# Presentation: 096313

## David N. Wear
And 
John G. Greis

- And
- John G. Greis

## Premise...

- Forest sustainability is about managing change in forested ecosystems to achieve a desired flow of benefits.
- ...pace and complexity of change is increasing
- ...options foreclosed through time
- ...the future is here

- Understanding change and options were fundamental motivations for completing the Southern Forest Resource Assessment.

## Southern Forest Resource Assessment

- Initiated April, 1999
- Issue Driven
- Public Involved
- 30+ Scientists and Analysts
- Completed November 2002
- Covered 13 Southern States
- Available at: www.srs.fs.fed.us/sustain

## Forest area and ownership

## Forest area and ownership

## 22+ MM acres of industrial timberlands changed owners in past five years

- Why?
- Performance issues
- Abysmal returns
- Debt!
- Change in strategic thinking timberland ownership not required
- Deep, mature markets for wood in most regions
- More efficient tax structures for owning timberland

**Notes:**
From January 1998 through June 2001, 11 of the 12 largest publicly traded fp fiirms had negative returns while the S&P 500 eared 18%

Table 1: Forest Product industry performance relative to key benchmarks

Source:  Wall Street Journal, 2/28/05

## Timberland Ownership Changes

## Findings--urbanization

- Land Use Change and Urbanization
- Most substantial threat to forests
- Focused in certain subregions
- Offsetting changes
- Forest to urban
- Agriculture to forest

*“**Among the forces of change,**** ****urbanization will have the most direct, immediate and permanent effects on the extent, condition and health of forests”**  *
-      SFRA, 2002

## Projected change in South’s population 2000 – 2020

**Notes:**
Urban uses occupy a small share of land in the South but this share is growing rapidly
About 12 million additional acres of southern forests are expected to be urbanized by 2040

Most of the forest loss will be offset by increased planting on agricultural land.  No net loss into the foreseeable future but much gross change.

## Forecast fragmentation

**Notes:**
Source: Wear, Pye and Riitters.  Note how fragmentation is organized along interstate Highways.  Future fragmentation also concentrated in the east but also Houston and Nashville.

## Forecast Change by Ecological Section

|  | Ecological Section | Change in interior forest (ha) | Change in percent area of county that is interior forest | Percent change in area of interior forest |
| --- | --- | --- | --- | --- |
|  |  |  |  |  |
| 1 |  Central Gulf Prairies and Marshes          | -802 | -0.17% | -56.74% |
| 2 |  Florida Coastal Lowlands (Eastern)         | -25,514 | -1.02% | -10.43% |
| 3 |  Central Ridge and Valley                   | -23,862 | -1.72% | -6.32% |
| 4 |  Florida Coastal Lowlands (Western)         | -24,936 | -0.81% | -5.16% |
| 5 |  Coastal Plains and Flatwoods, Lower        | -110,756 | -0.46% | -4.19% |

## Forecast Change by MSA

|  | Metropolitan Statistical Area | Change in area that is interior forest (ha) | Change in percent area of county that is interior forest | Percent change in area of interior forest |
| --- | --- | --- | --- | --- |
|  |  |  |  |  |
| 1 |  TAMPA-ST. PETERSBURG-CLEARWATER, FL        | -20,267 | -2.35% | -34.47% |
| 2 |  SARASOTA-BRADENTON, FL                     | -8,532 | -2.04% | -24.61% |
| 3 |  FORT MYERS-CAPE CORAL, FL                  | -5,171 | -1.66% | -23.13% |
| 4 |  COLUMBIA, SC                               | -10,837 | -2.74% | -20.55% |
| 5 |  JACKSONVILLE, FL                           | -10,903 | -1.35% | -19.19% |
| 6 |  ATLANTA, GA                                | -45,597 | -2.84% | -18.06% |
| 7 |  ORLANDO, FL                                | -18,025 | -1.73% | -18.02% |
| 8 |  FORT PIERCE-PORT ST. LUCIE, FL             | -4,735 | -1.27% | -16.74% |
| 9 |  RALEIGH-DURHAM-CHAPEL HILL, NC             | -15,336 | -1.67% | -15.86% |
| 10 |  PUNTA GORDA, FL                            | -4,379 | -1.97% | -15.27% |
| 11 |  FAYETTEVILLE, NC                           | -1,366 | -0.80% | -14.82% |

## Urbanization Outcomes

- Smaller parcel sizes
- More difficult management (e.g. smoke)
- More recreational pressure
- Conversion to non-forest
- Economic disincentives to own and manage
- More biocentric public
- More public resistance to harvests
- More local regulations and ordinances
- 346 in 2000 vs. 141 in 1992 in South

## Findings—timber management 

- South produces:
-  60% of nation’s timber
-  16% of world’s timber
- More timber than any other region
- More timber than any other nation
- Strong growth through late 1990’s
- Market changes since 2000
- Current prices are weak

## Regional Production Trends

## Timber harvest, US South (1952-2002)

## Domestic Demand--Pulpwood

- Southern pulping capacity down 16% since 1998 and down relative to US production
- No indications of increasing domestic demand
- Per capita use of paper products declines
- Capacity expanding in other countries
- e.g., Chile, Brazil, Finland

- Pulp Mill Capacity

## Trade--Wood Chips--Exports

- Near complete loss of exports to Japan
- Would account for ~9% of southern chip production in 1996
- Significant reduction in domestic demand

- Southern US Wood Chips Exports

## Conclusions

- Softwood and hardwood supplies have expanded over time
- In the long run, softwood inventories are market responsive
- But... supply responds slowly
- Large price declines for pulpwood a function of (in)elasticity of supply coupled with demand shift
- Softwood pulpwood prices
- Short run: likely to remain low unless demand expands considerably
- Long run: contraction of softwood investment leads to decline in economic inventory and some price increases
- Long run: increasing demand for less expensive softwood pulpwood

## Findings

- Timber Production has expanded—future change is unclear
- Harvesting could expand without depleting inventories (softwoods)
- Imports provide backstop for hardwoods

## Softwood Inventory Growth and Removals 1995-2040—scenario 1

**Notes:**
Future expansion in softwood harvests will be matched by expansions in growth

## Hardwood Inventory, Growth and Removals

**Notes:**
Hardwood harvests are expected to grow to the point where they match growth

## Forecast Forest Types, 1995-2040

- Scenario 1

## Rare Forest Communities

- Focus of concerns
- Disproportionately high ecological /  conservation values (scarcity=value)
- Spruce-fir impacted by multiple changes

- Wetlands/bog complexes and pocosins
- Bottomland and floodplain forests
- Glades, barrens, and prairies
- Longleaf pine ecosystems.
- Atlantic White Cedar Swamps
- Old-growth
- Spruce-fir forests

## Terrestrial Species

## Exotic Diseases affecting hardwoods

**Notes:**
Forest pest problems are expanding
Health problems indicated for hardwood forests in the northern part of the South.

## Changes in softwood types

- Changes in some softwood types in North Carolina (1964-2000)

**Notes:**
Fine scale changes are substantial—may have the most implications for species persistence and endangerment.
Ecological value is extremely high in these rare types
.
Story emphasized by the assessment—experienced a steady erosion of some of the more rare forest types—areas where we expect the highest ecological values.

## Key findings

- Forecast declines in forest area persist through 2040
- Increased population density of future forest area forecasted
- Increased timber production from a smaller land base
- Increased forest fragmentation

## Implications

- Increasing scarcity of ecosystem services in specific places
- Especially where people live
- Ecosystem services depend on a well-managed landscape
- Innovative forest management is needed
- Demand for conservation forestry between rural and urban forestry

## Thanks for listening