isnot adequately reflected in Forest Serviceprojections. Home prices increased rapid-ly relative to household income in the1970’s, partially as a result of inflation andlow real interest rates, conditions not likelyto be duplicated in at least the next decadeor two.Reduced housing affordability and house-hold size both point to decreasing homesize in the future. However, whether or notaverage unit size will reach 2,000 ft2 b y2030, as the Forest Service estimates, isuncertain; it is not unlikely that home sizecould stabilize or even decrease within 50years.Household size, lifestyle, and consumerpreference also could significantly effectthe type of housing built. The Forest Serv-ice forecasts multifamily and mobile homeunits declining as a proportion of con-struction in the future and single-familydetached units accounting for a growingshare. It is probably equally likely thatmultifamily units and mobile homes willaccount for a stable or increasing share offuture construction. Single-family homes

use more wood products than either multi-family units or mobile homes per unit offloor space.

These are among the many reasons to doubtthat the strong homebuilding activity of thepast will recur, yet they are not adequatelyrecognized in 1980 Forest Service forecasts,For the last 4 years, the homebuilding industryhas been depressed. The extent to which cur-rent conditions will continue or how the in-dustry will respond to recovery is unknown.It is possible that a full recovery could lead tomore housing construction in the future, par-ticularly since housing demand by the babyboom generation is expected to be strongest inthe 1980’s. This is based primarily on demo-graphics, however, which is only one of anumber of things that affect housing demand.

Demand for Timber in Other Uses

Demand for wood products other than fornew housing is, in general, tied to the level ofeconomic activity and population expected inthe next 50 years. Forest Service estimates offuture GNP and disposable personal incomeare based on projections made by the Depart-ment of Commerce’s Bureau of EconomicAnalysis (BEA). The BEA projections showfuture annual GNP growth of 2.0 to 3.7 percent,leading to a quadrupling of GNP by 2030 andthus to a substantial increase in demand forwood.

While these GNP forecasts are not inconsist-ent with past trends, some private sector timberdemand forecasts use slightly lower esti-mates. 36 The 1980 assessment, however, giveslittle consideration to the effects of differentassumed levels of economic growth on wooddemand, except to note that consumption oflumber and plywood are insensitive to changesin GNP growth in the short run.37 There is agreat deal of uncertainty in any forecast of eco-

s6Discussion of timber consumption forecasting models andassumptions used in various models can be found in Perry R,Hagenstein, and William E. Bruner, Timber and Wood PJwductsSupply and ~mand Analysis, contract report to the U.S. Con-gress, Office of Technology Assessment, July 2, 1982,

spAn Ana)ysjs of the 7’imber Situa fiOrI, Op. C lt., p. xx.

Ch. IV— Wood Use in the United States . 91

nomic activity for as long a period as 50 years,and even small changes may have considerableimpact on future wood needs, This impact isnot adequately recognized in the 1980 assess-ment.

Supply Projections

Actual future timber supply probably will bemuch different than projected in the 1980assessment, but the magnitude and directionof the difference are not clear. Timber supplyforecasting is complicated by the fact that theForest Survey, conducted under Forest Serviceauspices, which provides information on forestacreage, timber stocking, and growth, is doneat 10 to 15 year intervals and is not completedsimultaneously in all States (see ch, VI fordetailed discussion). At any given time, there-fore, forecasters may be using inventory andgrowth data ranging in age from 1 to 15 years,and, as recent surveys have shown, outdatedinformation can be inaccurate. New surveyscompleted since the 1980 assessment show thatthe softwood supply in the Pacific Northwest,present and future, definitely was underesti-mated, but that the future softwood supply inthe South, particularly on nonindustrial privateforestland, may be significantly overstated.

Overall, the Forest Service’s supply projec-tion process probably produces very conserv-ative estimates of nationwide future timbergrowth for three reasons:

● Forest Service projections are based onshort-term supply curves. These show thateven large increases in stumpage pricesproduce only very modest increases in tim-ber harvest. This relationship seems rea-sonable in the short run, since it takes 30or more years to grow mature timber.However, in the longer run, covering the50-year projection period used in the 1980assessment, timber supply is probablymuch more responsive to stumpage pricesthan short-run analysis indicates. With ris-ing stumpage prices, a much broaderrange of investments in timber manage-ment to increase future supply is feasible,

●

●

The 1980 assessment projections assumeno increase in management intensity over1970’s levels, which may be unreasonablebecause higher stumpage prices probablywould prompt many landowners to investmore heavily in timber management.The Forest Service forecasts rely on ex-tremely conservative conversion rates totranslate wood products consumption intodemand for raw timber, The amount oftimber required for wood products is af-fected by manufacturing technology andforest utilization, and there are many cur-rently available technologies that can re-duce the amount of roundwood needed tomake a wide variety of goods. In addition,technological advances have made it possi-ble for woody biomass, previously consid-ered waste, to be used in product manufac-ture. Rising stumpage prices are likely tostimulate investment in more efficientmanufacturing equipment as well as an in-crease in use of forest biomass, both ofwhich tend to increase the supply of usablewood. The effects of increased forest utili-zation and more efficient manufacturingtechnology probably are understated in the1980 assessment,

Timber Consumption Projections

According to the 1980 assessment, timberconsumption from domestic forests is pro-jected to rise from over 12 billion ft3 in 1976to approximately 23 billion ft3 in 2030 (fig. 11),The greatest rate of projected increase takesplace between 1980 and 1990, due mainly tothe strong housing demand of the baby boomgeneration, now entering the 28- to 35-year-oldage group of primary homebuyers.*

Most of the increase in timber consumptionbetween 1952 and 1976 was supplied by soft-woods, whose use rose from 7.2 billion ft3 t onearly 9,5 billion ft3. Hardwood use, in con-

——“Forest Service forecasts do not attempt to forecast short-term

consumption between 1976 and 1990. The forecasts begin with1990 consumption. However, attaining these levels by 1990 re-quires a substantial increase in short-term consumption.

92 ● Wood Use: U.S. Competitiveness and Technology——

Figure ll.— Domestic Timber Consumption, 1952-2030

Actual

I

1I I

1950 1980 1970 1980 1990 2000 2010 2020 2030Year

_ Total - - - SoftwoodSOURCE: Adapted from the U.S. Department of Agriculture, Forest Service, An

Anatysis of the Tlmtnx Situation In the United State$ 195Z-~, ForestResource Report No. 23 (Washington, D. C.: U.S. Government PrintingOffice, 19S2), p. 202-215.

trast, remained relatively stable at about3 billion to 3.5 billion ft3 By 2030, a large por-tion of the increased timber consumption fromdomestic forests is projected to be in hard-woods, primarily for paper, pallets, and hard-wood veneer for furniture. Hardwood use isprojected to rise to nearly 9.0billion ft 3 u pfrom nearly 2.9 billion ft3 in 1976–a jump ofover 300 percent. Softwood consumption is ex-pected to rise by 50 percent, to 14,0 billion ft3

Regional Timber Production

Forecasted regional distribution of timberproduction through 2030 indicates that soft-wood operations will continue to shift to theSouth (fig. 12). This shift projected in the 1980assessment reflects a decline in production inthe Pacific Northwest, thought to be caused bya drop in timber inventories due to overcuttingon forest industry land. * Since the 1976 pro-jection was made, however, a resurvey in thePacific Northwest shows that timber growthon forest industry land is significantly higherthan had been previously estimated, and it islikely that new Forest Service projections nowin preparation will reveal a much smaller de-cline in Pacific Northwest harvests. In addi-

*“Overcutting” means harvesting more than net growth perunit of time, or cutting above the level of sustainable yield.

Figure 12.- Softwood Timber Production:Regional Distribution, 1976 and 2030

Pacific coast40 ”/0

North7%

Rockies80/0

South450/0

1976

Pacific coast270/o

Rocl1

North9%

South53 ”/0

2030

SOURCE: U.S. Department of Agriculture, Forest Service, An Ana/ysls of ttreTimber Sltuat/on In the United States, 1$52-2030, Forest ResourceReport No. 23 (VWehlngton, D. C.: US. Government Prlntlng Off Ice,1982), p. 202-215,

tion, recent information shows that projectedsouthern softwood supplies are probably toohigh. Forecasts are being revised to reflectthese changes.

In 1976, the South produced 51 percent ofthe hardwood harvest, with the North produc-

———.

Ch. IV— Wood Use in the United States ● 9 3— —

ing 46 percent. Only 3 percent came from thePacific coast. The 1980 assessment showsslight shifts in hardwood production by 2030,with the South’s share increasing to 59 percent,the North declining to 39 percent, and thePacific coast dropping to 2 percent (fig, 13).

Figure 13. —Hardwood Timber Production:Regional Distribution, 1976 and 2030

A decline in the share of production does notnecessarily mean a decline in actual or volumeproduction. In the Pacific Northwest, wherethe share of softwood harvest is projected todrop from 31 to 21 percent of the national total,volume production is projected to increase by70 million ft3. In the South, where projectionsindicate an increase from 45 to 53 percent ofthe national softwood harvest, the increase involume production is nearly 3.3 billion ft3.

1976

2030SOURCE: U.S. Department of Agriculture, Forest Service, An Analysls of the Tim-

ber S/tuatlon /n the Urrlted Stales, 1562-2030, Forest Resource ReportNo. 23 (Washington, D.C : U.S. Government Printing Office, 1982), p202.215

The hardwood situation is similar. TheSouth’s hardwood production is expected tomore than triple, increasing from 1.7 billion to5.4 billion ft3. The North is projected to in-crease its volume production from 1.5 billionto 3.6 billion ft3. In the West, hardwood harvest levels projected to increase by 37 millionft3 by 2030.

Harvest by Ownership

Projections of the timber harvest by owner-ship also show major shifts in the contributionsof various forest land owners. In 1976, the pri-vate sector accounted for nearly three-fourthsof the softwood roundwood supplies, Privateindustrial and nonindustrial ownerships eachproduced about 36 percent of the total soft-wood harvest (fig. 14). The public sector ac-counted for the remainder, with the NationalForest System producing nearly 19 percent ofthe Nation’s softwood harvest,

By 2030, the public sector is expected to con-tribute a slightly smaller share, while in theprivate sector, the forest industry’s share dropsto 27 percent and the nonindustrial landown-ers’ share goes up to 47 percent. For the privatenonindustrial group, this change means in-creasing production by 94 percent over 1976levels, or by about 3.2 billion ft3, Despite sharedecreases, the harvest from forest industrylands is projected to increase slightly, by about354 million ft3. Similarly, national forest pro-duction is projected to increase by 928 millionft3, or by about 52 percent over 1976 levels.


Figure 14.— Softwood Timber Production: No major changes in regional distribution ofDistribution by Ownership, 1976 and 2030 hardwood harvests are projected, although all

PNIF360/o

NationalForest System19%

ownerships are expected to-harvest more hard-woods to meet increasing forest products in-dustry needs. The projected increase is greatestfrom private nonindustrial lands, which areprojected to expand hardwood harvests by 180percent, from 2.5 billion ft3 to approximately7 billion ft3.

ublicY “/0

1976

PNIF

Industry7% ‘

27%

2030

SOURCE: U.S. Department of Agriculture, Forest Sarvlce, An Analysls of the Thn-ber Situation In tbe United States 1!MXW30, Forest Resource ReportNo. 23 (VVashington, D. C.: U.S. Government Printing Office, 1982), pp.202-215.

The Forest Products Industry

The term “forest products industry” refers percentage of the Nation’s full-time workto the combination of the pulp and paper prod- force.” The pulp and paper sector is the fourthucts and the solid wood (lumber and panel)products sectors (fig. 15). This industry con- ~au.s< Depafirnent of Commerce, Bureau of Industrial ECO-

tributes 1.7 percent of the total gross domestic nomics, 1981 U.S. Industrial Outlook for 2W Industries With Projections for 1985 (Washington, D. C.: U.S. Government Printing

product (GDP) and employs about the same Offke, 1982), p. 425.

Ch. IV— Wood Use in the United States Ž 95

Figure 15.—Schematic of the Forest Products Industry

Solid-wood sector Pulp and paper sector

RoundwoodPulp

— Pulpwood Pulpwood — Chemical

— Sawlogs and veneer logs– Semichemical

— Other — Mechanical— Dissolving

Lumber, including presslamPanels:

— Solid-wood panels (plywood and veneer)— Reconstituted wood panels

(fiberboard, particle board,waterboard, oriented strandboard)

————

ConstructionFurniture-makingPackaging (pallets, crates)Finishing work

SOURCE Off Ice of Technology Assessment

largest producer of nondurable goods, and thelumber and panel products sector is the eighthlargest producer of durable goods in terms ofvalue of GDP.

The characteristics and performance of thetwo sectors are quite different. These dif-ferences are less, however, in the case of thelarger diversified companies that manufactureboth solid wood products and pulp and paper.Such firms often own significant amounts offorestland and are major employers in manyareas.

- 1

Paper - printing, writing, packaging,sanitary, other

Paperboard - containerboard, boxboardsetup boxboard, other

Other: rayon, plastics, lacquers, etc.

— Containers and boxes— Other

Contribution to the Domestic Economy

In 1977, the forest products industry em-ployed about 1.4 million people and con-tributed over $40 billion in value added. Thelumber and panel products sector employsmore people than the pulp and paper sector,but the pulp and paper sector ranks higher invalue added by manufacturing, which reflectsthe prevalence of automation in papermills.Lumber and panel products is a significantconsumer of adhesives and resins, preserva-


tives, and fire retardants. Pulp and paper is amajor user of industrial energy, water, andchemicals.

Primary Processing

primary processors handle the raw wood ma-terial. In 1977, they contributed about 43 per-cent of the total forest products value addedand employed 37 percent of the labor force ofthe forest products industry (table 16). Thelargest single employers are sawmills and plan-ing mills, which retain 211,300 workers, fol-lowed by papermills which employ 127,000

—-

people. Papermills lead primary operations invalue added and value of shipments, followedby sawmills and planing mills.

Secondary Processing

Secondary processors in both industry sec-tors together employ 63 percent of the forestproducts labor force and contribute 57 percentof total value added. Similar to the primaryprocessors, secondary lumber processors em-ploy more people than do the secondary pulpand paper processors, but the latter contributesa higher value added. When measured by all

Table 16.—Number of Employees, Value Added, and Value of Shipments forPrimary and Secondary Forest Products Industry in 1977

Number of Value added by Value ofemployees manufacture shipments

Industry (thousands) (million dollars) (million dollars)

Primary IumberLogging camps and contractors . . . . . . . . . .Sawmills and planing mills . . . . . . . . . . . . . . .

Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Percent of grand total . . . . . . . . . . . . . . .

Primary paper:Pulpmills . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Papermills (except building paper) . . . . . . . .Paperboard, building paper and

board mills. . . . . . . . . . . . . . . . . . . . . . . . . . .Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Percent of grand total . . . . . . . . . . . . . . .

Gum and wood chemicals:Percent of grand total . . . . . . . . . . . . . . .

Primary total:Percent of grand total . . . . . . . . . . . . . . .

Secondary Iumber.Millwork, plywood, and structural

members . . . . . . . . . . . . . . . . . . . . . . . . . . . .Wood containers, and miscellaneous

wood products . . . . . . . . . . . . . . . . . . . . . . .Wood buildings and mobile homes. . . . . . . .Furniture and fixtures . . . . . . . . . . . . . . . . . . .

Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Percent of grand total . . . . . . . . . . . . . . .

Secondary paper.Paperboard containers and boxes . . . . . . . . .Sanitary paper products . . . . . . . . . . . . . . . . .Bags . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Other converted paper and paperboard

products . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Percent of grand total . . . . . . . . . . . . . . .

Secondary total:Percent of grand total . . . . . . . . . . . . . . .

Grand total. . . . . . . . . . . . . . . . . . . . . . . . . . . . .

83.3211.3294.6

20.9

16.2127.0

74.6217.8

15.4

0.3

36.7

183.3

50.479.5

196.9510.1

36.2

176.134.548.7

123.5382.8

27.1

63.31,410.1

2,418.74,974.87,393.5

18.4

906.15,406.6

3,298.99,611.6

23.9

0.4

42.8

4,370.8

866.81,789.13,388.1

10,414.825.9

5,296.22,194.51,349.6

3,718.912,559.2

31.3

57.2

40,164.1

6,230.111,969.3

2,091.112,613.3

7,598.0

10,596.0

2,179.75,147.96,162.9

13,350.14,921.23,482.3

8,029.7

SOURCE: 1977 Census of Marrufacturers, Parts 1 and 2 (Washington, DC.: U.S. Department of Commerce, Bureau of theCensus, 1981).

Ch. IV— Wood Use in the United States • 97— . —.—.—

parameters displayed in table 16, the two larg-est secondary lumber subgroups are millwork,plywood, structural members, and furnitureand fixtures. The two largest paper subgroupsare paperboard containers and boxes and thecatch-all “other converted paper and paper-board products. ” Overall, paperboard con-tainers and boxes contribute the largest valueadded of the secondary processors, while fur-niture and fixtures employs the most people.

Consumption of Industrial Commodities

The forest products industry is a major con-sumer of several industrial commodities, Ply-wood and other panels, for instance, requiresignificant quantities of adhesives and resins,making plywood manufacture the largest singleadhesives market.39 Other solid wood productsuse significant amounts of phenol and urea for-maldehyde resins, fire retardants, and pre-servatives, most of which are petroleum-based.

The pulp and paper sector is the sixth largestconsumer of chemicals in terms of dollar valuepurchased. It also uses (but does not consume)more water for processing than any other man-ufacturing industry and is a leading industrialenergy consumer. The pulp and paper sectoruses about 7 percent of the Nation’s industrialenergy and 3 percent of all energy consumedin the United States. Because energy is a sig-nificant cost in producing paper, pulp andpaper companies have become industrial lead-ers in energy conservation and cogeneration.

Structure and Performance

The financial performance of the forest prod-ucts industry is neither better nor worse thanthat of other industries considered together. In1980, the wood-based companies among theFortune 500 trailed other industries in termsof total return to investors, return on stock-holders’ equity, return on sales, and changesin profits and sales, but 1980 is probably nota fair comparison because of the severe depres-sion in the forest products industry. overall,

“Peter Gwynne, “Adhesives: Bound for Boundless Growth, ”Technolog~, January/February 1982.

the pulp and paper sector generally performsas well as the rest of the economy, while solidwood products are subject to wide variationsdue to their close ties to residential construc-tion.

The performance of any industry—its growthrate, financial performance, ability to innovate,and record in entering new markets and con-trolling old ones—is related to its structure.Several key structural features appear to affectthe performance of the forest products in-dustry, including the degree of competitionwithin in the industry, landownership, prod-uct mix, diversification, and sensitivity toeconomic changes.

Degree of Competition

Industrial structure is commonly thought ofin terms of the degree of competition withinthe industry. An industry is described as “com-petitive” at one extreme if no firm holds asignificant proportion of market power and“monopolistic” at the other extreme if one firmcontrols the whole industry. While there areprobably no industries at either extreme, theforest products industry is generally consid-ered fairly competitive. In 1978, the top fourforest products firms accounted for almost 15percent of all wood-based sales, and the topnine accounted for 22 percent of industrysales. 40

The lumber and panel products sector iscommonly described as one of the Nation’smost competitive, with over 30,000 companies,while the pulp and paper products sector, withalmost 4,000 companies, is less fragmented,

In reality, however, the picture is more com-plicated than the number of companies alonewould indicate, The lumber industry, the mostcompetitive component of the lumber andpanel products sector, counts over 8,000establishments, 80 percent of which employfewer than 21 people. However, 50 percent of

qOJay 0’ Laugh] in, and pau] V. Ellefson, “U.S. Wood-Based In-dustry Structure: Part l—Top 40 Companies, ” Forest ProductsJourna], October 1981, p. 56.

98 ● Wood Use: US. Competitiveness and Technology

the total domestic lumber output is producedby 10 percent of the mills.4l

There are fewer mills in the panel productsindustry—232 softwood veneer and plywoodmills, 366 hardwood plywood and veneer mills,and 68 particleboard mills, employing about77,000 people. Whether or not the panel prod-ucts industry as a whole is more or less com-petitive than the lumber industry is unknown,

The pulp and paper sector is less competitivethan any major part of the lumber and panelproducts sector. There are over 4,000 pulp andpaper establishments, but the 10 largest firmsaccount for over half the pulp, paper, andpaperboard products manufactured in theUnited States.42

Forest Land Ownership

The fastest growing companies in the forestproducts industry often own substantial timberacreage. 43 In 1977, the industry owned about14 percent “of all commercial forestland or 69million acres.44 The top 40 firms accounted for80 percent of this acreage. The same firms ac-counted for 40 percent of all domestic wood-based sales in 1978.45

Wood is a major portion of the productioncost of lumber, plywood, and paper. Timberis estimated to account for 72 percent of thecost of manufacturing lumber, 46 percent ofthe cost of making plywood, 30 percent of thecost of making linerboard, and 18 percent ofthe cost of manufacturing white papers. 4 6

Timber costs have stimulated the many domi-nant forest products firms to maintain fee sim-ple ownership of land, usually near companymills. 47 Fee simple ownership gives a company

41 u .s. ConWess, office of Technology Assessment, Currentand Future Uses of Wood, vol. 11 1983, draft.

qZIbid.4sThomas p. clephane arlcl Jeanne Carroll, Timber ownership,

Valuation, and Consumption Analysis for 87 Forest Products,Paper, and Diversified Companies (New York: Morgan StanleyInvestment Research, 1980), p. 4.

4aAn Ana]ysjs of the Timber Situation, op. cit., p. 149.4so’Laugh]in and Ellefson, “U.S. Wood-Based Industry Struc-

ture, ” op. cit., p, 56.Wlephane and Carroll, Timber Uwnership, Valuation, and

Consumption Analysis, op. cit., pp. 3-4.471 bid., pp. 58-93.

a strong bargaining position with neighboringprivate nonindustrial timber owners as well asa source of less expensive timber when stump-age prices increase. This may serve as a “yard-stick” for establishing the local price of timber.

While forest land ownership may be a wisebusiness strategy for forest products firms, itcan cause local problems. In some southerncommunities, timber industry land “banking”may affect the availability of land for communi-ty development, housing, and other purposes.48

Access to high-quality timber has figuredprominently in the performance of the forestproducts industry. Since colonial times, in-dustry concentration has shifted from theNortheast, through the Great Lakes States andthe South, across the Rockies, and to the westcoast to harvest available mature, high-qualitytimber and is continuing to shift back to theSouth to take advantage of low-cost, fast-growing softwood stumpage. Expansion of theindustry to the Great Lakes and the Northeastmay be expected in the next several decadesto utilize the large inventories of hardwoodsgrowing in those regions.

Product Mix and Diversification

Product diversification is another factor thatmay be important to the growth of forest prod-ucts firms. The largest firms tend to produceboth pulp and paper and solid wood products.Only 12 of the largest 40 companies specializein one or the other. Smaller firms often spe-cialize in particular items.

Diversification outside the industry, how-ever, appears to offer no particular advantage.49

During the past 30 years, a number of energy,packaging, and conglomerate firms have en-tered the forest products industry to diversifytheir operations. The financial performance of

4sJean S. M~refield, Drafi-Forest Products Zn dustry: Socio-

economic Issues Related to Industry Expansion, contract reportto the [J.S. Congress, Office of Technology Assessment, 1982,p, 14.

4eJay O’Laughlin and Paul V, Ellefson, New Diversified En-trants Among U.S. Wood-Based Companies: A Study of Eco-nomic Structure and Corporate Strategy, Station Bulletin 541,Forestry Series 37 (St. Paul, Minn.: University of MinnesotaAgricultural Experiment Station, 1982), p. 25.

Ch. IV— Wood Use in the United States ● 9 9———

these diversified companies in terms of stockperformance, growth, and profit is not clearlybetter or worse than the performance of com-panies whose major line of business is wood-based.

Sensitivity to Economic Activity

There are major differences in how the solidwood products and the pulp and paper sectorsrespond to economic conditions. Because pulpand paper firms make a variety of products fora diverse mix of end uses, their growth patternfollows that of the general economy.50 Such isnot the case for solid wood products compa-nies. Nearly half of the lumber and panels pro-duced are used in new residential construction.The homebuilding industry, in turn, maybe themost volatile and unstable industry in theUnited States, as it is extremely sensitive to anumber of economic and financial variables.5l

Thus, the solid wood products sector is alsovolatile, which may explain why the dominantfirms often make a mix of paper and solidwood products rather than rely exclusively onone product line.

Innovation

The forest products industry has a modestrecord in developing new products and enter-ing new markets. It devotes most of its researchand development effort to internal processinnovation,

Three components of the lumber and panelproducts sector are among the 45 rapid growthindustries whose compound annual growthrates were between 6 and 20 percent duringthe period from 1972 to 1978. These com-ponents included wood pallets and skids, woodkitchen cabinets, and structural wood members(e.g., laminated beams and arches). Most rapid-growth industries attribute their success to newproduct development, but this does not appearto be true for the forest products industry.Historically, new products from the forestproducts industry have replaced establishedwood products rather than other materials, and

5’J198Z U.S. Industrial @t]ookj op. cit., p. 39.BIKidder, peabody & Co., Forest Products Industry, pp. 5-13.

many markets formerly dominated by woodproducts have been eroded by nonwood ma-terials.

Reliable figures on the level of effort and typeof research supported by the forest productsindustry are unavailable (see p. for dis-cussion of research and development). It isunusual for mature industries like the forestproducts industry to be dynamic and innova-tive, The industry is primarily “resource”oriented. Therefore, innovation seems to begenerally confined to exploring new uses forwood rather than how wood might be used inconjunction with other materials.

Regional Distribution

Primary wood processing facilities general-ly are found where raw materials are mostplentiful—on the Pacific coast and in the South.Lumber and plywood panels usually are man-ufactured in the Pacific Northwest and theSouth, and nonplywood panel products man-ufacture is concentrated in the Great LakesStates and the Northeast. Most pulp and papermanufacturing occurs in the South, and sec-ondary paper products are made mainly in theNortheast, both near the largest markets. Loca-tion of secondary manufacturing facilities alsodepends on transportation costs and otherfactors,

Lumber

Ninety-four percent of 1umber is producedin the South and the West, where high-qualitysoftwoods are abundant. There are more millsin the South, but Western mills are generallylarger and produce over two-thirds of the totalU.S. lumber output. The North and East pro-duce only 6 percent of the total U.S. lumberoutput (fig, 16).

Plywood and Other Panels

The plywood industry requires high-quality

softwood logs, and therefore it too is locatedprimarily in the South and West. Plywood pan-el production, now about evenly divided be-tween the South and Pacific coast, has beengrowing rapidly in the South since the early

100 ● Wood Use: U.S. Competitiveness and Technology-— ————

Figure 16.–U.S. Lumber Production by Region, 1952-76

181

North

1952

1

South Rocky Mountains

1962 1970

Pacific coast

1976

SOURCE: U.S. Department of Agriculture, Forest Service, An Analysis of the Timber Situation in the United States 1952-2030,Forest Resource Report No. 23 (Washington, DC.: U.S. Government Printing Office, 1982), p, 220.

1960’s (fig. 17). In 1979, the Pacific coast pro-duced nearly 47 percent of all U.S. plywoodpanels, the South 42 percent, and the RockyMountain States the remainder.

Plywood accounts for about 96 percent of allpanel production. Most of the expansion in thepanel products industry, however, is in non-plywood, unveneered panels like waferboardand oriented strand board. Manufacturing ca-pacity for these products is in the North Cen-tral and Northeastern States and future growthis expected to center there.

Pulp and Paper

Over half of America’s pulp and paper man-ufacturing capacity is concentrated in theSouth, whose share of total pulp productionwas 48 percent in 1947 but grew to 69 percentby 1976. The West produced 17 percent of theNation’s pulp in 1976; the remaining 14 per-cent came from the East and North Centralareas .52

S~Joan E. Huber, The Kline Guide to the paper ]ndustry (Fairf-

ield, N. J.: Charles H. Kline & Co., 1980), pp. 39-40.

Sixty-two percent of the secondary manufac-turing capacity of the paper industry, whichmakes containers, bags, sanitary products, andstationery, is located near major markets in theNew England, North Central, and Middle At-lantic regions.

Wood Fuel

Reliable data is not available on wood fuelproducers, but their locations may be inferredfrom patterns of consumption. Since the lowvalue of wood fuel does not encourage long-distance transport, production generally takesplace close to consumers.

The North and South are by far the leadingconsumers of wood fuel (fig. 18), with residen-tial and industrial/commercial use at its great-est in these regions. High levels of home fuel-wood consumption in the North probably re-flects the abundance there of inexpensive low-quality fuelwood used for heating, and in theSouth they reflect the paper industry’s burn-ing of wood waste to power its mills.


12

10

8

Figure 17.–Softwood Plywood Production by Region, 1952-76

6

4

o ~North

1952

I I

South

1962

Rocky Mountains

Region

1970

Pacific coast

1976

SOURCE U S Department of Aarlculture. Forest Service. An Ana/vs/s of the T/rnber Slfuatlon /n the Un/fed St8fes 1952-2030,-Fo~est Resource Rep%rf No. 23 (Washington, DC.: US’, Government Printing Office, 19S2), p. 222

102 ● Wood Use: U.S. Competitiveness and Technology——

Figure 18.— Regional Wood Fuel Consumption in 1981

South31 ‘/0

Pacific coast10%0

Rocky Mountains/Great Plains6%

Residential

South360/0

Great Plains

North37 ”/0

North44%

Total

Pacific coast170/0

y Mountains/

Industrial/commercial

Pacific coast140/0

cky Mountains)Great Plains4%,

SOURCE: Energy Information Administration, U.S. Department of Energy, Estimates of U S. Wood Energy Consumptlofl From 1959 to 1981, DOE/EIA-03, Dist, Cat UC-13(Washington, DC.: U.S. Government Printing Office, 19S2).

CHAPTER V

Technologies for Growing,Harvesting, and Using Wood

Page

Summary . . . . . . . . . . . . . . . 105

Increasing Timber Supplies by Intensive Timber Management . . . . . . . . . . . . . . . 108Harvesting Methods. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 109Site Preparation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 111Regeneration 4..,... . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 112Competition, Fire, and Pest Control . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 113Precommercial Thinning. . . . . . . . . . . . . . . . . .... . . . . . . . . .... ...... . 113Fertilization. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .... . . . . . . . . ... 113Commercial Thinning . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 114Genetic Tree Improvement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 114Short Rotation Hardwood Culture . . . . . . . . . . . . . . . . . . . . . . . . 117Potential Gains From Intensive Timber Management . . . . . . . . . . . . . . . . . . . . . . . . . 117

Increasing Timber Supplies by Improving Harvest Technology. . . . . . . . . . . . . . . 120Characteristics of U.S. Forests . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6....0 120Utilization Opportunities. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 120Environmental Limitations . . . . . . . . . . . . . . . . . . . . . . . . ..... . . . . . . . . . . . . . . . . . 121Technology Development Process . . . . ...... ... . . . . . . . . . . . . . . . . . . . . . . . 121Current U.S. Harvesting Technology and Systems . . . . . . . . . . . . . . . . . . . . . . . . . . . . 121Harvesting Machinery . . . . . ..... . . . . . . . . . . . . . . . . . . . . . . . . ... 124Harvet Methods . . . . . . . . . . . . . . . . . . . . . . 124Transportation Systems. . . . . . . . . ...... . . . . . . . ...... ...... ...... . . 126Training for Woodsworkers . . . . . . . . . . . . . . . . . . . . . . . . . . . .. ... 127Research and Technology Transfer . . . . . . . .. . . . . . . . . . . . . . . . . 127

increasing Timber Supplies Through the Manufacture and End Use ofwood Products . . .. . . .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 130

Technological Adjustments to Changes ingrowing Stock . . . . . . . . . . . . . . . . . . . . . 130Implications of New Wood Products for Fuller Use of Resources . . . . . . . . . . . . . . . 131Product Recovery in the Solid Wood Products Sector. . . . . . . . . . . . . . . . . . . . . . . . . 132Product Recovery by the Pulp and Paper Sector . . . . . . . . . . . . . . . . ... . . . . . . . ... 135Decreasing Energy Requirements . . . . . . . ...... ..... . . . . . . . . . . . . . . . . . . 136Increased Efficiency of Wood Products in End Use . . . . . . . . . . . . . . . . . . . 136

List of Tables

Table No. Page

17. Average Net Annual and Potential Growth Per Acre in the United States byOwnership and Section, 1976 . . . . . . . .. ...... . . . . . . . . ... . . . . 118

18. Area of Commercial Forestland and Areas Suitable for Intensive Managementin 25 FIC Study States ...... . . . . . . . . . . . . . . . . . . .. . . . . . .. 119

19. Performance of Timber Harvesting Equipment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. 12220. Summary of Workers' Compensation Insurance Rates by State for Logging

and Lumbering Workers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ...... 12721. Utilization of Waste Paper by Sector and Major Grade Category, 1980 . . . . . . . 138

List of Figures

Figure No. page

19. Productivity Increases Attributable to Intensive Management . . . . . . . . . . . . . . . 11620. Cost Comparison for Cutting and Skidding by Diameter Breast Height for

Three Logging Systems .... ........... ... , . . . . . . . . ● 123

CHAPTER V

Technologies for Growing,Harvesting, and Using Wood

Summary

The application of existing technologies tothe entire cycle of forest products manufacture,from growing and harvesting trees through enduse, offers major opportunities to extend do-mestic wood supplies, Economic considera-tions, however, will ultimately determine thedegree to which they are applied.

Substantial increases in U.S. timber pro-duction could result from expanding knownsilvicultural practices and management tech-nologies on suitable lands. “Economic oppor-tunities” for intensified timber managementmay exist on 30 to 40 percent of all commer-cial forestland, according to recent studies bythe Forest Industries Council and the ForestService. ’ Net annual growth on these landscould be increased between 11 billion and 13billion cubic feet (ft3) per year through applica-tion of certain management practices, whichcould require an investment of $10 billion to$15 billion over 30 to 50 years, Most of the op-portunities identified involve planting andmanagement of softwoods, often at a cost ofmore than $100 per acre. Hardwood manage-ment opportunities have yet to be assessedcomprehensively.

The area of forestland that is likely to bemanaged intensively is probably much lessthan all the land that is economically quali-fied. Although 30 to 40 percent of the for-estland base may be suitable for profitable tim-ber management, bringing these lands undersuch management may be difficult. Private in-vestments in intensive forest managementcompete with alternative investment opportu-

‘U.S. Department of Agriculture, Forest Service, An Analysisof the Timber Situation in the U. S., 1952-2030 (Washington, D, C.:Go\’ernment Printing Office, 1982), p. 248; and Forest IndustriesCouncil, Forest Productivit~ Report (Washington, DC,: NationalForest Products Association, 1980), p. 46.

nities, many ofrates of return,

which have less risk, higherand earlier payoffs.

The “economic opportunity” estimates donot reflect site-specific limitations such as con-flicting landownership objectives, small par-cels, lack of markets, and site conditions thatmake management difficult. These barriers tointensive management are discussed in detailin chapter VI.

Existing and emerging harvesting technol-ogies and systems could expand timber sup-plies by enabling recovery of wood now leftin the forest and by allowing harvest fromtracts now considered inoperable. Conven-tional harvesting systems now leave substan-tial quantities of industrially usable material inthe forest at harvest because the cost of removalexceeds the value of the product. In 1976, about1.4 billion ft3 of growing stock logging residueswere left on-site as well as two to four timesas much material in tops, branches, rough androtten trees, and small stems. Salvageable deadtimber also contains potentially usable woodymaterial. In addition, some land is excludedfrom harvest because of such constraints asremoteness, difficult terrain, small tract size,and potential for environmental damage. De-velopment of harvesting technologies andsystems to overcome these problems would in-crease recoverable timber resources.

A major opportunity for increasing harvest-ing efficiency may be through a systematic,integrated approach to growing, harvesting,and transporting wood for processing. Moreeffective use of equipment, improved harvest-ing practices, better training of woodsworkers,and more efficient transportation of wood tomills could improve productivity significant-ly. New harvesting systems also could reduce

105


the potential for environmental damage, Overthe long term, silvicultural systems for grow-ing wood and technologies for harvesting andprocessing it could be designed to optimize theuse of timber resources on a continuous basis.

Creative “small tract” harvesting technol-ogies and systems could enhance the poten-tial contribution of private nonindustrial for-ests (PNIF) to national timber supplies. About20 percent of the private forestland base is com-posed of parcels of less than 100 acres—tractstoo small for efficient use of large harvestingmachinery. In addition, improper harvestingoperations sometimes discourage landownersfrom harvesting timber from their land becauseof damage to remaining trees, impairment ofscenic qualities, and injury to the environment.Appropriate technologies and harvesting sys-tems specifically adapted to small tracts andthe diverse objectives of small landownerscould expand potential harvest levels from thePNIFs. While small-tract systems are well de-veloped in Sweden and other Western Euro-pean nations where most forestland is in smallparcels, they have not been widely adopted inthis country.

Public and/or private entities will need toplace greater priority on the development anduse of improved harvesting systems if theirpotential is to payoff. Areas deserving atten-tion include harvesting research and develop-ment (R&D), alleviation of environmental im-pacts, proper training of woodsworkers in theuse of new systems and machinery, landownereducation programs, transfer of proven tech-nologies, and overcoming institutional barriers.Countries like Sweden have improved harvest-ing productivity significantly through cooper-ative public and private efforts, but less than2 percent of the Forest Service’s R&D budgetin 1976 was applied to harvesting and onlyabout 70 scientist-years of effort were dedi-cated to it. A similar pattern exists in academicresearch.

Utilization technologies may expand theuse of currently abundant hardwood speciesand enable the use of low-quality woody ma-terial now underutilized or wasted. Several

existing technologies permit the manufactureof new high-performance wood products fromcurrently underutilized materials and speciesthat could substitute for goods requiring moreexpensive and scarcer trees. Softwoods, be-cause of their favorable properties, are nowpreferred for most high-volume conventionalproducts such as lumber, plywood, and somegrades of paper, and manufacturing processeshave been tailored to them. Yet, over one-thirdof the total volume of existing U.S. timber ishardwood, and hardwood inventories are in-creasing much faster than softwoods. Existingand emerging technologies can overcomemany deficiencies in hardwood properties andcan enable the manufacture of many productsfrom hardwoods that are now predominantlymade from softwood. Saw-Dry-Rip, compositelumbers, and particleboard made from hard-woods could substitute for softwood lumberand plywood. Advances in mechanical andchemomechan ica l pu lp ing t echno log ies ,coupled with newly developed processes formanufacturing press-dried paper, could ex-pand significantly the use of hardwood formaking paper and paperboard in time.

The U.S. forest products industry nowwastes very little wood in actual manufactur-ing. As a whole, the industry uses up to 96 per-cent of its delivered wood, which is either con-verted into products or burned for processenergy. Despite this high average utilizationrate, some plants are not able to produce aproduct mix of the highest value now techno-logically possible because their equipment isolder and less efficient. As new milling facil-ities replace the old, energy-efficient, higheryield technologies can enhance the industry’sproductivity and improve product values.

Wider use of currently available technol-ogies, such as computer-assisted milling, couldreduce requirements for roundwood per unitof lumber and panels by 20 percent or more.Nearly half of all industrial wood products arelumber and structural panels, so increasedyields from these products alone could have amajor impact on the domestic wood supply.However, increased yields also would reduce

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Ch. V—Technologies for Growing, Harvesting, and Using Wood Ž 107

Photo credit” U.S. forest Service

The forest products industry now uses nearly all woodentering mills for products or energy. These sawmillresidues are being loaded for transport to a pulpmill

the amount of wood residues available forenergy generation in lumber and pulpmills.Replacement of such materials by recovery ofadditional forest residues and biomass atharvesting may then become more widespread.Tradeoffs between improved wood use effi-ciency and wood fuel production will changein tandem with relative changes in energy andproduct prices.

Ex i s t ing and emerg ing manufac tu r ingprocesses could improve energy utilization.The forest products industry now fills asubstantial portion of its energy needs fromwood. The pulp and paper sector in particularconsumes an enormous amount of energy—over 2 quadrillion Btu in 1981—and furnishesabout half of it by burning processing residues.

Expanded use of mechanical pulping tech-nologies can conserve both energy and thetimber resource by recovering more wood fiberthan can chemical pulping. However, longerterm improvements in chemical pulping,which now requires large amounts of energy,could reduce energy needs and may even pro-duce additional energy for outside sale. Press-drying paper technologies may also reduce en-ergy requirements when commercialized. Bio-technologies, now in the laboratory stage ofdevelopment, could be potentially importantin pretreatment or digestion of wood prior topulping, thus improving yields and further cut-ting energy requirements. In addition, in lum-ber and panel manufacturing, improvementsin drying technologies could reduce energyneeds.

Improved end use of wood materials alsocould conserve timber supplies. For example,a significant reduction in wood needed for res-idential housing on a per unit basis is possiblethrough the use of innovative constructiontechniques and designs that are currently avail-able but not widely applied. Two of the majorobstacles to adoption of these innovations bybuilders are outdated building codes and home-buyers’ conservative tastes.

About one-fourth of the paper pulp producedin the United States comes from recycledpaper. The practical upper limit for the pro-portion of recycled paper in finished paper isbeing increased regularly as new technologiesare developed. The potential to achieve suchincreases is affected by the costs added for theremoval of glue, ink, and other contaminantsand by economic barriers to collecting wastepaper outside of metropolitan areas, Paper andpaperboards suitable for many uses can be pro-duced from pulp composed almost entirely ofrecycled fibers.


Phoft credit: U.S. Forest Service

Residential construction is the single largest use for solid wood products. This house is being constructed with atruss frame system developed by the Forest Products Laboratory of the U.S. Forest Service, and a wood foundation

which uses the subfloor as a heating and cooling plenum

Increasing Timber Supplies by Intensive Timber Management

Trees now growing will provide most of thetimber available for harvest over the next 30to 50 years. Beyond this, long-term increasesin timber supplies will vary considerablyamong geographic regions and tree species, butwill depend mainly on the area of land undermanagement and timber growth rates per unitarea. The area of commercial forestland thatcan respond profitably to investments in inten-sive management is a function of such factorsas climate, soil, topography, and the land’sproximity to wood processing facilities,

Unmanaged forests are generally composedof tree communities (stands) best adapted tolocal ecological conditions. Such stands mayproduce large quantities of tree biomass, in-cluding deformed stems, roots, limbs, andfoliage in addition to merchantable stems, butdo not necessarily provide industrially usefulwood at optimal growth rates. In managed for-ests, silvicultural technologies—practices thatcultivate tree crops by controlling forest com-position and growth-are employed to enhanceyields of industrially preferred species with

Ch. V— Technologies for Growing, Harvesting, and Using Wood ● 109— .—

usable trunks and stems. Other objectives, suchas maintenance of wildlife habitat, watershedmanagement, and esthetics, can be integratedinto timber management strategies but are notdiscussed here.

Distinctions between tree biomass and indus-trial-quality wood are important in assessingU.S. wood inventories. Such distinctions arenot static, however, because changes in man-ufacturing technologies can broaden utilizationstandards and the range of sizes and speciesthat are acceptable. Technologies that usematerial previously considered undesirablecould effectively increase existing industrialtimber supplies. For example, wood fuel canbe obtained from a broader spectrum of treebiomass than roundwood alone, and some sil-vicultural systems have been developed to max-imize biomass production for this purpose.

Ideally, a tree crop is harvested when itreaches the size required by utilization stand-ards and its growth rate has slowed. The seriesof silvicultural treatments is then repeated foranother rotation (or the interval between har-vests in a managed system). The optimum num-ber, sequence, and timing of treatments dependon the species, site conditions, and end prod-uct, For example, Douglas-fir in the PacificNorthwest and loblolly pine in the Southeast,probably the two most important U.S. timberspecies, require very different treatment sys-tems.

One or more of eight silvicultural technol-ogies may be used in a single timber rotation:

1.2.3.4.5.6.7.8.

harvesting;site preparation;reforestation;control of fire, competition, and pests;precommercial thinning;fertilization;commercial thinning; andgenetic improvement.

Harvesting Methods

Harvesting is often considered the first stepof a silvicultural system, because it affects thesuccessful establishment of new stands. The

best harvesting method depends on the repro-duction requirements of the tree species de-sired in the next crop. Most softwoods, for ex-ample, require full sunlight for optimumgrowth and regenerate best when an entirestand is harvested all at once. In contrast, manyhardwoods are “shade tolerant” and reproducewell when only part of a stand is removed.

Clearcutting—removal of all commercialtrees—is the preferred harvesting method formost commercial softwood species, includingDouglas-fir and loblolly pine. It is also com-monly applied to even-aged hardwoods suchas aspen. When properly conducted, clearcut-ting has several economic and managementadvantages:

● it results in even-aged timber stands thatare uniform in size and can be used for thesame product;

• it allows cost-effective harvesting becausemaximum volume is removed in one op-eration; and

● it provides for optimum regeneration ofspecies that grow best in full sunlight.

There are also possible disadvantages toclearcutting:

●

●

●

●

●

regeneration of single-aged, single-speciesstands (monoculture) can increase theirsusceptibility to widespread insect or dis-ease damage;uniform stands may not provide desiredkinds of wildlife habitat;total stand removal can be visually unat-tractive;intense logging activity can cause soil ero-sion and stream sedimentation if improp-erly conducted; andremoval of all streamside trees may causetemporary increases in water temperature,possibly affecting aquatic life until streammargins regenerate.

Most of these disadvantages can be mitigatedby advanced planning to minimize visual im-pacts, locating logging roads to minimize soillosses, reservation of “buffer strips” alongstreams, maintenance of wildlife areas, andlimiting the size of the harvest area.

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Ch. V—Technologies for Growing, Harvesting, and Using Wood ● 111

Partial cutting methods are less commonthan clearcutting and are less important for in-dustrial timber supplies. Selective cutting (atype of partial cut) involves harvest of a stand’slargest crop trees and its “weed” trees to givethe residual stand more room to grow. Selec-tive cutting results in an uneven-aged (various-aged) stand and is conducted at intervals ona continuing basis as trees reach crop size,Seed-tree or shelterwood cutting removes allcommercial trees except selected “seed trees, ”which are left to provide seed for the next standand sometimes to provide shelter from windor intense sunlight, Seed trees are often har-vested after the new stand is established.

A relatively new application of a centuries-old harvesting method—the coppice system—allows stumps to resprout for successive fast-growing wood crops from the same root sys-tem. It is sometimes used for small-diameterhardwoods intended for fuelwood or chips andis expected to become more popular as newmanufacturing technologies allow greater useof small hardwoods.

Site Preparation

Site preparation is often required for suc-cessful establishment of a new stand. It in-volves the clearing of unwanted vegetation ordebris and in some instances the cultivation ofan area prior to regeneration, By exposing baresoil so that seeds or seedlings can become es-tablished and by reducing competition fromnoncrop vegetation, site preparation optimizesconditions for new growth. It is especiallyvaluable in eliminating competing hardwoodtrees and shrubs when hardwood stands arebeing converted to softwoods,

There are four site preparation methods thatcan be used for Douglas-fir and loblolly pine.The methods include mechanical treatment,prescribed burning, herbicide application, andcombinations of these,

In mechanical site preparation, competingvegetation is physically uprooted, chopped,and/or removed by heavy equipment. This issometimes followed by disking, harrowing, or

bedding. Mechanically prepared sites can beburned or treated with herbicides to furtherreduce competition, Because mechanical sitepreparation removes organic matter andcauses significant soil disturbance, concernshave been raised over its potential effects onthe long-term productivity of the site. In somecases, mechanical site preparation results insoil losses from erosion. z In others cases, theuse of heavy equipment may cause soil com-paction. 3 The long-term effects of repeated sitepreparation on productivity will vary consid-erably depending on the soil, topography, andground cover,

The use of prescribed burning to expose thesoil and control competing vegetation is amongthe oldest and least expensive site preparationmethods. It is widely used in the South forsouthern pine species and in the West forDouglas-fir. An area maybe burned either be-fore or after harvesting to remove fuels andlimit the risk of wildfire or to control unwantedvegetation that often flourishes after crop treesare removed. Under certain atmospheric con-ditions, prescribed burning can significantlylower local air quality. Forest fires, includingboth wildfires and controlled burns, constitutea significant source of particulate emissions na-tionwide and therefore are a major source ofair pollution.4

Herbicide use has become more commonover the last few decades for site preparationon large areas. The most commonly used her-bicides are the phenoxies, such as 2,4,5-T;Silvex; 2,4-D; and 2,4-DP. Aerial applicationgenerally has replaced hand spraying tech-niques because in most cases it is less expen-

2As discussed in J. Douglass, “Site Preparation Alternatives:Quantifying Their Effects on Soil and Water Resources,” in Pro-ceedings: Site Preparation Workshop, East Southeast (Raleigh,N. C.: U.S. Department of Agriculture, Forest Service, and NorthCarolina Department of Natural and Economic Resources, 1977).

3However, there may be benefits from reduced competitionfor seedlings even though compaction occurs. See J. J. Stran-sky, “Site Preparation Effects on Soil Bulk Density and PineSeedling Growth, ” Southern Journal of Applied Forestry, vol..5, 1981, pp. 176-180, for a discussion,

‘As discussed in J. Hall, Forest Fuels, Prescribed Fire and AirQuality (Portland, Oreg.: U.S. Department of Agriculture, ForestService, Pacific Northwest Forest and Range Experiment Sta-tion, 1972), p. 44.


sive. Some herbicides may be applied eitherbefore or after planting, but application ofothers is more restricted because of potentialdamage to young seedlings. Herbicides arewidely used in the Pacific Northwest in themanagement of Douglas-fir and to a limited ex-tent in the southern pine region.

The widespread use of phenoxy herbicideshas become a major public policy issue, par-ticularly in the Pacific Northwest where publiclands predominate. While human health con-siderations are central to the debate, otherpublic concerns have focused on the relativecosts and benefits of herbicide applicationcompared to other site preparation methods.Site preparation studies have tentatively sug-gested that:

●

●

●

●

a ban of phenoxy herbicides in the coastalDouglas-fir region could reduce annualDouglas-fir yields by 7 to 17 percent;careful planning and controls could sig-nificantly reduce the hazards of human ex-posure to herbicides;nonchemical site preparation methods,such as chopping, clearing or plantingcover crops, may be almost as effective asherbicide treatment if properly conducted,but are likely to cost more; andmany herbicides can replace phenoxies forsite preparation, some of which cost moreand may be more or less effective. s

Regeneration

Regeneration—the establishment of a newtimber crop —is probably the most importantphase in a silvicultural cycle. It establishes thestocking (density and volume) and kind of spe-cies in the stand and, when conducted prompt-ly, minimizes the length of timber rotations.The three major regeneration methods areplanting, seeding, and natural regeneration.The best regeneration method depends large-ly on species, site, and stand conditions afterharvest, Douglas-fir, southern pine, and some

5A case study of herbicide issues in forestry can be found inK. Green, An Evaluation of Herbicides, Forestry and People: AWestern Oregon Case Study (New York: Council on EconomicPriorities, 1982).

eastern hardwoods often are planted afterclearcutting.

Planting involves setting seedlings in thesoil, either by hand or by machine. Use of con-tainerized stock, i.e., seedlings grown andplanted in small containers, is a relatively re-cent development that may improve seedlingsurvival rates and reduce handling problems.Density, or the number of seedlings per acre,is an important aspect of planting because itinfluences the rate of growth, total timbervolume produced, and individual tree size atthe end of the rotation, In general, high-densitystands produce smaller trees and higher totalvolumes, while low-density stands producelarger individual trees and lower total vol-umes.6 Planting is generally the best methodfor establishing rapidly growing, geneticallyimproved trees,

Regeneration by seeding can be accom-plished through “seed trees” purposely left onthe harvest area (see earlier discussion of har-vesting methods) or from seeds that are col-lected and sown. Seeding is generally less ex-pensive than planting, but the risk is greaterthat a fully stocked stand will not be establishedpromptly. If supplemental planting or seedingis required and growth of the next tree cropis delayed, seeding can cost more than plant-ing. Seeding can also result in high-densitystands requiring precommercial thinning (seebelow), which significantly increases costs.

Natural regeneration is the renewal of treecrops from seeds or sprouts, In many in-stances, it simply amounts to letting nature takeits course. In other instances, it may be partof a management strategy. Management ac-tions, such as proper harvesting and sitepreparation, may be required to ensure suc-cessful reseeding, Seed tree and selection har-vesting systems rely on natural regenerationto produce the next crop of trees.

‘W. Harms and F. Lloyd, “Stand Structure and Yield Relation-ships in a 20-Year-Old Loblolly Pine Spacing Study, ” Southern]ournal of Applied Forestry, vol. 5, 1981, pp. 162-165,

Ch. V— Technologies for Growing, Harvesting, and Using Wood ● 113—

Competition, Fire, and Pest Control

While site preparation can control competingvegetation that invades an area immediatelyafter harvest or planting, unwanted brush andgrasses can redevelop and crowd out new treesbefore a stand becomes sufficiently establishedto compete effectively for growing space. Con-trol of competition within 3 years after plant-ing loblolly pine can result in growth increasesof up to 300 percent.7 Alternative competitioncontrol methods include herbicide application,hand cutting, and mechanical cultivation be-tween trees.

Wildfire, insect, and disease control are im-portant in maintaining a healthy and vigorousstand of timber. Insect control increasingly in-volves integrated pest management systemsthat can reduce losses from insects and diseasethrough si lvicul tural methods, select ivechemical pesticides, and improved detectionand forecasting. Most U.S. forestland is nowunder organized wildfire control conducted ona cooperative basis by Federal, State, local, andprivate entities. Cooperative efforts also haveplayed important roles in insect and diseasecontrol,

Precommercial Thinning

There is some evidence that thinning plan-tations precommercially (before they reach amarketable size) can increase wood produc-tion. Growth of loblolly pine and Douglas-firhas been improved by precommercial thin-ning.89 A disadvantage of precommercial thin-ning is that it requires expenditures without im-mediate cost recovery from wood sales, in con-trast to thinning delayed until stands reachpulpwood size. Expanded use of fuelwood

7L. Nelson, C. Pederson, L. Autry, S. Dudley, and J. Walstand,“impacts of Herbaceous Weeds in Young Loblolly Pine Planta-tions,” Southern ]ournal of Applied Forestry, vol. 5, 1981, pp.153-158.

aD. Reukema and D. Bruce, Effects of Thinning on Yield ofDouglas-Fir: Concepts and Some Estimates Obtained b~’ Simula-tion, General Technical Report PNW-58 (Portland, Oreg.: U.S.Department of Agriculture, Forest Service, Pacific NorthwestForest and Range Experiment Station, 1977), p. 33.

9R. Lohrey, “Growth Responses of Loblolly Pine to Pre-Commercial Thinning, ” Southern ]ournai of Applied Forestry,VO], 1, 1977, pp. 19-21.

could make precommercial thinning more eco-nomical in the future.

Fertilization

Fertilization can increase wood productionsubstantially for certain species and soil types.Fertilizer is most commonly applied aerially,often to large areas. Since the cost of fertilizeris tied closely to the cost of energy, the futureextent of forest fertilization may depend onenergy costs in relation to timber values. l0

Nitrogen fertilization of Douglas-fir has be-come more widespread in the Pacific North-west, and growth response varies with the rateof application and with site quality. Incremen-tal growth increases from fertilization tend topeak 3 to 5 years after application, and detect-able effects disappear completely after 10 o r15 years.11 Research results suggest that max-imum economic benefit is achieved when ni-trogen is applied both 3 to 5 years before thin-nings and before final harvest and that lowerquality Douglas-fir sites may benefit more fromfertilization than higher quality sites.

Loblolly pine may benefit from phosphorusand nitrogen fertilization, although some stud-ies indicate a less consistent response. Fer-tilization of southern pines is not currently acommon t echn ique ,l2 yet some firms haveadopted it as a routine practice on responsivesites.

Following fertilization, nitrogen concentra-tion in nearby streams can reach high levels,in some cases increasing growth of aquaticplants downstream from the fertilized area.Peak concentrations of nitrogen, however, sel-dom persist for more than a few hours and usu-

IOS, Gessel, R. Kenedy, and W, Atkinson, Proceedings of Forest

Fertilization Conference (Seattle, Wash.: University of Wash-ington, Co]]ege of Forest Resources, 1981).

I I See R. Mi]]er and R. Fight, Fertilizing Douglas-Fir Forests,

General Technical Report PNW-83 (Portland, Oreg.: U.S. Depart-ment of Agriculture, Forest Service, Pacific Northwest Forestand Range Experiment Station, 1979), p. 29.

IzH, W. Dugan, and H. L. ~]en, “Estimating fertilizer responsein site-prepared pine plantations using basal area and site in-dex, ” in Proceedings of the First Southern Sihiculture ResourceConference (Washington, D. C.: U.S. Government Printing Of-fice, 1981,) p. 219-232, USDA Forest Service General TechnicalReport 50-34.


ally return to pretreatment levels within 3 to5 days. l3 Environmental damage can be re-duced if untreated buffer areas are left alongstreams, if fertilization is timed to avoid heavystorms or snow melt, and if fertilizer is appliedduring periods of low wind and good visibili-ty so that placement can be well controlled. l4

Recent investigations have tested the poten-tial for increasing nitrogen on poor sites bygrowing Douglas-fir in association with redalder, which adds nitrogen to the soil throughthe action of bacteria occurring naturally onits roots. Preliminary results suggest that thelargest total volume of both species maybe pro-duced by growing red alder for 13 years, re-moving it, and growing Douglas-fir for 45years. 15 However, maximum economic returnstill comes from growing Douglas-fir withoutthe alder rotation, because the current valueof red alder is relatively low.

Commercial Thinning

Commercial thinnings—removals of usabletrees to give the residual stand more room togrow—ideally are made on a 5- to 7-year basisin both Douglas-fir and southern pine. The firstcommercial thinning in Douglas-fir is usuallyapplied between ages 25 and 30 and in thesouthern pines between ages 15 and 20. Com-mercial thinning maintains optimum spacingto ensure desired tree size at harvest and pro-vides intermediate investment returns.

Heavy thinning may shorten the time re-quired for final crop trees to reach a specificsize. However, the maximum amount of woodfrom both thinnings and mature trees probablycan be produced by removing only the numberof trees that are likely to die naturally during

13D Moore Effects of Ferti/izatjon with urea on S’tream Water

Quallty, Res~arch Note PNW-241 (Portland, Oreg.: U.S. Depart-ment of Agriculture, Forest Service, Pacific Northwest Forestand Range Experiment Station, 1975), p. 9.

141J. Norris and D. Moore, “The Entry and Fate of Forest Chem-icals in Streams, ” in J. Krygier and J. Hall (eds, ), Proceedingsof the Symposium on Land Uses and Stream Environment (Cor-vallis, Oreg.: Oregon State University, 1971), pp. 138-158.

ISWI. Atkinson, B. Bormann, and D. DeBell, “Crop Rotationof Douglas-Fir and Red Alder: A Preliminary Biological and E;co-nomic Assessment, ” Botanical Gazette, vol. 140 (Supplement),1979, pp. 5102-5107.

the rotation. Manufacturing technologies thatallow use of smaller trees could make tree sizeless important and lead to longer intervals be-tween thinning or to shorter rotations,

Genetic Tree Improvement

Planting of genetically improved seedlingsultimately may increase future timber yieldsgreatly. Since the early l950's, programs todevelop genetically superior trees have beenundertaken by industry, government, and aca-demic institutions. Most of these efforts havefocused upon Douglas-fir and loblolly pine,First generation tree breeding efforts wereaimed at producing progeny from trees ofsuperior form and growth (superior trees). Sec-ond generation efforts have cross-pollinated orcloned superior trees to produce improvedplanting stock.

increases of 10 to 45 percent in the annualgrowth of Douglas-fir plantations have beenreported from the use of improved plantings t o c k ,l6 Increases of 40 to 80 percent insouthern pine growth rates also have been re-ported. 17 Genetic improvement appears to bemore advanced in the South than in other tim-ber producing regions, although all regions areworking on its development.

Optimal growth levels are achieved whenplantations of genetically improved trees areintensively managed under a silviculturalregime. Such management approaches dramat-ically boost productivity over what could be ex-pected on natural sites, According to one esti-mate, improved planting stocks and existingtechnology could improve Douglas-fir produc-tion by 70 percent and loblolly pine by 300 per-cent, but these gains are still less than half oftheoretical maximum productivity levels (fig.19), Further gains could be made through ad-ditional advancement in tree genetics andrefinement of management technologies.

18 WI. H Yale, Tjrnber SUpply, Land Allocation and Economic

Efficiency (Washington, D. C.: Resources for the Future, 1980),p. 223.

IW. Dorman and B. Zobel, Genetics of Loblolfy Pine, ResearchPaper WD-19, (Washington, D. C,: U.S. Department of Agricul-ture, Forest Service, 1973],

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Ch. V—Technologies for Growing, Harvesting, and Using Wood . 115

Photo credit USDA Soil Conservation Serv/ce

Commercial thinning is used to achieve desirable spacing of trees, and also provides landowners with income

Occasionally, the crossing of tree strains pro-duces hybrids that grow faster, produce higherquality wood or have better form than eitherparent tree. Such hybrids can be reproducedfrom cuttings (cloned) to supply large quan-tities of superior planting stock. Poplars prob-ably have been the most successful tree hy-brids. Clones developed from cuttings fromconifer species show gains in productivity, butseveral problems have been identified, in-cluding difficulties in propagating cuttingsfrom trees old enough to show superior char-acteristics. Clones developed for superiorgrowth often have less capacity to accom-

modate environmental variations and may bemore subject to damage from disease and cli-matic extremes than trees produced from wildseeds.

The potential of genetics to improve grow-ing stocks has not been realized as quickly insilviculture as it has in agriculture because ofthe long growing cycle of trees, Genetic im-provement of tree species requires far longertesting periods than for agricultural crops, andthe establishment of improved trees in planta-tions is an incremental process. The long timeperiod (5 to 20 years] before trees reach seed-


Figure 19.— Productivity Increases Attributable to Intensive Management

Natural Treated Target a Natural Treated Target a

Douglas Fir Loblolly Pine

PreplantTarget Genetics phosphorous Bedding

Drain and Nitrogen Plantation Naturalplant fertilization establishment growth

aJ’Twget ” value9 for maximum mean annual yield were defined through a theoretical model and observations frOm existingstarrds. The targets are estimates of mean annual yields potentially achievable on plarrtations established at the end of thecentury, assuming advancements In cultural and genetic technologies.

SOURCE: Ad@ed from Peter Farnum, et al., “Biotechnology of Forest Yield,” Science, 2/1 1/63, p. 697,

bearing age has slowed progress in tree breed-ing using traditional techniques. The corre-sponding commercial application of these ad-vances has taken 50 years or more in the pastbecause of the repeated breedings necessaryto establish useful strains.

Advances in biotechnology may acceleratethis process greatly.l8 For example, mass prop-

181mpacts of App]ied Genetics: Microorganisms, Plants, and

Animals (Washington, D. C.: U.S. Congress, Office of Technology

agation of superior clones through tissue cul-turing is a potentially important developmentin forest genetics. Tissue culturing entails invitro propagation of living cells in a suppor-tive medium that maintains their viability.Some forest products firms now are field test-ing mass propagation of clones producedthrough tissue cultures that have been plantedin natural conditions.

Assessment, OTA-HR-132, April 1981), describes new plantbreeding technologies in detail.

—


Photo credit: Simpson Timber Co.

Tissue culturing has important implications for forestgenetics. Tissue cultured clones (such as the redwood

plantlets shown above) are now being field testedby some forest products firms

Short Rotation Hardwood Culture

Improved techniques for hardwood manage-ment have received comparatively less atten-tion than management of softwood species. Animportant exception is short rotation intensivehardwood culture aimed at production of bio-mass for energy.

The oil shortages of the early 1970’s drew at-tention to the wood fuel potential of fast-growing trees produced in intensive agricul-tural-like systems, While both softwoods andhardwoods have been tested, fast-growinghardwoods such as hybrid poplar, cottonwood,

willow, and sycamore appear to be the mostpromising. These species are less expensive toregenerate because they can be propagatedfrom cuttings and can reproduce from stumpsprouts after successive harvests (coppicesystems).

Combinations of genetic improvement, l9 sitepreparation, cover crops which reduce com-petition, c u l t i v a t i o n ,20 f e r t i l i za t ion , 2l a n dirrigation 22 may be used to increase biomassproduction, Biomass yields from intensivelycultivated 4- to 5-year-old hardwoods may yield25 to 30 short tons per acre per year on the firstrotation and volumes 30-percent greater onsuccessive crops from the resprouted rootsystems. 23

While early research has focused on biomassfor energy, changes in wood utilization stand-ards to allow the use of small timber and modi-fications in intensive hardwood culture to growlarger trees could lead to other products.24

Potential Gains From IntensiveTimber Management

The Forest Service has compared currentaverage net annual wood growth with poten-tial growth that might occur in fully stockednatural stands, i.e., natural stands with optimaldensity and spacing (table 17), Net annual

lgsee, for example, J. Ranney, J. Cushman, and J. Trimble, TheShort Rotation Wood Crops Program: A Summary of ResearchSponsored by the Biomass Energy Technology’ Division, draftreport (Oak Ridge, Term.: Oak Ridge National Laboratory, 1982).

ZoSee, for example, H. Kennedy, Jr., ‘‘ Foliar Nutrient Concen-trations and Hardwood Growth Influenced by Cultural Treat-merits, ” Plant and Soi~, vol. 63, 1981, pp. 307-316.

ZISee, for example, T, BoWersox and W. Ward, “EconomicAnalysis of a Short Rotation Fiber Production System for HybridPoplar, ” ]ourna] of Forestry, vol. 74, 1976, pp. 750-753,

ZzSee, for example, D. H. Uric, A. R. Harris, and J. H. Cooiey,“Irrigation of Forest Plantations with Sewage Lagoon Effluents, ”in State of Knowledge in Land Treatment of Wastewa ter, vol.11 of proceedings from 1978 Conference at U.S. Army Corps ofEngineers Cold Regions Research and Engineering Laboratory,Hanover, N, H., pp. 207-213.

Z3M. Cannell and R. smith, “yields of Minirotation CloselySpaced Hardwoods in Temperate Regions,” Forest Science, vol.26, 1980, Pp. 415-428.

z4p. Larson, R. Dickson, and J. lsebrands, “Some PhysiologicalApplications for Intensive Culture, ” lntensi~re Plantation Culture,General Technical Report NC-21 (St. Paul, Minn.: U.S. I)epart-ment of Agriculture, Forest Service, North Central Forest Ex-periment Station, 1976), pp. 10-18.


growth on

Table 17.—Average Net Annual and Potential Growth Per Acre in the United Statesby Ownership and Section, 1976a

FarmerUnit of All National Other Forest and other

Item measure ownerships forest public industry private

North:Current . . . . . . . . . . . . . . Cubic feet 35 43 36 44 33Potential . . . . . . . . . . . . Cubic feet 66 63 59 74 66Current/potential. . . . . . Percent 53 68 61 59 50

South:Current . . . . . . . . . . . . . . Cubic feet 57 57 54 60 56Potential . . . . . . . . . . . . Cubic feet 77 71 71 83 77Current/potential. . . . . . Percent 74 80 76 72 73

Rocky Mountains andGreat Plains:

Current . . . . . . . . . . . . . . Cubic feet 29 30 25 50 25Potential . . . . . . . . . . . . Cubic feet 60 64 55 74 51Current/potential. . . . . . Percent 48 47 45 67 49

Pacific coast:Current . . . . . . . . . . . . . . Cubic feet 49 30 53 80 62Potential . . . . . . . . . . . . Cubic feet 97 91 88 119 99Current/potential. . . . . . Percent 51 33 60 67 63

Total:Current . . . . . . . . . . . . . . Cubic feet 45 35 42 59 45Potential . . . . . . . . . . . . Cubic feet 74 74 68 87 72Current/potential. . . . . . Percent 61 47 62 68 62

apotential growth IS defined as the average net growth attainable in fully stocked natural stands Much higher growth ratescan be attained in intensively managed stands.

SOURCE: Adapted from An Arra/ysis of The Thnber S/tuation /n the United States, 1952-2030 (Washington, DC. U.S. De.partment of Agriculture, Forest Service, 1982), p 137.

all commercial forestland in theUnited States in 1976 was estimated to be about60 percent of potential if all forests were well-stocked natural stands. The Pacific coast hadthe highest potential production at 97 ft3 peracre per year, but growth in 1976 was onlyabout half of what it could have been.

Differences among timber species, site qual-ity, available management techniques, andlandowner objectives make it difficult to re-liably estimate the absolute potential for in-creased timber production through intensivesilviculture, but substantial increases in per-acre productivity clearly are possible if ade-quate investments are made.

Several factors determine whether a tract ofland might be intensively managed for timber.These include its biological suitability as wellas its economic suitability. Another factor iswhether or not its owner is willing to make theinvestment and has the financial capacity todo so (see ch. VI for further discussion).

Both the Forest Industries Council (FIC), atrade group sponsored by the National ForestProducts Association, and the Forest Servicerecently published estimates of acreage afford-ing economic opportunities for managementin 25 States.25 26 Both studies used standard dis-counted cash flow techniques. The financialfeasibility of timber management was based onestimates of potential wood yields, manage-ment costs, and timber values that would pro-duce a positive net present value at specifiedinterest rates. The FIC study used a 10 percentrate of return criteria in calculating economicopportunities, while the Forest Service used a4-percent rate of return, The Forest Service ex-cluded national forests from its survey, whilethe FIC survey did not,

The 25 individual States that FIC analyzedcontain together about 83 percent of the com-

ZsFOr~St Industries council, Forest Productivity Report (Wash-ington, D. C.: National Forest Products Association, 1980), p. 46.

Z6An Analysjs of the Timber Situation, Op. Cit., p. 248.

Ch. V— Technologies for Growing, Harvesting, and Using Wood ● 119— — —

mercial forestland in the United States. Fifty-three percent of the land considered was deter-mined to be silviculturally suitable for inten-sive management, and 34 percent was deter-mined to be economically suitable (see table18).

Both studies concluded that the greatest po-tent ial for increasing t imber productionthrough intensive management is in the South,followed by the Pacific coast and the North.To achieve the projected potential gains, largeamounts of capital would be required—an es-timated total investment over a rotation cycleof $10 billion under the FIC study to $15 billionunder the Forest Service study.

The FIC and Forest Service estimates of eco-nomic opportunities for management provide

useful information given the limited dataavailable. The projected economic opportuni-ties, however, are probably higher than will ac-tually be realized. Landowner objectives, forexample, which on private nonindustrial for-ests (PNIF) lands are diverse and seldom in-clude intensive timber management, were notconsidered, even though most of the projectedpotential increase was on PNIF properties (seech. VI for discussion of PNIF ownership ob-jectives). In addition, the studies considered allcommercial forest tracts 1 acre in size andlarger, but the possible effects of tract size onthe economics of intensive forest managementwere not addressed.

Table 18.—Area of Commercial Forestland and Areas Suitable forIntensive Management in 25 FIC Study States (million acres)

Commercial Silviculturally Economicallyforest land suitable land suitable land

Mississippi . . . . . . . . . . . . . . . . . . . . . . . . 16.9 11.5 11.2Oregon . . . . . . . . . . . . . . . . . . . . . . . . . . . 24.4 12.5 10.0Arkansas . . . . . . . . . . . . . . . . . . . . . . . . . . 18.2 11.6 9.9Louisiana . . . . . . . . . . . . . . . . . . . . . . . . . 14.5 9.0 9.0Georgia . . . . . . . . . . . . . . . . . . . . . . . . . . . 24.8 12.8 9.0Washington . . . . . . . . . . . . . . . . . . . . . . . 17.9 9.4 7.6Alabama . . . . . . . . . . . . . . . . . . . . . . . . . . 21.3 15.1 7.4Texas . . . . . . . . . . . . . . . . . . . . . . . . . . . 12.5 8.9 6.5Florida . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15.3 7.5 6,3Virginia . . . . . . . . . . . . . . . . . . . . . . . . . 15.9 7.1 6.3California . . . . . . . . . . . . . . . . . . . . . . . . . 16.3 10.0 6.2Tennessee . . . . . . . . . . . . . . . . . . . . . . . . 12.8 6.6 6.0Idaho . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13.5 7.8 5.3Michigan . . . . . . . . . . . . . . . . . . . . . . . . . . 18.8 7.4 5.0West Virginia . . . . . . . . . . . . . . . . . . . . . . 11.5 7.2 4.9Montana . . . . . . . . . . . . . . . . . . . . . . . . . . 14,4 8.1 4.9North Carolina . . . . . . . . . . . . . . . . . . . . . 19.6 13.6 4.5South Carolina. . . . . . . . . . . . . . . . . . . . . 12.2 7.3 3.6Wisconsin . . . . . . . . . . . . . . . . . . . . . . . . . 14.5 4.9 3.3Missouri . . . . . . . . . . . . . . . . . . . . . . . . . 12.3 9.2 3.1Pennsylvania . . . . . . . . . . . . . . . . . . . . . . 17.5 2.8 2.4Kentucky. . . . . . . . . . . . . . . . . . . . . . . . . . 11.9 8.3 2.1Minnesota. . . . . . . . . . . . . . . . . . . . . . . . . 16.1 4.5 1.7Maine. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16.9 6.8 1,4New York . . . . . . . . . . . . . . . . . . . . . . . . . 14.5 3.6 1.4

Total . . . . . . . . . . . . . . . . . . . . . . . . . . . 404,5 213.3 139.0SOURCE Indlvldual State Productivity reports prepared for the Forest Productivity Project of lhe Forest Industries Coun.

cil, 1978-80


Increasing Timber Supplies by Improving Harvest Technology

Improved harvesting systems could effective-ly increase timber supplies by removing morewood from harvest sites and by opening upareas that currently are too costly or environ-mentally sensitive to log. Key areas where im-provement can be made include harvesting ma-chinery, harvesting methods, woodsworkertraining, and improved integration of allaspects of harvesting into an organized system.

Developing new, innovative mechanical sys-tems takes 7 to 10 years. Because of this time-frame, current timber characteristics and avail-able technologies for timber extraction andprocessing will define harvesting systems inthe next 30 years, In the longer term, it is possi-ble to improve utilization and increase avail-able wood fiber by designing integrated sys-tems for growing, harvesting, and processingto achieve near-optimal results.27

Several factors affect the feasibility of in-creasing timber supplies through improvedharvesting technology:

●

●

●

characteristics of the forests to be har-vested;opportunities for utilizing materials thatharvest makes available; andenvironmental constraints.

Characteristics of U.S. Forests

Over the next 20 to 30 years, harvesting sys-tems will reflect the quality and quantity oftrees now growing. These characteristics varysignificantly by region. In the East, average treediameters are not expected to change much,while in the West a decline of 27 percent by2000 has been projected .28 Hardwood inven-tories are expected to accumulate in the Northand the South; in the South, softwood produc-

Z7AS discussed in G. W. Brown, W. R. Bentley, and J. C. Gor-don, “Developing Harvesting Systems for the Future: LinkingStrategies, Biology, and Design, ” Forest Products Journal vol.32, 1982, pp. 35-38.

Z13R. Haynes, Il. tlclarns, and E. Bell. Manuscript on file at U.S.Department of Agriculture, Forest Service, Pacific NorthwestForest and Range Experiment Station, Portland, Oreg.

tion may increase on a per acre basis due tointensive management.

Ownership factors and the economics of ex-tracting timber will also affect harvesting effi-ciency. For example, private nonindustriallands are expected to account for an increas-ing portion of timber supplies. PNIF tracts aretypically small in size, however, while mostharvesting machinery is designed for largeoperations.

Beyond 2010, current and prospective inten-sive management practices could increase tim-ber supplies and change the character of timberstands. Replacement of unmanaged standswith rapidly growing, genetically improvedtrees could result in smaller, less defective, andmore uniform trees for harvest.

Utilization Opportunities

Recent technological advances in forestproducts manufacturing have increased sub-stantially the opportunities for utilization ofsmall logs, hardwoods, residues, and defectiveor rough timber. Some of the more importantdevelopments include:

●

●

●

●

the use of low-quality wood as filler forpanels and as center portions of laminatedbeams and studs,machines that peel smaller logs for ply-wood,processes that make panels from low-gradehardwood chips and f lakes that cansubstitute for plywood in some applica-tions, andnew systems for efficient combustion ofwood wastes.

Wider adoption of such processes could ex-pand the use of materials now considered toocostly to remove from the forest for use. Ac-cording to the Forest Service,29 1.4 billion ft3

of growing stock residues were left on harvestsites in 1976, along with two to four times as

ZQAn Ana]ysjs of the Timber Situation, op. cit., pp. 264-266.


much material in the form of tops, branches,small stems, and other materials. About 14 bil-lion ft’ of potentially salvable accumulateddead timber existed in 1977, mostly westernsoftwood. Commercial timberland also con-tains tens of billions of cubic feet of defectivetrees from commercial species. A greater por-tion of these materials may have economic po-tential for use in fuel and industrial applica-tions in the future.

Environmental Limitations

Improper harvesting practices can causeserious environmental damage. New harvest-ing technologies and systems could exacerbatesuch impacts unless special care is taken intheir design and operation. Harvesting systemsthat remove rough and rotten trees and deadtimber over a large geographic area could af-fect adversely those wildlife species dependenton such trees for habitat. Also, operations thattotally remove all the fiber produced on sitesmay further deplete nutrients in shallow, lownutrient soils, especially under short rotationsystems. Some States have adopted forest prac-tices laws designed to mitigate damage to soil,water quality, wildlife, and esthetic resourcescaused by harvesting.

New technologies and systems could be de-veloped to overcome some of the constraintsthat presently prevent harvest of some forests.For example, about 185,000 acres of nationalforest timberland in the Pacific Northwest areexcluded from the allowable cut base becauseof potential environmental problems associatedwith harvesting; systems that entail less dam-age could expand the acreage available. Formany small landowners, small-scale systemsthat are well adapted to scenic and estheticconcerns could broaden the appeal of timberharvesting. Training of woodsworkers is alsoimportant for reducing environmental effectsduring harvest operations.

Technology Development Process

The development of harvesting technologyin the United States has not been an integralpart of the overall timber production system.For the most part, coordination of efforts

among equipment manufacturers, timber pro-ducers, and processors has been limited, evenon a regional basis .30 Development of harvest-ing systems has not been supported as inten-sively by either private or public research inthe United States as in Western Europe (seebox B),

In the absence of a strong coordinated R&Dprocess, the focus has been largely on in-dividual machines rather than integrated sys-tems. In this country, harvesting machinery isdeveloped primarily in three ways:

●

●

●

Trial and error—often by loggers. While in-novation has sprung from this method, itusually produces designs that meet uniquerather than general needs.Development in small job shops—some-times in response to needs expressed bya logger client. These advancements oftenare not fully exploited because of limita-tions in the size of the production line, in-vestment capital, and the engineering staff.Development by major equipment manu-facturers, Contributions by large firms,while important, have been small in rela-tion to their potential, partly because theconstruction and agriculture industries aretheir primary markets.

Current U.S. Harvesting Technology and Systems

In general, U.S. harvesting equipment is clas-sified as either ground-based or aerial. Usual-ly, this equipment is designed to “yard” ortransport timber felled and limbed by chain-saw from stump to landing where it is loadedas a log onto a truck for transportation to themill, Probably 90 percent of the wood fiber inthe United States is processed in this manner.In the eastern half of the country, pulpwoodis the main product, cut into 100-inch” or63-inch lengths. Small diameter trees are fre-quently sheared rather than cut by chainsawand are often delimbed by pushing the stemthrough a gate. Trees are either yarded to thelanding by skidders or are cut into pieces andloaded directly onto flatbed trucks. In the West,

30As discussed in Brown, Bentley, and Gordon, “DevelopingHarvesting Systems for the Future, ” op. cit., pp. 35-36.


because logs are used predominantly for lum- Aerial harvesting equipment (cables, skylines,balloons, and helicopters) provide lift to logsas they are delivered from stump to landing.

ber or plywood, they usually are yarded in 25-ftlengths or longer.

A description of yarding equipment and theperformance characteristics of each type ispresented in table 19.31 Horses , t r ac to r s ,

The cost of harvesting by these means varieswidely depending upon the skill of the crew,the terrain, the timber size, and the size of thetract harvested. In general, ground-based op-eration cost less than aerial systems. Forground-based equipment, which is best suitedto gentle terrain, costs are usually half thoseof aerial machinery. As a result, most industrial

wheeled skidders, and feller-buncher tree proc-essors move logs across the ground surface.

Slsee J. J. Gar]and, Timber Harvesting ~pti0n5, Oregon StateUniversity, Extension Service Extension Circular 858 (Corval]is,Oreg,: Oregon State University, 1980), for a discussion.

Table 19.—Performance of Timber Harvesting Equipment—

Tractors and wheeled Feller-bunchersHorse skidders tree processors Cable and skyline Balloon Helicopter

Timber size capabilitySmall timber Capable of handling

generally less than all sizes in design24” Dbha range of machine

Production potentialLow production High production

Medium to bigtimber; smalltimber in thinnings

Timber weight limit Timber weight limitSmall to mediumtimber less than24” Dbha

High productionpossible

Medium to highproduction

Medium to highproduction; windsover 25 knots limitoperability

Very high productionbut weatherrestricts operability

Costs of productionLow Low

Limits on silvicultural systemNone None

Low to medium Medium to high High Very high

No limitationsThinning in rows orstrips possible

Generally clearcuts;partial cuts possible

Suited to clearcuts;experimental inpartial cuts

Topography limitsGentle; occasional Up to 35 to 450/o;

short, steep pitches downhill yardingover 500/o; downhil l preferredyarding preferred

Road access requirements

U p t o 3 0 % Deflection necessarybut suited to steepslopes

Adaptable totopography withinlimits

No limits

Haul road close-toskid road (300’ to500( desirable)

Long skid distancesfeasible but noteconomical

Medium distancesfrom haul road upto 1 ,500’

High lead logging1,500’ approachingmaximum yardingdistance—someskyline operationalat 5,000’

About 5,000 limit No limit except byeconomy

Stream protectionGenerally excellent

with properpractices

Can be excellentdepending onproximity to streamand practices;crossings needpreparation

Good with properpractices; streamcrossings needpreparation

High lead poor iflogging acrossstreams, otherwisegood; skylines canlift log free ofstreams

Capable of lifting logsfree of streams;large landings nearstreams areproblems

Excellent protection

Site disturbanceMinimum disturbance;

little slash handlingcapability; smalllandings 50’diameter

Medium to high dis-turbance; soilcompaction poten-tial; damage toresidual standpossible; slashhandling possible;medium landingsapproximately 75’diameter

Minimum to mediumdisturbance possiblewith properpractices; slashhandling possible;may damage residualstand in partial cuts;medium landingsabout 75’ diameter

Minimum disturbance;slash handling aproblem; requires100’ diameterlanding + 200’diameter tie downarea

Minimum disturbance;slash handling aproblem; requires100’ diameterlanding + 50’ x 100’setdown mainte-nance area

Medium to highdisturbance; soilcompaction poten-tial; damage toresidual standpossible; slashhandling possible;medium landingsapproximately 75’diameter

aDiameter at breast heiaht

SOURCE J. J, Garland, ‘Timber Harvesting Options, Extension Service Circular 858 (Corvallls, Oreg : Oregon State Unlverslty, 1980)

——.


and nonindustrial forestlands are harvested byground-based methods. Costs may range froma low of $15 per thousand board ft of timberlogged with skidders in favorable operatingconditions to a high of over $200 per thousandboard ft logged with helicopters.

Costs increase rapidly as tree size declines(fig, 20). Workers must handle more pieces toproduce the same volume of wood, so that astree size declines from 10 to 4 inches indiameter at breast height (4.5 ft above ground),costs increase by 70 to 80 percent.32 Tract sizealso affects harvesting expenses because ofthe fixed cost of moving equipment. One re-searcher, using simulation techniques to esti-mate the effect of tract size on harvest cost,found that highly mechanized equipment pres-ently available becomes inefficient as tractsdrop below 100 acres.33 This has significant im-plications for the future as more wood is ob-tained from small private nonindustrial tracts.

‘Zj. R. Erickson, “Changing Resource Quality: Its Impact inHarvesting and Transportation, ” in Impacts of the ChangingQuality of Timber Resources, Forest Products Research Socie-ty, Proceedings No. P-78-21, 1978.

33F. W. Cubbage, “Economies of Forest Tract Size in SouthernPine Harvesting, ” unpublished paper on file at the U.S. Depart-ment of Agriculture, Southern Forest Experiment Station, 1982.

Figure 20.—Cost Comparison for Cutting andSkidding by Diameter Breast Height for

Three Logging Systems

sol

— Chainsaw andcable skidder

- -- Feller-buncherand delimbing

4 5 6 7 8 9 10

DBH (diameter breast height) in inches

JRCE’ Adapted from J R Erickson, ‘rChanglng Resource Quality: Its impactin Harvesting and Transpiration, ” in /mpacfs of the Changing Oua/ifyof Timber Resources, Forest Products Research Society ProceedingsNO P.78-21 , 1978

The skill of equipment operators and othercrew members also is critical in determiningproduction costs. As in any industrial enter-prise, production rates can vary from 65 to 135percent of normal depending on worker exper-tise and work habits.

Aerial equipment, while more costly, is bet-ter suited to steep terrain than is ground-basedequipment. In the West, aerial equipment iscommonly used on slopes greater than 35 per-cent. Regulations for State forest practices inOregon, Washington, and California, for in-stance, require its use on steep slopes. Withinthe last 5 years, a few small U.S. manufacturershave placed light, highly mobile and inexpen-sive cable machines on the market that may be

Photo credit U.S. Forest Service

Helicopter yarding of logs is expensive, but can open upareas to logging that are too inaccessible orenvironmentally sensitive for ground-based

yarding systems


useful for harvesting small timber in privatenonindustrial forests in steep areas,

The structure of the logging industry also isan important consideration affecting the cur-rent and prospective design of harvesting sys-tems, Some forest products firms maintaintheir own logging crews, but independent con-tract loggers are responsible for a large portionof U.S. harvesting operations, Most such log-ging operations are small in scale, In 1977,there were over 15,000 independent loggingestablishments, employing about 83,000 work-ers, an average of less than 6 employees perfirm. This figure does not include crews hiredby sawmills and pulpmills, farmers or part-timeloggers. According to a 1982 report on Cana-dian companies’ equipment marketing pros-pects in the Southeast, forest products firmshave largely disbanded their logging crews inthe region except for areas or conditions wherespecialized machines are called for. 34 T h esmall-scale nature of southern logging contrac-tors, averaging about $250,000 invested inequipment, is a key determinant of equipmentneeds.

Harvesting Machinery

Priorities for new developments in harvest-ing machinery differ by region. To fully utilizeavailable forest resources in the East, harvest-ing machines need to be highly mobile, withlow environmental impact, and able to harvest,handle, and process large numbers of small ir-regular pieces. Prospects for companies thatdevelop such machines appear favorable, ac-cording to a recent Canadian assessment of thepotential for Canadian firms to penetrate U.S.equipment markets (see box B).

In the West, including Alaska, harvesting sys-tems for steep terrain are needed that producelittle environmental impact and that can eco-nomically deliver timber from thinnings andwood residue to roadside. Other systems ca-

S4Department of Canadian External Affairs, Market studiesof United States: Canadian Forestry Machinery and Equipmentin the Southeastern United States, prepared by Sandwell Inter-national, Inc. (Ottawa, Canada: Canadian Department of Exter-nal Affairs, August 1982), p. 12.

pable of reaching long distances could provideaccess to some presently inaccessible areas,

A systems approach to developing machinesfor growing, managing, and harvesting treesof given specifications for delivery to process-ing centers35 has not yet been undertaken inthe United States. Most big manufacturers pro-duce machinery primarily for agricultural orconstruction markets and only secondarily forharvesting timber, Much of the harvestingequipment now available is simply modifiedagricultural or construction vehicles. In addi-tion, small, independent contract loggers, whoplay a major role in harvesting even in the Pa-cific Northwest where there are large consoli-dated tracts of industrial land, are not orga-nized in a fashion that leads to the communica-tion of desired specification for harvestingsystems to machinery designers.

Harvest Methods

Harvesting machinery must be used properlyif it is to be economically and environmental-ly acceptable. In many cases, machinery cur-rently available can be more effective if newmethods for its operation are devised. For ex-ample, small, low-cost skyline yarders designedfor harvesting timber within 300 ft of roads canbe used to reach timber 1,000 ft from roadsusing a method called “multispan logging, ”This system, designed in Western Europe, ex-tends the reach of small yarders by suspendingthe cable from supports hung between twotrees and operates much like a ski lift. In manyregions, this method could provide access totimber too small to be yarded by large expen-sive systems with long-reach capabilities or toenvironmentally sensitive terrain where fewlogging roads can be used.

Soil disturbance has become a major envi-ronmental concern in many forests. Tractorshave been prohibited from harvesting timberon sensitive soils on some Federal landsbecause of the potential for site damage fromnormal tractor operations. Harvesting by cable

Sbsee “Developing Harvesting Systems for the Future, ” op. cit.,for a discussion.

Ch. V—Technologies for Growing, Harvesting, and Using Wood ● 125— ..——

Box B.—Harvesting Technology in Western Europe

The development of harvesting machinery in Western Europe began in much the same wayas it did in the United States. Most equipment was fabricated by individuals or small shops. Inthe last 15 years, however, Western European manufacturers have begun to design more completesystems for harvesting, preprocessing, and transporting wood from stump to mill. Scandinaviancountries have led this transition from a machine to system focus. These countries were forcedto better integrate harvesting with tree growing and processing because of increasing labor costsand a growing proportion of their timber supplies taken from small, nonindustrial private forest-lands—factors that also affect the forest products industry in the United States. In Sweden, wherethere are some 247,000 small forest owners, 56 percent of the forestland tracts are less than 62acres in size. In Austria, over 80 percent of the forest is privately owned and nearly all is in tractsof less than 500 acres.36

Rapidly rising labor costs threatened to price Swedish wood products out of the world marketin the early 1960’s. Reducing those costs became a national objective and the government, organizedlabor, forest owners, and machinery manufacturers banded together to forma cooperative researchorganization whose main charge was mechanization of timber harvesting. In 20 years, harvestingin Sweden was transformed from a high-cost, labor-intensive operation to a low-cost, mechanizedactivity.37

The payoff from such R&D can be very high. In Sweden, productivity was roughly 46 ft3 perworker-day in 1950. By 1975, it had increased about 7.5 times to 350 ft3 per day. The net resultof improved productivity was that Sweden remained a competitor in world markets. Its presentresearch thrust is the development of highly mobile, low-cost machines for use on small, scattered,nonindustrial forests.

The importance of small, privately held forests has led Western European manufacturers toproduce a wide variety of small, inexpensive, highly mobile machines that can be used individual-ly or as part of an integrated system. Such machines make it easy for landowners to harvest theirown timber and encourage them to manage their forests as part of their agricultural enterprise.Many machines are designed to operate from the power takeoff of common farm tractors.

Data is not available to assess the role that development of harvesting machinery for privatenonindustrial owners has played in increasing supplies of wood to Western European mills. Itis likely, however, to be significant, especially in Scandinavia. Sweden, for example, relies on nonin-dustrial forests for about 70 percent of its wood. Forest products continue to be the nation’s leadingexport commodity, evidence that output from nonindustrial lands remains high and that smallprivate owners continue to contribute to the country’s wood supply.

~Western European landownership trends are discussed in Swedish Institute, Forestry in Sweden (Stockholm, Sweden:Swedish Institute, 1976); and G. W. Brown, “lNTERFOREST 82—Technobgy and Science of Managing Small, Young Forests,”Journal of Forestry, vol. 80, 19%2, pp. 702-703,

wG. W. Brown “Harvesting Research and Development in Sweden,” Journal of Fores@, VOL 80, 1982, Pp. 793-794, 800.

126 ● Wood Use: U.S. Competitiveness and Technology— .

Photo credit George Brown

Development of small harvesting equipment for use on private nonindustrial forestland has been a priorityin Western Europe and Scandinavia. The photo shows a tractor-powered chipper and detachable chip bin

systems is permitted, but costs over twice asmuch. As a result, much of the timber effec-tively is excluded from harvest because it can-not be extracted economically. Recent researchon new methods of harvesting within accept-able levels of soil disturbance and cost maychange this situation.38

Transportation Systems

Once harvested, timber must be transportedfrom the forest to processing centers. For proc-essing centers that convert wood to fiber or

~aAs discussed in H. A. Froeh]ich, D. E. Aulerich, and R. Curtis,Designing Skid Trail Systems to Reduce Soil Impacts from Trac-tive Logging Machines, Forest Research Laboratory ResearchPaper 44 (Corvallis, Oreg,: Oregon State University, 1981).

composition products, a broader array of op-tions is available to transport wood besides thestandard log common today. These options in-clude whole trees, tree-length logs, chips,chunks, and compacted bales of residue. Anadvantage of using chunks or compacted bales,for instance, is that more wood fiber can bepacked into a load than with logs, especiallyif they are crooked and limby. Transportationcosts thereby are reduced and more timber canbe harvested economically.

Broader transportation questions are raisedwith the development of new harvesting sys-tems. These questions include the adequacy ofexisting highways and the design of vehiclescapable of dealing with diverse conditions. Forexample, most forest roads are designed for logtrucks that bend in the middle. Vans to haul

Ch. V— Technologies for Growing, Harvesting, and Using Wood ● 127

chips or chunks are designed primarily forhighway use and have a different configura-tion, This means they can neither turn aroundnor negotiate curves on standard logging roadsas easily as most logging trucks. In some cases,bridges and overpasses limit the size of trucksto be used and would need to be redesignedor strengthened to accommodate heavier loadsor wider carriers. Highway problems and likelysolutions differ by region. The West has longhaul distances on secondary or low-volumegravel roads; the East has a more extensivelydeveloped, paved public road network whereload limits and aging bridges are disadvan-tages.

Training for WoodsworkersNew machines and new methods require

trained crews to use them. As machines be-come more sophisticated, they usually becomemore expensive; abusive treatment or ineffi-cient operation can affect costs significantly,Unfortunately, woodsworker training has beengiven low priority in North America. In Scan-dinavia, operator training has received equalemphasis with machine development becauseresearchers and managers recognize that thetwo are closely linked (see box C). Probably halfof the increased productivity experienced inSweden can be attributed to operator trainingprograms. In central Europe, productivity fora well-trained crew averaged 19.3 minutes percubic meter harvested; an untrained crew re-quired 43.5 minutes.39 If similar gains in pro-ductivity can be achieved in the United States,timber now considered too costly to harvestcould be added to the supply base.

Woodsworker training could improve thelogging industry’s safety record and reduceharvesting costs associated with workers’ com-pensation payments (table 20). Among indus-tries in 1976, logging had the second highestinjury and illness rate and thus had high com-pensation rates. Logging is already a dangerousoccupation but may become more so as work-ers are required to handle more pieces and asoperations move into more difficult terrain.

wA. Trzesniowski, Logging in the Mountains of Central Europe[Rome, Italy: United Nations FAO, 1976).

Table 20.—Summary of Workers’ CompensationInsurance Rates by State for Logging and Lumbering

Workers (cost per $100 of payroll)

State 1974 1978 1980

Alabama . . . . . . . . . . . . . . . . . . . . $9.37 $10.52 $12.52Arkansas . . . . . . . . . . . . . . . . . . . . . 15.26 18.26 22.00Florida. . . . . . . . . . . . . . . . . . . . . . . . 13.60 32.59 27.69Georgia . . . . . . . . . . . . . . . . . . . . . . 13.52 16.10 22.16Louisiana . . . . . . . . . . . . . . . . . . 29.90 39.68 52.10Mississippi . . . . . . . . . . . . . . . . . . . . 23.24 34.59 44.36North Carolina . . . . . . . . . . . . . . . . . 10.47 16.54 28.59Oklahoma . . . . . . . . . . . . . . . . . . . . . 26.34 32.26 53,35South Carolina. . . . . . . . . . . . . . . 9.23 16.03 22.29Tennessee . . . . . . . . . . . . . . . . . . . . 14.08 19.61 17,43Texas a . . . . . . . . . . . . . . . . . . . . . . 27.06 41.90 14,98Virginia . . . . . . . . . . . . . . . . . . . . 8.86 15.37 23.69aTexas rates were lowered I n 1980 to encou ra9@ @m PIOYm@nt

SOURCE Market Stud~es of the Urr(ted SIafes Canadm Forestry Machineryand Equipment In the Southeastern Un/ted Stafes (Ottawa Canadlan Department of External Affairs, 1982), p 12

Workers’ compensation rates paid by employ-ees for their crews are very high, and con-tribute significantly to the costs of logging. In-juries and associated costs may continue to riseunless training programs can improve the safe-ty record.

Training workers also could reduce environ-mental impacts of harvesting and improve tim-ber management. Since most PNIF lands arenot harvested under a management plan pre-pared by a professional forester, special woods-worker education could be directed at ownersof private nonindustrial forests. Some ownerspersonally harvest their own timber, a choicecommon in Europe and among some U.S.farmers. In other cases, owners who do notperform the harvest themselves may benefitfrom learning more about harvesting timberand be better prepared to make decisions aboutharvest programs. Such education may be animportant key to the availability of timber onprivate nonindustrial forestlands.

Research and Technology Transfer

If timber supplies are to increase from im-proved harvesting and land management tech-nologies, additional improvements may beneeded in the present system of forestry-relatedresearch and technology transfer. The UnitedStates does not have a research organizationlike the Forest Engineering Research Institute


Box C.—Marketing Canadian Equipment in the Southeastern United States

Development of small, multipurpose harvesting equipment for use on nonindustrial tracts couldaid in increasing timber supplies from PNIF lands. Such equipment is widely available in Scandi-navia and Western Europe, where small tract ownerships are common, but less so in the UnitedStates. Sensing an opportunity for Canadian manufacturers, the Canadian Government recentlyundertook a study of the potential market for Canadian-manufactured harvesting equipment inthe Southeastern United States.40

The Sandwell International study, commissioned by the Canadian Department of External Af-fairs, found “no reasons . . . why Canadian-manufactured forestry machines and equipment couldnot obtain an increased market share in the Southeastern United States.” Although some importduties could affect Canadian competitiveness, favorable exchange rates between Canadian andU.S. currency would probably balance duties.

From interviews with logging contractors and corporate executives, the study concluded that“existing equipment design will not meet future requirements for log harvesting.” More intensivesilviculture with associated commercial and precommercial thinning will establish a need forsmaller, highly mobile skidders and harvesting equipment able to be used for several purposes.Machines designed to meet noise reduction standards, reduce damage to plants, and minimizestream water pollution would also be desirable.

The potential for Canadian penetration of the skidder market was found to be especially high,due to a continuing need for replacements (2,500 to 3,500 per year in the United States). Attach-ment devices able to run off tractors also were given high potential, due to unique designs by someCanadian manufacturers. Reforestation equipment was also found to be a promising market if Cana-dian manufacturers adapted their designs to Southeastern U.S. environmental and topographicconditions.

The study also assessed marketing strategies. Because many forest products firms have cutback their own logging operations, the most successful strategy, according to the study, wouldbe aimed at independent contractors, followed by farmers and other part-time loggers with a needfor attachments running off farm equipment. Dealerships were found to be crucial for successfulmarketing, since few loggers were willing to travel more than 30 miles for services. Trade fairswere found to be less effective because loggers want to see equipment in actual operation. Therefore,demonstrations at harvest sites by forestry schools and State agencies were thought to be morepromising. In addition, cooperative efforts with vocational schools would help train woodsworkersto use the new machinery and facilitate market penetration by giving operators a chance to testequipment.

%anadian Department of External Affairs, Mrkot StudfeS.

of Canada, which carries out coordinated re-search on harvesting. Furthermore, public re-sources currently directed to harvesting sys-tems research are quite small. In 1976, only 70scientist-years of effort were devoted to it, andit comprised less than 2 percent of the ForestService research budget.4l Greater emphasis onR&D may be needed if harvesting systems thatextend timber supplies are to be forthcoming.

41C, W. Boyd, W. W. Carson, and J. E. Jorgensen, “Harvestingthe Forest Resource—Are We Prepared?” Journal of Forestry,vol. 75, 1977, pp. 401-403.

Traditionally, the formal framework for for-estry-related technology and information trans-fer has been weak in the United States. Thissituation may improve over time, however, ifthe Renewable Resources Extension Act of1978 (Public Law 95-306) bringing forestrymore fully into the agricultural extensionsystem, is adequately implemented.

The 1978 act gives forestry a greater priori-ty in the Cooperative Extension System, whichfor nearly 70 years has served as a vehicle tohelp farmers in on-the-ground application of

Ch. V— Technologies for Growing, Harvesting, and Using Wood ● 129.——— .——. —

agricultural research findings, The act called sources extension was not provided until fiscalfor periodic development of a National Renew- year 1982, and it has been proposed for dele-able Resources Extension Plan, along with tion in fiscal year 1984, As a result, most for-complementing State plans, to identify renew- estry-related work is conducted with discre-able resource priorities in the extension system. tionary funds allocated chiefly to agriculturalThe initial program was submitted to Congress activities (see box D).in 1980. Earmarked funding for renewable re-

Box D.—Forestry in the Cooperative Extension System

The National Cooperative Extension System is the primary means by which government speedsagricultural research findings on technology and management to landowners and other membersof the public. Established in 1914 by the so-called Smith Lever Act, the system is comprised ofUSDA, land-grant universities, and State and county government extension agencies. Nearly allof the over 3,000 counties in the United States have extension offices which conduct information,education, and demonstration programs related to activities as diverse as forestry, home economics,marketing, and agricultural production.

Federal cost-sharing of forestry-related extension activities has occurred at a modest level formany years ($1.6 million in 1979) under general-purpose appropriations or separate appropria-tions for specific projects. Most of these activities are aimed at encouraging land managementby private nonindustrial owners, although wood utilization activities also have been authorized.Federal funds account for 30 percent of project costs. A State’s cost-share is 70 percent. Extensionforestry activities typically are undertaken in conjunction with other agencies, including the ForestService, State forestry offices, the Soil Conservation Service, local conservation districts, and countyagricultural conservation program committees.

Examples of cooperative extension forestry-related activities include:

• provision of stumpage price information in some county extension offices in the South,• operation of metropolitan area workshops on timber management investment opportunities

for absentee forestland owners,● initiation of a Northeastern project for improving timber stand management through income-

producing fuelwood thinning, and● establishment of County Forest Resources Associations in several States.

An organizational framework for increased involvement of the extension system in forestrywas provided by the Renewable Resources Extension Act of 1978. The act called for developmentof a National Renewable Resources Extension Plan on a 5-year basis.

In the initial renewable resources extension plan submitted to Congress in 1980, States iden-tified educational and informational “opportunities” associated with extension forestry which wouldrequire 493 staff-years to implement. This compared with 160 staff-years of forestry extension ac-tivities in 1980.

Although the 1978 act specifically authorized earmarked Federal appropriations, up to $15million annually, for renewable resource extension purposes, Federal funding continues at a modestlevel. Actual funding ($2 million) was not provided until fiscal year 1982 and has been proposedfor deletion in the fiscal year 1984 budget request. Smith Lever general funding thus may continueto be the primary source of forestry funds, with forestry competing with other activities for Federalsupport.


At present, however, fewer than 10 people ductivity witnessed in agriculture that is at-are actively involved in formal harvesting ex- tributable to extension education could be du-tension programs, and all forestry-related ex- plicated for forest resources, the timber sup-tension activities entail only about 160 staff- ply would likely be markedly improved.years or effort annually, If the increased pro-

Increasing Timber Supplies Through the Manufactureand End Use of Wood Products42

More efficient use of wood in the manufac-ture of forest products could be achieved inseveral ways by:

● the expanded use of underutilized tree spe-cies, wood residues, and defective mate-rials that are now left in the woods afterharvest;

● the increased recovery of high-value pri-mary products, such as lumber and ply-wood, from roundwood logs;

● the increased use of manufacturing resi-dues for particleboard and fiberboard;

• increased efficiency in end use of woodproducts, such as in the design of houses;and

• increased recycling of paper.

A variety of products can be made from un-derutilized trees. Such products may substituteincreasingly for wood products derived frommore costly and scarce raw materials. Applica-tion of advanced engineering techniques to enduses of wood, such as in design and construc-tion, also could improve efficiency by econo-mizing on the use of the resource while main-taining structural quality.

There are additional opportunities to im-prove raw material use in the mill, In 1976,over 96 percent of the wood entering mills forprimary processing was either converted intowood products, such as lumber, veneer, ply-wood, composite panels, and pulp and paper,or burned to supply the energy needs of the in-dustry. Although most material is used, prod-

4Zsee volume 11 of this report for detailed discussion of woodutilization and manufacturing technologies from which this sec-tion is derived.

uct yields can be improved as new mills, ableto process wood more effectively, come on line.

Technological Adjustments to Changesin Growing Stock

Historically, the U.S. forest products industryhas adapted well to changes in species avail-ability and growing stock.43 As preferred spe-cies, sizes, and qualities of wood have becomedepleted due to increased demand, processingtechnologies have been adjusted to work withmore abundant species and materials previous-ly thought to be unusable.

There are several examples of the industry’saccommodation to raw materials availability.Originally, the pulp and paper sector dependedon northern spruce and fir for papermaking.As inventories of spruce and fir declined in theearly 1900’s, widespread concern arose overpossible shortages, since other species such assouthern pine were thought to be unsuited forpaper. However, the sector, aided by researchlaboratories, quickly adapted the kraft sulfatepapermaking process to southern pine, whichnow is a major contributor to paper produc-t ion.44 In addition, research was initiated onthe use of lesser quality hardwoods in paper,so that suitable low-grade hardwoods are nowadded to the raw materials mix.

qasee, for example, Egon Glesinger, The Coming Age of WOOd(New York: Simon & Schuster, 1949), in passing, for discussionof changes in raw materials utilization by the forest productsindustry.

44AS discussed in Ibid., pp. 169-172.

—— ——

Ch. V— Technologies for Growing, Harvesting, and Using Wood ● 131

Similarly, plywood producers initially de-pended on large-diameter, straight westernsoftwood, As a result of increasing prices forsuch timber and uncertainties about future sup-plies, manufacturers learned to use previouslyuntried southern pine in the early 1960’s. By1980, the South produced nearly as muchplywood as the West, generally using smallerlogs,

Implications of New Wood Products forFuller Use of Resources

Today, softwoods are preferred for lumber,plywood, and certain papers. As currently pre-ferred softwood grades become scarcer andmore expensive, the forest products industrycontinues to seek ways to use different portionsof the timber resource through the expandedutilization of hardwood species and the ex-panded recovery of wood left in the forest after“merchantable” material is removed.

Hardwood species present major opportuni-ties for greater use. Hardwood inventories,found mostly in the East, comprise more thanone-third of the Nation’s growing stock and aremultiplying fast, In 1976, hardwoods ac-counted for 36 percent of the standing timber,but only 26 percent of roundwood supplies.45

Existing and emerging technologies can pro-duce materials from hardwoods of similar per-formance to many products now producedmainly from softwoods.

In the pulp and paper sector, the increasedsubstitution of abundant hardwoods in the pro-duction of papers suitable for a variety of usescould relieve resource problems caused by theeconomic scarcity of softwoods. While severaltechnologies could permit greater hardwoodutilization, only about one-fourth of the pulp-wood used in the United States presently isderived from hardwoods.

Current pulping processes can use a broadrange of woody materials, such as wood res-idues and chips, Over 35 percent of the totalwood used for kraft paper comes from res-

qsr)erl~,e{~ from An Ana]~’sjs of the 7’irnber Situation, OP. Cit.,

1982, p. 158.

idues. In the Pacific Northwest, nearly 90 per-cent of the wood used for pulp originates fromsawmill or veneer mill residues.46 The suitabili-ty of whole tree chips, including bark andbranches, is now under study; when efficientsegregation methods are developed, these chipscould greatly enlarge the wood resource avail-able for pulp products. In addition, waste papernow accounts for about one-fourth of the fiberused in the industry; increased recycling is alsofeasible (see box E).

The lumber and panel sector has adjusted itsprocesses to use smaller logs, as second-growthtimber replaced old-growth and as tree utiliza-tion standards changed. This trend will prob-ably continue. The potential of hardwoods instructural plywood production is being ex-plored, Some studies have concluded that con-struction-grade hardwood plywood made froma mixture of high- and low-density speciescould be economically competitive with soft-wood construction plywood.47 Improved meth-ods of drying and seasoning hardwoods48 couldprovide additional impetus for their use inplywood,

Several composite panel products have beendeveloped for structural application, includingwaferboard, oriented strand board, and Com-Ply in which a particle core is overlaid witha veneer surface. Nearly all the new panelproducts developed in the last 30 years can usehardwoods and some wood defective for otheruses, thus extending the timber resource.

Waferboard and flakeboard panels (made ofwood wafers or large flat flakes) can be madefrom any hardwood species, but the less densespecies are best. Waferboard is unsuitable forsome structural applications but may substitutefor plywood for sheathing. Waferboard has

-D. A. Tillman, A. ], Rossi, and S. O. Simmons, Wood: Its Pres-ent and Potential Uses (OTA contract report prepared by theEnvirosphere Co., April 1982), p. 4-25.

47R. W. Jokerst and J. F. Lutz, “Oak-Cottonwoood Plywood:No Delamination After Five Years, ” Plywood and Panel hfa,ga-zine, June 1981, p. 18.

qasee Walter R, Smith, “New Horizons in Hardwood Uti-libation, ” manuscript presented at Forest Products UtilizationResearch Conference, Forest Products Laboratory, Madison,Wis., Oct. 19-21, 1982, pp. 8-9 for a discussion of hardwoodseasoning research.


Box E.-Potential for Increased Recycling of Waste Paper

About 23 percent of the fiber used by U.S. papermakers in 1980 came from wastepaper accord-ing to a recent report prepared for the Solid Waste Council of the Paper Industry.* Paper recyclingdeclined in the 1950’s and most of the 1960’s, but has been increasing since 1968.

Most waste paper is not recycled. In 1980,67.8 million tons of paper were consumed and about42.7 million tons of paper were disposed of in landfills or were otherwise not recovered. An esti-mated 6.2 million tons were diverted, destroyed, or lost in use and therefore were not recoverablefor recycling, and 0.8 million tons were burned to produce energy. About 18.1 million tons wererecovered for recycling, up from 12.9 million tons in 1971.

A portion of the paper recovered for reuse—2.7 million tons—was exported. The remaining15.4 million tons were used as raw material in the production of new domestic paper.

Of the 18.1 million tons of paper recovered for recycling, 8 million tons consisted of corrugatedpaper (i.e., box plant cuttings and corrugated containers) obtained primarily from commercial enter-prises. The balance consisted of a mix of paper types, the most important of which was newsprintobtained chiefly from residential users.

Collection of waste paper is difficult, especially outside of urban centers. Furthermore, wastepaper is not always easily separatad from nonfiber contaminants. Eliminating contaminants is oftenlaborious and inconvenient and is frequently not fully accomplished. Contaminant problems arisein part from lack of coordination among the industries making, using, and recycling paper. Coopera-tion among them could be benificial and could greatly reduce obstacles to recycling. If paper con-verters used water soluble inks and glues, for example, subsequent recycling would be easier.

Municipal burning of wastepaper for energy has been singled out by the paper manufacturersas potentially competitive. According to industry estimates, waste paper burned for energy pro-duction could increase from less than a million tons in 1980 to nearly 9 million tons in 2000. Forthis reason, the industry is concerned that municipal efforts to address solid waste disposal prob-lems through waste-to-energy systems could create supply problems for paper recyclers.

(Naw York: American Paper Inatitute, l@S2).

been widely accepted in Canada where it wasfirst introduced. Several waferboard plantsnow operate in the United States, most ofwhich are in the Great Lakes States and NewEngland. 5O

Product Recovery in the Solid WoodProducts Sector

From roundwood, the solid wood productssector produces a variety of goods, includingdimension lumber, plywood, laminated lum-

WInitial waferboard plants were established in the Great LakeStates; subsequently, several others were established in NewEngland. Trends are discussed in Lloyd C. Irland, Wi]dIandsand Woodlots: The Story of New England Forests (Hanover andLondon: University Press of New England, 1982), p, 160; andHenry M. Montrey, III, Current Status and Future of StructuralPanels in the Wood Products Industry, M.S. thesis, Massachu-setts Institute of Technology, June 1982, pp. 110-115.

ber, molding, and furniture stock. Leftovermaterials generally are shipped to pulpmillsand particleboard plants or turned into othercomposite materials. Remaining materials,such as bark and sawdust, are burned as fuel,so virtually all of the roundwood—more than95 percent—is used in some way.

Improving Yields in Lumber Manufacture

Lumber products include dimension lumber,boards, finish lumber, and timbers. Of alllumber and panel products produced in theUnited States in 1979, almost 70 percent (byweight) was lumber.5l Available technologies

SIU.S. Depa~ment of Agriculture, Forest Service, U.S. TimberProduction, Trade, Consumption, and Price Statistics, 195G1980,miscellaneous publication No. 1408 (Washington, D. C.: U.S. Gov-ernment Printing Office, 1981), p. 10.

Ch. V— Technologies for Growing, Harvesting, and Using Wood . 133—


A variety of solid wood products are now used, but lumber continues to be the largest use by weight

could increase lumber yields per unit of round- are important, however, in balancing lumberwood, but these technologies would reduce the recovery efficiency with the production ofwood left over for nonlumber wood products. other goods and energy,

About 40 percent of a log entering a typical Several processes could increase lumber re-sawmill is converted into dimension lumber. covery without major sawmill modifications:Most of the rest becomes sawdust, shavings,

●

and edging used to manufacture particleboard,fiberboard, and paper or is used for fuel. Withnew technologies and processes, lumber recov-ery in mills could reach between 60 and 88 per-cent for medium-sized logs.52 Material tradeoffs

52 Jerome Saeman, “Solving Resource and Environment Prob-lems by More Efficient Utilization of Timber, ” in The Report ●

of the Presiden t’s Advisory Panel on Timber and the Environ-ment (Washington, D. C.: U.S. Government Printing Office, April1973), app, F, p. 361.

The best opening face process produceshigher grades and increases recovery oflumber through computer-assisted selec-tion of sawlines during milling. Laboratorytests indicate that this process could in-crease lumber yields by 20 percent andsome in-service tests have confirmed this,The saw-dry-rip process enables fuller useof hardwoods by reducing their tendencyto warp and deform and also permits use


LIVE SAW

EDGE FULL WIDTH

RIP TO LUMBER

●

KILN DRY

GLUE INTO PANEL

FINAL DIMENSION


I Tne Saw-Dry-Rip process enables fuller utilizationof- logs, particularly hardwoods

of defective timber and wood residues thatwere once considered unmerchantable.The edge-glue and rip process is an in-novative sawing and gluing techniquewhich reduces wood loss and permits useof low-quality raw materials to producehigh-quality lumber-like products.

Other available processes could improveproduct recovery, but would require costly in-vestment by mill owners. Technologies forcomposite products, such as Parallel-Lam-inated Veneer (PLV) and Corn-Ply, can producehigh-quality, lumber-like products from low-quality materials and hardwoods. The dimen-sions of PLV and Corn-Ply products are not lim-ited by log size and can produce strongerlumber than conventional manufacturing.

Despite the advantages, the substitution ofcomposites for dimension lumber may proceedslowly. Composite lumber manufacture re-quires expensive equipment, which therefore


The power backup roller can improve veneer logyields in plywood manufacture

is more likely to be installed in new mills thanretrofitted in old ones. As existing sawmills aredepreciated, PLV facilities may be built asreplacements, particularly if stumpage valuesincrease and building codes are modified topermit the use of PLV lumber.

Potential Improvements in Plywood Manufacture

At present, plywood recovery runs between47 and 53 percent.53 Less than 1 percent of allroundwood used in plywood manufacture iswaste, because residues from plywood millsare used for lumber, particleboard, pulp, paper,fiberboard, and fuel.

Mills now accept smaller logs than in thepast, and there is an increasing effort to usehardwood for structural plywood. Many in-novations in structural panel manufacturinghave focused on expanded use of hardwoodsand lower grade wood.

Currently, 25 percent of the veneer logsbrought in from the forests are considered un-suitable for peeling .54 Because of the high value

SsKidder, peabody & CO., Inc., A Critical Issue Report: COm-

Ply Waferboard, Oriented Strand Board: Revolution in the Struc-tural Panel Market (Kidder, Peabody & Co., Dec. 24, 1980), p, 14.

SqFrank J. Fronczek, “Preventing Veneer Bolt Spinout, ” re-printed from Modern Plywood Techniques, proceedings of theSeventh Plywood Clinic, Portland, Oreg., 1979, p. 22.

Ch. V—Technologies for Growing, Harvesting, and Using Wood ● 135—

of veneer logs, reducing the amount of unus-able material can improve the productivity andprofitability of the mill, and some promisingtechnologies for accomplishing this have beendeveloped.

Product Recovery by the Pulp and Paper Sector

The increased cost of energy, the rising costof both roundwood and sawmill residues, mar-ket emphasis on printability and other non-strength factors, and the abundance of less ex-pensive hardwood timber have all promptedthe pulp and paper sector to consider moreenergy-efficient and materials-efficient man-ufacturing technologies. Now pulp and papermanufacturers are turning out higher qualitypulps that require less wood per ton of pulpproduced.

In 1978, the pulp and paper sector consumedapproximately 77 million short tons of oven-dry pulpwood. Forty-four percent came fromchips and sawmill residues. About 26 percentwas hardwood. Trends in wood use in the past40 years have moved toward the increasedutilization of hardwood species and increasedreliance on chips and sawmill residues. In ad-dition to mill residues and chips, pulp andpaper manufacturers used approximately 15

Photo credit’ U.S. Forest Service

Modern papermills can achieve fuller woodutilization and decreased requirements

for purchased energy

million short tons of recycled waste paper forpulp and paper production.55

More widespread adoption of mechanicalpulping technologies could further reduce fiberrequirements, For example, it takes an esti-mated 2.5 short tons of wood to produce 1 tonof paper through the kraft chemical pulpingprocess. Only 1,05 short tons of wood is re-quired to produce 1 ton of paper in thermo-mechanical pulping. With this potential reduc-tion, each 2-percent increase in pulping capac-ity would require only a 1.7-percent increasein wood fiber.58

While incremental improvements in currentprocesses may be important in raising the ef-ficiency of existing mills, the greatest poten-tial for dramatic advances in pulp and papermanufacture lies in new technologies. Such in-novations could enable the use of large quan-tities of currently underutilized hardwoodspecies and may even present prospects fordeveloping superior new papers for specializedneeds. At the same time, new concepts inenergy use and cogeneration could achievenew levels of energy efficiency, thus freeingup additional fiber for paper.

Press-drying technology, developed at theU.S. Forest Products Laboratory, holds prom-ise both for reducing the amount of energy re-quired in papermaking and for enabling the useof dense hardwood species, such as sweetgumand red oak, which are not currently used inlarge quantities for pulp. Press-drying useshigh-yield hardwood or softwood kraft pulp toproduce linerboard with strength superior toconventional softwood kraft paper in every re-spect except tear strength. At the same time,press-drying can reduce the amount of energyneeded in the drying process by applying pres-sure to the fiber (pulp) mat as it is dried, in con-trast to conventional drying that appliespressure and heat separately.

ssJoan E. Huber, The Kline Guide to the Paper Industry (Fair-field, N. J.: Charles H. Kline & Co., 1980), pp. 66-67.

wG. Styon, “Impact of North American Timber Supply on In-novations in Paper Technology, ” Paper Trade Journal, May 30,1980, P. 28.

136 ● Wood Use: U.S. @repetitiveness and Technology


USDA Forest Products Laboratory scientists havedeveloped a prototype press-dried paper technology

Paper produced from press-drying kraft redoak pulp has been shown to have a burst andtensile strength approximately 13 percentgreater than conventionally dried pine kraftpaper. Compression strength of the press-driedred oak paper was 50 percent better than thepine. The lower tear strength of press-driedhardwood paper may limit its use for wrappingor sack paper; however, its higher burst andtensile strength make it suitable for linerboard.

An estimated 19 percent in net energy sav-ings could be gained from the use of press-drying technology. 57 press-drying also mayreduce equipment requirements in both thedrying section and the pulping process becauseof its capability for using unrefined pulpalthough this is uncertain because a commer-cial-scale press-dry paper machine has not yetbeen built and operated.58 The major limitationof press-drying to be overcome before the tech-nology can be used commercially, is the lowspeed of the Forest Products Laboratory’s pilot-scale paper machine and the resulting slowproduction rate.

‘7V, Setterholm and Peter Ince, “The Press-Drying Conceptfor Papermaking,” Southern Lumberman, December 1980.

58P, J. Ince, “FPL Press Drying Process: Wood Savings in Liner-board Manufacture, ” TAPPZ, vol. 64, 1981, p. 109,

Decreasing Energy Requirements

The forest products industry now burnsabout half the wood entering its mills to meetinternal energy needs. Generally, only low-value wastes and residues are used for fuel, butsome residues now used for fuel could be uti-lized instead in the manufacture of products.Development of energy-efficient wood proc-essing systems could improve the balance be-tween wood energy and fiber recovery.

The major long-term opportunities for energysavings are in the energy-intensive pulp andpaper sector. Pulp and paper producers con-sume about 7 percent of U.S. industrial energyand about 3 percent of the total energy con-sumed nationwide. ’g About half of the sector’senergy requirements currently are met inter-nally by burning wood residues, pulpingliquors, and other waste products,

In the near term, the best prospects for reduc-ing the pulp and paper sector’s energy require-ments may be through increasing the use ofmechanical pulping, which uses less energythan chemical pulping methods and recoversa higher proportion of the fiber. Another waymay be through expanding the use of recycledpaper.

Over the long term, commercialization ofsome experimental pulping technologies, couldhelp the industry reduce energy needs. One ex-perimental process, an organic solvent extrac-tion process called Organosolv, may permit theindustry to become a net energy producer inthe future. The Organosolv process also maybe capable of using hardwood species and ob-taining high fiber yields with little sacrifice inproduct strength. The process is still in the de-velopmental stage, but it may be commercial-ly available in 25 years or so.

There are also opportunities for the more ef-ficient use of wood fuels in the solid woodproducts sector. In plywood manufacturing,higher fuel costs have prompted increased in-terest in the improvement of veneer drying,

SeTota] U.S. energy consumption in 1981 was 74.1 quadrillion(Quads] Btu of energy.

Ch. V—Technologies for Growing, Harvesting, and Using Wood . 137— — — — — —

recycling waste heat, and heat conservation.Use of mill residue, wood dust, and bark forpower generation is a common practice inmany plywood mills. One manufacturer re-ports replacement of propane with plywoodtrimmings and scrap in two dryers at a savingsof over 70 percent in fuel costs. Another man-ufacturer is converting almost all of its woodsanding dust to energy, producing 40 millionBtu per hour in auxiliary power,

Veneer drying accounts for 70 percent of theprocess steam needs of plywood manufactur-ers. Improved drying processes, aimed at re-ducing energy consumption and increasing op-erating speeds, are being developed. One suchprocess, platen drying, increases recovery by5 to 15 percent, shortens drying time, reducesthe need for additional drying, and reducesprocess steam needs by up to 50 percent.

In lumber production, up to 90 percent of theheat energy consumed in processing is for dry-ing lumber, usually in a steam kiln that cir-culates air. Kilns may use natural gas or pro-pane directly or, more often, are heated bysteam coils. Several new drying technologies,including continuous feed solar, vacuum, andvapor recompression drying, may gain somecommercial acceptance by 2000, although noneseems likely to completely replace conven-tional steam kilns.60

Increased Efficiency of Wood Products in End Use

Design improvements in construction offera significant chance to increase efficiency inwood use. Current techniques could reducesubstantially the quantity of wood used forhome construction, particularly in single-family detached dwellings, without reducingthe quality of the structure. Two developmentsare particularly noteworthy—truss framing andengineered panel assemblies that combinesheathing and framing. The use of trusses isbecoming more common for roof and floor sys-tems. Truss framing uses single trusses toframe floors, walls, ceilings, and roofs together.Some analysts estimate that it could achieve

‘30Ti]lman, Rossi, and Simmons, Wood: /t.$ Present and pOten-

tiai Uses, op. cit., p. 3-25.

as much as 30-percent reduction in lumber useover conventional construction practices, En-gineered panel assemblies or stressed-skinpanels used for floors, walls or ceilings whichcombine sheathing and framing in sandwichpanels, may also conserve wood. Such assem-blies are factory—built, as are trusses, and theiruse could reduce the wood wastes on construc-tion sites from cutting and custom fitting, whilestill providing structural strength and stiff-ness, 61

Since lumber production is linked closely tothe housing industry, an upturn in homebuild-ing could drive softwood log prices up, thusincreasing the incentives for lumber manufac-turers to streamline operations and increaseproduct yields to remain competitive. Lowrates of residential construction could forcemany small lumber mills out of business, thusconcentrating production in the larger millsthat tend to be more efficient, Other devel-opments in the homebuilding industry couldalso affect the lumber sector, such as movestoward smaller houses and multifamily dwell-ings.

In the pulp and paper sector, increased paperrecycling could reduce demands on the re-source base (see box E). Approximately one-fourth of the paper pulp produced each yearis from recycled paper, with the practical up-per limit for using recycled fiber in the pulpmix increasing as new technologies are devel-oped. The suitability and use of recycled fiberfor current paper products varies significant-ly. Some products [i.e., bleached paperboard)are made with little or no recycled fiber, butin some others one-third or more of the fiberrequirement come from recycled materials(table 21). In Europe, paper suitable for manyuses is produced from pulp containing as muchas $10 percent recycled fiber. However, thepotential for further increases in recycledpaper use must be weighed against two bar-riers—the expense of removing glue, ink, andother materials that normally are present in

61 Trends in wood utilization in construction are discussed inUniversity of Wisconsin Extension, Environmental AwarenessCenter, Housing and C4’ood Products Assessment (OTA contractreport, Dec. 10, 1982).


Table 21 .–Utilization of Waste Paper by Sector and Major Grade Category, 1980

Quantity ofwaste paper Utilization

Industry/grade category Total production used in production ratea

——Paper:

Newsprint . . . . . . . . . . . . . . . . . . . . 4,672 898 19.2Tissue. . . . . . . . . . . . . . . . . . . . . . . . 4,375 1,698 38.8Other grades . . . . . . . . . . . . . . . . . . 21,144 1,125 5.3

Subtotal . . . . . . . . . . . . . . . . . . . . 30,191 3,721 12.3Paperboard:

Unbleached kraft . . . . . . . . . . . . . . 15,295 912 6.0Semichemical . . . . . . . . . . . . . . . . . 4,724 1,206 25.5Recycled . . . . . . . . . . . . . . . . . . . . . 7,071 7,710 109.0Bleached . . . . . . . . . . . . . . . . . . . . . 3,862 2 0

Subtotal . . . . . . . . . . . . . . . . . . . . 30,952 9,830 31.8Construction . . . . . . . . . . . . . . . . . . . . 2,558 1,543 60.3

Grand total . . . . . . . . . . . . . . . . . 63,701 15,094 23.7aRati~ of the weight Of waste paper used In production to the weight Of the new PaPer Produced

SOURCE Franklln Associates, Waste Paper, The future of a Resource 19802000 (New York American Paper Institute,1982), p 22

Photo credit: US. Forest Service

Truss framing can significantly reduce lumber requirements in light frame construction

Ch. V—Technologies for Growing, Harvesting, and Using Wood . 139—

waste paper and the economics of collectionand transportation that limit recycling primari-ly to metropolitan areas. Recycling reduces theenergy requirements of papermaking signifi-cantly. It also reduces municipal solid wastedisposal problems. 62 63

The efficiency of residential and commercialfuelwood burners is another area where signifi-cant advances could be made. Approximatelyone-third of the wood fuel burned in the UnitedStates is for home heating.64 This is about equalto the amount of wood that ends up in paperand paperboard products each year whenwood fuel consumption by the forest productsindustry is subtracted. Firms outside the forestproducts industry that use fuelwood commer-cially now constitute a small but very rapidly

62W, E, Franklin, Paper Recjrcling: The Impacts of Con-taminants. 1973-1985, Summar~r and Otrer\’ie}\’ (Kansas CitytMo.: Nlidwest Research Institute, 1975).

63P. Sizifert, R. Se(; tor, and P, C rirea, ‘‘Waste Paper Pulpi n.gWith Maximum Energy, “ TAPPI , v()], 59, 1981, pp. 111-113,

13AU ,s, I]epartment of Energ~r, Estimates of US. WOOd Enerar

Consumption From 1949 (CJ 1981 (Washington, D, C.: [ J,S, Gov-ernment Printing Office), p. 74,

growing group. The potential for residen-tial/commercial fuelwood demands to conflictwith forest industry demands for roundwoodmay be lessened by more efficient woodstoves,boilers, and furnances.

The number of efficient small capacity burn-ers—stoves in particular—are growing steadi-ly. Many improvements, such as more air-tightdesigns, have increased burning efficiency byan estimated l.5 percent annually.65 Technol-ogies capable of even more efficient wood com-bustion also may reduce air pollution emis-sions. One example is wood burning stoveswith catalytic converters. As the demand forwood burning devices spreads, further im-provements in efficiency, wood handling, andfuel uniformity may follow.

~sAs cited in Applied Management Sciences, Methodolog~’ for

Residential Wood Energj Consumption, Letter Report No. 2:Recommended hfethodolog~r (Silver Spring, Md,: Applied Man-agement Sciences, June 30, 1981).

CHAPTER VI

The Forest Resource Base

PageSummary. . . . . . . . . ✎ ✎ ✎ ✎ ✎ ✎ ✎ ✎ ✎ ✎ ✎ ✎ ✎ ✎ ✎ ✎ ✎ 143

Characteristics and Productivity of U.S.Forests . . . . . . . . . . . . . . . . . . . . . . 146

Extent of Domestic Forests . . . . . . . . . . . . . . 148Variation in Productivity of Forestland ... , 150Decline in Commercial Acreage . . . . . . . . . . 151Out-of-Date Forest Surveys. . . . . . . . . . . . . . . 152Soil Conservation Service Estimates of

Non-Federal Forestland . . . . . . . . . . . . . . . . 153Anticipated Further Declines in Forest

Acreage . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 154Availability of Commercial Forestland for

Intensive Management . . . . . . . . . . . . . . . . 155Growing Stock Volumes . . . . . . . . . . . . . . . . . 156Resource Implications of Increased Wood

Fuel Demand... . . . . . . . . . . . . . . . . . . . . . . 158Nontimber Values of Forestland . . . . . . . . . . 159

Ownership and Management ofForestland . . . . . . . . . . ... . . . . . . . 163

Publicly Owned Forestland . . . . . . . . . . . . . . 164Forest Industry Lands. . . . . . . . . . . . . . . . . . . 169Private Nonindustrial Forest Lands . . . . . . . 172

Factors Affecting Implementation of IntensiveTimber Management . . . . . . . . . . . . . . . . . 176

Markets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 180Stumpage Prices and Market Structure . . . . 180Information . . . . . . . . . . . . . . . . . . . . . . . . . . . . 181Length of Ownership . . . . . . . . . . . . . . . . . . . 181Tract Size .... . . . . . . . . . . . . . . . . . . . . . . 181Financial Considerations . . . . . . . . . . . . . . . . 182Federal and State Programs for Private

Forestland Management . . . . . . . . . . . . . . . 183

List of Tables

Table No. Page22. Countries With Largest Forested

Areas . . . * . * . . 0 0 . 0 . . . . . . . . . . . . . * * * . * 14723. Area of Commercial Timberland in the

United States, by Owner Class andRegion, 1977... . . . . . . . . . . . . . . . . . . . . . 149

24. Area of Commercial Forestland in SiteClasses Capable of Producing 85 CubicFeet of Wood per Acre or More, byOwnership, in 1977. . . . . . . . . . . . . . . . . . 151

25. Area of Commercial Timberland in theUnited States, by Owner Class andSection, 1952,1962, 1970, 1977, andProjections to 2030 . . . . . . . . . . . . . . . . . . 151

26. Screening of Land-Related ManagementConstraints on Private NonindustrialForestland in the Southeast . . . . . . . . . . . 155

Table No.27. Classification of Renewable and

Nonrenewable Resources . . . . . . . . . . .28. Multiresource Interactions in the

Southeast Resulting From MeetingProjected Timber and Range GrazingDemands . . . . . . . . . . . . . . . . . . . . . . . . .

29. Roundwood Supplies and Acreage byOwnership Class . . . . . . . . . . . . . . . . . .

30. Regional Distribution of ProductiveReserved National Forest Lands inWilderness and Their AverageProductive Potential, 1981 . . . . . . . . . .

31. Forest Industry Holdings, 1952-77 . . .

Page

. . 161

. . 163

. . 165

. . 169

. . 17032. Area of U.S. Commercial Timberland in

Private Nonindustrial Forest Ownershipby Region . . . . . . . . . . . . . . . . . . . . . . . . . . 172

33. Change in Farm and ’’MiscellaneousOther’’ Ownership: 1952-77 . . . . . . . . . . . 172

34. Average Net Annual and PotentialGrowth per Acre in the United States, byOwnership and Section, 1976 . . . . . . . . . 176

35. Area Planted and Direct-Seeded in the

36,

37.

United States, bisection andOwnership, 1950-78. . . . . . . . . . . . . . . . . . 179Costs per Acre of AchievingManagement Opportunities Identifiedby the Forest Service and the ForestIndustry Council . . . . . . . . . . . . . . . . . . . . 180Selected State Activities Related toPrivate Forest Management, 1981. . . . . . 187

List of Figures

Figure No. Page21. Commercial Timberland Area by Type,

1977 . . . . . . . . . . . . . . . . . . ...... 14722. Major Uses of Land in the United

States, 1978..... . . . . . . . . . . . . . . . . . . . . 14923. Commercial Timberland Area by

Productivity Class and Region, 1977 . . . 15024. Timber Inventories by Region, 1976. . . . 15725. Biomass on Commercial Forestland . . . . 15826. Ownership of U.S. Commercial

Forestland, 1977 . . . . . . . . . . . . . 16427. Roundwood Supplies by Ownership

Class; With Base Level Projectionsto2030 165

28. Timber Self-Sufficiency of Major TimberProcessing Firms . . . . . . . . . . . . . . . . . . . . 170

29. Acres of Private Forest LandownershipUnits by Size Class and Region, 1978 . . 174

30. Current and Potential Net AnnualGrowth per Acre by Section . . . . . . . . . . 177

31. Area Planted and Direct-Seeded,1950-78 . . . . . . . . . . . . . . . . . ..... . . . 178

CHAPTER VI

The Forest Resource Base

Summary

The U.S. forest resource is quite adequate tomeet expected domestic demand for woodproducts. U.S. forests also could supply ex-panded international wood markets or unex-pected increases in domestic demand if exist-ing technologies for growing, harvesting, andprocessing wood are widely applied. If demandincreases without corresponding adoption ofsuch technologies, however, land resource con-straints could arise. These potential constraintsinclude the declining size of the forestlandbase, private nonindustrial forest ownershippatterns, and other uses for forestland that mayconflict with industrial wood production.

The U.S. forestland base is declining in sizeand further reduction is anticipated in thenext 50 years, but how much it will declineis uncertain. The Forest Service estimates that27 million acres of commercial forestland werelost between 1962 and 1977. This drop from509 million acres to 482 million acres rep-resents a 5-percent reduction over the period.A primary reason for the decline was the con-version of private forestland to agriculture anddevelopment. Also, some commercial acreageon Federal land was reclassified as wildernessand is no longer available for timber produc-tion. The decline was visible in all regions, butwas largest in the south, which lost 12 millionacres, By 2030, the Forest Service projects thatcommercial forests will decline further to 446million acres, chiefly because the conversionof private nonindustrial land to other uses maycontinue.

The exact magnitude of the national trendtowards a decline in commercial forestland isnot certain, because up-to-date field surveyswere not available in most States when theForest Service acreage estimate was made in1977. While individual State forest surveys arehighly reliable, they are only conducted every12 years on the average. As a result, when the

1977 estimate was compiled, forest surveys in22 States predated l970. The Forest Service ad-justed some of these surveys, but not on the ba-sis of field data; other pre-l970 surveys wereused without adjustment. Consequently, the1977 composite figure may not fully reflect thediversion of forestland to agriculture and ur-ban uses that took place during the 1970’s andmay not reflect some shifts back to forestland.Some post-l977 State surveys published by theForest Service show far higher rates of declinein commercial forestland acreage than listedin 1977, while others show moderate increases.

Divergent estimates of non-Federal forest-land by the Forest service and the soil Con-servation Service (SCS) need to be clarifiedor resolved if Congress is to receive consist-ent information in congressionally mandatedassessments of land resources. The ForestService and SCS, both Department of Agricul-ture (USDA) agencies, collect data on forest-land, but SCS efforts are limited to non-Federallands and do not differentiate between com-mercial and noncommercial forests. For 1977,the SCS survey showed 74 million acres lessnon-Federal forestland than the Forest Serviceestimate and a more rapid rate of decline. TheForest Service figure was reported to Congressin the 1980 assessment required by the Forestand Rangeland Renewable Resources PlanningAct (RPA) of 1974, while an assessment for theparallel Soil and Water Resources Conserva-tion Act (RCA) of 1978 used the SCS figure.

Much of the discrepancy arises from dif-ferent classifications of forest-range ecosys-tems that are not of importance to industrialtimber supplies, The remainder of the discrep-ancy is due in part to different procedures,methodologies, and judgments about classifica-tion of currently forested land that is in or nearbuilt-up areas. In addition, all of the SCS datawas collected in the 1975-77 period and may

143


reflect some land use changes not captured bythe Forest Service estimates.

The Forest Service and SCS currently are inthe process of developing a common non-Fed-eral acreage figure for use in future assess-ments of renewable resources. Preliminary ac-tivities include identifying areas of disagree-ment between the two agencies on a State-by-State basis. As this report went to press, theagencies’ were still developing revised acreageestimates at the national level.

The net effect of an acreage overcount, if itexists, is uncertain. On the one hand, an over-count of forest area could cause an upwardbias in estimates of current and projectedgrowing stock volumes. On the other hand,Forest Service estimates about growth ratesand management intensity are conservativeand consequently may bias the estimates down-ward (see ch. IV for a discussion of projectionmethods).

More up-to-date information about forest-land acreage and ownership is needed in For-est Service data used for the periodic assess-ment and program required by RPA. The longinterval between State surveys is a major causeof uncertainty about national forestland data,The interval is probably too long to meet theperiodic reporting requirements of RPA, andit may explain some of the discrepancy be-tween Forest Service land data and that of theSCS. Recent cooperative initiatives by theForest Service, other Federal agencies, andState agencies, such as “midcourse” survey up-dates in key timber-producing States, may helpto improve the timeliness of information. Moredetailed data about forest land ownership, es-pecially in the southern United States, couldalso improve the information available todecisionmakers.

Rapidly increasing residential use of woodfor fuel is a major new influence on the U.S.wood situation, but it is so recent that itsprecise effects are hard to determine. Homefuelwood use may have both positive and neg-ative ramifications for forest resource manage-ment. For example, fuelwood harvesting couldcomplement timber management by removing

“weed” trees, If poorly done, however, fuel-wood harvesting could conflict with timbermanagement by removing trees that are morevaluable for industrial uses. If wood demandcontinues to grow and prices rise significant-ly, competition in the roundwood market couldintensify between industry and homeowners.

The magnitude of these effects is difficult toanalyze. Recent Forest Service and Departmentof Energy estimates of residential fuelwood usefor 1981 are seven to eight times greater thanthose the Forest Service issued for 1976. Pre-liminary Forest Service figures indicate thatabout 27 percent of the residential fuelwoodcut by landowners comes from trees that poten-tially contain sawlogs and pulpwood. It is notknown what proportion of purchased fuelwoodcomes from industrial growing stock.

Predictive capabilities about tradeoffs be-tween timber production, environmental val-ues, and other forest uses need to be im-proved. Timber production both affects and isaffected by rising demand for many other eco-nomic, social, and environmental uses and val-ues that forestland provides. Both public andprivate forests are critically important forrecreation, wildlife habitat, watershed manage-ment, soil conservation, environmental quali-ty, landscape esthetics, and other purposes,While timber production often is compatiblewith all of these purposes, and while landmanagement strategies can be designed toachieve multiresource objectives, tradeoffsamong resource values are inevitable.

Water pollution and soil erosion can resultwhen timber management and harvesting areconducted without adequate attention to prop-er safeguards. Increased levels of timber har-vesting also could intensify conflicts with otherland uses such as agriculture, recreation, wil-derness, and wildlife.

The diversity of conditions on U.S. forestscomplicates the analysis of such effects beyondspecific sites, but the capacity to trace andpredict multiresource interactions at the Stateor regional level is improving as more infor-mation becomes available. Current efforts bythe Forest Service and others to develop

———— . —— - — — ———

Ch. V/—The Forest Resource Base • 145—— ——— —

models of these interactions could improveunderstanding of resource tradeoffs involvedin increasing timber production on both publicand private lands.

Forest industry lands have high potentialfor increasing national timber supplies. Therecent trend on industry lands has been awayfrom “extensive” rudimentary forest practicesand toward more intensive management,which probably will bring higher productivi-ty in the future. Despite this trend, however,some industry forests are not managed inten-sively.

The forest industry is in a favorable positionto increase yields on its lands for severalreasons. First, industry lands on the averageare naturally more productive than land inother ownerships, and tracts are large and tendto be located close to mills. Second, the largeforest products firms, which own most of theindustry land, ordinarily have access to capitalfor major management investments. Third, tim-ber production is the primary ownership ob-jective of these firms. Although the size of theindustrial land base is no longer increasing atthe rate it once did, intensive timber manage-ment could enlarge the forest industry’s con-tribution to U.S. timber supplies significantly.

There is an opportunity for nonwood-basedcorporations to play a more important rolein private forestland timber production. Sev-eral financial firms recently have offered in-vestment opportunities in private nonindustrialforestland. The impact of such investments onforest management and ownership is still un-known, but significant capital may becomeavailable for intensive timber management ifthese investment programs continue to grow.

In addition, USDA landownership data sug-gests that nonwood-based corporations havemajor forestland holdings. These propertiesmay enjoy some of the same advantages as for-est industry lands in terms of their potentialfor increased production. More informationabout nonwood-based corporate holdingswould be desirable to assess their possible con-tribution to U.S. wood supplies.

Private nonindustrial forest (PNIF) landscontribute nearly haIf of the industrial woodused in the United States, and their increasedcontribution can be expected as new localmarkets develop. Opportunities for more in-tensive timber management on PNIF landsexist but are complicated in some cases byownership patterns and financial consider-ations.

The forest products industry obtains 47 per-cent of its roundwood from PNIF lands, whichaccount for 58 percent of the U.S. commercialforestland base. In the South, about 60 percentof the region’s wood comes from PNIF lands.

Net annual growth on PNIF lands has beenincreasing more rapidly than on other owner-ships, and this growth rate could double PNIFoutput by 2030 if current trends continue. Onthe whole, therefore, PNIF lands can be ex-pected to enlarge their contribution to domestictimber supplies without substantial increasesin timber management activities. Far highersupply levels could be achieved through inten-sive management, but there are impedimentsto making such investments.

Lack of certainty about future markets, par-ticularly in the North where hardwoods pre-dominate, may discourage small landownersfrom investing in timber management activitiesthat may not provide returns for decades, Also,many PNIF owners are unwilling to assumerisks such as fire, weather damage, insects, dis-ease or other catastrophes when safer, shorterterm nontimber investments are available.

Changes in land use and ownership also mayaffect long-term management investments onPNIF lands, The total acreage of these landsis declining, especially in the South, due tocompetition from other uses, and further de-cline is expected in the future. Since PNIFlands change hands rapidly, only a small pro-portion is likely to be under single ownershipfor the length of time needed to grow a treecrop. Some PNIF lands are in parcels too smallfor economical management. Parcellation maybe increasing in some locales, but regional andnational data is fragmentary and inconclusive,

146 ● Wood Use: U.S. Competitiveness and Technology— —.— —

Nonfarmers have replaced farmers as the dom-inant owners of private nonindustrial forests.These new owners have less predictable own-ership objectives, but in some cases they mayhave investment capital available for timbermanagement.

Impediments to PNIF management may notbe as great as many observers traditionallyhave believed. In general, higher timber out-put can be expected even if management levelsremain the same, Still, some PNIF holdings of-fer appreciable opportunities for more inten-sive management. The cost effectiveness oflimited public funds available for PNIF man-agement incentives could be improved if dir-ected towards those lands with the highestmanagement potential. The forest products in-dustry, through landowner assistance pro-grams and long-term leasing agreements, maybe even more important than government inputting management capital into PNIF lands,

While existing law provides some flexibilityfor temporary increases in timber harvest onFederal lands, statutory changes could be re-quired if more acreage is to be allocated to

timber production. Over the long run, how-ever, more intensive timber management oflands already open to t imber productioncould increase national wood supplies signif-icantly. Harvest levels on national forests areset by a “nondeclining even flow” policy in-tended to ensure sustained yields in perpetui-ty, although temporary departures from thispolicy are legal under certain circumstances.For instance, a 1979 Presidential directivecalled for accelerated updating of land man-agement plans for some national forests to in-crease the harvest of mature timber. Becauseof the simultaneous nontimber uses mandatedby Federal law, however, major statutor y

changes could be required to open more Fed-eral forestland to timber production than is cur-rently allowed. Some Federal forestland, suchas tracts being studied for possible wildernessdesignation, is in an indeterminate status re-garding its potential availability for timber pro-duction. Nevertheless, more intensive manage-ment on lands now allocated to timber harvestcould increase production, provided politicaland budgetary constraints are eased,

Characteristics and Productivity of U.S. Forests

The United States ranks third among the na-tions of the world in exploitable forest-acreageand growing stock (table 22). * U.S. forests arehighly productive, providing more industrialwood than any other country, including theSoviet Union, which has 3½ times more grow-ing stock than the United States.

The suitability of U.S. forestland for timberis enhanced by favorable climatic conditions,especially in the Southern States, which resultin greater annual growth and faster timber re-generation than in Canada or the U.S.S.R.Mature timber can be grown in 30 to 40 yearsin the South, for instance, while production of

*No standardized international definitions are used by coun-tries to identify exploitable forest areas. Some countries use moreconservative criteria than others. Canada recently reduced itsestimate of its exploitable forestland area significantly.

similar tree crops in parts of Canada or theU.S.S.R. may take two to three times longer.

There are well-developed transportation andmanufacturing systems in the most heavilyforested regions of the United States. In con-trast, countries like Brazil and the U.S.S.R,Would require significant investments intransportation before exploitation of remote in-terior forests even could begin, The majorityof American processing facilities are locatedin the two most important timber areas—thePacific Northwest and the South—which areaccessible to the major markets of Japan andWestern Europe, The United States also has alarge number of different forest ecosystemsthat provide a wide variety of commercially im-portant softwood and hardwood species (fig.21).

. . . .

Ch. VI—The Forest Resource Base • 147

Table 22.—Countries With Largest Forested Areas

IndustrialExploitable Growing stock harvestforest area (million meters3 over bark)c (billion ft3)

(mi l l ion ha) ab T o t a l Coniferous Broadleaved 1977

U.S.S.R. . . . . . . . . . . . . . . . . . . 389 74,710 62,000 12,710 10.0Brazil . . . . . . . . . . . . . . . . . . . . 305 47,088 98 46,990 1,5United States . . . . . . . . . . . . . 195 20,132 12,906 7,226 11.5Canada . . . . . . . . . . . . . . . . . . 191 19,645 15,571 4,074 5.1aEXPl~ltabl~ fOre~t d~fl”ltl~”s differ by country %rne countries such as Canada have restrictive definitions that result inconservative estimateS of exploitable forestland. Vo[ume estimates for the U.S S R. Include growing stock on some 110 mllllonacres considered to be unproductive forestland

%0 convert hectares to acres, multlply by 2471C To convefl cubic meters to cubjc feet, multlply by 35.31.

SOURCES United Nations Food and Agricultural Organ! zatlon, Yearbook of Forest Products, 1979( Rome, 1981), G M. Bonner,Canada’s Forest Inventory 1981 (Environment Canada, 1982), United Nations Environment Program/Food and Agrocultural Organization, Los %corsos Fores ta/es de la American Tropical (Rome, 1981), United Nations Econom rcCommission for Europe, European Timber Trends and Prospects, 1950 to 2030 (Geneva, 1976), U S Departmentof Agriculture Forest Service, An Analysis of the Timber Sifuatlon in the Unifed States 1952.2030 (Washington,D.C 1982)

Figure 21. –Commercial Timberland Area by Type, 1977

East

Oak, hickoryI

o 20 40 60 80 100 120Million acres

west

Western hardwoods

I 1 Io 20 40 60 80

SOURCE U S Department of Agriculture, Forest Ser vice, An Ana/ysis of the Timber S/tuafion in the United States 1952.2030(Washington, D C U S Government Printing Office, 1982), p. 122


Reversing a historical trend toward apparentdepletion, U.S. timber inventories have beenincreasing since at least 1952. Growth patternsare uneven, however, with irregular patternsin land clearing, tree planting, and harvestingcausing waves or bulges in the distribution oftree sizes and species. Most increases in timberinventories have been in hardwood species, butmost increases in timber demand in the past20 years have been for softwoods. Althoughpreferred species generally are in shorter sup-ply than less valuable trees, and regional trendsdiffer, higher levels of timber harvesting arebiologically sustainable on U.S. forestlands.

Trees that are already growing will be thepredominant source of industrial wood for thenext 30 to 50 years. This is because of the longlength of time required for tree crops to mature.However, if intensive timber management sys-tems (applications of planned treatments to for-estland aimed at increased production of in-dustrial roundwood) are widely adopted, moretimber could be available for harvest in the longterm. In theory, “economic opportunities” formanagement intensification are promising. Inparticular, studies by the Forest Service andthe Forest Industries Council have identifiedsubstantial opportunities for management in-vestment in 25 States. i These investmentswould be expensive to make ($10 billion to$15 billion over 30 to 50 years, the course ofa single rotation) but would boost growth tre-mendously.

Extent of Domestic ForestsBefore the colonization of America, forests

covered about half of the 2.3 billion acresthat span the United States. Until 1800, remov-als of the original forest cover were relativelyminor, but the westward expansion of the 19thcentury brought the clearing of nearly 300 mil-lion acres for farming, settlements, and otheruses. z Timber generally was considered a nui-

I Forest Industries Council, Forest Productivity Report(Washington, D. C,: National Forest Products Association, 1980);

and U.S. Department of Agriculture, Forest Service, An Analysisof the Timber Situation in the United States, 1952-2030(Washington, D, C.: U.S. Government Printing Office, 1982),

Pp. 246-255.

‘Marion Clawson, “Forests in the Long Sweep of AmericanHistory,” Science, June 15, 1979, pp. 1168-1174.

sance and cleared land was often worth morethan land supporting large timber stands. Re-gional cycles or waves in the amount of forestacreage have been significant; in some areas,in the past 200 years, forestlands more thanonce have been cut, used for agriculture, andagain allowed to revert to woods.

The rate of decline of U.S. forestland leveledoff around 1920, although slight declines con-tinued through 1940. From 1940 to the early1960’s, acreage then increased slightly, becauseof farm abandonment and reversions of fieldsto forests in the Southeast, Northeast, and theupper Great Lakes States. During the late1950’s and early 1960’s, the Federal soil bankprogram (now suspended) stimulated forest-land expansion by encouraging farmers toplant trees on cropland. Since 1962, forestlandarea again has declined somewhat—chiefly be-cause of expanded agricultural and develop-mental uses.

Today, only about one-third of the UnitedStates is forested (fig. 22), with the acreagedivided about equally between the East and theWest. This area—736 million acres in 1977—in-cludes some land that is sparsely stocked withtrees or otherwise unsuited for industrialtimber production.

About two-thirds or 482 million acres of thetotal forestland area is classified by the ForestService as “commercial.” The commercial clas-sification includes all forestland that is capableof growing 20 cubic feet (ft3) of industrial woodper acre annually in natural stands and whichhas not been withdrawn from timber harvest-ing by statute or administrative action. Non-commercial forestland may produce fuelwoodand some timber, but is generally not impor-tant for industrial forestry.

The commercial forest designation does notimply that all or even most of this land current-ly is used to supply timber markets. Only about14 percent of the commercial base is ownedby the forest products industry, the singlegroup for which timber production is unequiv-ocally the primary ownership objective (table23). Twenty-eight percent is publicly ownedand generally is managed for multiple uses in-cluding recreation, wildlife habitat enhance-

Ch. V/—The Forest Resource Base ● 149

Special us7

G

O

2

Figure 22.— Major Uses of Land in the United—

(Excludes areas usedfor parks and otherspecial uses)

States, 1978a

Forest land31 “/0

aThe esti mates shown in this figure were derived by using several data sources, and may differ in some lnStanCeS from other published data

SOURCE U S Department of Agriculture, Major Uses of Land (n the Urr/ted Stafes, 1978 (Washington, D C U S Government Prlntlng Off Ice, 1982)

Table 23.—Area of Commercial Timberland in theUnited States, by Owner Class and Region, 1977

Million PercentOwner class and region a c r e sa of total

National Forest . . . . . . . . . . . . . . . . . . . . . . . 86.7 18.4Other public . . . . . . . . . . . . . . . . . . . . . . . . . 47.0 9.7Forest industry . . . . . . . . . . . . . . . . . . . . . . . 68.7 14.3Farm and miscellaneous private . . . . . . . . 278.0 57.6— —

Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 482.4 100North . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 166.1 34.4South . . . . . . . . . . . . . . . . . . . . ., . . . . . . . . . 188.0 39.0Rocky Mountains . . . . . . . . . . . . . . . . . . . . . 57.8 12.0Pacific coastb . . . . . . . . . . . . . . . . . . . . . . . . 70.5 14.6

Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 482.4 100aTO convert acres to hectares, multiply by O 4047blncludes Alaska

SOURCE Adapted from Brian R. Wall, Trends in Cornrrrerica/ Timber/and AreaIn the United States by Sfate and Ownership, 1952.1977, With Pro]ec.lions to 203U(Washington, D C U S Government Printing Off Ice, 1981),p 10

ment, and watershed protection in addition totimber production. Fifty-eight percent of thecommercial base is PNIF held by over 7 millionowners with diverse objectives and manage-ment capabilities, Although most PNIF land isnot owned primarily for timber production,nearly half of the industry’s wood suppliescome from this acreage.

Regionally, the South has the most commer-cial forestland and makes the greatest contribu-tion to nationwide timber supplies (table 23).The Pacific coast supplies the most softwood,Although the North has about one-third of thecommercial acreage, the forest products indus-try is less developed there than in the Southor on the Pacific coast.


Variation in Productivity of Forestland

Nearly all forestland in the Eastern UnitedStates (93 percent) meets the commercial stand-ard for productivity. In other words, it is ca-pable of producing the Forest Service’s desig-nated minimum of 20 ft3/acre/year in naturalstands. In the Rocky Mountain and Pacificcoast regions respectively, only 42 and 33 per-cent of the forestland area is considered com-mercial. The lower proportion of Western com-mercial acreage arises mostly from the per-vasiveness of low productivity forests, such aspinyon-juniper in the Southwest and mixedconifers in interior Alaska. Administrativerestrictions on timber management on Federalland also play a role.

Natural productivity also varies greatly with-in the commercial timberland classification(fig. 23). About 28 percent of the commercialforestland is capable of growing 20 to 50 ft3/

acre annually. This low-quality acreage mayprovide timber and fuelwood, but ordinarily itis not well suited for intensive timber produc-tion. Another 40 percent is in an intermediaterange of productivity at 50 to 85 ft3/acre/year.

The remaining 30 percent of commercial for-est is “prime timberland” capable of produc-ing 85 ft3 or more of industrial wood per acreper year in natural stands. All else being equal,management investments on such lands willbe more cost effective than investments on lessproductive lands. In 1970, nearly 48 percentof the productive capacity of all commercialforests was on the 34 percent of the commer-cial forest base that was considered primetimberlands

Even within the prime category, there is awide range in productivity. Some forestland in

3U .S. Department of Agriculture, Forest Service, USDA PrimeForestlands Program, Mimeograph, May 23, 1977, p, 3.

Figure 23.–Commercial Timberland Area by Productivity Class and Region, 1977

20-50 50-85 85-120Productivity class (cubic feet/per acre/per year)

120 or more

Pacific Rockycoast Mountain North South

SOURCE: U.S. Department of Agriculture, Forest Service, An Analysis of the Timber Situation In the Unlfed States, 1952-2030(Washington, D C.: U.S. Government Printing Office, 1982), pp. 350, 355.

—— -— — ———Ch. V/— The Forest Resource Base ● 151

the Pacific Northwest is naturally capable ofproducing 225 ft3 of wood per acre per year.Thus, the productive capacity of such landswithout intensive management is 10 timesgreater than the productivity of marginal com-mercial forestland, and nearly three timesgreater than land on the threshold of quali-fication as “prime timberland. ”

The distribution of prime forestland also var-ies among ownership classes (table 24), As ageneral rule, forest industry lands include pro-portionately more land in the better site classesthan public or private nonindustrial forestland,This is especially true in the West, where two-thirds of the forest industry’s holdings areprime lands and nearly half of them are capableof producing over 120 ft3/acre/year.

Table 24.— Area of Commercial Forestland inSite Classes Capable of Producing 85 Cubic Feet of

Wood per Acre or More, by Ownership, in 1977

As a proportionof acres i n

Million ownership categoryacresa (percent

National Forests . . . . . . . . . . 27.0 30.4Other public . . . . . . . . . . . 11,5 24.5Forest industry . . . . . . . . . . 30,3 44.0Farm, miscellaneous . . . . . . 77.4 27,8All ownerships ., ... . . . . . 146.2 30.3

aTo convefl acres to hectares, multlply by O 4047

SOURCE Adapted from U S Department of Agriculture, Forest Service, An Aria/YSIS of the Twnber S/fuat/on m the (Jn/ted States, 1952-2030 (Wash-ington, D C 1982), pp 350-359

Decline in Commercial Acreage

The Forest Service estimates that commer-cial forestland declined by about 5 percent be-tween 1962 and 1977—from 509 million acres

to 482 million acres. Most of this decline re-sulted from diversion to other uses, such asagriculture, urbanization, and wilderness;some is attributed to reclassification of land.The decline in acreage represents a reversal ofan earlier trend toward a slight increase in for-estland that occurred between 1920 and 1952.Although pressures on forests are expected tocontinue, less rapid declines in forest acreagefor the coming decades are projected by theForest Service and other resource analysts(table 25).4

Most of the 1962-77 nationwide decline wasin private forests owned by farmers or othernonindustrial parties. Some of this private landwas purchased by the forest products industry,whose holdings increased by about 7 millionacres during the period, making the net declinein private holdings about 19 million acres. Na-

4B ria n R. Wall, Trends in Commercia 1 Tim berlan d Areas inthe United States b~, State and Chvnership, 19,52-1977, With Pro-jections to 2030, Genera] Technical Report WO-31 (Washington,D. C.: U.S. Government Printing Office, April 1981), p. 7, Fordiscussion of agricultural competition for forestland, see ThomasN. Schenartz, “I)ynamics of Agricultural Land Use Change, ”Agricultural Land A\ailabilitj: Papers on the Suppl~ and lle-mand for Agricultural Land in the [~nited .$ta tes [Wash ington,D.C; .: U.S. Government Printing Office, July’ 1981), pp. 187-216,

Table 25.—Area of Commercial Timberland in the United States, by Owner Class and Section,1952, 1962, 1970, 1977, and Projections to 2030a (million acres)

Projections

Owner class and section of United States 1952 1962 1970 1977 1990 2000 2010 2020 2030

National Forest . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 94.7 96.9 94.7 88.7 81.3 80.4 79.8 79.2 78.8Other public. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49.0 46.8 46.9 47.0 46.6 46.5 46.4 46.4 46.4Forest industry . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 59.5 61.6 67.0 68.7 70.9 72.2 72.7 73.0 73.1Farm and miscellaneous private . . . . . . . . . . . . . . 296.1 304.1 287.8 278.0 268.8 261.8 256.1 251.5 247.9

Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. 499.3 509.4 496,4 482.4 467.6 460.9 455.0 450.1 446.2North . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 168.8 170.9 168.6 166.1 164.2 162.5 160.9 159.1 158.5South . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 192.1 199.9 192.5 188.0 182.5 179.7 177.2 175.2 172.9Rocky Mountains . . . . . . . . . . . . . . . . . . . . . . . . . . . 63.9 64.4 62.1 57.8 56.2 55.2 54,1 53.6 53.0Pacific coastb . . . . . . . , . . . . . . . . . . . . . . . . . . . . . . 74.5 74.2 73.2 70.5 64.7 63.5 62.8 62.2 61.8

Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .....499.3 509.4 496.4 482.4 467.6 460,9 455.0 450.1 446.2

aoata for I g!jz and 1982 as of Dec 31, other years as of Jan 1blncludes Alaska

SOURCE U.S Department of Agriculture, Forest Service, Trends (n Commercial Timberland Area In the Urr/?ed States 1952.77, W(th Projecf(ons to 2030 (Washington,D C 1981), p 10


tional forest acreage also declined by 8.2 mil-lion acres as a consequence of wilderness des-ignations and other administrative actions thatpreclude timber harvesting. Most of the ForestService land that shifted to noncommercialpurposes was in the low productivity range (be-tween 20 and 50 ft3/acre) and was thus of mar-ginal value for timber production.

The greatest regional decline in commercialforestland was in the South, the Nation’s fastestgrowing region between 1970 and 1980,5 Here,about 12 million acres were diverted to otheruses between 1962 and 1977 according to theForest Service. In particular, the South’s“prime timberland” declined very rapidly—amatter of special concern because of theregion’s importance to national timber sup-plies. Between 1970 and 1977, the decline wasabout 6 million acres—a 10-percent reductionin the region’s prime acreage in 7 years, Lossof prime timberland apparently exceeded theregion’s total timberland loss for the period,which was 4.7 million acres, because somepoorer quality land reverted to forest duringthe same timeframe.

Shifts between agriculture and forestry prob-ably will continue to be the major factor influ-encing forestland acreage, although the extentis unclear. Rapid changes in agricultural landrequirements have made it extraordinarily dif-ficult to project long-term interactions betweenforestland and cropland. Projections made inthe 1960’s and early 1970’s, when grain sur-pluses were common, assumed that croplandneeds would decline due to improved yieldsper acre. During the 1970’s, however, ex-panded world demand for U.S. food, togetherwith the lifting of farmland set-aside programsby the Federal Government, led to a very rapidexpansion of cropland. Projections by the U.S.National Agricultural Land Study (NALS)made in 1979-80 assumed that cropland re-quirements would expand rapidly and wouldaccelerate conversion of forestland to agricul-

5For discussion of southern land use conflicts and their rela-tionship to the forest products industry, see Robert G. Healy,“Land in the South: Is There Enough to Satisfy Demands, ” Con-servation Foundation Letter, September 1982; and Schenartz,“Dynamics of Land Use Change, ” op. cit.

tural use. Specifically, NALS concluded thatmost of the 31 million acres of forestland thathave a high or medium potential for crop pro-duction could be cleared and converted to cropuse by 2000, G Most of this converted landpresumably would be commercial forestland,and two-thirds of it would be located in theSouth, Some agricultural land reverts to foresteach year, but generally is not stocked withcommercially important species.

Since the NALS study was published in ear-ly 1981, the agricultural situation has againchanged dramatically. In the 1980-82 period,enormous grain supplies similar to those of the1960’s developed once more, and the Reaganadministration instituted a payment-in-kind(PIK) cropland set-aside program for eligiblefarmers. In 1983, under the PIK program, agri-culture activities on 82 million acres of crop-land will be restricted to eligible conservationuses during the growing season.

Urban and other developmental uses such aswater reservoirs also will affect the forestlandbase. For the first time in memory, populationsin rural areas grew at a faster rate than in met-ropolitan areas between 1970 and 1980, chief-ly as a result of in-migration of people to non-metropolitan counties. This shift occurred inall regions of the country, including high woodproduction areas.

Out-of-Date Forest Surveys

Forest Service acreage estimates are basedon periodic State forest surveys, which, at thetime they are taken, are the most reliable andconsistent sources of information available,However, because they are conducted in indi-vidual States only on an average of every 12years, many surveys are out-of-date by the timethey are used to assess nationwide trends; thiswas the case in 1952, 1962, 1970, and 1977.

The 1977 national estimate of commercialforestland, used for the 1980 assessment re-quired under RPA and for subsequent analyses

“U.S. N a t i o n a l A g r i c u l t u r a l I,ands Study, Fjnal Report(Washington, 11. C,: U.S. Government Printing Office, 1981),pp. 8-10, p, 13.

.

of timber supply and demand trends, exempli-fied this timing problem. In 1977, the most re-cent forest survey had been conducted priorto 1970 in 22 States. The Forest Service re-ported some of these estimates without changein compiling its 1977 data; in other instances,revisions were made, but these were riot basedon field data and consequently carry a higherlikelihood of error, Forest surveys completedafter 1977 show important differences with theacreage figures issued in 1977.

Budgetary and political constraints underliethe Forest Service’s difficulty in increasing thefrequency of forest surveys. Congress, throughthe Forest and Rangeland Renewable Re-sources Research Act of 1978 (Public Law95-307), recognized that adequate informationwas a key component of RPA planning. WhileCongress initially provided expanded fundingfor surveys, current budget cuts may slow thesurvey schedule again. To overcome some ofthe scheduling problems, in some States, theForest Service and State agencies have coop-erated in producing “midcycle updates. ” An-other option would be to give greater surveypriority to the most important timber produc-ing States and to those where rapid changesin inventories and acreage are expected.

Soil Conservation Service Estimatesof Non-Federal Forestland

In addition to the Forest Service, SCS alsocompiles data on non-Federal forest area. SCSdoes not distinguish between commercial andnoncommercial forestland, in contrast to theForest Service. SCS’s estimate of non-Federalforest area in 1977 was 74 mil l ion acresless than the Forest Service’s estimate for thesame year. Both figures were reported to Con-gress by USDA in 1980. The higher Forest Serv-ice estimate was part of the 1980 assessmentrequired by RPA, while the lower SCS figurewas reported in the 1980 assessment for theparallel Soil and Water Conservation Act.

The two USDA agencies are working to re-solve this discrepancy and have agreed to usecommon forestland acreage figures in futureassessments. Nevertheless, the situation

Ch. VI— The Forest Resource Base ● 153

demonstrates some of the difficulties in pro-viding decisionmakers with accurate nationallevel data on natural resources,

According to the Forest Service, non-Federalforestland amounted to 451 million acres, in-cluding noncommercial forestland, in 1977.According to SCS, which does not distinguishbetween commercial and noncommercial for-estland, only 377 million acres were non-Federal forestland in 1977.7

Nearly half the difference is attributable tothe fact that SCS classifies some transitionalforest-range ecosystems as rangeland, while thesame land is called forest by the Forest Service.As much as 35 million acres of transitional landmay be involved, according to a report pre-pared for the U.S. National Agricultural LandsStudy in 1980. 8 Most of this land would not beconsidered commercial forestland by the For-est Service’s definition.

Additional differences are attributable to thefact that SCS includes more forestland in its“urban or built up” classification than does theForest Service, and some land may be classifiedas native pasture by SCS but forestland by theForest Service. The timing problems associatedwith uniform reporting of Forest Service dataat a given date may partially explain some ofthe difference. The 1967-77 period witnessedmajor land use changes in agriculture anddevelopment that could be expected to affectforestland, and Forest Service estimates maynot fully reflect these. The 1977 SCS inventorydata, on the other hand, was compiled in a2-year period and estimates were based solelyon field data, Several technical difficulties havebeen identified with the SCS field data, how-

7U. S. flepa rt ment o f Ag ric u] tu re, E’o rest Ser\ ic e, ,411 Assess-ment of the Forest and Range land S’itua tjon in the 1‘nited .States

(Washington, I), C.: U.S. Government Printing office, Januar}1980), table 2.3, p. 35; U.S. Department of Agriculture, Soil andWater Resollrces Conser\atjon Act of 1980 Appraisal Part I(Washington, D. C,: [J,S, Government Printing Office, 1981), p. 49.

8F. rnest McGill, Allen H idlebaugh, and Joseph Yovino, “FederalData on Agricultural Land Use, ” Agricultural bind A\ail;ibili-ty: Papers in the SupplJ and Demand for Agricultural Lands inthe United States, prepared for the L1. S, National AgriculturalI,ands Study and printed for use of [J, S. Senate Committee onAgriculture, Nutrition, and Forestry, [Washington, D. C.: U.S.Government Printing Office, July 1981), table 1, p. 246.


ever, which may have resulted in overstate-ment of the magnitude of shifts in land use dur-ing the 1970’s.

As this report was going to press, the twoagencies appeared close to reconciling key dif-ferences associated with their 1977 estimates. *

Anticipated Further Declines in Forest Acreage

To estimate long-term timber supplies, as-sumptions must be made about the amount offorestland that will be available in the future.Predicting future land use trends is still littlemore than guesswork. The magnitude of recenttrends affecting forestland, such as increaseddiversion of forestland to agriculture and de-velopmental uses, was not anticipated by ana-lysts in the 1960’s. Current analysis is equallysubject to uncertainty.

There is little surety that the dramatic landuse changes that occurred in the 1970’s will berepeated. The 1981-82 recession, whichbrought slumps in housing demand and slack-ened growth in world markets for U.S. food,presumably has reduced conversion pressureson forestland. If agricultural surpluses keepmounting, forestland acreage could begin to in-crease as agricultural land is retired from pro-duction. Such land, if allowed to naturally re-vert to forest, probably would be poorly stockedwith commercial tree species. However, if gov-ernment programs such as the soil bank of thelate 1950’s and early 1960’s were reinstituted,planting of commercial species on land that isnow cropped could result.

Based on trends through 1977, it is reason-able to assume that forestland will continue tobe diverted to other uses. The Forest Serviceprojections used in modeling long-term timbersupplies show commercial forestland declin-ing at a net average rate of about 700,000 acresannually over the next 50 years. This projected36 million acre net decline would reduce the

*Shortly after OTA released a review draft of this assessment,the Forest Service and the Soil Conservation Service movedrapidly to resolve their differences. Agreed upon statistics forState by State and national non-Federal forestland acreage wereexpected to be released shortly as the report went to press.

commercial forestland base by about 7.5 per-cent from what it was estimated to be in 1977.9

The Forest Service anticipates that most ofthe decline would result from conversion ofprivate nonindustrial lands to other uses. Com-mercial land on national forests would declineslightly due to wilderness designations, whilecommercial industry lands would increasesomewhat. All regions of the country would ex-perience a decline in commercial forest, butthe most significant decline would be in theSouth (table 25).

The projected decline is less than half the rateof decline measured by the Forest Service inthe 1962-77 period, but it is consistent with thelonger term trend seen in Forest Service sta-tistics between 1952 and 1977. There are sometechnical difficulties with this projection dueto the out-of-date information used in the 1977baseline data. Recently completed State sur-veys in Arkansas and Michigan, for example,show that 1977 RPA forestland acreage projec-tions in those States were overstated. The 1978survey in Arkansas showed that commercialforest acreage in the State had already declinedto the level that had been projected for 2010.10

Arkansas’ 1977 projection was based on theState’s 1969 survey, but Arkansas forestlandwas greatly affected by expanded soybean pro-duction in the mid-1970’s, a change apparent-ly not incorporated into 1977 projections. Thepreliminary 1980 Michigan forest survey datashows present commercial acreage to be aboutwhat was projected for the period from 2010to 2020. 11

Close monitoring of forestland acreage i sneeded in the coming years. A revived econo-my coupled with potential renewed growth inagricultural exports could produce a morerapid decline in commercial forest acreage

9Wall, Trends in Commercial Timberland Areas in the UnitedStates, op. cit., p. 9.

IOThe projected ]eVel of decline, based on 1969 data, is in Ibid,p. 17, The new survey is in William W, S. Van Hees, ArkansasForests: Trends and Prospects, Forest Service Resource BulletinSO-77 (Washington, D, C.: Government Printing Office, 1980).

Arkansas forests declined 9 percent between 1969 and 1978.llclted in W, B r a d S m i t h , “Michigan Forest Inventory

Fieldwork Completed,” Northern Logger and Timber Processor,April 1982, pp. 20-22.

Ch. VI— The Forest Resource Base ● 155

than has been projected. If the 1962-77 t rendextended through the year 2000, commercialacreage would decline by 41.4 million acresrather than by the projected 21.5 million acres.

Availability of Commercial Forestlandfor Intensive Management

Merchantable trees eventually may be har-vested from most commercial forestland. Asa practical matter, however, only part of theforestland base is worth special managementtreatment. Since some lands are better suitedfor such investment than others, the issue hasarisen on how to direct limited public incen-tives and private investment capital to acreageoffering the most cost-effective intensive man-agement opportunities.

Factors affecting a tract’s suitability for in-tensive management include:

●

●

●

●

●

●

management profitability;parcel or stand size;market proximity;landownership objectives;accessibility; andsite specific variables such as natural pro-ductivity and slope.

To demonstrate the information systemsneeded to portray the interaction among thesefactors, OTA asked the Forest Service’s South-

east Forest and Range Experiment Station toscreen its data on private nonindustrial com-mercial forestland. The Southeastern Stationoperates the Forest Information Retrieval Sys-tem (FIR)—a sophisticated system that is ableto cross-reference inventory data for the fiveSoutheastern States on local, county, State, andregional levels without double-counting acre-age. Low productivity, lack of accessibility, andother factors were assumed to limit the feasi-bility of tree planting and silvicultural ac-tivities. Although these factors are likely to im-pede intensive management activities, the spe-cific criteria chosen (such as exclusion of tractsof 10 acres or less) are somewhat arbitrary andmay not necessarily preclude economical man-agement in all circumstances.

Of the 64 million acres of private nonindus-trial lands in the region, only 34 million acreswere not affected by the selected management-constraining factors. The 30 million acres ofaffected lands currently contain 40 percent ofthe region’s PNIF softwood growing stock and50 percent of the hardwood growing stock.This land can be expected to provide timber,but silvicultural activities on the affected landswould presumably be less cost effective thaninvestments on nonaffected lands (table 26].The FIR analysis does not include ownershipobjectives or financial 1 imitations on manage-ment and therefore is not a complete picture

Table 26.—Screening of Land-Related Management Constraints onPrivate Nonindustrial Forestland in the Southeast

Maximum PNIF discount Residual

Commercial Growing-stock volume Commercial Growing-stock volumeforest (thousand cubic feet) forest (thousand cubic feet)

Step Descript ion (acres) S o f t w o o d H a r d w o o d (acres) So f twood Hardwood

1 Total area and volume — — — 87,999,5372 Minus public and forest industry holdings — — — 64,089,2093 Minus remaining stands on poor sites

(site 5) 10,523,496 3,289,981 3,666,237 53,565,7134 Minus remaining stands 10 acres or less 14,673,950 8,557,411 7,429,750 40,936,3965 Minus remaining stands that are

inaccessible 668,975 298,788 804,547 40,512,0906 Minus remaining stands with difficult

operabiIity 6,857,375 2,383,606 7,663,517 36,434,5997 Minus remaining stands in strips,

stringers, and strands 4,017,883 1,582,757 5,259,451 33,787,9678 Minus remaining stands that are poorly

stocked 12,696,671 1,998,743 3,142,848 28,890,905SOURCE Data and table provided by the U S Department; of Agriculture, Forest Service, Southeastern Forest Experiment Station

49,040,88834,670,624

31,380,64323,516,864

23,330,665

22,036,160

21,099,625

20,188,588

53,279,04240,649,933

36,983,69630,072,922

29,384,892

23,959,028

20,184,492

18,826,225


of the factors needed for a comprehensive as-sessment.

The screening described illustrates the capa-bilities of advanced information systems to) pro-vide refined data about forestland managementopportunities. Broader application of suchsystems could provide decisionmakers with amore realistic picture of feasible goals bothregionally and nationally.

A better national assessment of the manage-ment potential of U.S. forestland ultimatelymay require a modified conceptual frameworkas well as additional data. One possibility, pro-posed by resource economist Marion Clawson,would be to incorporate economic and envi-ronmental considerations into site class desig-nations. 12 Three classes of commercial forest-land could be established:

1.

2.

3.

Class A—lands capable of producing atleast 85 ft3/acre per year in natural stands,able to yield a lo-percent return on man-’agement investments in real terms, andposing no serious environmental prob-lems;Class B—50 to 85 ft3/acre/year, less thanlo-percent return on investment, and noserious environmental problems; andClass C—less than 50 ft3/acre/year, and/orserious environmental or other constraintsthat would preclude commercial opera-tions. Other analysts have proposed simi-lar classification systems, although thespecifics differ.

The growing importance of fuelwood alsopoints to a need to redefine commercial for-estland. In some areas, rising fuelwood use hasincreased demand for wood growing on landsthat are marginal for producing industrialroundwood. In the Southwest, for example,large areas of pinyon-juniper classified as non-commercial are being utilized for energy pro-duct ion.13 Hence, it may be necessary in the

1’Marion (~liilvs{)n, “An Economic: Classification of U.S. ‘Com-mt>r[ ial’ Fores ts” /(Jurna/ (Jf’ Forestr~, Noirember 1 9 8 1 ,1)1). 727-730.

“Stx! hl i(; hael [,. Samue]s and Julio 1,, Betancourt, “Modeling[ ,ong-rl’erm Effects of F’uclwood Har\ests in l)in}ror~-Jul]i[jcIW()(dlands,” Er]~rir(~r]n](!r]till hfiinagement, ~ol. 6, pp. 505-575,for (Iis(:ussion.

future to take into account both industrial andnonindustrial commercial uses for wood whenassessing commercial forestland.

Growing Stock Volumes

The Forest Service estimated that commer-cial growing stock* in 1976 amounted to over710 billion ft3. l4 Softwood species, currentlypreferred for most high-volume wood uses,comprise about two-thirds of the stock; hard-woods comprise one-third.

About half the softwood volume is in thePacific coast region; the South and the RockyMountain areas each have about one-fifth ofthe softwood growing stock, while the Northhas about 10 percent (fig. 24), Over 90 percentof the hardwood stock is in the Eastern UnitedStates—half in the North, 40 percent in theSouth. The South, therefore, has a high propor-tion of both hardwood and softwood volumes.Even though only one-fifth of the Nation’sstanding softwood volume is in the South, theregion accounts for more than half the annualgrowth of softwoods.

ownership of inventories varies significantlyby region. About 56 percent of the softwoodinventory is in public ownership, primarily inthe old-growth stands of the western nationalforests. The forest products industry current-ly owns relatively small volumes of sawtimberin the Pacific Northwest, because most old-growth has been cut; many of these harvestedareas now support rapidly growing second-growth stands, Most growing stock in theSouth is located on private nonindustrial landsand a lesser amount on forest industry lands.

Current efforts to manage forestland areaimed primarily at increasing the area in soft-wood species or in reducing the hardwoodsamong existing softwood stands. Emphasis onsoftwood management is largely a function ofthe higher demand for softwood timber, theresulting higher value of such wood and pro-jections of its increasing economic scarcity.

* Net volume of live sawtim~er and ~c)letimber trees from thestump to a minimum A inch top c)f the central stem or to thefirst limbs.

laAna]~~sjs of the Timber Situation, op. cit., p. 182.

Ch. VI—The Forest Resource Base Ž 157— .

Figure 24.— Timber Inventories by Region, 1976 (billion cubic feet)

219

Rocky a

Mountains

95

5

45

I I

aData for Kansas, Nebraska, North Dakota, and eastern South Dakota Included In the North

SOURCE U S Department of Agriculture Forest Service An Ana/ys(s of the T/rnber S/tuaf/on (n the United States 1952-2030 (Washington, D C U S Government Print.In g Off Ice, 1982), p 158

Much less attention has been given to hard-wood management because hardwood growthin general greatly exceeds removals. Desirableand undesirable hardwood species may be in-termixed in a stand, thus complicating harvest-ing and processing, In many hardwood forests,“high grading’’—removal of high-value trees—has left mature stands of hardwood species thatare currently undesirable from an industrialperspective.

Growing stock volumes comprise only partof the potentially usable woody biomass inforests. Nongrowing stock sources–limbs,tops, and rotten and small trees—currently ac-count for 7 percent of softwood and 14 percentof hardwood industrial wood supplies and alsoare important for fuelwood. Technological ad-

vances in harvesting such as whole tree chip-pers that convert the entire above-ground por-tion of trees into chips, may expand the impor-tance of nongrowing stock sources of wood,as may fuelwood demands and manufacturingprocesses able to use wood chips,

In 1980, the Forest Service established a Na-tional Tree Biomass Compilation Committeeto gather more precise information aboutpotentially usable above-ground woody bio-mass [growing stock plus nongrowing stockwood). Preliminary national estimates of treebiomass were issued in late 1981 15 (fig. 25) .

1‘[ 1.S. D e p a r t m e n t of A g r i c u l t u r e , Forest Ser\rice, ‘1’ree

ll;omas.s--,~ State of the ,4rt Compilation. General TechnicalReport \lrO-33 (M’ashington, II, C.: U.S. Government Printing Of-fice, No\cmber 1981),


Figure 25.— Biomass on Commercial Forestland

A

Softwoods Hardwoods

merchantable tops and branches merchantable tops and branchesGrowing stock Growing stock Rough and rotten Rough and rotten

Small trees

SOURCE Derived from US Department of Agriculture, Forest Service, Tree B/ornass-A Stafe of(Washington, D C U S Government Printing Office,

Because of economic constraints, as well aspossible harm to soil, wildlife, and future treegrowth, however, only a portion of the non-growing stock biomass actually could be uti-lized.

Resource Implications of IncreasedWood Fuel Demand

The effects of the recent growth in demandfor wood fuel (discussed in detail in ch. IV) onthe Nation’s forest resources are difficult topredict, Continued growth in wood fuel con-sumption presents both opportunities andproblems for timber management,

It is clear that supplies of woody biomass indomestic forests could sustain higher levels offuelwood use than at present without affectingindustrial wood supplies, The Office of Tech-nology Assessment’s 1980 report, Energy FromBiological Processes, concludes that the biolog-

1981), p 5

ical capacity exists to produce between 4 and10 quadrillion Btu (Quads) of energy per year—two to four times current levels—mostlythrough utilization of wood wastes, logging res-idues, dead wood, management thinning, etc,16

The Forest Service’s 1981 biomass inventoryalso showed large quantities of potentiallyavailable biomass that could be utilized withoutaffecting merchantable portions of trees.

Fuelwood for residential use already has re-emerged as an important timber crop in someareas. A sustained market for residentialfuelwood could have positive effects on in-dustrial wood supplies if properly managed. Itcould stimulate timber stand improvement ac-tivities on private nonindustrial forests, for ex-ample, because trees of little current commer-cial value are often suited for fuelwood. This

la~nergy ~ro~ Biological Processes (Washington, D. C.: U.S.Congress, Office of Technology Assessment, OTA-E-124, 1979),p. 24.

—

Ch. VI—The Forest Resource Base ● 159

could enhance growth of the remaining treesby reducing crowding, an important problemon some forestland. Harvesting residues,which are normally left behind in the forestwhere they can increase the cost of regenera-tion as well as create fire hazards, are nowsometimes removed for fuel.

However, there are no guarantees that fuel-wood harvesters will confine their removals totrees that are of little value to the forest prod-ucts industry. In some areas, markets for fuel-wood already are stronger than for industrialroundwood. Many fuelwood harvesters may beunconcerned about restricting removals tononindustrial timber and may harvest treesthat are more valuable as nonfuelwood. Thisis less likely to be a problem with high-valuemature trees than for young trees that couldprovide high-value forest products if left tomature.

In addition, a large number of inexperiencedfuelwood harvesters could exacerbate environ-mental damage to forestlands, Improper har-vesting can result in increased water pollution,soil erosion, and damage to fish and wildlifehabitat. Only about 12 percent of homeownerswho cut fuelwood from their own land in 1981consulted a professional forester, according tothe Forest Service. l7

Clearly there is a need for more informationabout fuelwood use and its ramifications forforest management, Current levels of residen-tial fuelwood use (40 million to 43 million cordsannually) are several times higher than esti-mated by the Forest Service for 1976 (6 millioncords per year) and greatly surpass levels ini-tially projected for 2030 (26 million cords). Al-though a Forest Service Forest Products Lab-oratory study, to be published soon, has im-proved the understanding of key aspects of res-idential fuelwood harvesting (see box F), it isnot yet clear what proportion of residentialfuelwood is coming from commercially impor-tant forestland or what kinds of trees (industrial

quality, nongrowing stock, or rough and rottentrees) predominate in fuelwood harvests.

Nontimber Values of ForestlandDomestic forestland serves a wide variety of

uses in addition to timber production (table 27).These uses include watershed and soil protec-tion, fish and wildlife habitat, grazing, land-scape esthetics, and recreation. Also, signifi-cant energy and mineral resources are foundon domestic forestland, both public and pri-vate.

Conflicts between timber production andother land uses, such as wilderness preserva-tion, are unavoidable to some extent. Commer-cial timber management and harvest necessari-ly disturb natural forest ecosystems, althoughthe degree of disturbance varies greatly de-pending on the practice used, site conditions,and the care that is taken to minimize harm.For example, silvicultural application of her-bicides, pesticides, and fertilizers, if not prop-erly done, can adversely affect water quality,fish, and wildlife. Timber harvest and associ-ated logging roads and skidding activities dis-turb the soil and often lead to increased soilloss and sedimentation of streams, at least tem-porarily, Erosion problems may continue ifs tand regenerat ion is not accomplishedpromptly. Stand conversion to different speciesalso radically alters the previous natural eco-system.

Interactions among the various objectives offorest management are often complex. Someland uses such as grazing can interfere withtimber growth if improperly handled, but arecompatible with timber production if precau-tions are taken. Timber production can im-prove some kinds of wildlife habitat by produc-ing increased forage after harvest, but otherkinds of wildlife, such as those that are depend-ent on mature forests for habitat, may be ad-versely affected. I n general, however, forest-lands can be managed to produce a mixture ofeconomic and noneconomic values importantto society even though some tradeoffs cannotbe avoided.

Multiple use management has long been akey tenet of national forest policy and also is


Box F.—Wood Fiber for Fuel

Fuelwood (or firewood), once the primary source of heat for American homes and businesses,was relegated to footnote status in most government energy reports prior to the 1973 oil embargo.The post-embargo rise in fuelwood use was so rapid that adequate estimates of residential fuelwoodconsumption were not available until surveys were conducted in 1980-81 by the Forest Serviceand the Department of Energy. The unexpectedly high levels of fuelwood use in the last few yearsraise significant forest management issues and are intensifying competition between homeownersand the forest products industry in some areas.

The following are among recent findings related to wood fuel:

●

●

●

●

●

●

●

●

●

According to preliminary statistics prepared by the Forest Service Forest Products Laboratory,residential fuelwood usage during the 1980-81 heating season amounted to 42.1 million cords.By contrast, the total forest products industry harvest of pulpwood in 1979 amounted to86 million cords.Thirty million cords of the residential fuelwood was self-cut by the user; the rest was ob-tained from mill residues or purchased. About 27 percent of the self-cut wood came fromindustrially merchantable trees. It is not known what proportion of the mill residues or pur-chased cordwood came from industrially merchantable trees.Millions of Americans are now harvesting wood for residential fuel. Some 3.9 millionhouseholds cut fuelwood from their own land. In addition, 3.4 million other households cutfuelwood from private land they do not own.An estimated 12 percent of those who cut from their own land stated that they cut theirwood based on the advice of a professional forester.About 11 million cords of residential fuelwood were acquired, averaging 1.5 cords per pur-chase, at $85 per cord. Variations in both volume and price paid were great, with those buy-ing larger quantities paying less per cord, and those buying smaller quantities (less than athird of a cord), reportedly paying typically more than twice the average—$193 per cord.Fuelwood permits for national forests have increased tenfold in the last 10 years, and legalremovals have increased from 400,000 to 4 million cords. National forest administrators aretrying to manage fuelwood harvests, but there are severe problems with fuelwood thefts.The number of reported thefts increased over sixfold between 1971 and 1980, and these theftsare considered one of the top three law enforcement problems in the National Forest System.Wood fuels are beginning to be utilized by commercial and industrial establishments thatare not part of the forest products industry. A recent nationwide study which comparedwood-fired systems to energy production based on other fuels has found that wood energysystems are in many cases economically attractive. Wood fuels are particularly competitivein the South, the Northeast, and the North Central region, especially for residential and smallindustrial applications.A recently released American Paper Institute study concluded that the burning of waste paperin municipal powerplants will present major competition for recyclable fiber (now account-ing for 25 percent of the fiber requirements of the paper industry) in coming decades. Wastepaper exports, which constitute a major share of U.S. wood fiber exports, also maybe af-fected if municipal burning accelerates.International trade in wood fuels, long thought impractical, is now being contemplatedseriously in some areas. Shell International reportedly expects trade in densified wood fuelsto develop in the Far East. And Minnesota and the Seaway Port Authority of Duluth areexamining the prospects for exporting wood fuels from that State.

Ch. VI— The Forest Resource Base ● 161. —

Table 27.—Classification of Renewable and Nonrenewable Resources

Resource Kind of management required

Herbage (livestock) Intensity of grazing must be balanced withannual growth

Fish and wildlife Varies with species that are desired. Habitatmust be protected, created, or enhancedfor the species desired

Endangered species (alive) Critical habitat must be protected,enhanced. or created

Water Control sources of pollution, somemodification of quantity possible bymanipulating vegetative cover

Timber Replanting unforested areas, silviculturalpractices to increase growth rates

Landscape esthetics Varies with values and objectives, in relationto timber harvest generally involvesrestriction of harvest in areas of highrecreation use, reduction in size of clearcuts

Wilderness Withdrawal from other consumptive uses,restriction of use intensity to preservewilderness condition

Soils and watersheds Protection and preservation

Minerals Control rate and efficiency of useEndangered species Generally none, unless possible to

(extinct) reestablish species through geneticbreeding

SOURCE Off Ice of Technology Assessment—

Time required to replenish consumptive use

One year

Generally less than 10 years

Preservation of habitat requires no time,creation of habitat may take a few years tohundreds of years

Generally less than 10 years unless thehydrologic balance has been drasticallydisturbed

Thirty to over a hundred years

Tens to hundreds of years (higher end toestablish wildernesslike esthetics

Usually hundreds of years to reestablishonce wilderness environment has beendisturbed

Thousands to tens of thousands of years toreestablish equilibrium after drasticdisturbance

Millions to hundreds of millions of yearsNew species may evolve to replace niche

left by extinct species, but the loss of thegene pool is usually irreversible


Tree plantation can help prevent erosion while also providing landowners with income This farm was badly gulliedby erosion before Ioblolly pine plantings were begun in the mid-1 940’s on the hilI sides. By the early 1960’s, the owners

were able to harvest some of the pine for pulpwood


applied in some other Federal, State, and localforest systems. The Forest Service’s RPA as-sessments call for increased production of bothtimber and nontimber resources from nationalforest lands.

Lands owned by the forest products industryand by some States are managed primarily toproduce timber, but other objectives such aswildlife and recreation also may be included.Multiple use resource management is less oftena goal of private nonindustrial landowners, butthey too have numerous opportunities for it,For example, less than 15 percent of easternforestland with grazing potential is now beinggrazed, according to the SCS. The recreationalpotential of private acreage also is far greater

than is currently realized. In a limited numberof cases, forests can serve pollution control ob-jectives, such as in the application of treatedsewage sludge to forestland. When properlyconducted, s ludge applicat ions enhancegrowth by providing important plant nutrientswithout appreciable environmental damage orhealth hazards.

Some forestland functions are difficult toquantify in economic terms, The importanceof the forest in hydrologic regimes and inminimizing soil erosion has been understoodfor over a century. Many of America’s mostscenic areas are forested, Designated wilder-ness areas, most of which are on Federal lands,are cri t ical for recreation and scientif ic

Ch. VI—The Forest Resource Base ● 163—

research and increasingly are being recognizedboth as a national and global heritage of im-measurable long-term value.

Because of wide variation in site conditions,it is hard to generalize about the nationwideor regionwide effects that increased timberproduction would have on other forestland val-ues. In the 1980 RPA assessment, the ForestService introduced a model to show some ofthese interactions (table 28). An important

characteristic of the model is that it permits dif-ferent assumptions to be used about resourcemanagement while quantifying potential ef-fects on other resources. A more refined modelis expected to be used in the 1985 assessment.Such efforts, by developing realistic portrayalsof future effects on domestic forests of in-creased timber production, can help decision-makers understand resource tradeoffs.

Table 28.—Multiresource Interactions in the Southeast Resulting FromMeeting Projected Timber and Range Grazing Demands

Item Units 1977 1985 1995

Projected demands:a

Softwood timber . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Hardwood timber . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Range grazing ., . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Resource use and environmental effects:Dispersed recreation use . . . . . . . . . . . . . . . . . . . . . . . .Herbage and browse . . . . . . . . . . . . . . . . . . . . . . . . . . .Wild ruminant grazing . . . . . . . . . . . . . . . . . . . . .Water yield . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Sediment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Storm runoff . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Intensity of land resource used:National Forest Iands:b

Extensive usec . . . . . . . . . . . . . . . . . . . . . . . .Intensive usec . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Other Federal lands:Extensive usec ... ... . . . . . . . . . . . . . . . . . . . . .Intensive usec . . . . . . . . . . . . . . . . . . . . . . . . . . . .

State and private lands:Extensive usec . . . . . . . . . . .Intensive usec . . . . . . . . . . . . . . . . . . . . . . . . . . . .—

Billion cubic feetBillion cubic feetMillion animal unit months

Percent change from 1977Percent change from 1977Percent change from 1977Percent change from 1977Percent change from 1977Percent change from 1977

Percent of areaPercent of area



———

——————

8911

982

7822

2.421.01

18.10

10.16.0

-0.30.4

89.00.3

7723

919

7030

3.061.35

21.50

-4.016.0

2.01.0

116.00.1

7228

8911

6535

aprojected demands as shown In the review draft of the 1 ~ RPA assessmentbln this mult!resource interaction analys!s the areas recommended for wilderness or further planning by the RARE II process were considered wildernesscThe land resource use ,s said t. be intensive If one or more of the timber, range, or wildlife activities Of the resource management oPt ions are intensive Timber ‘C”

tlvltles are defined as Intensive if Intermediate treatments between regeneration and harvesting are conducted Range acttv!tles are defined as Intensive If practices,mal nly species conversion, are made to maximize I Ivestock forage production Wildllfe activities are defined as Intenswe if vegetative man!pulatlon practices are undertakento Improve wlldllfe habitat If none of the three activities are !ntens!ve, the use IS considered extensive

SOURCE Adapted from An Assessment of (he Forest and Rangeland S/tuation In the Urrlfed Sfafes (Washington, D C U S Department of Agriculture, Forest Service,1980) p 513

Ownership and Management of Forestland

Trends in ownership have an important bear- private nonindustrial forest owners (farmers,ing on current and prospect ive uses of “miscellaneous” individuals, and corporationsforestland. The Forest Service separates forest that are not part of the forest industry). PNIFlandowners into three basic categories: public land comprises 58 percent of all commercial(Federal, State, local, and Indian), forest inforests; industry lands 14 percent; and publicdustry (corporations or individuals who own lands the remaining 28 percent (fig. 26).or operate a wood-processing facility), and


Figure 26.—Ownership of U.S. Commercial Forestland, 1977

23 million acres69 million a

Farmers116 million acres

Other private162 milIion acres

SOURCE U S Department of Agriculture, Forest Service, An Ana/ys/s of the Timber Situation In the Unfted Stafes 1952-2030 (Washington, D C U S Government Print.ing Office, 1982), p. 121

Ownership composition varies significantlyby region. In the Western United States,Federal and State Governments and the forestindustry, which collectively own over 75 per-cent of the region’s forests, dominate. In theEastern United States, private nonindustrialowners hold most of the forestland, althoughforest industry holdings are large in Maine andin the South. Federal holdings in the East maybe locally important, but constitute only 5 per-cent of forested areas.

Timber harvest levels among ownershipclasses are not a function of acres held (table29). Forest industry lands—14 percent of com-mercial forests— accounted for an estimated31 percent of timber harvested in 1976, whileother ownerships provided less timber peracre.

Nearly half (47 percent) of all U.S. timbersupplies in 1976 came from private nonin-dustrial lands. In the East, however, PNIFs’contributions to regional timber supplies arefar higher. Forest Service projections suggestthat the forest products industry will rely in-creasingly upon these PNIF lands for wood. By2000, according to the Forest Service, 54 per-cent of the harvest will come from private non-industrial sources (fig. 27). This representsmore than a 50-percent increase in roundwoodsupplied from PNIF lands in 24 years.

Publicly Owned Forestland

About 28 percent of commercial forestlandis owned or held by Federal, State, or localgovernments or kept in trust for Indian tribes.

Ch. VI—The Forest Resource Base ● 165

Table 29.—Roundwood Supplies and Acreage by Ownership Class

Percent of VolumeMillion commercial harvested Proportionacresa forest (million ft3) of harvest

1976 2000 1976 2000 1976 2000 1976 2000

Forest Service . . . . . . . . . . . . . . 88.7 80.4 18 17 1,987 2,555 14.9 14.9Other public . . . . . . . . . . . . . . . . . . 47.0 46.5 10 10 982 1,219 7.7 7.1Forest industry . . . . . . . . . . . . . . . . 68.8 72.2 14 16 3,890 4,141 30.7 24.3Private nonindustrial forests . . . . 278.0 261.9 58 57 5,946 9,169 46.7 53.7

U.S. to ta ls . . . . . . . . . . . . . . . . . .482.5 461.0 100 100 12,805 17,084 100.0 100.0NOTE Survey data In 1981 shows fuelwood consumption to be several times hfgher than estimated for 1976, but II IS not known

what proporflon of the fuelwood consumed comes from commercial growing stock Harvest levels cited above for 1976and projections for 2000, may underestimate historical and projected fuelwood removals

aTo convefl acres to hectares, multlply by O 4047.

SOURCES AdaDted from An Analysis of the Timber Sifuat/on In the Unifed States, 1952-2030 (Washlnqton, D C U S Depart.ment of Agriculture, Forest Service, 1982), p 158

Figure 27.— Roundwood Supplies by OwnershipClass; With Base Level Projections to 2030a

10000

900080007000600050004000300020001000

01952 1962 1970 1976 1990 2000 2010 2020 2030

aSupply ad ta for 1952 1962, 1970 and 1976 are estimates of trend levels ofharvests and differ somewhat from Forest Service estimates or actual consumpl [on Project on year supply data shows volume that would be harvestedgiven the assumptions made by the Forest Service

SOURCE Derived from the U S Department of Agriculture, Forest Serwce, AnAna/ys/s of the Timber S/tuafion in the Unifed States 1 9 5 2 - 2 0 3 0(Washington, D C U S Government Printing Off Ice, 1982), p 160

State and local governments hold about 30 mil-lion acres forestland nationwide. In the GreatLakes States, State and county forests are es-pecially prominent, comprising one-fourth ofthe region’s timberlands. Pennsylvania, Alaska,

and Washington also own sizable forests. Else-where, State and county holdings may be im-portant locally, but comprise a minor fractionof regional timber acreage. Indian lands, about6 million acres in total, are concentrated inOregon, Washington, and Arizona.

The Federal Government is by far the mostimportant public owner of forestland. It man-ages more commercial forestland than anyother single entity, Its holdings—nearly 100million acres in l977—amount to about one-fifth of the commercial acreage in the country.Ninety-five percent of the Federal holdings areadministered by the Forest Service, whichmanages the National Forest System, and bythe Department of the interior’s Bureau ofLand Management. Other Federal agencies,such as the Department of Defense, also havecommercial forest holdings, mostly located inthe East and generally small, In the WesternUnited States, where three-fourths of the Fed-eral commercial timberland is located, Feder-al holdings comprise 57 percent of the region’scommercial acreage.

National Forests

Most of the National Forest System, admin-istered by the Forest Service, is composed oflands reserved by Congress from the originalpublic domain. Other portions, primarily in theEast, were acquired by purchase, exchange ordonation. Only about half of the land in na-tional forests is commercial forestland. The restis rangeland, grassland, nonproductive forests,and lands closed to timber production. Some

166 Ž Wood Use: U.S. Competitiveness and Technology—

national forest land has been closed to timberproduction by Congress through wildernessdesignation, and other land has been deferredpending such designation. Some land also isadministratively closed for endangered specieshabitat or recreation or because it is deemed“unsuitable” (see box G).

In March 1983, the Reagan administrationstated that about 6 million acres of nationalforest land were being considered for possiblesale as part of its asset management program.18

Further study of these parcels was announced;actual sale may require congressional approval.

Most of the tracts were in isolated ownerships,checkerboard patterns, special use permits,and community expansion lands.

In 1977, the National Forest System con-tained about 89 million acres of commercialforestland or 18 percent of total U.S. commer-cial timberland. Most of the commercial tim-berland in national forests is located in theWest—41 percent in the Rocky Mountain re-gion and 36 percent in the Pacific coast region.The 23 percent in the East is divided aboutequally between the North and South.

Several different laws govern Forest Service

1s”6 Million Acres of U.S. Forest Eyed for Sale, ” ‘A’-- ~’--’-- administration of commercial timberland o npost, Mar. 16, 1983, P ‘8

Box G.—Basic

VVd311111~l UIl

national forests. The Multiple Use and Sus-

Forest Service Management Principles

Multiple Use-The Multiple Use and Sustained Yield Act of 1960 directs that all resource valuesbe weighed and tradeoffs made in making management decisions. It requires that economic fac-tors be considered but not necessarily control management decisions. Also, management objec-tives must preserve land productivity. The multiple use concept has proven difficult to implementbecause Congress did not provide criteria for deciding between conflicting land uses. Lands thatare managed primarily for recreation, wilderness, wildlife habitat, or watershed may receive littleor no timber management treatment.

Sustained Yield–The principle of sustained yield is closely linked to the principle of multipleuse. The Multiple Use and Sustained Yield Act defines it as “the achievement and maintenancein perpetuity of a high-level annual or regular periodic output. . . “ This relatively straightforwardconcept is complicated in practice, because many different levels of sustained yield can be de-fined for a given tract of land, depending on management intensity and the interval chosen for“periodic output.” NFMA reaffirmed the concept of sustained yield (nondeclining even flow) butalso authorized the Forest Service to depart from even flow in order to meet “overall multiple useobjectives.” The act failed, however, to provide clear guidance as to what specific situations justifysuch departures. Under a 1979 Presidential directive, departures are being assessed on some na-tional forests through acceleration of planning.

Harvesting at the High Point of Forest Growth-NFMA affirmed the Forest Service’s existingpolicy of setting timber rotation age at the point of maximum biological growth of a forest stand(called “culmination of mean annual increment”). Such a policy maximizes the volume of timberthat is harvested, but financial maturity (the age at which economic efficiency would dictate harvest)generally comes well before biological maturity. This policy has been criticized by economists andthe forest industry as being economically inefficient, but by law it remains a strong influence onthe formation of national forest management objectives.

Exclusion of “Unsuitable” Land From Timber Production-NFMA restricts timber harveston lands that have been identified as unsuitable for timber production based on physical, economic,and “other pertinent factors.” It also directs that cutover lands be restocked within 5 years afterharvest and sets specific criteria for the choice of cutting method. NFMA further requires thatthe reforestation backlog-which as of October 1, 1982, had been reduced from 6.1 million acresin 1975 to 413,000 acres-be treated by 1985.

— ——— —.——.

Ch. VI—The Forest Resource Base . 167

tained Yield Act of 1960 (Public Law 86-517)articulated a congressional policy that nationalforests should be managed for “outdoor recrea-tion, range, timber, watershed, and wildlife andfish purposes, ”

The setting of land management objectivesfor national forests is controlled by RPA andits amendment, the National Forest Manage-ment Act (NFMA) of 1976 (Public Law 94-585),under the overall framework of multiple useand sustained yield principles set forth in the1960 act, RPA requires the assessment of allforest and rangeland renewable resources inthe United States on a continuing basis and thepreparation of a 50-year renewable resourcesprogram. These mandates were intended tohelp Congress set a forest resource budget.

NFMA requires the preparation of manage-ment plans under regulations consistent withcongressional guidelines, a lengthy and com-plicated process. At the regional level, forestplans are developed to establish general man-agement objectives, standards, and guidelines.At the local level, forestland and resourcemanagement plans are drawn up for each na-tional forest, using the regional standards andguidelines to develop specific objectives andprescriptions for planning units within theforest. The first round of this new planningprocess is still underway. As of March 1983,individual plans for 18 out of 121 nationalforests had been released in draft form; the re-mainder are scheduled for completion in1983-84. 10

Basic management principles set by Con-gress provide a framework for planning andmanaging the use of timber and nontimber na-tional forest resources (see box G), Their im-plementation limits timber management andharvest levels in the interests of meeting otherresource management objectives. Harvests onindividual national forests generally cannot ex-ceed a level which could be removed “annuallyin perpetuity on a sustained yield basis. ”However, temporary exceptions to this policy

19U.S. Department of Agriculture, Forest Service L a n dManagement Planning Staff , personal communication,Washington, D. C,, Oct. 14 1982.

through “planned departures” are authorizedin some cases to achieve sustained yield objec-tives, In 1979, the Carter administration calledfor accelerated updating of plans on some na-tional forests to increase sales of maturetimber. This process continues today.

The potential for producing more wood peracre of allocated timber production land underFederal laws is substantial, An important lim-itation to more intensive management, how-ever, is budgetary constraints.

Bureau of Land Management Land

The Bureau of Land Management (BLM) wascreated in 1946 to administer Federal Govern-ment properties that were never disposed intoprivate ownerships or set aside for special uses.Nearly all of these are in the West,

BLM manages 5.8 million acres of commer-cial timberland, About half of this is originalpublic domain lands. The other half is the so-called “O&C” lands, located in western Ore-gon, This acreage is the remains of a land grantthat was revested by Congress in 1866 whena railroad failed to comply with the terms ofits grant. The O&C lands are BLM’s most pro-ductive and are among the most productive for-estlands in the country.

Permanent objectives for BLM-administeredlands were not clarified until enactment of theFederal Land Policy and Management Act(FLPMA) of 1976 (public Law 94-579), FLPMAdirects that public lands, only 1 percent ofwhich are forested, be managed on a multipleuse, sustained yield basis, but the act does notprovide specific objectives for timber re-sources. O&C lands are administered underFLPMA and the O&C Act of 1937 (50 Stat. 875),which name timber production as the majorownership objective. In the event of conflictingpurposes, the O&C Act prevails.

In response to FLPMA’s mandate, BLM ispreparing Resource Management Plans foreach of its management units. These docu-ments will combine in one environmental im-pact statement, as required by the National En-vironmental Policy Act of 1969 (public Law91-l90), both land use allocations and specific

98-829 0 - 83 - 12

I& I . Wood Use: U.S. Competitiveness and Technology— —

guidelines on how lands will be managed. Sixfactors must be cons idered in reach ingdecisions:

1.

2.3.

4.

5.6.

legislative and Department of the Interiorgoals,resource demand forecasts,estimated sustained levels of the multipleuses that may be obtained under existingbiological and physical conditions and dif-fering management practices,degrees of management intensity whichare economically viable,opportunities to resolve public issues, anddegree of local dependence on public landresources.

Thus, planning objectives for BLM-adminis-tered forestlands, like those for the NationalForests, balance many different legislativemandates.

Other Legislative Mandates for Federal Lands

Many other statutes related to environmen-tal protection and the management and use ofpublic lands affect Federal forest management.The Nat iona l Envi ronmenta l Po l i cy Act(NEPA), for example, requires preparation ofenvironmental impact statements for Federalactions that may significantly affect the en-vironment, including some forest managementactivities on Federal lands.

Another example is the Endangered SpeciesAct of 1973 (Public Law 93-205). The act pro-tects endangered species on Federal lands byprohibiting activities that damage their habi-tats, and some view it as a potential major con-flict with timber production on Federal forests.Although about 200 threatened and endan-gered species are listed by the Federal Govern-ment, most have specialized habitats that coverrelatively small areas. Only a few species ap-pear to have potential for serious conflict withtimber production. The grizzly bear and graywolf are two of them. The national forests areconsidered to be of major significance in therecovery of these species, because large por-tions of their habitat—82 percent or 4,432,920acres of the gray wolf’s, for instance—are onnational forest lands. In the Pacific Northwest,

efforts to protect the spotted owl may conflictwith timber production because this species re-quires old-growth conifer stands for habitat. Inother national forest regions, there may becases where endangered species protection re-duces Federal lands available for timber pro-duction, but these areas are likely to be smallin relation to total national forest acreageavailable for harvest.20

Another law, the Wilderness Act of 1964(Public Law 88-577), also has been perceivedby timber interests as a threat to future woodsupplies. Although the act clearly has resultedin substantial acreage being removed from pro-duction, wilderness lands are generally belowaverage in productive potential. There arepresently 25.1 million acres in the NationalWilderness Preservation System, but only 40percent of this land (10.2 million acres) is “pro-ductive reserved land”- i.e., land that wouldbe called commercial forestland if it had notbeen withdrawn from timber production. Table30 shows the average productive potential byForest Service region of “productive reservedland” included in existing wilderness areas.Only Alaska and the Pacific Southwest havewilderness with high productive potential, andthe acreages are relatively small. In fourregions, the average productive potential ofwilderness areas is less than 50 ft3/acre/year,which often is considered the minimally ac-ceptable cutoff point for economical timbermanagement.

In recent years, Congress has prohibited thesale of Federal timber to companies who in-tend to export it prior to processing. It also hasprohibited the sale of timber to purchasers whouse Federal timber to substitute for exportedunprocessed logs from private lands. The ra-tionale for this restriction has been jobs. Con-gress intended to encourage domestic process-ing of the raw material to provide employmentfor U.S. workers, implying that this benefit isyet another objective of Federal forest manage-ment.

ZO& discussed in J, Russell Boulding, Federal Forests: AnAssessment of Their Management, Use, Potential Productivi-ty, and Economic Significance, OTA contract report, June 1982,p. 5-9.

Ch. V/—The Forest Resource Base Ž 169

Table 30.—Regional Distribution of Productive Reserved Nationai Forest Landsin Wilderness and Their Average Productive Potentiai, 1981

Productive reserved Average potential Regional productiveforest in wilderness production potential average

Forest Service region (millions of acres)a (ft3/ac/yr) b (ft3/ac/yr) b

Northern . . . . . . . . . . . . . . . . . 2.2 56 —Rocky Mountain . . . . . . . . . . 1.5 43 63.7Southwestern . . . . . . . . . . . . . 0.8 41 —Intermountain. . . . . . . . . . . . . 1.8 40 —Pacific Southwest . . . . . . . . . 0.4 78 90.8Pacific Northwest . . . . . . . . . 1.2 42 —Southern . . . . . . . . . . . . . . . . . 0.1 59 71.1Eastern . . . . . . . . . . . . . . . . . . 0.8 56 62.3Alaska . . . . . . . . . . . . . . . . . . . 1.4 109 —

Total . . . . . . . . . . . . . . . . . . 10.2aTo convert acres to hectares, multiply by 0.4047b To ~onvefi ft,/ac t. cumihgctares, multiply by 007

SOURCE Compiled by the Wilderness Soc!ety, Washington, D C , from 1981 Forest Service Data

Forest Industry Lands

The forest industry owns land primarily to

produce commercial timber. About 69 millionacres were owned by the forest industry i n1977. These lands on the average are natural-ly more productive than lands in other owner-ships, they generally are in larger tracts, andthey often are located near mills.

Forest industry landownerhip is highly con-centrated, In 1978, the 90 largest firms owned62 million acres of forestland—9l percent ofall industry-held acres.21 Nearly half (48 per-cent) of the total was owned by just 17 com-panies, with the half-dozen largest firms eachhaving holdings the size of Connecticut, Mostof the remaining 30,000-plus companies in thelumber or pulp and paper sector either haveminor landholdings or none.

In addition to land they actually own, forestproducts firms lease a substantial amount ofprivate property. Management activities onleased land vary from minimal maintenance tointensive timber management practices. Short-term leases generally involve timber harvestingbut not management. Long-term leases, whichoften do involve management, are an impor-

—.illa}, O’ I,au~h]ln ancl Pad V, Ellefson, New Diversified En-

trants Among U.S. Wood Based Companies: A Study ofEconomic Structure and Corporate Strateg~, Bulletin 541-1982(St. Paul, Minn.: University of Minnesota Agriculture Experi-ment Station, 1982), p, 18,

tant trend in the South, where nearly 6.7 mil-lion acres are leased for 25 years or more.22

Leasing activities by the forest industry mayincrease in the future, especially in those areaswhere large mills require large timbersheds forsupplies.

The South contains more than half of the in-dustry’s holdings. All but one of the southernStates have at least 1 million acres, and in eachof six of these States, the industry owns morethan 3 million acres.

In the West, where Federal forestlands dom-inate, the major forest industry holdings are inOregon, Washington, and California, withmuch smaller (1 million acres) but still signifi-cant holdings in Idaho and Montana. In theNorth, Maine alone contains nearly half of theregion’s industrial forestland. Most of the re-maining northern industrial holdings are in theGreat Lakes States and in Pennsylvania andNew York.

The era of large-scale assembly of new forestindustry lands may be over. There are manyreasons for this, but possibly the most impor-tant is the tremendous increase in land pricesin the 25 years following World War II.Although price increases have moderated or

zzu, S, Department of Agriculture, The Federal Rol~ iJI the COn-serl’a tion and .4 fanagemen t of Prj\fa te A’on-jn du $ tria 1Forest]ands, Interagency Committee Report (Jt’ashington, 11. C.U.S. Department of Agriculture, 1978), p. 41.

170 . Wood Use: U.S. Competitiveness and technology

declined just recently (1980-82), it still seemsunlikely that the forest industry as a whole willembark on major new land acquisition pro-grams in the coming years. In fact, during the1980-82 recession, forest industry firms havetried to sell several million acres of commer-cial timberland; this may have been a short-term response to acute cash flow problemsbrought on by high interest rates and by theeconomically depressed state of the industry.The Forest Service projects that only about 4.4million acres of additional industry holdingswill be purchased in the next 50 years (table31). About three-fourths of this increase is pro-jected for the South, much of the remainder isin the North, and a modest increase is expectedto occur in the West. The Forest Service pro-jects that most of these purchases will takeplace before 2000; thereafter, forest industryholdings will begin to decline—chiefly as aresult of the disposal of some industry landsin the Pacific Northwest.

Ownership Objectives

The forest industry’s major landowning ob-jective is the production of timber for its mills.23

For strategic corporate reasons, partial self-suf-ficiency in timber supply is considered impor-tant to those forest products companies thatown land. Relatively few firms, however, canrely on their own lands for more than a por-tion of their timber needs (fig. 28). Most firmsare highly dependent on PNIF or public landsto provide much of their wood.

In the past, when old-growth timber wasabundant and land prices low, companies ac-

Zso’Laughlin and El]efSOn, New Diversified Entrants, table 5,P, 16.

Figure 28.—Timber Self-Sufficiency of Major TimberProcessing Firms

SOURCE: Forbes, Dec. 24, 1979, as reproduced In U.S. General Accounting Of-fice, New Means of Analysis is Required for Policy Oecisions Affect-ing Private Forestry Sector (Washington, D. C.: U.S. General Account-ing Off Ice, 1961), p. 18.

quired land with the simple objective of cut-ting the trees. Today, however, old-growth sup-plies have dwindled and land prices have risensharply, so objectives now center on manag-ing existing holdings for improved production.Potential acquisitions are evaluated for theirproductive capacity as well as for their existingtimber stand.

Table 31 .—Forest Industry Holdings, 1952.77 (million acres)a

1952 1962 1970 1977 Projected 2030

North . . . . . . . . . . . . . . . . . . . . . . 14 13.9 17.4 17,9 18.7South . . . . . . . . . . . . . . . . . . . . . . 32 33.4 35.0 36.2 39.7West . . . . . . . . . . . . . . . . . . . . . . 13.5 14.1 14.5 14.6 14.7

Total United States . . . . . . . . 59,5 61.5 67.0 68.8 73.1

~o convert acres to hectares, multiply by 0.4047.

SOURCE: Brian R. Wall, Trends in Corrrrrrerciai Timberland Area in the United States by State and Ownership, 1952-197? WithPro@ctions to 2030 (Washington, D. C.: U.S. Government Printing Office, 19S1), pp. 15, 18, and 21.

.

Ch. V/—The Forest Resource Base • 171

Rapid population growth and increased de-mand for outdoor recreation have made someindustry land more valuable for uses other thantimber production. Firms with large holdingsusually have realty divisions or subsidiaries,Forest industry real estate activities werehighly publicized in the early 1970’s w h e nseveral firms began to promote recreationalhome sales and development on their lands,Since the 1974-75 recession, however, the in-dustry’s real estate ventures have been relative-ly conservative. Rural population growth alsois increasing the potential for conflict betweenindustry and residential goals. A case study inone Texas county found that local timber com-panies opened their lands to the public forhunting, in part because of a good neighborpolicy but also because of threatened arson orvandalism. 24

Management of Industrial Lands

Since timber production is the major objec-tive of the forest industry, the prospects forhigher output in response to increased demandlook very good, Response would be limited, ofcourse, by how profitable it would be to investin more intensive management. The produc-tive capacity of most industry lands is high,however, and they are generally well-locatednear processing facilities and contain largetracts capable of capturing “economies ofscale” in management,

Management intensity on industrial forest-lands apparently is increasing, although signifi-cant differences exist among firms and datais limited. According to a review by JayO’Laughlin and Paul V. Ellefson, those fewstudies that have been conducted suggest amixture of management intensity among dif-ferent industrial size classes. One study of 2 0major firms, which together owned almost 4 0million acres of timberland in 1969, found that16 of the firms practiced varying degrees ofmanagement. All of them had planting pro-grams, 11 used timber stand improvement, and13 practiced site preparation. Four of the com-

ZaRob~rt c, Hea] ~, and James 1,. Short, The ,$ farket for Rorai

Land: Trends, Iss;es and Policies (Washington, D. C,: (conser-vation Foundation, 1981 ), pp. 51-58.

panics apparently did not practice manage-ment even though they each owned more than1 million acres. Another study of 166 firms inthe mid-1970’s found that those with holdingsof 250,000 acres or more used certain manage-ment practices (precommercial and commer-cial thinning, timber stand improvement, fer-tilization, site preparation, and genetic im-provement) to a greater extent than did firmswith smaller holdings, but it found no signifi-cant differences between other forest manage-ment techniques. This study also found that in-dustrial lands were managed most intensive-ly in the South and Pacific Northwest, and thatlarge tracts were more intensively managedthan small ones.25 Industry planting and directseeding of harvested land have increased froman average annual rate of about 150,000 acresin 1950 to over 1 million acres per year in themid- to late-1970’s,

Since 1949, about 19 of the 90 largest forestindustry firms have merged or been acquiredby conglomerates. These 19 companies pres-ently own about 14 percent of the total forestindustry land base and account for about 8 per-cent of wood-based sales in the United States.26

It has been speculated that these conglomeratesmay be less inclined toward long-term forestmanagement than traditional forest industryfirms, but a recent University of Minnesota re-port found little ground for such speculation.Based on questionnaires and interviews withseveral diversified and traditional forest prod-uct firms, the study concluded that, “ . . . thelarge diversified firm with a wood-based sub-sidiary manages its lands no differently thandoes the traditional wood-based company,”27

In fact, the study found that the diversifiedfirms that were surveyed invested slightly morein forest management on a per-acre basis thandid traditional companies, It should be noted,however, that the study was based only on apartial response by firms and that some tradi-tional forest products companies may havebeen more reluctant to reveal information

ZSThis discussion of industrial forwstland management 1S dI13WIl

extensive]j from New’ Diversified Entrants, pp. 33-35,‘eIbid., p. 20.271 bid., p. 43.

-. L - L { — 2 - - -


about management than the new diversifiedfirms.

Private Nonindustrial Forest Lands

Private nonindustrial forestland, sometimestermed underproductive, actually makes a ma-jor contribution to U.S. wood supplies. Abouthalf (46 percent) of all roundwood and 38 per-cent of sawtimber were harvested from theselands in 1976. While their contribution to na-tional wood production is proportionatelysmaller compared to the total acres theirowners hold—about 58 percent of the commer-cial forestland or about 278 million acres—thisdifference is less pronounced when regionalmarkets are considered.

About nine-tenths of PNIF lands are in theEast (table 32), where they account for overtwo-thirds of regional timber supplies. PNIFlands are especially important in the South,which contains more than half of all privatenonindustrial land. Because the forest productsindustry is concentrated more heavily in theSouth than in the North,28 the southern PNIF

28A1] A1la]J,sjs of the Tjn]ber Situation, Op. (: it., P. 1 ~$J.

Table 32.—Area of U. S. Commercial Timberland inPrivate Nonindustrial Forest (PNIF) Ownership by

Region (thousands of acres)a

Commercial timberlandin PNIF ownership

North . . . . . . . . . . . . . . . . . . . . . . . . 117,715South . . . . . . . . . . . . . . . . . . . . . . . . 134,070Rocky Mountains . . . . . . . . . . . . . . 12,502Pacific coast. . . . . . . . . . . . . . . . . . 13,695

Total United States . . . . . . . . . . 277,982a~o Convefl acres to hectares, multiply by O 4047.

SOURCE: An An8/ysis of the Tm_rber S/tuat/on In the Un/fed States 1952.2030,(Washington, D.C U S. Department of Agriculture, Forest Service,1982), Pp 344-349

is viewed as a critical part of the nationaltimber supply.

In the Pacific coast region, PNIF owners ac-count for less than 20 percent of commercialforestland. The proportion of large timber onthese lands is small relative to other owner-ships since the old-growth has been cut andmost stands are still immature; thus PNIF landsin this region are relatively insignificant interms of near-term timber resources. Aboutone-fourth of the Rocky Mountain commercialforestland base is in the private nonindustrialcategory.

Changing Ownership Composition

Information about PNIF owners comes fromthree major sources—State forest surveys, a na-tionwide rural landownership survey con-ducted in 1978 by USDA, and statewide sur-veys conducted in 11 Northern States by theForest Service. The Forest Service traditionallydivides PNIF landowners into two catego-ries—farmers and “miscellaneous other” (or allthose who are not farmers). “Miscellaneousother” represents a cross-section of society, in-cluding professionals, retired people, blue col-lar workers, and nonwood-based corporations.

State forest surveys over the last three dec-ades have shown a very rapid transfer of landfrom farm to miscellaneous ownership, In1952, about 58 percent of all PNIF acreage wasin farm ownership and 42 percent was in mis-cellaneous other (table 33). In 1977, the situa-tion was exactly the reverse—42 percent wasin farm ownership and 58 percent were in mis-cellaneous other. More than 60 percent of thedecline in farm forestland occurred in theSouth and most of the rest occurred in theNorth.

Table 33.—Change in Farm and “Miscellaneous Other” Ownership: 1952-77 (millions of acres)a

1952 1962 1970 1977Number of Percent of Number of Percent of Number of Percent of Number of Percent of

acres total acres total acres total acres totalFarm-. . . . . . . . . . . . . . 172 58 145 48 125 - 44 116 42Miscellaneous other 124 42 159 52 163 56 162 58

Total . . . . . . . . . . . . 296 100 304 100 287 100 288 100aTO convert acres to hectares, multlply by O 4047

SOURCE Derived from ArI Analys/s of the T/mber S/tuaflon m (he Urrlted States 1952-2030 (Washington D C U S Department of Agriculture, Forest Semlce, 1982), p 349

Ch. VI—The Forest Resource Base ● 173-—

The implications of this transfer in owner- ever, may be investors able to provide capitalship for timber harvesting and management are for timber management if it is profitable, Someunclear. Nonfarm owners sometimes are con- of the PNIF land is owned by nonwood-basedsidered to be less interested in harvesting tim- corporations, which also may be in favorableber than are farmers and more interested in positions to undertake management activitiesamenity values. Many of the new owners, how- (see box H).

Box H.—Forestland Holdings of Nonwood-Based Corporations

Nonwood-based corporations own substantial forest acreage but do not operate wood processingfacilities.

Forest Service landownership surveys in 11 Northeastern and Middle Atlantic States providethe best data about these corporate holdings. In the surveyed States, about 6.7 million acres areowned by nonwood-based companies—nearly twice as much land as is owned by the forest in-dustry. (This excludes the major forest industry holdings of Maine, where a survey is not yet com-plete.) In other surveys, five Southeastern States show a total of 7.4 million acres owned by suchfirms—about half as much as forest industry holdings in those States.29 In California, just ninenonwood-based corporations are said to hold 30 percent of all PNIF land.30 In western Oregon,about 15 percent of the PNIF lands are owned by such firms, and roughly half of this land is inparcels of 5,000 acres or more, according to a recent Forest Service study.31

National information on nonwood-based corporate holdings is imprecise. The Forest Servicestudy, The Private Forest Land Owners of the United States, identified 89.5 million acres offorestland as being in all categories of corporate ownership—21.8 million acres above estimatedforest industry holdings for 1977. This figure is an inexact estimate of nonwood-based corporateholdings, because the landownership survey and forest industry data were derived from differentdata series and some of the forest industry data is out-of-date.

National information about the kinds of companies involved also is imprecise. Mining andenergy corporations may own large quantities of forestland, but information is fragmentary. Whileit is known, for example, that 21 such firms own at least 3 million acres of land and lease far moreprivate land,32 the proportion of these holdings that is forested is unknown.

The extent of forestland owned by real estate firms is not available nationwide, but it maybesubstantial, judging from the Northeast and Middle Atlantic landownership surveys.33 In Maryland,realty firms held 32 percent of all corporate forestland—more than forest industry holdings in thatState. In Pennsylvania, 13 percent of all corporate forestland is owned by real estate firms. Sportsand recreation clubs, churches, and other nonprofit organizations hold a significant amount ofprivate forests. About 5 percent of Pennsylvania’s private forestland, for example, is owned byhunting and fishing clubs.

Recently banks, investment firms, and other financial institutions have become involved inprivate forestland management, with some firms offering limited partnerships in these ventures.The trend is too recent to appraise fully, but it is potentially important as a means for channelingcapital into PNIF management.

ZS1nfOrmatiOn protided by the usL)A Forest Service Southeastern Forest Experiment Station.Wited in Marion Clawson, The Ehonomics of U.S. Non-I.nhXrialPrivate Forests, Research Paper R-14 (Washington,

D. C.: Resources for the Future 1979), p. 24.alDOna]d R. G~neY, c~r~c~eris~ics of Private Timberland Ownership in Western Oregon, draft manuscript (Portland,

Oreg.: Pacific Northwest Forest and Rangeland Experiment Station), p. 32.=DO@aS G. Lewis, Comrate ~ndhollfings: AI lnq~i~ ~n~o ~ ~~t~ source (Springfield, Va.: National Technical in-

formation Service, 1976).~anata on real estate firm hol&ngs are t~en from USDA FOreSt service surveys Of lamlcwnwship in the Northeastern

and Middle Atlantic States conducted during the last decade by the Northeastern Forest Rangeland Experiment Station,Broomall, Pa. Separate reports are available for each of the surveyed States.


More detailed national and regional informa-tion about private forest owners is availablethrough a U.S. rural landownership survey thatUSDA conducted in 1978. Although the sur-vey did not specifically ask questions aboutforestland, Forest Service analysts were ableto construct from the survey data the first na-tionwide statistical profile of private forestowners in 25 years. The profile is entitled ThePrivate Forest Landowners of the UnitedStates. 34 In addition, Forest Service analystshave conducted in-depth forest land ownershipsurveys in the Northeastern and Middle Atlan-tic States.

The national survey provides data aboutowners, including their numbers, acres held,

sqThO~~~ wI. Birch, Douglas c. Lewis, and Fred H. Kaiser,The Private Forestland Owners of the United States, Forest Serv-ice Resource Bulletin W(3-1 (Washington, D. C.: U.S. GovernmentPrinting Office, 1982).

occupation, educational level, and other fac-tors relevent to assessment of timber manage-ment. It was based on 11,000 respondents. Thesurvey does not distinguish between forest in-dustry owners and PNIF owners—an impor-tant qualification, since forest industry hold-ings account for 69 million acres of forestland,

The national survey provides general infor-mation about the size of individual holdings.The overwhelming majority of the 7 millionowners of private forestland held less than 10acres apiece, but these holdings collectivelycomprised only a small proportion of the landbase (fig. 29). Four-fifths of the privateforestland is held by people or corporationswho own 100 acres or more. Although someindividuals own enormous tracts of forestland,most of it that is in the l0,000-acre-pluscategory shown in figure 29 presumably be-longs to the forest products industry or otherlarge corporations.

Figure 29.—Acres of Private Forest Land Ownership Units by Size Classand Region, 1978

70

v1-9 100-499 500-999 1000-999910-49 50-99

Size class (in acres)

North South Rocky Mtn

10,000 +

Pacific

SOURCE: Thomas W. Birch, D. C. Lewis, and H. F. Kaiser, The prh’ate ForestlafJd OwnerS of the United States, USDA ForestService Technical Bulletln (Washington, D. C.: U.S. Government Prlntlng Office, 1982), p. 36.

Ch. V/— The Forest Resource Base • 175-— -—

It is clear from the national data that mostU.S. forestland is in large enough holdings forefficient commercial harvesting and manage-ment. However, some observers are concernedthat parcellation (division of land withoutdevelopment) may be effectively reducing theacreage available for timber production, Ade-quate historical data is not available to deter-mine whether the proportion of forestland insmall tracts has increased nationwide. Mostcase studies in specific rural areas suggest thatparcellation has been most intense on tractsthat were small to begin with.35 Hence, forest-land in holdings of 100 acres or less (about 20percent of the private acreage according to the1978 survey) are probably most likely to be sub-ject to parcellation. Still, in some areas, con-solidation of land into larger parcels may haveoccurred. Closer monitoring of parcellationwill be needed to identify national trends clear-ly.

Ownership Objectives

Many local surveys have been conductedwhich reveal landowner objectives, but theresults of such surveys cannot be combined orcompared with statistical accuracy because ofdifferent methodologies. Nevertheless, somegeneralizations can be made about their find-ings:

• PNIF ownership objectives vary widelyboth within and among regions. Ownersin the Southeast appear to be more in-terested in timber production than thosein the North, who are more interested inrecreational and other nontimber uses.Lack of markets in the North may explainpart of this difference.

Ž PNIF owners who harvest timber tend tohave larger parcels of forestland than thosewho do not; hence, the proportion of landheld by owners with timber production ob-jectives tends to be high relative to theirnumbers, and the proportion with recrea-

‘~Hea]j, and Short, Market for Rural Land, Op. Cit., p. 22.

tional objectives tends to be low relativeto their numbers. se

Limited regional data on ownership objec-tives is available for both the Northeast andSoutheast. In a survey of PNIF owners in theSoutheast, 62 percent reported that timbermanagement is very important on the land theyown, but fewer owners (54 percent) actuallynamed timber growing as an important owner-ship objective, Much of the land was notspecifically acquired for timber management,however, and is held for reasons in additionto timber production. For example, over halfof the owners indicated that they had inheritedtheir land and that a highly important reasonfor owning it was to pass it on to their heirs.37

In the Northeast, nearly half of the ownershave forestland simply because it is part oftheir farm or residence or because they deriveesthetic enjoyment from it. These owners, how-ever, hold only about one-third of the region’sPNIF acreage. About 10 percent of the PNIFlands in the Northeast are held for recreationalpurposes and 14.5 percent for investmentreasons. Less than 2 percent of the owners re-port that they hold land for timber production,but they own approximately 15 percent of theacreage .38

Forest Service landownership surveys in theNortheastern and Middle Atlantic States foundthat less than 1 percent of the harvests on PNIFlands were conducted for timber stand im-

ie]ack p, Royer, A Report to the Forest productit’it~r cO~ln~~-

tee of the Forest Industries Councel Highlighting the Findingsof a Ret’ien’ of Non-Industrial Pri~rate Forest Owner Sur~’e~’s,and Assessing the Usefulness of Data from Past Sur\’eys inEvahiating Alternative Proposals for Impro\ing Forest Produc-tivity, unpublished manuscript, Center for Resource and En-vironmental Policy Research (Durham, N. C.: Duke University,School of Forestry and Environmental Studies, 1979), p. 16.

iTUnpublished results of the 1981 Reforestation Surve}’ con-ducted by U.S. Department of Agriculture, Statistical ReportingService, Crop Reporting Board.

q8Neal P. Kingsley, “The Northeastern Forest LandownershipStudy,” in Jack P. Royer and Frank J. Convery, eds., IVon-lndustriaf Private Forests.’ Data and information Needs Con-ference Proceedings (Durham, N. C,: Duke University School ofForestry and Environmental Studies, April 1981], p. 90.

176 ● Wood Use: U.S. Competitiveness and Technology— —- — —

provement purposes. Only 9 percent of theowners have ever received any kind of forestryassistance, 39

Similar but more explicit findings come fromthe Southeast. For instance, on lands fromwhich pine has been cut, the most commonharvest method was partial cutting, a practiceresulting in site conditions that are suboptimalfor pine regeneration. On 80 percent of the har-vested lands, no site preparation practices(readying the land for reforestation) were car-ried out, and 65 percent of the lands were notplanted or seeded with pine but left to reforest

themselves naturally. As a result, these landsprobably will be restocked eventually withhardwood or mixed pine/hardwood stands ofrelatively low timber value. Eighty percent ofthe lands in the sample were not covered byforest management plans.40

These statistics would be more illustrative ifthey could be compared with similar data forother ownerships, but such information is notavailable. They do suggest, however, that PNIFowners as a whole in the Southeast are not tak-ing active steps to perpetuate their supplies ofpine.

sgKingsley, “Northeastern Forest Landownership Study,”op. cit., pp. 91-92. w(J 11 ~)ub]ishe~ results of the 1981 Reforestation SU rvey.

Factors Affecting Implementation of Intensive Timber Management

Timber growth trends, while favorable, could coast has the highest productive potential (97be increased dramatically through intensified f t3/year), although actual growth in 1976management. Net annual growth on all com- reached only about half that, The South has themercial forestland in the United States in 1976 next highest potential (77.3 ft3/year), with ac-was about 60 percent of the estimated produc- tual growth the highest for any region (74 per-tive potential if all forests were in well-stocked cent of potential) (table 34 and fig. 30).natural stands. Among regions, the Pacific

Table 34.-Average Net Annual and Potentiala Growth per Acrein the United States, by Ownership and Section, 1976 (cubic feet)

All National Other Forest Farmer andItem ownerships Forest public industry other private

NorthCurrent . . . . . . . . . . . . . . 35 43 36 44 33Potential. . . . . . . . . . . . . 66 63 59 74 66

SouthCurrent . . . . . . . . . . . . . . 57 57 54 60 56Potential. . . . . . . . . . . . . 77 71 71 83 77

Rocky MountainCurrent . . . . . . . . . . . . . . 29 30 25 50 25Potential. . . . . . . . . . . . . 60 64 55 74 51

Pacific coastCurrent . . . . . . . . . . . . . . 49 30 53 80 62Potential. . . . . . . . . . . . . 97 91 88 119 99

United StatesCurrent . . . . . . . . . . . . . . 45 35 42 59 45Potential. . . . . . . . . . . . . 74 74 68 87 72

apOtenti~ ~ro~rh is defln~ ss the average net growth attainable in fully stocked natural stands. Much hi9her 9rowth canbe attained in intensively managed stands.

SOURCE: An Ana/ysLs of the TknbarSltuat/on in the Lhlted States 1952-20.3U~ashington, DC.: U.S. Department of Agriculture,Forest Service, 19S2), p, 137.

———

Figure 30.— Current and Potential Net AnnualGrowth per Acre by Sectiona

North

South

Rocky Mountain

Pacific coast

Current 1976

Potential

I I Io 25 50 75 100

Cubic feet

apotent~al gro~h IS defined as the average net growth attainable in fully ‘twked

natural stands Much higher growth can be attained In intensively managedstands

SOURCE U S Department of Agriculture. Forest Service, An Analysfs of fheTmber Sifuat/on In the United States 1952-2030 (Washington, D CU S Government Printing Office, 1982), p 137

Historical evidence suggests that dramaticgains in productivity could be made withmodest improvements in the intensity of timbermanagement practices .41 The rate of improve-ment would depend on two factors—the timerequired for wood output to be increased as aresult of management investments and the rateat which landowners are willing and econom-ically able to intensify forest management.Because of the lag time between managementinvestments and resulting yields, the full im-pact of intensification measures begun imme-diately would not be attained nationwide un-til after 2000 and probably would not peak untilafter 2030.

Through cooperative Federal, State, andprivate programs, most U.S. forestland is nowmanaged extensively to control wildfire andlimit damage from insects and disease. About1.4 billion acres of forest, rangeland, and otherrural land are now under organized fire pro-tection. The total area of commercial forestland

“R. Fisher, “Productivity in Florida’s Third Forest, ” }ournafof Forestry. VO]. 79, 1981, pp. 613-615.

Ch. VI— The Forest Resource Base ● 177————.

burned by wildfire has decreased significant-ly since the early 1950’s, in part because moreland is now protected. Successful control andsuppression of wildfire almost certainly hascontributed much to improved growth trendson private nonindustrial lands.

Intensive timber management is applied cur-rently on only a small portion of U.S. forest-land, but apparently its use is spreading, Mostof the practices now applied involve plantingtrees or seeding harvested areas with commerc-ially desirable species, primarily softwoods,and intermediate stand treatments, primarilyprecommercial thinnings and release/weeding(see ch. V for a discussion of managementpractices).

Artificial regeneration of stands has in-creased steadily on forest industry lands sincethe early 1950’s as well as on public lands,although to a lesser extent. Planting of PNIFlands reached an all time high in the late 1950’sand the 1960’s as a direct result of the Federalsoil bank program, now defunct, which paidfarmers to plant trees on cropland to conservesoil and reduce grain surpluses. Intermediatestand treatments on all ownerships reached ahigh point in 1968, having fallen off subse-quently. Figure 31 and table 35 show estimatedannual acreage treated by ownership and re-gion. Current levels of tree planting andseeding on all PNIF lands are less than half thelevels of the soil bank era.

The first systematic evaluation of the possi-ble effects of cost-effective management wascompleted in 1980 by the Forest ProductivityProject of the Forest Industries Council. Thisproject developed detailed estimates of theeconomic potential for increasing timbergrowth, by ownership, in 25 States that con-tain about 80 percent of the commercial forestsin the United States,

The Forest Industries Council study esti-mated that profitable management opportuni-ties could be undertaken on 139 million acresof commercial forestland in these 25 States ifthe minimum rate of return was 10 percent,The Forest Service, using a 4 percent return-on-investment criteria, estimated that 168


2

1

Figure 31 .—Area Planted and Direct-Seeded, 1950-78 (million acres)

United States

North

By section

2

1

Rocky Mountain

2

1

By ownership

National Forest

2

1

0

2

1

South

1950 1960 1970 1980

2

1

Other public

.

0 I

2r Farmer and other private

1950 1960 1970 1980

SOURCE: U.S. Department of Agriculture, Forest Service, An Arra/ys/s of the Thnbar Sltuat/on in the Un/fed States 1952-2030 (Washington, DC.: U.S. Government Print-ing Office, 1982), p. 229.

— —

Ch. VI—— The Forest Resource Base ● 179.— .

Table 35.—Area Planted and Direct-Seeded in the United States,by Section and Ownership, 1950-78 (thousand acres)

— — . —Section

137164191212236

242235258285283

308302270270269

268265245281250

225271211195168

249184160233

United RockyYear States North South Mountain

1950 . . . . . . .—

488 -

1951 . . . . . . . . . . . 4531952 . . . . . . . . . 5201953 . . . . . . . . . 7101954 . . . . . . . 808

1955 . . . . . . . 7791956 . . . . . . . . . 8861957 . . . . . . . . . . 1,1381958 . . . . . . . . 1,5331959 . . . . . . . . . . . 2,117

1960 . . . . . . . . 2,1001961 . . . . . . . . . 1,7611962 . . . . . . . . . . . 1,3661963 . . . . . . . . . . . 1,3251964 . . . . . . . . . 1,313

1965 . . . . . . . . . . 1,2851966 . . . . . . . . . . 1,2811967 . . . . . . . . . . . 1,3731968 . . . . . . . . . . . 1,4391969 . . . . . . . . . 1,431

1970 . . . . . . . . . . . 1,5771971 . . . . . . . . . . . 1,6671972 . . . . . . . . . . . 1,6471973 . . . . . . . . . . . 1,7211974 . . . . . . . . . . . 1,576

1975 . . . . . . . . 1,9001976 . . . . . . . . . . . 1,8581977 . . . . . . . . . . 1,9421978 . . . . . . . . . . 2,072

285245250420506

482574782

1,0801,642

1,5671,205

816798756

708696769795808

9251,0021,0141,0511,037

1,2691,1721,3011,245

1515151717

5777

13

1418273742

6469656973

7084688165

73765774

Pacif iccoast

5229636049

517091

161179

212235253221246

245251294294300

357310354394306309426424520

NationalForest

4546505354

56618589

112

134163198221208

233237257269257

261267268299272

293292257296

owne rsh ip

Other Forestpublic industry

54 15349 10667 14389 21770 265

72 23984 25786 311

119 370123 417

130 521140 588151 443151 467161 485

136 455144 475132 527128 604127 681

131 763124 895114 828123 879116 836

138 1,059135 1,040120 1,138124 1,145

Farmerand other

private

237253260352419

413484657955

1,465

1,315870573486460

461425457437367

422381436420352

410391427507

SOURCE An Ana/y.sIs of the T/rnber S/tuafion(ri the Un/fed Slafes 19522030 (Washington, DC US Department of Aynculture Forest Service 19821 p 231

million acres in the same 25 States presented“economic opportunities” for management (na-tional forest land was excluded). Capital re-quirements for taking advantage of all of themanagement opportunities identified in thetwo studies would be high, both in aggregate($10 billion to $15 billion nationwide) and ona per-acre basis.42

Most of the opportunities identified involvedestablishing and maintaining softwood speciesin the East, primarily on private nonindustrialforestlands and often at a cost of more than$l00 per acre (table 36). Less costly manage-ment opportunities (such as management of ex-isting hardwood stands to optimize growth)

4 2 A11ajJ,5;,S of the Tjmber S i t u a t i o n , op. ci t . , p. 248: alldF1ore\t ries Industry Council, F’orest Productivity’ Report, p. 46.

received less attention. Planting softwoods onidle fields also is less expensive than standregeneration on harvested sites, but this toowas not emphasized in the two studies, whichwere conducted prior to 1983 cropland set-asides.

Many factors are believed to influence pri-vate landowners’ management decisions, andthe most important ones seem to be closelyrelated to potential return on the managementdollar .43 Other factors such as tract size andownership tenure also are believed to be influ-ential, especially on PNIF ownerships. In ad-dition, there is evidence that timber manage-

4S L:,s, IIt}[lil rtl~lCnt of Agric ult II re, Forest Ser~i(:e, Economi([~{)porfunitics to Increase ,$off~$rood Produ[:tion on Foresf I,ands,k.ol. 11 ( 1 n~’est rnents) (lVasl~ i n gton, D .C.: USDA Forest Ser\’ i(:e,1981 ).

180 ● Wood Use: U.S. Competitiveness and Technology—. — ——— .————————————

Table 36.—Costs per Acre of Achieving Management Opportunities Identified bythe Forest Service and the Forest Industry Council

Acres Total cost Per acre(million) (million dollars) (cost) -

Forest Service:Reforestation/stand conversion . . . . . . 121.5 $13,525 $111.30Stocking control . . . . . . . . . . . . . . . . . . . 46.7 1,569 33,60

Forest Industry Council:Harvest and regeneration . . . . . . . . . . . 48.2 4,072 84.50Stand regeneration. . . . . . . . . . . . . . . . . 16.4 1,872 114.15Intermediate stand treatment . . . . . . . . 38.3 756 19.74Stand conversion . . . . . . . . . . . . . . . . . . 33.3 3,353 100.69Plant idle cropland . . . . . . . . . . . . . . . . . 2.6 81 31.15

SOURCES Foresl Industries Council, Forest Producthdty Report (Washington, DC : National Forest Products Association,1980): An Ana/vsw of the Tknber SItuafion /rI the Unifed States 1952-2030 (Washington, D.C. U.S Department ofAgriculture, F~rest Service, 1982)

ment costs have been rising faster than infla-tion since the late 1960’s.44

Markets

Uncertainty about future timber markets isperhaps the single greatest deterrent to inten-sified timber management, since investmentsneed to be made decades in advance of harvest.Limited markets are an especially importantconstraint on private nonindustrial forests ofthe North, where the majority of stands sup-port low-grade hardwood stands that historical-ly have been in low demand. New manufac-turing processes (such as waferboard plants)have improved markets for such materials insome areas. Expanded hardwood markets, par-ticularly opportunities to sell lower grade,small-size hardwood timber, could stimulate in-vestment in the conversion of less profitablehardwood stands to more valuable softwoodsor could lead to improved hardwood manage-ment. Increased fuelwood consumption alsocould encourage such stand improvements ifproperly undertaken. Since only a small per-centage of fuelwood harvesters seek profes-sional advice, fuelwood removals probably arenot improving existing stands appreciably.

Stumpage Prices and Market Structure

PNIF owners respond to increases in stump-age prices by making more of their timber

“J. Moak, W. Watson, and P. Van Deusen, “[;osts and CostTrends for Forestry Practices in the South, ” Forest Farmerhfanua], 1981, pp. 58-63.

available for harvest. 45 46 47 Seventy-three per-cent of PNIF owners surveyed in the Southeastsaid that they harvested their timber becausethey were offered a good price, while the sec-ond most important reason was that the tim-ber had reached maturity.48

Stumpage prices also influence the propen-sity of landowners to manage their timber,although the effect is less clear. Among PNIFowners in general, a poor market usually is notconsidered a serious land management prob-lem.49 However, landowners who see timberproduction as an important priority responddifferently, For example, nonindustrial mem-bers of the American Tree Farm System (anindustry-sponsored program providing recog-nition and information to landowners) said lowstumpage prices more often than any other var-iable discouraged them from managing theirtree farms more intensively. 50 51

%lark S. Birddey, Timber Supply From Private Non-IndustrialForests, A Macroeconomic Analysis of Landowner Behavior,Bulletin No. 92 (New Haven, Corm.: Ya]e University, 1981), p. 78.

~Roger A. Sedjo and David M. Ostermeier, Policy A]terna tivesfor Non-Industrial Private Forests, report of the Workshop onPolicy Alternatives for Non-Industrial Private Forests [Washing-ton, D. C.: Society of American Foresters and Resources for theFuture, 1978], p. 22.

iTClawson) The Economics of U.S. Nonindustrial private

Forests, op. cit., p. 187.48U11pub]ished results of the 1981 Reforestat ion Survey.iest(lneland Research, ‘‘A Study of Private Woodland OWner-

ship in the U.S.,” report prepared for American Forest Institute,Washington, D. C,, September 1974, p. 11.

~OArnerican Forest Institute, ‘‘Profile of a Tree Farmer, TreeFarm News, February 1973, p. 4.

‘lAmerican Forest Institute, “Tree Farm Survey Yields In-teresting Data, ” Tree Farm News, summer 1979, p. 3.

———


PNIF owners in many areas are at a disad-vantage in the marketplace because there arerelatively few timber buyers. Because of thehigh ratio of transportation cost to wood value,markets for many tree species and grades oflogs are highly localized and may be monopo-listic in some respects, often with only one ortwo purchasers.

Information

PNIF owners often know little about currentwood prices, volume estimation techniques,and other aspects of stumpage sales. Thus,many owners have little chance or ability toinfluence the price they receive for their woodother than electing not to sell. PNIF owners insome areas are seeking more professional as-sistance and getting better prices as a result,52

but they are exceptions to the rule.

In addition, owners also may not knowenough about potential yields, market charac-teristics, and timber prices to make good deci-sions about investing in intensive forest man-agement. Computerized information programsmay be an important solution to this problem.The Tennessee Valley Authority [TVA), for ex-ample, has developed a software program us-able in personal computers that can facilitatetimber management decisions (see box I), TVAalso is training consulting foresters as part ofan outreach effort to expand the use of this tool.Plans by USDA to place computers in countyextension offices could broaden the use of suchsystems.

Length of Ownership

The private nonindustrial forest owner typ-ically owns a parcel of land for a relativelyshort time. According to the Forest Servicereport, The Private Forest Land Owners of theUnited States, more than one-fifth of all privateforests were acquired by the present owner be-tween 1970 and 1978, while another 20 percentwere acquired between 1960 and 1969, In con-trast, only 27 percent of the commercial forest

szPersona] communication with J, E. Carothers, I,ouisiana TechUniversity, Aug. 2, 1982.

area was owned by the present owner for atleast 30 years,53 These estimates include forestindustry land, which tends to be held for longperiods of time. Transfer of ownership onPNIF lands, therefore, may be more rapid.

Tenure may be slightly longer for landswhose owners name timber production as amajor objective, but the difference does not ap-pear to be significant. PNIF owners as a wholeacquired their land somewhat more recentlythan did members of the American Tree FarmSystem, according to one survey, but 24 per-cent of American tree farmers still have ownedtheir property less than 10 years .54

Short tenures may have a beneficial effect ontimber harvest, since owners who are reluctantto harvest soon may be replaced by newowners with new objectives. However, therapid transfer of forest real estate from oneowner to another may complicate efforts to in-crease the intensity of PNIF management.Most private forestland is held in a singleownership for less than 30 years—the mini-mum amount of time required even in theSouth for a stand to reach maturity. It is uncer-tain whether new owners in general continuemanagement efforts begun by the prior owner.

Tract Size

various studies show that owner inclinationto harvest timber correlates with parcel size.The larger the holding, the more likely it is thatthe owner will harvest timber from it, Accord-ing to one researcher, “A shift in the distribu-tion of parcel size to small holdings will, all elseequal, lead to less timber supplied,”55 E v e nwhen owners of small parcels want to harvest,small-scale logging may be unattractive to largebuyers because of the high cost of movingequipment from one logging site to the next,Cooperat ive management approaches andsmall-scale machinery can alleviate this prob-lem.

ssBirch, Lewis, and Kajser, The Private Fores tland @ners of

the United States, op. cit., p. 38,‘American Forest Institute, “Profile of a Tree Farmer, ” op. cit.55B inkley Tim ~r supply Fmm }+-iva te Non-In dustrial Forests,

op. cit., p, 79,


Box I.—Information Technology and Forest Management

Computer technology can assist forest managers in several ways through easy storage and rapidretrieval of data, development of management strategies for forestland at various geographic scales,and education and training for foresters, landowners, and decisionmakers.

Computerized information systems have been used by the Forest Service in developing in-dividual forest plans (FORPLAN) as well as in modeling long-range forest needs. The Forest Infor-mation Retrieval System (FIR) administered by the Southeastern Forest Experiment Station hasfor many years provided landowners, industry, and government with easily retrieved, low-costdata at the local, State, and regional levels. The system is commercial and users pay for informa-tion retrieved.

With the advent of the microcomputer, personal computers, and associated software programs,computers may now facilitate PNIF management operations. Several forest management softwareprograms now are commercially available. One of the leaders in the development and applicationof computer technology to forest management is TVA, a public corporation established by theFederal Government in 1936. TVA has developed a software program (WOODPLAN) that com-bines forest management and business administration that can be used in personal computers.

WOODPLAN programs now available permit users to process timber inventory data into stand-ard stock tables, to forecast yields according to alternative management strategies, and to predictpotential lumber yields and corresponding value based on current prices. Financial analysis pro-grams, as well as a “caretaker program” which will store, retrieve, and process information forclients of consulting foresters, facilitate management decisions.

The WOODPLAN program plays an important role in an innovative cooperative effort by TVA,the Forest Service, and the Association of Consulting Foresters to establish self-employed consultingforesters in the region. About 10 consulting foresters have been setup in business since the pro-gram was established. TVA presently guarantees work to these foresters during their first 3 yearsof business to help them get started.

Distribution of the WOODPLAN program has been facilitated through the establishment ofForest Service and State forestry agency computer terminals in central locations in several States.TVA intends to charge for the program in time. The program is offered by at least one commercialfirm.

National and regional data comparing man-agement intensi t ies by tract s ize is notavailable. However, a similar relationship prob-ably exists. Owners of smaller tracts probablyare less likely to manage their land than ownersof larger tracts, although there is no data to sup-port this hypothesis. Management of smalltracts often is relatively more expensive thanlarge tracts, because it lacks economies ofscale. The Forest Service estimates that the per-acre cost of site preparation and planting, pre-commercial thinning, and removal of trees can

be two to five times higher on a lo-acre parcelthan on a 160-acre parcel.56

Financial Considerations

The peculiar economics of PNIF manage-ment often have been singled out as a majorroadblock to improved productivity. Specifical-ly, investment requirements or costs of man-

‘U, S, Department of Agriculture, 7%e Fe~eral Role in the Con-servation and Management of Private Nonindustrial Forestlands,op. cit., p. 20.


agement often are high—as much as $100 to$200 per acre for stand establishment–andcash returns cannot be expected for at least15 years. This lack of immediate or regular in-come may discourage PNIF owners, especial-ly those who may not be able to realize a returnwithin their lifetimes. In addition, investmentsin timber management are illiquid and riskydue to potential damage from fire, insects, anddisease.

Also, capital sometimes has not been readi-ly available for PNIF management, but thisdearth may be improving as forestland be-comes more valuable. Although data on forest-land prices is fragmentary, anecdotal evidencesuggests that in many areas forest prices in-creased even more rapidly than farm prices,which rose 900 percent between 1950 and 1977before tapering off recently .57

Increased land values, coupled with finan-cial incentives (such as low-rate long-termloans with no payback penalty offered to PNIFlandowners by Federal Land Banks) permitlandowners to use their timberlands for col-lateral. Federal, and in many cases State, taxcodes also give preferential treatment to timberacreage. In addition, limited assistance hasbeen offered to PNIF owners through Federalprograms such as the Agricultural Conserva-tion Program and the Forestry Incentives Pro-gram, although funding for these programs cur-rently is uncertain.

Insurance companies, banks, and other com-mercial investors are showing interest in own-ing and managing PNIF lands, especially in theSouth. 58 The E. F. Hutton Group, which has ac-quired, managed, and sold timber in the South-east since 1979, bought 40,000 acres of south-ern forestland for commercial management in1981. The First National Bank of Atlanta’s“Collective Timberland Fund” is an interme-diary for pension funds and for other investorsin managed commercial forestlands. Since

~pH~a]y and short, Market for Rural Land , op. ci t . , p. 9.

SeSee, for exa mp]e, E, F. Hutton & Co., Inc. HU tton STouthernTimber Partner 1: Prospectus, Oct. 30, 1981; and The First Na-tional Hank of Atlanta, Timberland, A Growing Investment Fromthe Ground Up, May 1, 1981.

these companies do not operate mills, they arenot classified as part of the forest productsindustry.

Federal and State Programs forPrivate Forestland Management

Federal and State tax policies offer preferen-tial treatment to timberland owners. Federaltax incentives that make timber managementmore attractive to private investors include thecapital gains treatment of timber income, thedeductibility of some reforestation costs, thepreferential valuation of forestland for estatetax purposes, and the deductibility of timberlosses (see box J). Many State governments alsoprovide preferential estate tax treatment andhave established preferential assessment of for-estland for property tax purposes.

The Federal provision allowing capital gainstreatment of timber income entails a greatersubsidy to timberland owners than all otherFederal programs combined, but does not re-quire that tax savings be used for managementactivities. Although the favorable tax treatmentof timber income probably has encouragedmanagement intensification, its direct effect oninvestments is difficult to establish, due to theirlong-term nature and many other factors. An-other Federal tax provision, adopted in 1980,allows a deduction for reforestation expenses,up to a maximum of $10,000 annually undercertain circumstances.

Several Federal programs to provide infor-mation, technical help, and direct cost-sharingassistance to private landowners have beenestablished over the last 50 years. These pro-grams are administered by several USDA agen-cies besides the Forest Service, including theSoil Conservation Service, the AgriculturalStabilization and Conservation Service, and theCooperative Extension Service. Most funds gothrough the Forest Service to State forestryagencies for subsequent dispersal, althoughsome USDA agencies administer forestland as-sistance through general agriculture programs.

The most important cost-sharing program isthe Forestry Incentives Program (FIP), which


Box J.-Federal Tax Incentives to Timberland Owners

Capital Gains Treatment of Timber Income-Under the current IRS Code, gains on the saleof timber maybe treated as capital gains rather than as ordinary income—a provision favored bythe forest products industry and timberland owners since capital gains are taxed at a lower ratethan ordinary income. Capital gains treatment makes timber growing more lucrative, althoughthere is no requirement that owners spend tax savings on management investments. By one estimate,funds available to one subsector of the forest products industry for investment in timberlands andplants and equipment would have been 5 to 7 percent less between 1971 and 1978 if the capitalgains provision did not exist.59 If timber-growing alone were the sole purpose of the capital gainsprovision, however, other tax options (such as investment tax credits) would be a more direct routeto assure that Federal tax expenditures were contributing to management. Current Federal revenuesforegone because of the provision are about $500 million per year, two-thirds of which goes to cor-porations, one-third to individuals.

Deductibility of Reforestation Costs—In 1980, Congress amended the IRS Code to permit“above the line” deductibility of certain reforestation expenses-up to a maximum of $10,000 an-nually under certain circumstances-with associated limited income tax credits. Under the amor-tization schedule established by the 1980 law, a landowner needs to incur reforestation expensesof $10,000 per year for 7 years before the maximum deduction can be taken. Although directlylinked to reforestation expenditures, this tax provision is not likely to affect significant acreagesince it currently covers reforestation costs of about 100 acres per landowner (assuming $100 peracre in costs). Current Federal tax expenditures accruing from the program are $20 million to $30million per year-about 200,000 to 300,000 acres, assuming $100 per acre reforestation costs. Mostof these benefits now go to corporations, but the individual share is expected to increase in thenext 2 or 3 years as noncorporate owners become more aware of the program.

Federal Estate Taxes-Several provisions in Federal estate tax law benefit people who inheritforestland. Heirs are exempt from Federal estate taxes on gains in property values realized priorto forestland inheritance. The provision eases tax burdens on those who harvest inherited timber,and in theory it makes more money available to landowners for post-harvest management. Estatetax payments may be spread over a l0-year period if forest property comprises 35 percent of theestate’s value and therefore may discourage premature cutting of timber stands to pay taxes.Forestland maybe assessed for estate tax purposes according to its current use rather than forits market value-a provision which also theoretically removes incentives to prematurely cut timber.The requirements for use of this benefit are strict, however, and are thought by some to precludeits widespread use.

Casualties, Thefts, and Condemnations-Deductions are permissible for timber losses dueto fire, storm or other casualty, theft or condemnation by a public agency if the timber is notsalvageable and not covered by insurance. Although not a tax provision, the Federal Crop InsuranceAct of 1980 (Public Law 98-365) authorized a pilot program related to insurance against risks andlosses associated with forest industry needs (including appreciation). The initial pilot program isnot expected to begin until late 1983.

qo~ph E, ~er, ~ ~o, &onomjc Cimskkrations Re&Jting to (kpjti~ @ins Taxation of T~ber Income, mPort P-*for Forest Industries Committee on Timber Valuation and Taxation, Stanford Research Institute, September 1981, p. 58.

is jointly administered by the Forest Service assistance was delivered for timber stand im-and the Agricultural Stabilization and Conser- provement and reforestation on about 2.2 mil-vation Service. Between its 1973 inception and lion acres of private forestland. FIP assistance1981, some $88.8 million in FIP cost-sharing is restricted to owners of between 10 and 1,000

Ch. VI—The Forest Resource Base ● 185— —

acres (5,000 acres under certain circumstances)and to sites capable of producing 50 ft3/acre an-nually in natural stands.

A recent evaluation of the FIP program bythe Forest Service and the University of Min-nesota concluded that the program has gainedin efficiency over time.60 The average size oftracts has increased and 70 percent of thetreated acres in 1979 were on timberlands ca-pable of producing 85 ft3/acre/year in naturalstands. Nonetheless, most of the treated sitesin 1979 were small (41 acres for reforestationand 31 acres for timber stand improvement),and about 6 percent of the acres treated in 1974had not been retained by the owner through1981, Several States have established their ownforestry incentives programs since FIP wasenacted. The Reagan administration, in itsfiscal year 1984 budget proposal, has requestedthat Congress consolidate FIP with the Agri-cultural Conservation Program and has soughtno funds for FIP.

Three 1978 enactments—the CooperativeForestry Assistance Act (Public Law 95-313),the Renewable Resources Extension Act (Pub-lic Law 95-306), and the Forest and RangelandRenewable Resources Research Act—placedadditional emphasis on technical assistance,research, education, and information programsfor private forestry. These programs have thepotential to reach more landowners than directcost sharing, but funding has been limited, es-pecially for education and information. In ad-dition, several Federal environmental lawshave direct and indirect effects on timbermanagement on private lands (see box K).

For many years, State governments have pro-vided forestry-related technical and informa-tion services to forest land owners, as well asfire suppression and other extensive manage-ment assistance. Currently, these programs aresupported by the Forest Service’s Rural For-estry Assistance Program.

— .fl[~(; 11 r i ~t( )J)}lt, 1, 1) K I s]] rll{it a [l{i ~’~1]1 \’. ~~1 lof s[)11, .-~ r] E( ofIoIII”;(

Et aluation f)r (I]f: 1979 ~“f~restr}’ ln(j(’r]tj~f’ Progrijrn ( S t . I)auljhlinrl [ Trlii(’rslty of h! i[l ncsota, A~ri(.lllt(lrtil [ixljt’rim(?nt St,]-tlorl 55(1, 19831

Recently, State legislatures have expandedforestry-related activities. A 1981 survey by theNational Conference of State Legislaturesfound significant modifications in State pro-grams during the 1970’s61 (table 37). State pro-grams at the end of 1981 included:

●

●

●

●

●

preferential forestland tax treatment in atleast 22 States;six cost-sharing programs, either inde-pendent of or supplemental to the FederalForestry Incentives Program;15 State forest practices acts that regulateharvesting activities, environmental prac-tices or reforestation;other initiatives designed to retain forest-land in productive use; andforestland retention Provisions of variouskinds.

Most of the State programs are intended toencourage timber production and manage-ment. Some State forest practices acts, how-ever, have more complex objectives, includingenvironmental protection which in some in-stances may have negative effects on inten-sified forest management. California’s law(California Public Resources Code Division 4,ch. 8), which is the most stringent, is believedby some to actually discourage timber manage-ment, even though one of its goals is to improveit, because of high compliance costs. One ana-lyst makes informal estimates of $10 to $40 perthousand board-feet for addit ional costsresulting from implementation of practices re-quired by law and concludes, “ . . . it seemsquite unlikely that the costs associated withrule requirements are likely to have much ef-fect on the magnitude of operations, except ina limited number of marginal cases. Quiteclearly, however, the net returns from timberharvesting to some stumpage owners havebeen significantly reduced. ”62


Box K.—Environmental Regulations and Timber Management

Environmental damage is to some extent unavoidable in timber harvesting and managementactivities, but many of these impacts can be ameliorated through environmentally sound manage-ment. Environmental protection is a key management objective of congressional policy articulatedfor Federal lands. Several recent Federal and State laws related to water quality, air pollution con-trol, and chemical use affect forest management activities on private lands, although often lessdirectly. These laws have been cited as potential barriers to more intensive timber management,but empirical evidence that this is the case is limited to relatively few instances.

Clean Water-Certain provisions of the Federal Clean Water Act (33 U.S.C. 1251 et seq.) affectforestry activities, but to date implementation of these provisions has not substantially impededsilvicultural activities. The act’s section 208-aimed at reducing nonpoint pollution (including thatwhich results from timber harvesting and other silvicultural practices)—has been implemented pri-marily through State level educational efforts and voluntary compliance with forest practice guide-lines. It is not known whether these voluntary guidelines have been widely adopted by PNIF ownersor how widely the guidelines diverge from common practices, but it appears unlikely that timberproduction would be significantly affected by compliance. Some foresters feared that section 404of the act would restrict some practices for crossing streams and forest drainage areas, especiallyin the South where wetlands abound. To date, however, forest managers apparently have beensuccessful in qualifying for exemption from 404 provisions or in obtaining the necessary permitsto conduct forestry operations. The extent to which 404 restrictions may diminish forest produc-tivity or discourage landowners from intensifying management is speculative but appears to beminimal.

Clean Air-Prescribed burning of forestlands is regulated under particulate emission provi-sions of the Clean Air Act (42 U.S.C. 7401 et seq.), and forest management interests have fearedthat these restrictions may impair managers’ ability to effectively use fire as a silvicultural tool.However, OTA found no evidence that burning activity has been significantly constrained. Permitand notification requirements do not appear to be burdensome, and smoke management regula-tions seem to restrict scheduled burning activity only rarely.

Chemical Use-Regulation of chemical uses under the Federal Insecticide, Fungicide, andRodenticide Act (92 Stat. 819-838) is restricting timber management activities in some regions.The most important restriction is a ban on forestry uses of 2,4,5-T, but the effect of the ban onforest productivity is uncertain. Some States’ legal requirements for applicator licensing and watermonitoring, coupled with rising insurance Premiums, may result in higher Costs of chemical ap-plication

Table 37.–Selected State Activities Related to Private Forest Management, 1981

State Cost sharing

Alabama a . . . . . Considered but not adopted

Alaska a . . . . . . . ., Authorization exists butappropriation to date

Arizona ... . . —

Arkansas a . . . . —

no

C a l l f o r n i aa 80- to 90-percent cost-sharing forre fores ta t ion , T imber s tandimprovement and landconservat ion-1 978

Colorado . . . . . . . . . —

C o n n e c t i c u t a . . . . . —

Delaware . . . . . . . . . . —

Florida. . . . . . . . . . Considered but not adapted c

Georgia . . . . . . . . . —Hawaii . . . . . . . . . . . . —

Idaho . . . . . . . . . . . . . —

Illinois . . . . . . . . . . . . Considered and defeated inlegislature 1979 and 1980

Indiana . . . . . . —

Kansas ., . . . . . . . . —

Kentucky a . . . . —

Louisiana . . . . . . . . . Considered but not adopted

Maine . . . . . . . . —

Maryland . . . . . . . . . —

Tax provisions

Fixed assessment rate on landTimber exempted from ad valoremSeverance on t imber

No special tax treatment

Ad valorem with market-valueassessment on forest land andtimber on more than 40 acres

Use value assessment on productivityof forest land. Severance tax ontimber products. Five cents peracre fire protection tax

Use valuation on zoned land; yield taxon severed timbers

Ad valorem tax on land; conditionalexemption of increased value asresult of planting

Use valuation on land; yield tax onland and timber

30-year exemption for establishedcommercial plantation of 5 acres ormore

Forestland valuation based onpotential yield according to siteindex as an annual ad valorem taxon capitalization of net incomeexpected from yield

No special treatment for forest landsUse valuation on land; yield on

severed timber. Private lands underpublic management are exempted

Yield tax on severed timber 61 peracre assessment on land

No special treatment for forestlands

Lands classified as forest are eligiblefor $1 per acre assessment

Use valuation IS authorized but notimplemented

Use valuation on land; standingtimber is Included in land valuation

Use valuation on land; severance taxon timber

Tree Growth Law providesproductivity valuation; standingtimber included with land

Assessment Iimits on classifiedlands; income tax credit beingconsidered

Forest practice acts

Voluntary with recommendedguidelines for nonpolit sourcepollution b

Requires reforestation of allpublic and private harvestedlands; regulates harvestingpractices

—

Retention of forestland—

Authorization exists for retentionof forestland in State ownershipfor multiple use, but no landsdesignated

—

—

Comprehensive regulations tomaintain timberland productivitywater quality, and other values

—

—

—

—

——

Requires reforestation andregulates harvesting practicesb

—

Classified forestlands must meetminimum managementstandards

—

—

—

Land Use Regulation Lawregulates harvesting in shorelands and hazard areas

Forest Conservancy Law and PineReforestation Law

Favorable tax treatment IS

conditioned on timberlandpreserve zoning, permit IS

required to convertEducational program to promote

multiuse

Open-space law provides favorabletax treatment for classifiedtimberland

—

—

—Statewide zoning by land-use

commission provides someprotection

—

—

Tax provision of the ForestClassification Act encouragesretention

—

—

—

—

Forest Conservancy Law and itstax provisions are intended toencourage retention

Table 37.—Selected State Activities Related to Private Forest Management, 1981 (continued)

State Cost-sharing —— Tax provisions Forest practice acts Retention of forestland

Land is taxed at fixed rate; yield taxon severed timber

Classified forestland is taxed at afixed rate; yield tax on timber

Productivity valuation on land plusyield tax at fixed rate on land.Valuation on timber IS at fixed rate

M a s s a c h u s e t t s . . Slash reduction, wetlandsprotection, and harvesting plansare required

—

Forest Tax Law is intended asIncentive for retention

Michigan . . . — —

Minnesota. ... 50-percent cost-share for 7-countyarea administered by Soil andWater Conservation District, 1979

——

and according to managementagreement

Mississippi 75-percent cost-shar ing Program Ordinay Property tax on land; Mississippi forest harvesting law —,.

Missouri a . . . . . . . .

funded by severanc; t“ax ~ith $37per acre limit, 1974

severance tax on timber

Fixed assessment on classified land(voluntary tax law); yield tax ontimber harvested from classifiedland only

Land is assessed by productivity andaccessibility for ad valorem taxes

Related to grassland value

— —

Montana . . . . . . . . . .

Nebraska. . . . . . . . . .

Nevada . . . . . . . . .

N e w H a m p s h i r e

N e w J e r s e ya . .

—

—

—

By executive order, owners musthave State approval for treecutting

Very extensive seed-treerequirements and strictharvesting standards

Several laws regulate timberharvesting techniques

Use value assessment on classifiedland; yield tax on severed timber

Use valuation on land if certified astree farm; yield tax on severedtimber d

Use value assessment base onproductivity

Voluntary wi th recommended

guidel ines for nonpoint po l lu t ionPineland Protection Act Iimits

development and encouragesforestry or agricultural use on1.1 million acres

New Mexicoa . . . . . . Productivity valuation on land; Forest Conservation Act requires—severance and excise tax on timber reforestation, seed tree,

harvesting standards, and fireprevention

Extensive technical assistanceIncluding management planningand timber marking

—

N e w Y o r ka — Tax treatment IS intended toencourage retention andmanagement of forestland

—

Forestland is assessed at a reducedrate; yield tax

N o r t h C a r o l i n aa 6 0 - p e r c e n t c o s t - s h a r i n g o n amaximum 100 acres per yearfunded by pr imary productsassessment and Stateappropr ia t ions, 1978

N o r t h D a k o t a —

Use valuation on land; exemption forstanding timber. Amortization oftimber receipts

Differential valuation in lieu of advalorem taxes on land and timber

Forestland is taxed at 50 percent ofnormal rates, use valuation isoptional

Market valuation on land; ad valoremon timber

Use valuation on land; income taxcredit for reforestationcapitalization of income overrotation; yield tax on timber

——

Ohio. . . . . . . . . . — — —

O k l a h o m a —

Oregon a ... . . . . . . Considered but not adoptedc

Voluntary guidelines developed byforestry committees

Practice Act provides forreforestation, reading,harvesting, chemicals, and slashburning

—

State land-use law requires localuse plans to conform with Stategoals and guidelines

Ch. VI— The Forest Resource Base ● 189———

II

iI II I

APPENDIX

APPENDIX

Glossary of Terms

Baling—The process of compressing pieces ofwood into a dense package or bale,

Best opening face (BOF)—A computer program,developed at the U.S. Forest ProductsLaboratory, that determines the optimum sawingpattern to use on a log to maximize its lumberyields.

Biomass—The total mass, at a given time, of livingorganisms of all species in a natural communi-ty. In this report, biomass is used to describe thetotal mass of woody plants, unless otherwisespecified.

Bleaching—The chemical treatment of pulp to in-crease its brightness.

Bristol—cardboard with a smooth surface suitablefor writing or printing.

Bucked log—A log that has been cut into smallerlengths.

Burst strength—A measure of the ability of a sheetto resist rupture when pressure is applied by aspecified instrument under specific conditions.

Cellulose—The major chemical constituent of plantcell walls; a long chain polymer formed from glu-cose units.

Chemical pulping—The process of obtaining pulpby cooking wood chips in acids, alkaline, or neu-tral salt solutions under pressure and high tem-peratures. This process breaks down the woodstructure and dissolves some or most of the ligninand hemicellulose contents.

Chips—Small pieces of wood used to make pulp.The chips are made either from wood waste ina sawmill or plywood plant, or from pulpwoodspecifically cut for this purpose.

Coated paper—Printing paper that has been coatedwith materials that improve its printability andphoto reproduction.

Cogeneration—The combined production of elec-tricity and useful thermal energy in one process.

Commercial forestland–All forestland capable ofgrowing 20 ft3 of industrial roundwood per acreannually in a natural stand that has not beenwithdrawn from timber harvesting by statute oradministrative action. This designation does notnecessarily imply that the land is currently be-ing used for commercial timber production.

Corn-ply-Flat plywood-like panels or lumber-likepieces with particleboard cores and wood veneerfaces.

Composite lumber–Lumber made from smallwood pieces, usually chips or veneers glued to-gether.

Converted paper products—Paper that has beenconverted to product form, such as envelopes, tis-sues, boxes, cartons, and printing and writingpapers.

Coppice system–A silvicultural system in whichtimber crops originate from cutover stumps fromwhich shoots develop into mature timber. Cop-pice harvesting and growth cycles can be re-peated as long as the supporting root system re-mains sufficiently productive.

Cover crop—A subsidiary crop of low plants in-troduced in the earlier stages of planting to pro-tect the land from erosion and to suppress weeds.

Cull trees—Individual trees which, because of cer-tain defects, fail to meet standards for commer-cial exploitation.

Disking—Cultivating with an implement (such asthat used in farming] that turns and loosens thesoil with a series of disks.

Edge, glue, and rip (EGAR)—A sawing and gluingtechnique that reduces wood loss during millingand permits use of low quality raw materials tomake high-quality lumber-like products.

Feller-buncher tree processors—A self-propelledmachine used to cut trees by shearing them offnear the ground, then move bundles of logsacross the ground surface using a hydraulic ap-paratus.

Fiberboard—Panels composed of wood fibers, usu-ally glued together. They have extremely flat andsmooth surfaces and edges.

Flakeboard—Particleboard with surfaces com-posed of flakes or composed entirely of flakes.

Forage—Edible vegetation available for livestock orwildlife grazing,

Fuelwood—Wood removed directly from the for-ests primarily to burn as fuel (firewood) for resi-dential heating. Fuelwood is one type of “woodfuel”.

Groundwood pulp—Pulp produced by grindingwood between stone surfaces or between sets ofmetallic bars in a refiner.

Growing stock—The net volume of live sawtimberand poletimber trees from the stump to a min-imum four inch top of the central stem or to thepoint where the central stem breaks into limbs.

193

194 . Wood Use: U.S. Competitiveness and Technology—.—— —

This definition includes most wood used by theforest products industry; however some timbersupplies are derived from nongrowing stocksources such as salvageable dead trees.

Hardboard—Flat panels made of individual woodfibers, usually glued together. They are gradedaccording to density.

Hardwood—One of two broad classes of timber,usually characterized in the tree by broad leavesthat fall off each year. Examples include oak, elm,and ash.

Harrowing—Cultivating with an implement setwith spikes, spring teeth or disks used primarilyfor pulverizing and smoothing the soil.

Industrial roundwood—Wood harvested for use asan industrial raw material rather than as fuel.Note: Residues derived from industrial round-wood are often used as wood fuels.

Intensive forest management—A general termused to distinguish active versus passive treat-ment of specific forest sites. As used in this reportit refers to application of planned treatments toforestland to enhance the quality and/or quanti-ty of industrial timber. Management intensityvaries from simple procedures such as thinningof stands for improved growth to complex useof genetic and chemical technologies. Costs of in-tensive management vary accordingly. The tech-nologies used are further described in chapter V.

Kraft—A strong paper or board made from wood-pulp derived from chips boiled in an alkalinesolution containing sodium sulfate,

Lathing—The process of peeling logs to yieldveneer for plywood.

Lignin—The noncarbohydrate, structural compo-nent of wood that encrusts the cell walls and ce-ments the cells together. Its exact compositionis unknown.

Linerboard—Stiff, durable, thick paper made pri-marily from bleached sulfate kraft pulp and usedas a facing sheet on corrugated box material orin material for solid fiber containers.

Log—Any section of the trunk or of the thickerbranches of a felled tree after trimming.

Lumber–Beams, planks or boards produced bysawing logs and used primarily for construction.

Mechanical pulping—The process of producingpulp by use of a machine known as a defibratorin which wood chips from debarked logs arephysically ground or are passed through a mill.

Millwork and molding—Units of wood complete-ly manufactured and assembled ready for puttingin place; doors, window frames, etc.

Multiple use—Any forest management policywhich seeks to simultaneously fulfill several dis-

tinct objectives. In the case of National ForestSystem and Bureau of Land Management lands,these objectives are mandated by law and includerecreation, timber, wildlife, and watershed man-agement.

Multispan logging—A type of skyline loggingwhere the cable is stretched between severalposts or trees.

Naval stores—A wide variety of chemical productsextracted from wood, including pitch, rosin, tur-pentine, and pine oils. The term dates back to thedays when wooden vessels were caulked withpine tar and pitch.

Newsprint—A coarse textured paper of lowstrength and limited durability which is madefrom mechanical or semimechanical pulp, whichuses either hardwoods or softwoods.

Nondeclining even flow-The harvest policy onNational Forest lands which seeks to ensure sus-tained yield in perpetuity without diminishingharvest levels; however temporary departuresfrom this policy are permitted under certain cir-cumstances.

Oriented strand board—Flat plywood-like panelsmade with alined strand or ribbon shaped piecesof wood, sometimes crossbanded (strands in dif-ferent layers oriented perpendicular to adjacentlayers), sometimes veneered.

Pallet—A low wooden platform, sturdy and port-able, on which material is stacked to facilitatehandling and shipping.

Panel product—Any composite wood sheet in-cluding plywood, particleboard, fiberboard, andveneer.

Paper and paperboard—All primary and convertedpaper products including newsprint, printingand writing paper, and paperboard. This termdoes not include waste paper and waste paper-board unless otherwise specified.

Paperboard—A pulp product which is typically stif-fer and thicker than paper; it includes linerboardand corrugated boxes,

Parallel laminated veneer (PLV)—A compositeproduct made of layers of veneer laid with thegrain going in the same direction and united withan adhesive or mechanical fastener.

Particleboard-A general term for flat panels man-ufactured from wood particles which are bondedtogether with synthetic resin or other suitablebinder under heat.

Planing mills—Mills which plane or smooth thesurface of sawn timber.

Platform frame—The traditional American 2 x 4method of building a house.

Plenum system—An underfloor wood construction

.—

Appendix: Glossary of Terms ● 195. . . -—

heating/cooling system in which air pressure isbuilt up under the house, pushing air into therooms of the house without using ducts.

Plywood—Flat panels, usually 4 ft by 8 ft and lessthan 1.5-in. thick, consisting of laminated hard-wood or softwood veneers. The grain directionof each ply or layer is usually at right angles tothe ones adjacent to it. The veneer sheets arejoined, under pressure, by a bonding agent.

Press drying–A new papermaking technologywhich both reduces the amount of energy re-quired in the papermaking process and enablesthe greater utilization of some hardwood species.

Primary paper products—All paper and paper-board except converted products; includes liner-board, newsprint, etc.

Productive deferred forestland—Land that hasbeen temporarily withdrawn from timber utiliza-tion pending government action,

Productive reserved forestland—Productive publicforestland withdrawn from timber utilizationthrough statute or administrative action.

Pulp—A processed wood fiber in which varyingamounts of lignin have been removed in prepara-tion for making paper.

Pulping liquors—A general term which refers tothe different chemicals used in the pulping proc-ess. “White Liquor” is the original sodium sulfideand sodium hydroxide solution. “Black Liquor”is the liquid rich in lignin salts and other organicsremoved from wood in the pulping process. Thesalts remaining after the water is removed andthe remaining viscous solution is burned in a re-covery furnace (mostly sulfides and carbonate ofsoda) form a molten stream known as smelt andare recombined with water to form “GreenLiquor. ”

Rayon—A synthetic fiber made primarily fromwood by the viscose process using pure celluloseproduced by the dissolving pulp process. Itsproperties are similar to those of cotton.

Roadless area review and evaluation (RARE)–An administrative review of national forests toidentify potential wilderness areas for congres-sional consideration. There have been two suchreviews, RARE I and RARE II.

Roundwood—Logs, bolts, or other round sectionscut from trees.

Saw, dry, rip (SDR)—A process which allowsgreater use of hardwoods for lumber manufac-ture by reducing their tendency to warp and de-form.

Sawlines—The lines or cuts that a saw followsthrough the wood.

Sheathing—A wooden covering laid over the ex-terior framework of a structure for attachmentof roofing and external wall coverings; often con-sists of particleboard and plywood.

Silviculture—The science and art of cultivating for-est trees by tending, harvesting, and replacingthem in a way which results in the planned pro-duction of tree crops.

Skidding–A loose term for hauling timber bysliding it along the ground,

Skyline logging–A method of power cable loggingin which a heavy cable is stretched between up-right supports, the whole functioning as an over-head track for a log carrying trolley.

Softwood—One of the two broad classes of timber,usually characterized in the tree by needlelike orscalelike leaves that persist year after year. Ex-amples include Douglas fir, hemlock, pine, andspruce.

Solid wood products–All wood products exceptpulp, paper, paperboard, and derived products.

Stand regeneration—The establishment of a newtimber crop. The three major regeneration meth-ods are planting, seeding, and natural regener-ation.

Stocking—The extent to which forestland is oc-cupied by trees of specified classes. Classifica-tion of forestland and forest types are based onstocking of all live trees. Classification of condi-tion classes are based on stocking of desirabletrees.

Stumpage—Uncut standing timber.Sustained yield management—Silvicultural sys-

tems designed to achieve perpetually a continu-ing balance between forest growth and harvest.

Tariffs—An official schedule of taxes imposed onimported and less commonly exported goods,either in the form of a percentage of their valueor as an amount per unit of measure.

Tensile strength—The capacity of a body to sus-tain equal and opposite forces tending to length-en it in that direction. In wood, tensile strengthis high along the grain and low across it,

Thermomechanical pulping—In this process woodchips are continuously fed into a steam heatedchamber with mechanical separation of the fiberstaking place at high temperatures.

Traditional quotas—Formal quantitative limitsplaced on imports.

Truss framing—A method of homebuilding basedon braced framing designed to transfer structuralloads to the supports.

Veneer—A thin sheet of wood of uniform thickness,produced by rotary cutting, slicing, or sawing.


Waferboard-Flat panels made with wafers or largechips of wood glued and pressed together;generally used in structural sheathing.

Waste paper—Paper or paperboard collected forreuse either as raw material for new paper andpaperboard or as a fuel,

Wilderness—Federal lands designated by Congressunder The Wilderness Act of 1964 and subse-quent legislation for protection and managementto preserve natural conditions. wilderness areasgenerally show little evidence of human activi-ty, provide outstanding opportunities for primi-

tive and unconfined recreation, are at least 5,000acres or more, and have important scientific, ed-ucational, scenic, or historic values.

Wood fuel—Any wood or wood derived source offuel including fuelwood (firewood), byproductsof wood processing and manufacturing subse-quently used as fuel, and specially processedwood products specifically made for use inenergy production.

Woodpulp—pulp manufactured from either soft-wood or hardwood trees either by mechanicalmeans, chemical means or both,

Index

—

Index

Africa, 54, 56, 57agricultural land, diversion of forestland to, 11Alabama, 127Alaska, 51, 124, 150, 165, 168American consumption, 73, 75, 82, 88-94American Forestry Association, 32American Paper Institute, 63, 160American Tree Farm System, 180, 181Argentina, 60Arizona, 165Arkansas, 127, 154Association of Consulting Foresters, 182Australia, 59Austria, 125

balance-of-payments deficit, 15, 49, 66base level forecast, 14Brazil, 8, 9, 13, 50, 55, 62, 146, 147

California, 123, 169, 173, 185California Public Resources Code, 185Canada, 3, 8, 9, 13, 15, 36, 49, 51, 52, 54, 55, 56, 57,

58, 59, 61, 68, 124, 128, 132, 146, 147Canadian advantage, 13Canadian Department of External Affairs, 128Carter administration, 167cellulosic fiber industry, 74, 86Chile, 56, 59, 60, 62China, Peoples Republic of, 13, 56, 59Clawson, Marion, 156clearcutting, 109, 110commercial forestland, 148, 149, 150, 151, 152, 154,

155, 156, 158, 164, 165, 166, 169, 172commercial thinning, 114, 115, 171commercial timber production, 4Corn-Ply, 134computer technology, 182Congress:

House Subcommittee on Forests, Family Farms,and Energy, 4

Senate Committee on Appropriations, 4congressional interest and options, 4, 22, 29, 30, 31,

32, 35, 37, 39, 41, 45, 168construction, design improvements in, 136, 137contribution to the domestic economy, 95currency exchange rates, 64

decline in forestland, 143, 148, 151, 153demand projections for wood, 89, 90Department of Agriculture (USDA) 5, 12, 19, 22, 31,

35, 38, 39, 40, 41, 43, 45, 65, 66, 129, 145,172, 181

Agricultural Stabilization and Conservation Service,5, 12, 39, 43, 44, 183, 184

Agricultural Conservation Program, 44, 183, 185Commodity Credit Corporation, 65Cooperative Extension Service, 5, 12, 34, 35, 39, 43,

128, 183

Farmers Home Administration, 43Federal Crop Insurance Corporation, 5, 22Federal Land Bank, 183Foreign Agricultural Service (FAS) 5, 18, 20, 36, 37,

65, 66Renewable Resources Extension Program, 35Science and Education Administration, 5Secretary of, 31, 32, 35, 38, 39, 88Soil Conservation Service, 5, 12, 39, 43, 129, 143,

144, 153, 162, 183Department of Commerce, 6, 19, 65, 66, 84

Bureau of Economic Analysis (BEA), 90Foreign Commercial Service, 18, 37, 65

Department of Defense, 65, 165Department of Energy, 37, 79, 144, 160Department of the Interior, 19, 168

Bureau of Land Management, 5, 164, 165, 167, 168Department of Justice, 20, 21, 33Department of State, 6, 65Department of the Treasury, 6, 19, 44, 45, 65Domestic International Sales Corporation (DISC), 66Douglas-fir, 58, 63, 109, 111, 112, 113, 114, 116, 147

E. F. Hutton Group, 183Egypt, 60Ellefson, Paul V., 171employment, 7, 31, 75, 95Energy From Biological Processes, 158

energy savings, 135, 136environmental damage, 121, 159, 186Environmental Protection Agency, 19equilibrium level forecast, 14European Community (EC), 61European Economic Community (EEC), 61, 63European Free Trade Association (EFTA), 61exploitable forests, 8, 9, 13, 57, 146, 147exports, 3, 13, 20, 37, 49, 51, 53, 54, 55, 56, 57, 58,

59, 60, 61, 62, 63by area of destination, 54embargos, 62factors affecting, 64U.S. expansion of, 15, 18, 35, 49, 50, 52, 58, 59,

60, 61trade barriers, 15, 18, 35, 36, 37, 49, 60, 61, 62

Export-Import Bank, 65

Federal estate tax, 184Federal ownership, 12, 45, 163, 169fertilization, 113, 114, 117, 159Finland, 13, 55fire and pest control, 113, 177First National Bank of Atlanta, 183Florida, 127Food and Agricultural Organization (FAO), United

Nations, 36, 50Forest Industries Council (FIC), 32, 105, 118, 119,

148, 177,forest management, incentives, 12, 21, 183, 184

199

200 ● Wood Use: U.S. Competitiveness and Technology—.—

forest products, consumption, 6, 13, 14, 18, 36, 49forest products industry:

competition, 97consumption of industrial commodities, 97employment, 7, 31, 75, 95foreign markets, 53, 55 (see exports)forest land ownership, 98, 169, 170future role of, 8, 13, 75importing (see imports)innovation, 99ownership objectives, 170private business attitudes, 64product mix and diversification, 98pulp and paper sector, 7, 13, 37, 50, 51, 55, 56, 57,

61, 68, 83, 94, 95, 97, 100, 106, 131, 137demand for, 74established markets, 52product recovery, 135

regional distribution, 99sensitivity to economic activity, 99solid wood sector (lumber and panel), 7, 13, 35, 50,

51, 55, 57, 59, 61, 67, 87, 95, 97, 131product recovery, 132

U. S. lumber production by region (fig. 16), 100U.S. position, 13, 30, 35wood fuel use by, 80wastes, 106

forest resources, assessment and reporting systemfor, 6, 9

forestry assistance programs, State involvement, 12

Forest Service, 5, 6, 9, 11, 12, 13, 14, 16, 17, 19, 20,21, 22, 29, 31, 32, 33, 34, 35, 37, 38, 39, 40, 42,45, 74, 79, 80, 85, 88, 89, 90, 91, 92, 105, 106,117, 118, 119, 120, 129, 143, 144, 148, 151, 152,153, 154, 155, 160, 164, 166, 170, 172, 173

Annual Report, 1982, 32Forest Information Retrieval System (FIR), 155, 182Forestry Incentives Program, 183, 184, 185Private Forest Land Owners of the United States,

study, 173, 174, 181research budgets, 33, 34, 128Rural Forestry Assistance Program, 185Southeast Forest and Range Experiment Station,

155, 182U.S. Forest Products Laboratory, 86, 135, 136, 159,

160France, 61furniture, 85

General Agreement on Trade and Tariffs (GATT), 36,60, 61, 62, 63, 65, 66

general questions, 4genetically improved seedlings, 10, 114, 115, 116, 117Georgia, 127global economic conditions, 64government assistance to exporters, 65government participation in trade, 62government policies that hinder exports, 65Great Lakes States, 50, 51, 68, 98, 99, 132, 148,

165, 169

gross domestic product (GDP), 94, 95gross national product (GNP), 75, 89, 90Gulf States, 51

hardwood, 10, 15, 33, 40, 50, 55, 56, 57, 58, 62, 75,92, 93, 117, 120, 130, 131, 145, 148, 155, 157,158, 163

harvesting efficiency, 105, 109, 120, 124, 125harvesting equipment, 121, 122, 123, 124, 125, 126,

127, 128harvesting systems, 34, 35, 120, 121, 122herbicides, use of, 111, 112, 159history of wood use, 76Hong Kong, 59housing demand, 89, 90

imports, 3, 13, 15, 18, 49, 51, 52, 60American Market Syndrome, 65Canadian softwood, 67pulp and paper, 68solid wood, 67tonnage of U.S. wood, 66value of U.S. wood, 66, 67

increasing timber supplies through manufacturingand use, 130-139

Indonesia, 62industrial roundwood, 13, 50, 139, 155intensive timber management, 117, 118, 119, 145,

146, 155factors affecting, 176-189

International Monetary Fund, 64international trade, 3, 18, 20, 35investment needed to achieve full economic potential,

3, 10, 41IRS Code, 184

Japan, 3, 13, 18, 20, 36, 49, 50, 51, 52, 54, 55, 56, 57,58, 59, 61, 62, 63, 64, 146

Japan External Trade Relations Organization(JETRO), 66

Kennedy Round of Multilateral Trade Negotiations,61

Korea, 13, 59

landownership patterns, 37, 38, 163, 169land use and ownership trends, 10, 11Latin America, 49, 50, 54, 56, 57, 59, 60, 62legislation:

Clean Air Act, 19, 185Clean Water Act, 19Cooperative Forestry Assistance Act (Public Law

95-313), 22, 34, 35, 43, 185Endangered Species Act of 1973 (Public Law

93-205), 168Export Trading Company Act (Public Law 97-290),

20, 37Federal Crop Insurance Act [Public Law 96-365),

22, 184Federal Insecticide, Fungicide, and Rodenticide

Act, 186

———— .— . .

Federal land Policy and Management Act(FLPMA), 167

Federal Water Pollution Control Act, 186Forestry and Rangeland Renewable Resources

Planning Act (R PA) of 1974 (Public Law93-378), 6, 9, 16, 19, 21, 29, 30, 31, 32, 34, 37,38, 39, 40, 43, 74, 80, 88, 143, 144, 153, 162, 167

Forest and Rangeland Renewable ResourcesResearch Act (Public Law 95-307), 22, 34, 35,38, 43, 153, 185

Forestry Incentives Program (Public Law 93-86), 22,43

McSweeney-McNary Act of 1928, 6Multiple Use and Sustained Yield Act of 1960,

166, 167National Environmental Policy Act (NE PA) of 1969

[Public Law 91-190), 19, 167, 168National Forest Management Act (NFMA) of 1976

(Public Law 94-585), 6, 19, 29, 31, 32, 88,165, 167

National Renewable Resources Extension Plan, 129Renewable Resources Extension Act (Public Law

95-306), 22, 34, 35, 43, 128, 129, 185Smith Lever Act, 129Soil and Water Resource Conservation Act (RCA)

of 1978 (Public Law 95-192), 39, 40, 143, 153Wilderness Act of 1964 (Public Law 88-577), 19, 168

loblolly pine, 109, 111, 113, 116, 147Louisiana, 127

Malaysia, 62management of industr ial lands, 171Maryland, 173Mexico, 51, 54, 56, 60, 62Michigan, 154Middle Atlantic States, 8, 38, 100, 173, 174, 175Middle East, 54, 56, 57, 60Minnesota, 160Minnesota, University of, 171, 185Mississippi, 127Multi lateral Trade Negotiat ions, 63

National Agricultural Land Study (NALS), 1 5 2

National Conference of State Legislatures, 185National Forest System, 5, 6, 19, 29, 31, 32, 34, 62,

93, 160, 165, 166National Forest Products Associat ion (NFPA), 18, 36,

65, 118national goals, 19, 30, 31national research centers , establishment of , 35National Security Council, 6 5National Tree Biomass Compilat ion Committee, 157National Wilderness Preservation System, 168New England, 8, 100, 132New York, 169New Zealand, 59non-Federal forest land data, 153nontariff barriers (NTB), 60, 62, 63, 64, 65nonwood-based corporat ion, forest land holdings, 173North Carolina, 127

Index ● 2 0 1.—. ——

North Central States, 8, 38, 51, 100Northeastern States, 38, 68, 98, 173, 174, 175Norway, 62

oak wilt, 58ocean freight rates, 63Office of Technology Assessment (OTA), 4, 5, 14, 16,

21, 22, 78, 79, 155, 158Oklahoma, 127O’Laughlin, Jay, 171Oregon, 5, 165, 167, 169, 173organosolv process, 136out-of-date surveys, 152overseas Private Investment Corporat ion, 65ownership, tenure, 181

Pacific Northwest 7, 17, 34, 51, 75, 91, 92, 112, 113,121, 124, 131, 146, 151, 168, 170, 171

parallel-laminated veneer (PLV), 134payment-in-kind (PIK) program, 44, 153Pennsylvania, 165, 169, 173Philippines, 62plywood recovery, 134policy consideration, 4, 19, 23, 29, 31, 34, 35precommercial thinning, 113, 171primary processing, 96private nonindustrial forests (PNIFs), 9, 11, 12, 21,

40, 41, 43, 45, 106, 119, 127, 128, 145, 146, 149,155, 163, 164, 170, 172, 173, 174, 175, 176, 177,179, 180, 181, 182, 183, 186

product recovery, 132, 133, 134

Reagan administration, 152, 166, 185recycled paper, 107, 132, 137regeneration, 112, 177research and development (R&D), 3, 4, 19, 20, 21, 23,

33, 34, 35, 41, 106, 125, 128RPA 1980 assessment, 9, 16, 17, 19, 20, 31, 33, 37,

38, 39, 80, 89, 93, 163

Sandwell International , 128Saudi Arabia, 60Saw-Dry-Rip process, 134Scandinavian producers , 18, 34, 54Seaway Port Authori ty, Duluth, Minn. 160secondary processing, 96selective cutting, 111Shell International, 160silvichemicals, 86, 87silviculture, 10, 33, 34, 105, 106, 109, 115, 155Singapore, 59site preparation, 111Small Business Administrat ion, 65small tract harvesting, 10softwood, 5, 8, 10, 11, 13, 14, 15, 17, 21, 40, 42, 50,

51, 55, 57, 58, 59, 68, 75, 91, 92, 93, 94, 101,106, 120, 131, 155, 157, 158, 163, 179

soil bank, 44Solid Waste Council, 132South Atlantic States, 51


South Carolina, 127South Central States, 51Southeast Asia, 8, 18, 49, 56Southern States, 7, 8, 38, 93, 146, 169Spain, 58specialty products, 18State activities related to private forest management,

187-189stumpage prices, 180supply projections, 91Sweden, 13, 55, 62, 106, 125, 127systems approach to harvesting, 10

Taiwan, 59tax incentives, 183, 184taxonomy of major forest products (table 11), 77technology transfer, 34, 35, 127Tennessee, 127Tennessee Valley Authority (TVA), 5, 19, 181, 182Texas, 127, 171timber growth and demand, domestic, 10, 16, 20,

40, 74timber inventories, 9, 10, 17, 37, 41, 43, 45, 108, 109,

143, 156, 157timber management needs, 40, 42, 45, 108, 145, 146timber resource development, public and private

sector involvement in, 12Tokyo Round of Multilateral Trade Negotiations, 61transportation systems, 126, 146truss framing, 137

usable residues, 34uses for wood (table 1), 7, 76, 78-88

advanced materials, 86, 87, 88cellulosic fibers, 86construction, 81furniture, 85nutritional products, 86shipping, 85

U. S. S. R., 8, 9, 13, 49, 50, 59, 62, 146, 147U.S. timber supplies, 19, 40, 120, 144U.S. Trade Representative, Office of, 6, 19, 36, 37,

65, 66

Venezuela, 60Virginia, 127

Washington, 123, 165, 169Western Europe, 3, 18, 34, 36, 49, 50, 51, 52, 53, 54,

55, 57, 58, 61, 62, 106, 121, 124, 125, 128, 146wood fuel use, 7, 9, 33, 37, 39, 41, 79, 80, 81, 100,

102, 136, 144, 158, 159, 160wood in construction, 81, 83WOODPLAN, 182wood products, major world producers of (table

3), 13wood pulp, 83, 84wood use, history of, 76woodsworkers, training of, 127