Wood Use: U.S. Competitiveness and

Technology—Vol. I

August 1983

NTIS order #PB84-109925
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 role

of technology in the U.S. forest products industry. It was undertaken at the request

of Senator Mark Hatfield, Chairman of the Senate Committee on Appropriations,

and Senator Thad Cochran, Chairman of the Subcommittee on Agriculture, Rural

Development, and Related Agencies. Representative James Weaver, Chairman of

the Subcommittee on Forests, Family Farms, and Energy, joined in support of the

assessment in the House of Representatives.

This assessment surveys the contribution of the forest products industry to the

U.S. economy, the ability of the industry and the U.S. forest resource to satisfy

expected domestic demands for wood, the competitiveness of U.S. forest products

on world markets, and the role of technology in stretching the U.S. forest resource

and providing products that satisfy domestic needs as well as international markets.

It discusses the relationship of various levels of government and the forest products industry in providing for future wood products needs, Finally, it presents policy

options designed to enhance the advantages of U.S. producers in international markets, to provide research and development in forest management, environmental

effects of forestry, and wood materials science, and to improve the productivity

of U.S. forests.

JOHN H. GIBBONS

Director

. . ///
Wood Use: U.S. Competitiveness and Technology Advisory Panel

Larry Tombaugh, Chairman

Department of Forestry, Michigan State University

Darius Adams Carter Kiethley

Department of Forest Management Wood Heating Alliance

Oregon State University Peter Kirby

Clark S. Binkley The Wilderness Society

School of Forestry and Environmental

Studies, Yale University

Carroll Brock

M. G. Brock & Sons

Merle Conkin

National Forest Products

Association*

M. Rupert Cutler

National Audubon

Ormand Danford

Tree Farmer

Society

Dudley Kircher

Mead Corp.

Bruce Lippke

Weyerhaeuser Co.

Norma Pace

American Paper Institute

Carl Reidel

University of Vermont

John Ward

National Forest Products Association*

Henry Webster

Robert D. Day

Renewable Natural Resources Foundation

Michigan Department of Natural Resources

Kirk Ewart

John Zivnuska

Boise Cascade Corp.

University of California

R. Rodney Foil

Mississippi Agricultural and Forestry

Experiment Station

Wood Science and Technology Working Group

R. Rodney Foil

Mississippi Agricultural and Forestry

Experiment Station

Dean Einspahr

Institute of Paper Chemistry

John Haygreen

Department of Forest Products

University of Minnesota

John Koning

Forest Products Laboratory

USDA Forest Service

Alfred H. Nissan

Consultant

Jerome Saeman

Energy Research Center

University of Wisconsin

Jay Johnson Necmi

Weyerhaeuser Co. Forest

T. Kent Kirk USDA

Forest Products Laboratory Vance

USDA Forest Service Forest

USDA

Kenneth Skog

Forest Products Laboratory

USDA Forest Service

Robert N. Stone

Forest Products Laboratory

USDA Forest Service

Bruce Thoman

International Paper Co.

Sanyer John White

Products Laboratory Cooperative Forestry Staff

Forest Service USDA Forest Service

Setterholm

Products Laboratory

Forest 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 assumes

full 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, 0TA

Energy, 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 Service

Forest 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, Contractor

Environmental Awareness Center,

University of Wisconsin

OTA Publishing Staff

George Brown, Oregon State University

Deborah Cichon, Contractor

Russell 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 the

Office of Technology Assessment. The staff wishes to acknowledge the contribution of OTA’s contractors

in the collection, analysis, and preparation of material for the report and to thank the following individuals

and Government agencies for their generous assistance:

USDA Forest Service James Lyons, Society of American Foresters

Brock Evans, National Audubon Society George Marra, USDA Forest Service

Richard Haynes, USDA Forest Service Jerome Saeman, University of Wisconsin

Jay Johnson, Weyerhaeuser Co. Ross Whaley, USDA Forest Service

Herbert Knight, USDA Forest Service Robert Wolf, Congressional Research Service

William Lange, National Forest Products

Association

vi
Organization of the Assessment

Volume I of the assessment is organized as follows:

●

●

●

●

●

●

●

Chapter I provides an overview and summary of the report and a tabulation

of 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 summarizes

the implications of world demand and supply for the U.S. timber resource

and the forest products industry.

Chapter IV describes the range of uses of wood and forest products in the

U.S. economy and evaluates the impacts that current trends may have on

domestic wood demand and supply in the future.

Chapter V reviews the technologies available for increasing the growth and

productivity of American forests and assesses the potential for harvesting

technologies to expand supply by recovering larger proportions of timber

at harvest. It also summarizes the status of manufacturing technologies that

are covered in detail in volume II.

Chapter VI reviews the U.S. forest resource base and weighs constraints for

ensuring that future wood demands are met.

The appendix to volume I includes a glossary of terms which the reader may

find useful in understanding forestry terminology.

Volume II of this report contains a detailed review and assessment of manufacturing 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 ... . . . . . . . . . . .. . . . . . . . . . . . . . . ... 6

Structure of the Industry . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7

Future Role of Forest Products . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8

Forest Resources .. . . . .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. . 8

Technological Opportunities To Extend Timber Resources . . . . . . . . . . . . . . . . . . . . 10

Land Use and Ownership Trends . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10

Public and Private Sector Involvement in Timber Resource Development, . . . . . . . 12

Domestic Production and International Trade . . . . . . . . . . . . . . . . . . . . . . . . . 13

Domestic Demand for Forest Products . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13

U.S. Imports of Forest Products . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15

U.S. Exports of Forest Products . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15

Future Potential ... . . . . . . . . . . . . . . . . . . . . . . .. . . . . . . . . . . . . 16

Future Domestic Demand . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16

Future Domestic Supply . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17

Opportunities To Exand Exports . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18

Policy Considerations ● ... . . . . . . . . . . . . . . . . .. . . . . . . . . .... . 19

National Goals . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19

U.S. Timber Supply . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19

International Trade . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20

Research and Development . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20

Private 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 . . . . . . . . . . . . . . . . . . .

Page

7

9

13

23

 — 6
CHAPTER I

Overview

Summary

The United States could greatly expand its

role in world forest products trade over the

next decade and could become a net exporter

of solid wood and paper products before IWO.

For the past 30 years, the United States typically has imported more forest products than it

has exported. Because exports have grown faster than imports, the trade deficit has narrowed.

This trend is likely to continue.

Global demand for a wide range of forest

products is growing rapidly, but the best trade

opportunities for U.S. producers appear to be

in the paper markets of other industrialized nations, particularly Western Europe and Japan.

In contrast to many basic U.S. industries, the

forest products industry has distinct advantages over its foreign competitors. The U.S. forest products industry is the most productive

and among the most efficient in the world, and

it benefits from a vast and highly productive

domestic forest resource.

The United States and Canada are expected

to remain the world’s largest mutual trading

partners in wood products, continuing to exchange those products for which one country

has a competitive advantage over the other.

Continued imports of Canadian low-value lumber and newsprint may result in greater opportunities for U.S. producers to export products

such as linerboard and high-value lumber

where the U.S. competitive edge is greatest.

To capitalize on international trade opportunities, the forest products industry and the

Federal Government probably will have to

make concerted efforts to promote exports.

Although responsibility for developing foreign

markets rests primarily with the private sector, government action will be needed to overcome trade barriers that currently inhibit the

competitiveness of U.S. wood products in foreign markets.

Past Government and private sector concerns regarding a possible domestic timber

shortfall no longer seem justified. Futur e

timber needs, especially for housing but also

for other products, probably have been overestimated. The effects of intensive timber management and the ability of wood utilization

technology to stretch the wood resource have

probably been underestimated.

If current trends toward more intensive forest management continue, domestic needs for

wood probably can be met without dramatic

price increases. However, substantial investments in forest management would be required to increase wood production beyond

the levels expected to result from current

trends. U.S. timber harvests can be more than

doubled over the long term through increased

application of intensive forest management

technologies such as applied genetics, fertilization, and improved harvesting systems. To

achieve the full economic potential of U.S. forestlands, an estimated investment of $10 billion to $15 billion would be needed over the

next 30 to 50 years.

Existing and emerging technologies enable

a broad range of wood products to be manufactured from currently underutilized hardwood species and from waste wood material.

For example, high-strength papers now are

made from hardwoods, once considered impossible. Many manufacturing technologies are

available which have not been commercialized,

but future economic conditions probably will

warrant commercialization of many of these,

and research and development (R&D) will continue to play an important role in the introduction of new products.

Several factors could affect future timber

availability. However, none is expected to be

a serious future limitation to wood supply,

3
4 ● Wood Use: U.S. Competitiveness and Technology

unless demand increases dramatically without adoption of intensive forest management

and wood utilization technologies. These factors include a shrinking forestland base, a large

portion of U.S. forests in private nonindustrial

ownership that may not be managed for commercial timber production, and the recent

trend toward significantly increased use of

wood fuel.

Commercial timber production is only one

of many uses for U.S. forestland. Other uses

include wildlife habitat, rangeland, watershed

protection, wilderness, and recreation. Achieving a balance among many forest uses, especially on Federal lands, is a fundamental part

of U.S. public lands policy. Broad-scale intensive forest management may result in increased

soil loss, altered wildlife habitat, reduced water

quality, and lower soil productivity. The environmental impacts of intensive forestry are

not well understood, and further research on

its effects may be needed.

Significant changes in Federal programs and

policies probably are not required to ensure

that future domestic forest products needs are

met. However, OTA has identified several policy options which, if implemented, could help

to increase the competitiveness of the forest

products industry, There are five general types

of options:

1.

2.

3.

4.

5.

Establish national objectives for management and use of the Nation’s forest resources.

Encourage research, development, and

transfer of forestry-related and wood utilization technologies.

Increase international competitiveness of

U.S. forest products.

Improve the quality of information needed

for forest policy formulation.

Improve systems for identifying timber

management needs.

Introduction

The Senate Committee on Appropriations requested that the Office of Technology Assessment (OTA) undertake an assessment of technologies related to the growth and use of U.S.

timber resources. OTA found that the technologies were tied closely to the economic conditions affecting the forest products industry and

the resource base. With the concurrence of the

committee, OTA broadened its assessment to

include an evaluation of the role of wood in

the U.S. economy. Subsequently, the House

Subcommittee on Forests, Family Farms, and

Energy wrote to OTA affirming its interest in

the assessment.

In response to this congressional interest,

OTA undertook a study to answer the following

●

general questions:

What is the status of technology for increasing the efficiency of wood use in the

manufacturing process, for increasing the

productivity of U.S. forestlands, and for re-

●

●

●

●

covering a larger proportion of timber during harvesting?

Do Forest Service projections of demand

and supply accurately reflect the future potential of technology?

What is the status of worldwide timber demand and supply, and how will global conditions affect U.S. wood futures?

Is the manufacturing capacity of the U.S.

forest products industry adequate to meet

future needs?

Is U.S. R&D balanced and adequate

enough to achieve national goals in the

growth, harvesting, and utilization of the

timber resource?

To answer these questions, OTA first reviewed in detail the existing, emerging, and

possible future technologies for converting

timber into commercial wood products. Second, technologies for increasing the growth

and productivity of the resource and for har-
Ch. I—Overview . 5 — ——-. -—. . . —

vesting timber and transporting it to mills were Finally, projected domestic and foreign deassessed. Third, based on the potential for tech- mand for wood products was compared to the

nology to increase the capacity to grow timber ability of various timber-producing nations to

and 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’s

Forest Service has primary responsitimber production may not be

areas where other resource

bility within the Federal Government (or administering programs affecting forest resources and wood utilization. The Forest Service manages the National Forest System, which

encompasses 190 million acres of forestland

located primarily in the West. Approximately

half the acreage in national forests is considered to be suitable for commercial timber

production, The National Forest System is the

Nation’s largest single reserve of standing sawtimber and represents about 41 percent of the

total U.S. sawtimber resource, consisting mainly of high-value softwood species, Because it

is so large, the National Forest System provides

nearly one-fourth of the softwood sawtimber

consumed annually in the United States. The

management of Forest Service lands must ac

-

commodate a broad range of uses; therefore

maximized in

values compete.

Other agencies within USDA also share responsibility with the Forest Service for forestryrelated activities. These include the Soil Conservation Service, the Agricultural Stabilization

and Conservation Service, the Foreign Agricultural Service, the Cooperative Extension Service, the Science and Education Administration,

and the Federal Crop Insurance Corporation.

The Bureau of Land Management in the Department of the Interior manages forestlands

primarily in Oregon, and the Tennessee Valley

Authority undertakes cooperative forestry programs with States and private agencies in the

Tennessee Valley region.

Several other Federal agencies also could

play prospective roles in facilitating the further

development 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 the

Departments of Treasury, Commerce, and

State, and the Office of the U.S. Trade Representative. Most of these agencies have from

time to time been involved in forest productsrelated issues, but not in a focused, coordinated

manner.

During the past decade, Congress established

a comprehensive assessment and reporting system for forest resources, reaffirming a commitment to resource evaluation articulated in the

McSweeney-McNary Act of 1928. The Forest

and Rangeland Renewable Resources Planning

Act (RPA) of 1974 (Public Law 93-378), as

amended by the National Forest Management

Act (NFMA) of 1976 (public Law 94-585),

directs the Forest Service to assess timber

supply and resource requirements every 10

years. Based on each assessment, the Forest

Service is directed to formulate 5-year programs that present strategies for achieving national goals. Each assessment and program are

used in the Federal budgeting process and

serve as guides for the administration of Forest

Service programs. However, NFMA’s emphasis on the National Forest System limits the

usefulness of the RPA assessment and program

for guiding national efforts to expand and use

timber resources, although there are modest

Federal programs to increase forest productivity in the private sector.

Forest Products Industry

Wood was the single most important industrial material in the early development of the

U.S. economy. It was essential to most forms

of construction and manufacturing and as fuel.

After 1920, its role began to decline, so that

wood now accounts for only about 26 percent

of the value of major industrial raw materials

[fig. 1). Despite its smaller contribution to

today’s economy, the volume of wood used for

industrial purposes since the beginning of the

century has increased from approximately 8

billion cubic feet (ft3

) to more than 13 billion

ft3 annually due to population expansion and

economic growth.

The U.S. consumes more forest products,

nearly 70 ft 3 per capita per year, than any

country in the world and accounts for about

one-fourth of total world consumption. It is

also the leading industrial source of forest

products, producing 35 percent of the world’s

paper, 45 percent of its plywood, and 20 percent of its softwood lumber. The properties of

wood make it adaptable to a wide variety of

uses (table 1), with domestic production linked

Figure 1.— Relative Importance of Industrial

Raw Materials, 1920-77

Agricultural nonfood, and wildlife productsa

--- - Timber products

1 1 1 1 I 1

1920 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!llzer

materials, 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 S

Government Printing Office, 1982), p 3
Table 1.— Representative Uses for Wood

Uses/Examples

Construction:

Residential housing construction and upkeep, mobile

homes, and light commercial structures; arches and

beams 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, and

light airframes

Wood fuel:

Fuelwood, woodchips, mill residues, etc.:

Residential home heating and cooking, forest

products industry process energy, electricity

generation

Liquid and gaseous fuels:

Potential supplement for petroleum and natural gas

as a fuel or alternative petrochemical feedstock

Chemicals and cellulosic fibers:

Rayon and cellulose acetate:

Clothing fibers, tires, conveyor and transmission

belts, ribbons, films, etc.

Silvichemicals (naval stores and pulping byproducts):

Used in production of synthetic rubber, chewing

gum, rosin bags, inks, adhesives, paints, soaps,

detergents, solvents, odorants, bactericide, drilling

mud thinners, dispersants, leather tanning agents,

water treatment, pharmaceuticals, etc.

Food and feed products:

Feed molasses, animal fodder, vanillin flavoring, food

grade 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 communications requirements:

● About 60 percent of solid wood products

(lumber, plywood, and panels) was used

in construction in 1976, chiefly in new

homes but also for home restoration and

remodeling and nonresidential construction. Significant volumes of solid wood

products also are used for shipping pallets

and containers and in furniture and cabinets.

● The pulp and paper sector produces about

equal amounts of paper and paperboard

(cardboard, linerboard, and other stiff,

Ch. l—Overview ● 7

thick papers). High-volume paper uses include printing and writing papers (51 percent), newsprint (17 percent), tissues (14.5

percent), and packaging (17.7 percent).

Packaging materials (both paper and

paperboard) accounted for about 60 percent of domestic paper and paperboard

production in 1981,

Fuelwood for residential use recently has reemerged as a major, high-volume timber use.

Most residential fuelwood is cut for personal

use by homeowners and is not considered an

industrial forest product in this report.

Structure of the Industry

The two major divisions of the forest products industry—the pulp and paper sector and

the solid wood (lumber and panel) products

sector—display significantly different characteristics and performance:

●

•

●

The solid wood products sector employs

more people. The value added to products

in manufacture is greater in the capitalintensive pulp and paper sector.

Demand for paper products is dependent

on general economic conditions, while demand for lumber and panels is dependent

on highly cyclical new home construction,

which consumes nearly 40 percent of solid

wood products.

The pulp and paper sector is more concentrate-d than the solid wood products sector, with the 10 largest firms accounting

for more than half the pulp, paper, and

paperboard products manufactured in

North America; the lumber industry (the

most competitive subgroup of the solid

wood sector) is far less concentrated, with

50 percent of its output produced by 800

firms.

Primary processing of forest products—logging, lumber and panel manufacture, pulping,

and papermaking—is concentrated near abundant timber supplies, mostly softwoods in the

South and Pacific Northwest. Secondary processing (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 the

United States, accounting for two-thirds of production in 1976. The remaining production

was about equally divided between the West

(17 percent) and the North (14 percent). Sixty

percent of secondary paper manufacture (converted paper products such as containers, bags,

sanitary products, and stationery) is located

near major markets in New England and the

North Central and Middle Atlantic States.

Most lumber and panel manufacture occurs

in the West and the South, where softwood

timber is most available. The West accounts for

more than two-thirds of lumber production,

with the South producing most of the remaining one-third. The West also accounts for most

panel production, although the South has

gained rapidly since the early 1960’s. Manufacture of panel products—e,g., waferboard and

oriented strand board—is located in the North

Central and Northeastern regions, and virtually

all expansion is expected to occur in these

regions.

Future Role of Forest Products

Most basic industries are in economic trouble as a result of high labor costs, foreign competition, aging plant equipment, low productivity, lagging innovation, and, in some cases,

dwindling raw materials. The forest products

industry is an exception. Although it was hit

hard by the recent recession, conditions are

favorable for the industry to enlarge its contribution to the domestic and international

economy because:

●

●

●

●

World demand for forest products is expected to grow in the decades to come,

presenting U.S. firms with opportunities

to develop new markets.

Supplies of competitive products from

some foreign countries are expected to decline, particularly in Southeast Asia.

The U.S. timber supply picture is on the

whole optimistic, with increased levels of

timber production anticipated in the future. Many international competitors are

confronted with tighter supplies.

Most important timber production regions

in the United States already have well-developed transportation and manufacturing

facilities. Other countries (Brazil, the

U. S. S. R., and Canada) have equal or greater timber supplies, but these are not as accessible or as easily exploitable.

Forest Resources

The United States ranks third among nations

in exploitable forest area and first in industrial

timber production (table z). U.S. timber grows

rapidly, especially in the South where financially mature softwoods can be grown in 30 to

40 years, compared with two to three times

longer in many parts of Canada, the Soviet

Union, and some parts of the Western United

States. Transportation and manufacturing systems are well developed in many heavily forested regions of the country, unlike the U.S.S.R.

and most of the developing nations, where

roads, railroads, or water transportation systems must be built before interior forests can

be harvested.

National timber supplies are likely to be

sufficent to meet probable domestic wood demand for the foreseeable future, given current trends in intensive forest management

(see ch. V). Beyond this, with increased forest

productivity, the United States also can supply a larger share of world wood needs and

meet unexpected domestic demand should it

arise. There are many opportunities to expand

timber supplies significantly through widespread use of existing intensive management

technologies for growing, harvesting, and processing timber,

Forestland availability is not likely to become

a serious limitation unless wood demand increases dramatically without adoption of technologies capable of increasing timber supplies

and improving the efficiency of wood use (see
Ch. l—Overview • 9

Table 2.—Countries With Largest Forested Areas

Industrial

Exploitable Growing stock harvest

forest 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 10.0

Brazil . . . . . . . . . . . . . . . . . . . . 305 47,088 98 46,990 1.5

United States . . . . . . . . . . . . . 195 20,132 12,906 7,226 11.5

Canada . . . . . . . . . . . . . . . . . . 191 19,645 15,571 4,074 5.1

aEX@~{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 milllon

acres (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 Agricultural Organization, Los Recorsos Foresta/es de la American Tropical (Rome, 1981); United Nations Econom!c

Commission for Europe, European Timber Trerrds and Prospects, 1950 to 2030 (Geneva, 1976), U.S. Department

of 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 expand

U.S. timber supplies

ch. V and vol. II). Nevertheless, several trends

could affect future timber availability:

● The U.S. forestland base probably will

shrink in the future because of conversion

●

●

●

for agriculture and development and because of allocation of additional Federal

timberland to wilderness and other restricted uses.

Private nonindustrial forests (PNIFs) are

not owned chiefly to produce timber income. With the forest products industry

owning only 14 percent of the timberlands,

it will have to increasingly rely on PNIF

lands for future resources. Timber supply

in some areas could be reduced by demands for wildlife habitat, recreation, and

amenities or for fuelwood.

Continued growth in residential fuelwood consumption could be a special

concern, because it potentially could

compete with the forest products industry for commercial wood supplies.

Current fuelwood consumption has been

several times higher than anticipated, but

available information is not sufficient to

determine the extent to which fuelwood

may be depleting future timber reserves.

State-level survey data on forest acreage

and timber inventories is collected infrequently, averaging once every 12 years. As

a result, data at the national level used

by the Forest Service in its RPA assessments is based in part on estimated updates and therefore may reduce the accuracy of projected resource trends.
10 • Wood Use: U.S. Competitiveness and Technology

. — —

Technological Opportunities To Extend

Timber Resources

Trends in domestic timber growth are on the

whole favorable, although less so for softwood

species and the sizes of trees in highest demand. U.S. timber inventories have been increasing for at least three decades, a reversal of an earlier trend towards decline (see ch,

VI). Growing stock on commercial forestland

increased from 603 billion ft3 in 1952 to 711

billion ft3 in 1976. Net annual growth in 1976

was 21.6 billion ft3 compared to 13.9 billion ft3

in 1952, Most of the increase has been in hardwood species, which could afford major opportunities for expanded wood use for products and fuel. Hardwoods comprise about onethird of the growing stock inventory, but account for only about one-fourth of the national

timber harvest.

Two-thirds of the inventory is in softwoods,

which are preferred for many high-volume

uses. Softwood stock has increased slowly due

to greater demand and liquidation of oldgrowth timber in the West. Old-growth stands

have enormous volumes of standing timber, but

grow very slowly if at all; replacement stands

have less volume and smaller trees but grow

rapidly,

Existing technologies for growing, harvesting, and processing timber could significantly extend wood resources if widely adopted

(see ch. V). Existing processing technologies

are able to manufacture high-performance

products from wood previously considered too

small, unsuitable, or defective. This capability

could increase the market for low-demand, less

expensive hardwoods and permit the greater

utilization of residual or defective materials

now left on harvested sites.

The development of harvesting technologies

and systems capable of economically recovering previously wasted material in an environmentally sound manner could increase the

amount of timber removed from harvest sites

and open some additional areas that are now

off limits for environmental reasons. Key needs

include the development of small tract

harvesting equipment targeted to the needs of

small landowners; the training of woodworkers in productively efficient, safe, and environmentally sound harvesting operations;

and a systems approach to harvesting to integrate the growing, harvesting, and manufacture of wood products. To date, the Federal

Government generally has given harvesting

technologies low priority in forestry R&D activities.

Opportunities exist to expand long-term

timber supplies through intensive forest management systems (application of planned

treatments to forestland to increase growth of

industrial-quality timber), Compared to cropland, most U.S. forestland is managed well

below the current state of the art of management technology, but this is consistent with

forestry’s historical role as a residual use of

land. Despite the increase in inventories that

has occurred in recent years, net growth averages only 60 percent of growth levels that could

be achieved if all stands were stocked for optimal growth. Over time, far greater growth

rates could be achieved if harvested stands

are replaced with rapidly growing, genetically improved seedlings managed under intensive silvicultural regimes.

Intensive timber management is expensive,

however, with costs of planting alone often exceeding $100 per acre. Economic opportunities for timber management investments

may exist on 139 million to 168 million acres

in 25 States. The net annual growth increment (net growth attributable to management)

could be 11 billion to 13 billion ft3 annually

if all these investments were made—at a cost

of approximately $10 billion to $15 billion

over the course of a rotation (30 to 50 years)

(see ch. V).

Land Use and Ownership Trends

Most forestland in the United States is not

owned exclusively for timber production. It

often is owned for various other purposes, including recreation, wildlife, or speculation. of

the 482 million acres of “commercial” forestland (forestland considered capable of supplying industrial timber on a sustained basis but

not necessarily so used), 58 percent is owned

by 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 about

47 percent of all timber produced domestically and about 35 percent of the softwood timber. Their share is expected to increase significantly in coming decades.

Twenty-eight percent of the commercial base

is owned by public agencies, usually for multiple uses. The forest products industry owns the

remaining 14 percent, Industry lands contribute disproportionately more to supplies

(over 30 percent in 1976) because they tend

to be better suited to timber growing than

other lands.

According to the Forest Service, commercial

acreage declined 5 percent between 1962 and

1977, Most of the decline occurred on PNIF

land and is attributed largely to diversion of

forestland to agriculture and development.

Wilderness areas set aside on Federal lands accounted for approximately 30 percent of the

decline, but much of the land reserved as

wilderness is not highly productive timberland (see ch. VI).

Future forestland trends are difficult to foresee, but the Forest Service anticipates that

only modest declines in commercial forestland are expected over the next 50 years, as

agricultural pressures ease. But agricultural requirements probably will continue to exert a

powerful influence on future forestland trends.

If farmland requirements expand, as was the

case in the 1970’s, greater declines in forest

acreage may be expected, especially in the

South, which contains 20 million acres of

forestland with crop potential, If recent

(1980-83) crop surpluses continue for a protracted period, more land may revert to forest

than is cleared for agriculture. If so, new opportunities may arise to establish managed

plantations on unneeded cropland, as was the

case in the late 1950’s and early 1960’s.

Ownership patterns could complicate the development of timber resources, due to the small

size of many private holdings and the diverse
12 . Wood Use: U.S. Competitiveness and Technology

—

objectives of their owners. Over 20 percent of

all private forestland is in tracts of 100 acres

or less—a size generally too small to capture

fully economies of scale in management and

harvesting (see ch. VI). Most PNIF land is now

owned by nonfarmers, some of whom have little interest in timber production, Owners of

large PNIF tracts may be investors interested

in timber management, although data to substantiate this is fragmentary. The most promising PNIF lands for intensified management are

the larger tracts in important timber production areas.

Forest industry holdings are expected to increase only modestly in the future, but these

may be some of the most cost-effective lands

for investing in timber management, A key factor that makes industry and some nonindustrial

private lands prime areas for increased timber

productivity is continuity of ownership. Other

factors that make forestry investments on these

lands attractive are their large tract size, high

natural productivity, proximity to processing

facilities, and the commitment of their owners

to grow timber.

Public and Private Sector Involvement in

Timber Resource Development

The Federal Government owns about onefifth of the Nation’s commercial timberland

and has established several programs to encourage timber management on private lands.

Federal lands available for timber production

are managed under a multiple-use sustainedyield framework established by statute by the

Congress. Temporary increases in harvest levels are permitted in some limited circumstances, but changes in existing law probably

would be needed to significantly increase harvest levels beyond those included in current

Federal planning. Over the long-term, intensive

management of Federal lands could” increase

growth greatly on land available for timber production, but this would require increases in the

Forest Service budget to upgrade timber management and to ensure careful attention to impacts on other multiple-use resources.

Forest management activities on private

lands are encouraged by a variety of Federal

and State programs related to cooperative fire,

pest, and insect control programs; research,

education, and technical assistance; and financial assistance through tax incentives and direct cost-sharing of management practices with

small landowners, Capital gains taxation of

timber income is perhaps the greatest single

Federal inducement for timber management,

although it does not require landowners to use

tax savings on management. Several USDA

agencies in addition to the Forest Service, including the Soil Conservation Service, the Agricultural Stabilization and Conservation Service, and the Cooperative Extension Service,

play roles in providing assistance to forestland

owners.

Since the early 1970’s, several State governments have expanded their forestry assistance

programs. Many States offer preferential tax

laws for forest owners, and a few provide limited cost-sharing assistance, either to supplement Federal funds or on an independent

basis, Some States are developing State forest

plans to establish overall goals for forestry activities and have integrated forest products into

their overall industrial development plans.

Most States also have forest practices acts, providing guidelines or, in some cases, regulations

for harvesting and reforestation,

Because of limited Federal and State budgets,

however, private sector interests will be pivotal

in determining future levels of management on

private nonindustrial lands. Fortunately, a

number of forest products firms sponsor landowner assistance programs aimed at the PNIF

owner, and efforts of this kind may warrant expansion if government funds are cut back. Private financial institutions recently have begun

offering limited partnerships and other arrangements to attract investors to forestland

management opportunities. Although this

trend is too recent to be assessed adequately,

it could be an important future source of

capital for upgrading timber management.
Ch. l—Overview . 1 3

Domestic Production and International Trade

The U.S. forest products industry is the

most productive in the world. In 1980, the

United States ranked first in paper and paperboard, industrial roundwood, nontropical

hardwood lumber, plywood, pulpwood, and

chip production, and second in softwood lumber production (table 3). Several factors make

this leadership possible. Although the United

States has only about half of the exploitable

forestland that the Soviet Union has, its forests

are far more productive due to more favorable

climate, terrain, and soils. U.S. forests generally are more accessible than those of most other

nations, and the forest products manufacturing capacity of the United States is unsurpassed. The United States also has an enormous demand for forest products, with consumption expected to increase. However, there

seems to be no reason that increased domestic

consumption would significantly limit U.S. exports of forest products. American forests can

support much larger harvests, and technologies

capable of increasing timber productivity and

manufacturing efficiency are available. Therefore, the United States is well positioned to

satisfy both domestic and a major share of

future global forest product requirements (see

ch. III).

By taking advantage of existing opportunities, the United States probably can become

a net exporter of forest products before 1990.

The United States is currently a net importer

of forest products, but during the last 20 years

its exports have grown much faster than its imports. This trend probably will persist. It is likely, however, that Canadian wood products will

continue to account for large portions of U.S.

consumption. Canada’s lower production

costs, good transportation systems, and nearby softwood forests give Canadian producers

an advantage in providing lower grade softwood lumber, woodpulp, and newsprint for

Americans. Continued use of these Canadian

products increases the opportunities for U.S.

producers to export forest products where the

U.S. competitive edge is greatest—in paper,

panels, hardwood products, and high-quality

softwood lumber (see ch. III).

Domestic Demand for Forest Products

The high productive capacity of the U.S. forest products industry has emerged in response

to substantial domestic demands. The United

States is the world’s number one consumer

of most industrial wood products. Per capita

consumption of lumber, panels, paper, and

paperboard in North America is greater than

in any other region of the world. The United

States consumes almost 25 percent more paper

and paperboard per capita than Sweden, which

ranks second in per capita use.

U.S. consumption of forest products averaged 12 billion to 13 billion ft3 per year in the

past decade, growing slowly from 8 billion ft3

at the beginning of the 20th century. About

three-quarters of this consumption consisted

of softwoods, which are used for most lumber

and panels and many types of paper.

Domestic consumption of forest products

is expected to nearly double by 2030, according to the Forest Service (see box A). While

U.S. forests are capable of supporting much

larger harvests than they currently do, a 1980

Forest Service analysis projects that this inTable 3.—Major World Producers of Selected Wood Products

Industrial Sawn Sawn Pulpwood Paper

roundwood softwood hardwood Plywood and chips a

and board

United States . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 308 58 17 16 109 57

U.S.S.R. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 278 87 12 2 38 9

Canada . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 156 41 — 2 39 13

Sweden . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49 — — — 26 6

Finland . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44 — — — 19 6

Japan. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — 31 6 8 18

People’s Republic of Chinab . . . . . . . . . . . . . . . . . . . —

—

13 8 – — 5

Brazil . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — — 6 — — 3

Korea. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — — — 2 — 2

apulp ~~~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 figures cited in the Forest Service 1980 projections because the Forest Service prepares two different

forecasts. One is called the equilibrium level forecast (cited in this report), and the other the base

level forecast.

The base level forecast assumes that timber prices will continue to rise at the same rates as

in the past (1950 to 1976) and projects timber demand and supply at these assumed prices. Because projected timber demand rises faster than projected supply, these forecasts show a gap between demand and supply (see table below). As a result, the base level forecasting technique is

often referred to as the “gap model.”

The equilibrium level forecast projects what could happen in a free competitive economy, where

the 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 to

achieve this equality.

Comparison of Base Level and

Equilibrium 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 23.0

Imports . . . . . . . . . . . . . . . 4.5 3.8

Exports . . . . . . . . . . . . . . . . .

Gap. . . . . . . . . . . . . . . . . . . . 3.9 0.0

SOURCE: U.S. Depertnwmt of Arwlculture, Foreet Setvloe, An Ane&e/8 of the ThnberS/tuaWn M the Ufi/ted Stdea fWZ03Q Fore8t Reeouroe Report

No. 23 (VVeehln@on, D.C.: U.S. Government Prlntlng Office, 19S2), pp.

Xxi, 203, 211.

crease in consumption will have significant

adverse effects on the economy and the environment as timber becomes more scarce.

OTA found, however, that there is reason to

doubt that the Forest Service projections are

accurate. More than likely, Forest Service

forecasts of timber demand are overstated. Future domestic demand for wood products probably will grow, but it is unlikely to reach the

projected levels unless there is a major upturn

in the housing market or government intervention to stimulate wood fuel use (see ch. IV).

Conversely, the Forest Service forecasts of timber supply are conservative, particularly on forest industry lands, and probably underestimate

the ability and willingness of landowners to increase timber production, However, recent

data indicate that softwoods on nonindustrial

private ownerships are likely to be in shorter

supply in the South before 2000 due to a shortfall in softwood reforestation. In addition, the

Forest Service projections probably understate the ability of technology to stretch U.S.

wood supplies. There are many technologies

currently available that can improve wood utilization in the forest, in the mill, and in end use.

During the next few decades, the consumption of forest products is expected to grow. As

demand rises, increasing pressure on the forest

resource probably will bring an increase in

stumpage prices, and this, in turn, may motivate landowners and the industry to invest

more money in intensive timber management

and more efficient facilities. Should these

changes occur, they could result in the greater

availability of forest products at reasonable

prices and the increased competitiveness of
U.S. wood products on world markets. Many

industrial and nonindustrial private owners

already are making substantial investments in

intensive timber management, and the forest

industry is upgrading the efficiency of its

plants and equipment.

U.S. Imports of Forest

While the United States is

producer of forest products,

Products

the world’s top

it is also one of

the largest importers. The majority of U.S.

imports are from Canada and consist mainly of lower grade softwood lumber, woodpulp,

and newsprint (see ch. 111), In 1981, the value

of imports from Canada totaled over $7 billion

and accounted for over two-thirds of U.S. imports of wood products. The United States also

imports substantial amounts of tropical hardwood veneer and plywood from the Far East.

The United States and Canada are mutually dependent for forest products. Canada’s

share of U.S. lumber markets has grown steadily for over 30 years and currently accounts for

nearly one-third of U.S. lumber consumption.

In 1981, the United States consumed approximately two-thirds of Canada’s production of

softwood lumber, pulp, paper, and paperboard.

Although Canada imports smaller quantities of

wood products than does the United States

(about 1 billion dollars’ worth in 1981), the

United States is its major foreign source.

Current exchange rates between U.S. and Canadian currencies favor Canadian exports. The

Canadian dollar is worth about 0.8 $U.S., making Canadian products more attractive to

American consumers. Although Canadian

wood manufacturing costs are rising faster

than those in the United States, a situation

which may offset some of Canada’s advantage

in the future, imports of wood products from

Canada are likely to continue to account for

significant portions of U.S. consumption.

U.S. Exports of Forest Products

Imports of Canadian lumber and newsprint

to offset some increases in domestic demand,

combined with the productive capacity of the

Ch. l—Overview ● 1 5

U.S. forest products industry, probably will

enable the United States to expand its forest

products exports. Although the United States

still has a balance-of-payments deficit in wood

products trade, the deficit has narrowed in the

past decade. In 1982, the United States was a

net exporter of solid wood products. Overall,

U.S. producers have an unprecedented opportunity to expand their exports for three reasons.

First, world demand for forest products, particularly paper, is expected to grow rapidly,

possibly increasing by 50 percent by 2000 according to some estimates. Second, at the same

time, many countries that have been traditional

sources of wood products are unable to expand

production significantly because of raw materials limits and lack of installed manufacturing capacity; some regions may even face declining production before the turn of the century. Third, North American producers have

both the manufacturing capacity and access to

productive forests and skilled labor that could

enable them to expand production and capture

a growing share of world markets. U.S. forest

products can be manufactured at costs that

are competitive throughout the world, an advantage that is probably sustainable for the

foreseeable future.

However, other factors diminish the competitive position of the United States in world

markets. The most important of these are

global economic and financial conditions (see

ch. III). The recent world recession adversely

affected U.S. exporters in general, including

the forest products industry, which in 1982 experienced a decline in exports from 1981 levels.

Spurring the decline was the increased

strength of the U.S. dollar relative to other currencies. The U.S. balance-of-payments deficit

would have been expected to cause some devaluation of the dollar, but this adjustment has

not occurred, primarily because of the enormous Eurodollar market and high U.S. interest

rates.

Tariffs, quotas, and nontariff barriers also

depress offshore markets for U.S. forest products. Nontariff barriers probably are the most

important. The most deleterious nontariff barriers affecting U.S. forest products exports cur-
16 . Wood Use: U.S. Competitiveness and Technology

rently are product standards, nontariff charges

or taxes on imports, preferential trade agreements, and discriminatory ocean freight rates.

In the future, preferential trade agreements

may have an even greater impact on the ability of U.S. producers to maintain and penetrate

world markets. Countertrade, a form of barter

between nations, may be particularly troublesome unless the U.S. Government or producers

also are willing to engage in countertrade

agreements.

Future Potential

The latest assessment required by RPA was

prepared by the Forest Service in 1980. Because it projected domestic wood demand to

increase more rapidly than timber supply, the

1980 assessment forecasted that timber will

become more expensive relative to other products. Although this future is possible, it may

not be the most probable. Forest Service demand projections are likely to be overstated,

and timber supply adjustments that would be

expected as a result of increasing timber consumption are not given adequate consideration.

In the 1980 assessment, the Forest Service

concluded that increased efforts to expand timber production and increase manufacturing efficiency may be needed to meet domestic

needs. OTA has concluded that domestic needs

probably can be met without major changes in

policies affecting timber production. However,

it appears that there may be unprecedented

opportunities for U.S. producers to expand

forest products exports in the next few decades as well as satisfying domestic needs (see

ch. IV).

Future Domestic Demand

Forest Service projections of future timber

demand are based largely on projections of

overall economic growth and demographic

shifts. Future demand for all forest products

except those used in housing is tied to a projection of future economic growth, while forecasts of forest products used in new home construction are prepared independently by the

Forest Service.

Forest Service estimates of future timber

needs for housing are probably too optimistic.

Its estimates of future housing replacement are

much higher than historical levels, and the effects of increased housing prices are not given

adequate emphasis. Housing size may rise

more slowly than forecasted, or it may stabilize

or decrease in the future. Also, multifamily

units, manufactured housing, and mobile

homes may become more desirable, particularly if housing does not become more affordable.

The Forest Service recently has revised its

housing forecasts downward in recognition of

some of these factors.

Although projected wood needs for housing

have been reduced, Forest Service forecasts of

timber demand have not changed significantly, probably due to increased projection of demand for fuelwood. This increase in fuelwood

demand offsets declines in softwood demand

resulting from lowered projected housing forecasts. These projections show fuelwood demand roughly quadrupling by 2020, from over

40 million cords to 180 million cords per year,

primarily for industrial power generational

This projection is based on scanty data and

short-term trends that probably should be regarded as tentative.

Forest Service forecasts of demand for other

forest products generally are linked to the gross

national product, which is projected to inIThese projections are contained in U.S. Department of Agriculture, Forest Service, “America’s Renewable Resources: A Supplement to the 1979 Assessment of the Forest and Rangeland

Situation in the United States, ” review draft, Feb. 4, 1983. The

draft report does not specify what proportion of the increase

is attributable to residential, commercial, or industrial uses,
Ch. l—Overview . 1 7 —

crease by 2,0 to 3.7 percent in the future. While

this rate of growth is consistent with historical

trends, it may change appreciably if the economy undergoes structural reorganization (e.g.,

decreased activity in some basic industries and

increased activity in high-technology and service sectors). Forest Service forecasts provide

no information about the possible effect of different rates of economic growth on timber demand, nor is there detailed analysis of factors

that affect wood products use other than demographic shifts and economic activity. For example, expanding use of electronic communication and data processing may have significant impacts on future amounts and types of

paper used, although it is difficult to predict

either the magnitude or the direction of likely

long-term changes.

Future Domestic Supply

Forest Service forecasts of future timber

supply probably underestimate the productivity of U.S. forests, particularly if timber

prices rise (see ch. IV). This underestimate is

primarily a result of failure to include the effects of improved technology and more intensive timber management on future timber supply.

However, the 1980 assessment probably

overestimates future softwood timber growth

on private nonindustrial land in the South, due

mainly to a shortfall in softwood reforestation

during the last 20 years, Even with increasing

timber management intensity, southern softwoods may be scarcer than projections show,

beginning in the 1990’s, Conversely, softwood

supplies in the Pacific Northwest may be somewhat more abundant than the 1980 assessment

shows, according to more recent timber survey

information, although not enough to offset the

likely reduction in southern softwood supply,

assuming no increase in timber management

intensity.

Forest conditions can change significantly

between Forest Service State surveys, which

are usually conducted every 10 to 15 years, or

every 12 years on the average. Outdated survey

information is a continuing problem for timber

resource forecasters. There are, however, other

uncertainties in timber supply forecasting. The

manner in which the Forest Service treats

these uncertainties probably leads to conservative forecasts of future timber supply (see ch.

IV). There are two sources of bias in the supply forecasts—conservative assumptions about

future timber management intensity and conservative assumptions about the ability of technology to stretch the wood resource.

Short-run supply curves show that even large

increases in stumpage prices produce only

modest increases in timber harvest. This type

of increase is reasonable, because timber crops

usually require three or more decades to mature. In the long run, however, there are many

adjustments that probably would be made in

response to increased stumpage prices,

One result of increased stumpage prices

probably would be increased levels of forest

management, As timber values increase, a

broader range of investments in timber production is economically possible, and it is likely

that these investments will be made, particularly on forest industry lands. The 1980 assessment assumes no increase in timber management intensity for the next 50 years, even with

rapidly rising stumpage prices. (Alternative

projections showing the effect of increasing

levels of management intensity have been

made, but they have not been given adequate

attention. ) Even under the current stumpage

price structure, increased investment in intensive forest management is occurring.

The role of changing technology in stretching

the wood resource also is treated conservatively in the 1980 assessment. A variety of technologies is currently available that can increase

manufacturing efficiency as well as promote

conservation in end uses (see vol. II). Investments in more efficient manufacturing are

being made by the forest industry, and rising

stumpage prices are likely to increase the use

of these technologies. More efficient manufacture is a key factor in keeping forest product

prices from increasing at the same rate that

stumpage prices increase,
18 . Wood Use: U.S. Competitiveness and Technology

— —

Opportunities To Expand Exports

U.S. producers have an opportunity to significantly expand exports of forest products,

particularly paper. This opportunity is emerging because world demand for forest products

is growing, possibly increasing by 50 percent

by 2000. Also, many traditional world timber

supply regions are not capable of expanding

production to meet this demand—some may

even face declining production as a result of

deforestation. Furthermore, the United States

has a large, modern, efficient manufacturing

capacity, forests that can support larger harvests, and access to skilled labor and materials.

The value of U.S. forest products exports

has more than quadrupled in the last 20 years,

while the value of imports has almost doubled

(see ch. III). Although the United States consistently has been a net importer of forest products, the trade deficit has declined, This is

primarily due to increased exports of woodpulp and paper products, export of high-value

products and imports of lower value products,

and, in the last few years, decreased lumber

imports. Lumber imports probably will rise as

the U.S. economy and homebuilding industry

recover from recession. International economic recovery, which is likely to parallel that

of the United States, probably will mean expanded international markets for U.S. forest

products.

Most of the increased consumption of forest

products is likely to come from industrialized

nations, particularly Western Europe and

Japan. Both are already major purchasers of

U.S. woodpulp and paper products and probably will buy more in the future. This is

because Scandinavia, which supplies large

quantities of paper to Western Europe, is facing limits on its forest resource as well as rising pulpwood costs and may be unable to compete with less expensive U.S. paper products,

such as linerboard. Also, Japan imports large

numbers of logs from Southeast Asia to make

paper and other products, but harvest rates in

Southeast Asia may not be sustainable through

2000, A cooperative effort between the Foreign

Agricultural Service (FAS) and the National

Forest Products Association (NFPA) is underway to promote exports of U.S. lumber and

panel products to fill these developing needs.

There are several trade barriers that limit

the ability of U.S. producers to expand wood

products exports. The most important of these

are world economic and financial conditions.

For several years, global recession has dampened demand for wood while the dollar has remained strong relative to other currencies due

to its enormous stocks in Eurodollar markets

and high U.S. interest rates. Improvements in

these conditions undoubtedly would stimulate

U.S. wood exports in spite of other trade barriers.

Trade barriers limit U.S. exports of processed wood products, but not raw materials.

The United States probably will have no trouble exporting logs, chips, and pulp in the future, but will need to seek reductions of barriers on processed lumber, panels, and paper

products. FAS and NFPA are cooperating in

negotiations with foreign producers and governments to reduce tariff and nontariff barriers

affecting lumber and panels, Part of this effort

is devoted to market promotion, primarily to

gain wider acceptance of U.S. homebuilding

techniques in order to stimulate demand for

American building products.

Lumber and panels are often specialty products, but most U.S. papers are commodities

on world markets. Reduction of tariffs on

paper products such as linerboard could stimulate U.S. paper exports. particularly in Western Europe, although Scandinavian producers

already have free access to these markets due

to lower tariffs. While both the Foreign Commercial Service of the Department of Commerce and FAS are authorized to—and do—

provide assistance to the U.S. paper industry

in easing trade barriers, specific efforts comparable to the FAS/NFPA initiative in solid

wood products do not exist.
Ch. 1— Overview ● 19

—. — — ——. —

Policy Considerations

Federal policies toward forestry and the forest products industry are found in numerous

laws that authorize programs and expenditures

within the Departments of Agriculture, Interior, Commerce, and Treasury, and within

the independent Environmental Protection

Agency, Office of the U.S. Trade Representative, and TVA. General statutes, such as the

National Environmental Policy Act [NEPA) of

1969 (Public Law 91-190), Wilderness Act of

1964 (Public Law 88-577), Clean Air Act (42

U.S.C. 7401 et seq.), the Clean Water Act (33

U.S.C. 1251 et seq.), and others, also affect

timber production. State timber policies often

are patterned after Federal statutes.

The Federal laws that most directly affect

long-term forest management are the Forest

and Rangeland Renewable Resources Planning

Act (RPA) and its amendment, the National

Forest Management Act (NFMA). These statutes are the basis for formulating policies affecting the timber supply, R&D, and the National Forest System.

National Goals

Although RPA and NFMA direct the Forest

Service to prepare a comprehensive assessment every 10 years and a national program

every 5 years, the acts provide no clearly stated

long-term goals to guide the Forest Service in

policy development. In this vacuum, the program and the Forest Service’s annual report

have become the basis for budget requests and

appropriations.

Under NFMA, the Forest Service concentrates heavily on National Forest System policy

and programs. In the absence of congressional

guidance, however, the Forest Service tends to

provide little analysis of policies and programs

that it does not specifically administer or that

do not pertain to the National Forest System,

although there is no limitation on its authority to do so. This emphasis does not address the

roles of other Federal and State agencies and

the private sector in national timber production.

Thus, while the Forest Service is responsible for overseeing the Nation’s wood future, it

concentrates primarily on land and forest management. Little attention is given to those economic factors that affect the business practices

of the forest products industry.

“There have been a number of proposals by

private groups that Congress establish a national timber production policy. Proponents of better defined goals note that RPA has enabled the

Forest Service to assemble a comprehensive

data base on U.S. timber resources and future,

demand, but RPA does not provide congressional guidance for national strategic planning.

RPA’s focus on Forest Service programs tends

to be of limited use to the private sector and

the States, reducing it to little more than a

budget justification for Federal activities,

With 10 years of RPA data available, Congress has a great deal of reliable information

on which to base decisions on the future role

of wood in the U.S. economy. In considering

an overall national industrial policy, Congress

may wish to foster and promote the forest products industry. Among U.S. basic industries, it

is the only one* that has a sustainable resource

base; adequate, modern, and efficient plant

capacity; expanding international markets; and

a competitive edge over most other exporting

nations.

U.S. Timber Supply

National timber famines have been predicted

repeatedly since the turn of the century, None

has occurred to the extent that the national

economy has suffered appreciably, While there

have been regional migrations by the forest

products industry as certain types of timber

have been depleted, major shortages have been

*[J ,S, agriculture shares man} of the same ad~anta~t;s, hut is

not considered a n industrial sector.
20 . Wood Use: U.S. Competitiveness and Technology

avoided through changing technologies, economic adjustments, substitution of other materials, increased production in other regions,

and imports. Government programs, such as

organized fire protection, also have helped.

The Forest Service’s 1980 RPA assessment,

like forecasts of the past, anticipates increasing timber scarcity in the future. Major uncertainties are inherent in these projections, however, particularly in their assumptions about

future economic conditions, consumer demand

(especially housing), timber growth, and technological change.

Because timber demand-supply forecasts

continue to be more an art than a science, wide

ranges in future timber resource and consumption estimates should be expected. Timber

assessment models may be used most effectively in showing how changes in future conditions

affect wood demand and supply and in identifying those factors most critical to policy decisions. By generating alternative scenarios

based on different economic and resource assumptions, the Forest Service projections could

aid Congress in more fully analyzing a variety

of options. The majority of the analysis in the

1980 assessment, however, is based only on

one scenario.

International Trade

To benefit from opportunities to export its

goods, the forest products industry will have

to mount a concerted effort to expand foreign

trade. In the past, U.S. firms have concentrated

on the vast domestic wood market, with their

interest in offshore markets picking up only

when U.S. demand slackened. As a result, the

U.S. forest products industry has gained international notoriety as a somewhat unreliable

supplier. This reputation will have to improve

if the U.S. industry is to take full advantage of

foreign markets. This change already has

started. The solid wood sector of the industry

and FAS recently began working on foreign

market development and trade barrier reduction.

While the private sector has primary responsibility for export market development, the Federal Government must ensure that as few trade

barriers as possible exist between the United

States and potential importing nations. Although the U.S. forest products industry is in

a strong competitive position internationally,

protective tariffs and nontariff trade barriers

put U.S. forest products at a disadvantage in

a number of major consuming countries. This

situation is not unique to forest products, but

if U.S. industry is to successfully maintain and

penetrate major foreign markets, it will be necessary to overcome these impediments.

Of all forest products, the United States is

probably competitively strongest in pulp and

paper. Markets for high-strength paper (linerboard) for shipping containers are expected to

expand rapidly, and U.S. industry has the current capacity and future potential for supplying them. At the moment, however, FAS is not

promoting paper products as actively as it is

solid wood products. The Foreign Commercial

Service also is authorized to undertake export

promotion, but its promotional activities for

forest products are minimal,

In 1982, Congress passed the Export Trading

Company Act (Public Law 97-290) that authorized the creation of overseas export trading

companies with exemptions from certain provisions of the antitrust and banking laws. Currently, the Department of Justice is formulating

regulations to govern the operation of these

companies. The Japanese have had outstanding

success with this concept. Whether U.S. firms

can duplicate the Japanese experience will partially depend on how the Justice Department

structures its regulations and how skillfully the

U.S. industry uses trading companies to expand foreign markets.

Research and Development

Government, academia, and the private sector share responsibility for conducting forestry

research. Traditionally, the Federal Government has played a major part. In general, the
 .

Ch. l—Overview • 21

Government concentrates on funding basic research and performing R&D functions of a

long-term, high-risk nature that are unlikely to

be undertaken by the forest products industry

in response to market forces. This strong Government involvement is based on the premise

that a large portion of the wood-using industry

and forestland owners represent small, diverse

units with limited capital and knowledge and

that the results of such research generally

would benefit this group.

Under RPA, the Forest Service has set priorities for research activities. Over 70 percent

of the recommended Forest Service R&D budget is devoted to growing, protecting, and inventorying trees. Less than 3 percent is aimed at

harvesting technologies, yet, as OTA has concluded in this study, improved harvesting technologies offer important opportunities for

stretching the Nation’s timber supply.

The forest products industry appears to lag

behind other basic industries in research expenditures. It is difficult, however, to obtain

reliable data on forest firms’ R&D investments

because of the proprietary nature of this information. In addition, related industries, such as

forestry equipment suppliers, also do some

R&D to benefit their customers, but data is

unavailable. Antitrust fears undoubtedly have

limited joint research programs. There are indications that the Justice Department is becoming more lenient toward cooperative industrial

research efforts, but in the absence of clarifying language in the antitrust statutes, the forest

products industry is unlikely to move more aggressively.

Private Nonindustrial Timber Management

Private nonindustrial forests account for 58

percent of the commercial timberland base and

supplies about 47 percent of industrial roundwood. These lands, 90 percent of which are

located in the East, are accumulating timber

inventories—especially hardwoods—at a rapid

rate, Timber supplied from PNIF lands is expected to increase significantly, both in volume

and as a proportion of total national timber

supplies.

At the moment, limited Federal assistance in

the form of tax benefits and direct cost-sharing for management expenditures is available

to PNIF owners. A key issue in U.S. forest policy is whether the public interest would be

served by additional incentives for intensive

timber management on private holdings or

whether this should be the responsibility of the

private sector, The Forest Service and the forest products industry estimate that, over the

next few decades, investments of between $6

billion and $9 billion in forest management

may be needed on PNIF lands to meet future

wood demands. There are cogent arguments

both for and against extensive public support

of such investments.

Those opposed to extensive government involvement in private timber management note

that private nonindustrial landowners already

provide a major portion of U.S. timber supplies

and that prospects for further increases are

good, provided management is upgraded. If demand does not rise rapidly, they say, the cost

effectiveness of public incentives for private

timber management is questionable. If demand

does rise quickly, they claim, the attractiveness

of timber management investments will be increasingly recognized by the private sector and

investments will follow in response to the market.

Those favoring more government involvement assert that PNIF landowners may be unable or unwilling to assume all the risks involved in timber management and that broader

public objectives (e. g., the national commitment to affordable housing) justify substantial

Federal commitment to ensuring an available

supply of softwood in the next 50 years. Since

investments must be made decades in advance

of demand, proponents of extensive government programs say that current public decisions on assistance should provide for investing more heavily in intensive timber management to prepare for future timber requirements.

Government involvement in private nonindustrial forestry is not limited to financial

assistance for management. A variety of research, education, extension, and technical as-
22 ● Wood Use: U.S. Competitiveness and Technology

—

sistance programs have been authorized by

Congress in the past to assist private landowners. While the Forest Service leads in

assistance to State and private forestry, on-theground delivery of forestry assistance is a

cooperative effort between several USDA agencies, State forestry agencies, county agricultural stabilization committees, and soil and

water conservation districts.

State and private forestry programs entail a

broad range of objectives and concerns, including noncommodity and nonmarket values

of importance to both landowners and the

public. For this reason, it is difficult to separate

the commodity production profit motive from

that of land stewardship that benefits the public

at large. Thus, forestry assistance is traditionally less commodity-oriented than is agricultural

policy,

Since the early 1970’s, Congress has enacted

several laws to boost private nonindustrial forestry, These include the Forestry Incentives

Program (Public Law 93-86), passed in 1974,

and the Cooperative Forestry Assistance Act

(Public Law 95-313), the Forest and Rangeland

Renewable Resources Research Act (Public

Law 95-307), and the Renewable Resources Extension Act (Public Law 95-306), all passed in

1978,

Although budgetary constraints have limited

the implementation of these laws, the current

forestry assistance policy framework focuses

more on commodity aspects of private forestland management through:

• Increased emphasis on renewable resource research, technology transfer, and

expanded extension services to private

nonindustrial forestry. Although funded

modestly, these efforts in time could result

in more rapid on-the-ground implementation of research findings in much the same

way as agricultural research findings have

been disseminated effectively to farmers,

Changes in the tax law that ease inheritance tax burdens on forest land owners

and provide favorable treatment of reforestation expenses on a limited basis.

Potential establishment of crop insurance

programs. In 1980, through the Federal

Crop Insurance Act (Public Law 96-365),

Congress authorized the Federal Crop Insurance Corporation to develop, in cooperation with the Forest Service, an all-risk

insurance program for timber crops on a

pilot project basis. The pilot program, expected to be launched in late 1983, will

cover pine species in selected southern

counties, It is similar to other agricultural

crop insurance programs.

major problem in government landowner

assistance ‘is how to target the limited funds

available to those lands with the highest potential for cost-effective management. Tracts of

less than 100 acres often are too small to capture economies of scale in timber management,

yet 47 percent of the acres treated with Federal

forestry incentive cost-sharing assistance in

1979 were in tracts of 40 acres or less.

As a result of its assessment, OTA identified

a range of congressional options to deal with

all 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 resources

1. Create a commission to recommend a series of Establish a committee representing timber,

objectives for national timber production for recreation, wildlife, range, water, and

congressional adoption consumer interests

2. Formulate congressional objectives for national Amend the Forest and Rangeland Renewable

timber production Resources Planning Act

3. Direct the administration to formulate specific Administrative action by all relevant agencies

long-range goals for the Nation’s forests, to implement national goals established

including a comprehensive approach to link the by Congress

resources of government and the private sector

Policy Issue B: Encouraging research, development, and transfer of forestry-related technologies

1. 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, and

regulations, and guidelines to exempt joint guidelines

research among private firms from antitrust

laws

3. Direct USDA to place greater emphasis on Greater funding for Cooperative Extension

forestry technology transfer under the Service forestry activities, and technology

framework provided by the Forest and transfer functions of the Forest Service

Rangeland Renewable Resources Research Act,

the Renewable Resources Extension Act, and

the Cooperative Forestry Assistance Act

4. Establish two or three centers of excellence at Legislation creating the regional research

universities to focus on improved utilization of centers

wood and wood materials

5. Allocate more research funds to the effects of Greater funding of environmental components

intensified forest management (including of the Forest and Rangeland Renewable

harvesting technology) on the environment, soil Resources Research Act related to timber

nutrient levels, wildlife, and other resources management and harvesting

Policy Issue C: Enhancing the role of the United States in international trade of wood products

1. Clearly establish the authority, responsibility Administrative directives or legislative action to

and capacity in USDA’s Foreign Agricultural assign responsibility and provide for assisting

Service (FAS) or the Commerce Department’s in export of paper products

Foreign Commercial Service (FCS) to assist the

private sector in developing international

markets and removing foreign trade barriers in

paper products

2. Direct the U.S. Trade Representative to give Congressional directive which may require

priority to identification and negotiation of legislative action or statutory amendments

reductions of tariffs and quotas that restrict

U.S. exports of forest products

Impact of option — .

Would provide recommendations to Congress as

a basis for establishing national timber

production goals and objectives and a

benchmark for timber management

appropriations

Would provide targets for USDA’s Forest

Service to develop programs for timber

production, provide guidance for other Federal

agencies to achieve national goals, and help

the private sector integrate its activities with

Government action

Would extend Government planninf for timber

production and forest products trade to all

relevant agencies, not just the Forest Service

Would enable Congress to evaluate the Federal

research budget with respect to national

timber production objectives

Would permit private firms to participate in joint

research ventures aimed at implementing

national timber production and wood products

trade objectives

Would accelerate on-the-ground implementation

of recent research findings and technological

developments through the education,

information, and demonstration services

provided by the cooperative extension system,

and the Forest Service

Would provide R&D support for improving wood

materials

Would facilitate development of environmentally

sound management practices, and provide a

better information base about environmental

effects of silvicultural activities

Would provide assistance to the U.S. pulp and

paper industry in expanding exports of paper

products (FAS is already responsible for

promotion of solid wood products)

Would focus the trade representatives’ attention

on export problems of the U.S. forest

products 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 statistical

recordkeeping and statistics on tariffs, quotas, collection and reporting of trade statistics and

and other barriers affecting international trade identification of trade barriers

in U.S. forest products

Assign responsibility to a specific agency in the Congressional directive or legislative

Departments of Agriculture or Commerce to amendment, followed by administrative action

monitor the performance of export trading

companies with respect to wood products and

recommend needed changes in the legislation

or regulations

Policy Issue D: Improving RPA information for formulating forest policy

1.

2.

3.

4.

Direct the Secretary of Agriculture to give

priority to forest inventories in important timber

producing States, and to establish priority

schedules for inventorying important regions

Direct the Secretary of Agriculture to improve

the coordination of the RPA and RCA planning

processes among agencies of USDA

Direct USDA to expand its efforts to monitor

fuelwood use and landownership patterns at

regional and National levels to improve the

reliability of RPA data

Direct the Forest Service to provide alternative

projections of future timber supply and demand

as part of the RPA planning process, and

identify the impacts of changes in key variables

on demand, supply, and price

Policy Issue E: Identifying timber management needs

Congressional directive and administrative

action, including budget adjustments

Congressional directive or amendments to

RPA and RCA

Congressional directive and administrative

action

Congressional directive and administrative

action

1.

2.

Direct the Forest Service to place greater Congressional directive and administrative

emphasis on hardwood management action to emphasize intermediate stand

opportunities treatment and hardwood silviculture

Direct USDA to undertake a “potential Congressional directive and administrative

forestland study” to identify extent of marginal, action

erosive, or reverting agricultural land that may

be better suited for timber production than crop

or 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 the

cooperation with the Forest Service, to report to Treasury, and possible amendments to the

Congress on effectiveness of current tax Internal Revenue Code

treatments in encouraging timber management

Would systematically identify and report on

existing and developing barriers to” U.S. forest

products

Would enable Congress to evaluate the

effectiveness of the Export Trading Company

Act in strengthening the U.S. position in

international trade in wood products

Would provide timely information in States with

large and changing inventories, thereby

improving the data base for Forest Service

projections and timber management programs

and budgets

Would ensure that uniform treatment and

emphasis is given to forest lands by agencies

of USDA in planning documents

Would provide information about the

consumption and impact of fuelwood

removals and landownership changes on the

timber resource and implications of these

trends for public policy

Would provide Congress with information that

reflects a range of possible futures on which

to formulate policies, rather than single-point

estimates or “most-likely scenarios” as is

now the case

Would provide for incremental gains in timber.

quality and quantity on private lands without

major expenditures required for intensive

management or species conversion. Would

provide information needed to “target” public

and private assistance to those lands most

suitable for intensive management in costeffective fashion

Would provide better information for formulation

of national policies related to agriculture,

conservation and forestry assistance on

private lands

Would establish the extent to which the current

tax system supports timber management

investments, 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 gains

treatment of timber income and tax incentives

to industry to expand private forestry incentive

programs)

Emphasize Federal assistance programs related

to research, education, extension, and technical

assistance associated with private nonindustrial

forestry

Focus Federal cost-sharing for tree planting to

agricultural land that should be retired from

production for a protracted period due to

erosion; relinquish most other cost-sharing

assistance to the private sector

If general cost-sharing is maintained, direct the

Secretary of Agriculture to focus Government

cost-sharing programs on those private lands

whose potential for producing timber is greatest

Direct the administration to intensify timber

management on suitable Federal lands

Investigate alternative timber management and

timber sales procedures for Federal lands which

would provide industry with incentives to assure

increased responsibility for intensive

management

Appropriations to the Forest Service, the

Extension Service, the Soil Conservation

Service, and other agencies providing forestry

related information, education, and technical

assistance to private owners

New legislation or amendments to the

Cooperative Forestry Assistance Act, and the

Soil Conservation and Domestic Allotment Act

of 1936

Congressional directive and/or legislative

amendments to the Cooperative Forestry

Assistance Act and the Soil Conservation and

Domestic Allotment Act of 1936

Increased appropriations and congressional

directives

Congressional hearings and deliberations,

leading to possible legislative enactments and

associated administrative action

SOURCE Office of Technology Assessment

Impact of option

Would place increased emphasis on programs

of broad application, leaving the private sector

to determine financial investment

requirements

Would channel limited Federal funds for costsharing to areas where timber production

would serve multiple public objectives such

as erosion prevention and water pollution

control

Would ensure that Government investments be

made in lands best suited for efficient timber

production, and that such investments wil l

contribute to future timber supply

Would accelerate timber growth on suitable

Federal lands and increase future yields

Would transfer more responsibility for Federal

timberland management to the private sector,

subject to Federal guidelines, policies, and

planning requirements
CHAPTER II

Policy Analysis and Legislative Options
Page

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

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

Policy Issues ● .. . . . . . . . . . . . . . . . . . . . . . . . 31

Policy Issue A: Establishing Goals for the Management

and Use of the Nation’s Forest Resources . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31

Policy Issue B: Encouraging Research, Development,

and Transfer of Forestry-Related Technology . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33

Policy Issue C: Enhancing the Role of the United States

in International Trade of Wood Products . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35

Policy Issue D: Improving RPA Information for Formulating Forest Policy . . . . . . 37

Policy Issue E: Identifying Timber Management Needs . . . . . . . . . . . . . . . . . . . . . . . 40

Policy Issue F: Establishing Public and Private Management Priorities . . . . . . . . . . 42
CHAPTER II

Policy Analysis and Legislative Options

Introduction

U.S. forest policy has changed dramatically

since the turn of the century. To counteract the

destructive exploitation of the Nation’s forests

that resulted from the “cut-out and get-out” logging practices of the 1800’s, the Federal Government began setting aside forest preserves

of uncut timber that later formed the nucleus

of what is now the National Forest System.

Since then, Federal and State Governments

also have become instrumental in conservation

programs aimed at improving the management

of private forests. Since World War II, the

forest products industry in particular has

assumed increasing responsibility for promoting, advancing, and practicing sound timber

management. The private sector’s initiative in

developing the Nation’s timber resources has

thrust it into a position of leadership in expanding the contribution of forest products to the

American economy.

Nevertheless, despite the private sector’s ascendance, Federal and State forest policies

continue to focus primarily on timber management and secondarily on economic issues crucial to the forest products industry beyond

those related to timber supply Several Federal

Government departments and agencies administer programs dealing with resource utilization, employment, environmental quality,

transportation, housing, finance, and international trade, all of which directly and indirectly

affect the forest products industry. Nationally, the Forest and Rangeland Renewable Resources Planning Act (R PA) of 1974 (Public

Law 93-378) and its amendment, the National

Forest Management Act (NFmA) of 1976 (Public Law 94-585), now address timber management objectives in a broad multiresource

framework. RPA and NFMA, however, concentrate on land management—as Congress

intended—and deal mainly with the U.S.

Department of Agriculture’s (USDA) Forest

Service programs and responsibilities. As a

result, the broader role of forest products in the

Nation’s economy and in its industrial base

continues to receive attention in a piecemeal,

incidental, and uncoordinated manner.

Possible Congressional Strategies

Two excellent positions—the favorable outlook for domestic timber supplies and the

U.S. ’S strong potential for increased world

trade in wood—together give Congress a range

of legislative alternatives for revising forest

policies, Congress may choose from among

four general strategies to:

1. Relinquish responsibility for national

timber supplies and industry development

to the private sector to meet domestic demands so that little government involvement and no special incentives are needed. 2,

It is assumed that timber supplies are adequate and probably will remain so. This

strategy would require modification of

portions of RPA that authorize projections

of timber supply and demand, reductions

in Forest Service program levels, and no

special Federal emphasis on increasing

forest products exports. Timber management on Federal lands would revert to its

status before the enactment of the NFMA,

and the market would determine private

investments in timber management and

plant expansion,

Maintain the status quo, accepting current

limitations and uncertainties concerning

29
30 ● Wood Use: U.S. Competitiveness and Technology

— —

3<

4.,

information in RPA, and make no special

effort to induce expansion of the forest

products industry beyond present program

levels. Under this strategy, ongoing efforts

for timber management on Federal and

private lands would continue, possibly

with incremental changes, but would not

be broadened or significantly changed.

Continue to rely on the planning process

established by RPA as the general guide

for Federal policy, but upgrade the information base, forest inventory, and timber

inventory to support the development of

a wider range of program alternatives and

program plans.

Identify national goals for developing forest resources to take advantage of future

international markets by:

●

●

●

improving RPA as indicated in Strategy

#3 above,

providing aggressive Federal support to

the forest products industry in its efforts

to expand its role in world markets, and

expanding U.S. timber supplies through

increased support of research and technical assistance to private forestry and

through intensified management of Federal lands.

The degree of congressional action and Federal involvement increases from Strategy #1,

which would dismantle the current Forest

Service planning system and return to the

former decentralized management system, to

Strategy #4, which would require more positive

Federal support and commitment to expanding

U.S. timber potential and increasing international trade in forest products.

The magnitude of the economic and social

impacts of a national strategy to strengthen and

expand the U.S. role in world trade of forest

products is difficult to forecast accurately, but

the direction of such changes can be anticipated, Significant expansion of forest production, improved wood utilization, and modernization of old mills and construction of new efficient plants probably would bring increased

prices for forest products in the short run. In

the long run, however, higher prices could

stimulate more investment in efficient manufacturing, forest management, and research

than would be undertaken under the existing

price structure. As producers shift to more efficient production facilities and more intensive

management and harvesting practices, forest

product prices could be forced downward. The

effects of price increases on consumers is often

slight. Wood products in general account for

less than 15 percent of the price of the average

home, with structural lumber and panels in

particular accounting for only 7 percent.1 The

same is true for many other consumer goods—

wood is often only a small portion of the price.

The forest products industry currently employs about 1.7 percent of the full-time labor

force. Expanding production to meet world demand for forest Products could increase employment in the industry. The increase maybe

modest, however, because modern mills are becoming less labor-intensive as the industry

moves toward mechanized technologies. Also,

employment in the solid wood (lumber and

panel) products sector is subject to wide

swings, since production depends on the cyclical homebuilding industry. Increased participation in world markets possibly could

cushion this oscillation somewhat, but, as international economies become more closely

linked through commerce and banking, so have

worldwide economic trends. An expanded

U.S. forest products industry role in world

trade may not significantly buffer its employees

from the shocks of recurring recession. Increased international trade could result in better price stability for forest products prices,

which often dramatically increase as production attempts to meet pent up demand during

economic recoveries.

Expanded production could have environmental effects, too. Some observers say that expanded export markets could result in “exporting” the Nation’s soil, fisheries, and wildlife

as well as forest products if good forest practices are not adhered to. If not conducted properly, timber harvesting and intensive forest

1U.S. Congress, Congressional Budget Office, ‘‘Forest Timber

Sales: Their Effect on Wood Product Prices, ” background paper,

May 1980.
Ch. II—Policy Analysis and Legislative Options ● 3 1

—. — — . —

management often may change wildlife habitats, affect the availability of forage for

livestock, cause erosion, and decrease water

quality. Shorter rotations and greater utilization of forest residue may deplete soil nutrients

over an extended period of time that could possibly affect future productivity of forest sites,

Some timber management practices are incompatible with some forms of outdoor recreation.

While severe environmental damage can be

avoided in increased management intensity

and residue utilization, some negative effects

probably are inevitable.

In summary, a program to increase the role

of U.S. forest products in international trade

may:

Policy

Discussed below are six policy issues. Under

each are presented key findings, a brief summary of current policy status, and selected legislative options for congressional consideration.

Policy Issue A

Establishing Goals for the Management and Use

of the Nation’s Forest Resources

There are no clearly stated long-term national goals to guide

Federal and State Governments and the private sector in longrange planning for the use and management of the Nation’s

forests.

Findings

●

●

RPA, as amended in 1976 (NFMA), does not

set forth general long-range national goals

for timber production; it does not require the

executive branch to develop specific national

goals, except for the National Forest System.

In the absence of specific national goals, the

RPA planning process lacks a reference

point for program revision (required by the

act every 5 years) and fails to measure success in improving the use of the Nation’s

forest resources.

• increase the supply of timber available to

U.S. producers as well as international

markets,

• result in slightly higher employment in the

forest products industry,

● increase the U.S. role as an exporter of forest products, thus improving the balance

of trade,

• slightly increase the price of housing and

other consumer products whose production depends on forest products, and

• cause some deterioration in the environmental quality of U.S. forests.

Issues

Ž In addition to the U.S. Department of Agriculture, (USDA) numerous Federal departments and agencies and State and private institutions play important roles in national

programs to improve the management and

use of the Nation’s forests. Among these

agencies and institutions are those that deal

with finance, housing, environmental quality, international trade, and resource management. Clear national goals are needed to

guide these institutions in providing support

for USDA.

Current Policy Status

The framework for national long-range forest

resources planning is based on two statutes,

RPA of 1974 and a 1976 amendment to RPA,

NFMA.

RPA directs the Secretary of Agriculture to

prepare a comprehensive assessment of renewable 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 a

program based on the assessment recommending levels of Forest Service activities and to update it every 5 years. The assessment and program serve as guides for Forest Service plan-
32 ● Wood Use: U.S. Competitiveness and Technology— —

ning and aid in the development of annual

budget proposals. Once accepted by Congress,

the program becomes the basis for Forest Service annual reports that accompany the President’s budget submissions to Congress. Each

annual report includes a quantitative and qualitative appraisal of how the administration’s

proposed budget meets the needs of the program. If the budget does not support the policy

objectives or activity levels that the program

prescribes, the President is directed to specify

the reasons for proposing different policies or

cutting programs, NFMA establishes an elaborate planning process for the National Forest

System.

In sum, RPA as amended directs the

Secretary of Agriculture to make an assessment

of the present and future state of the Nation’s

forest resources and to formulate a program

accordingly. However, Congress has not provided specific goals to be used in carrying out

this directive. The original RPA contained

neither a statement of policy nor congressional

findings, Findings set forth by NFMA and

more recent policies stated in the Forest Service’s 1982 Annual Report are very broad and

fail to provide clear direction for implementation of RPA’s mandate.

In the absence of congressional guidance, the

Forest Service has interpreted RPA program

requirements narrowly by focusing on National Forest System planning and Forest Service programs. This emphasis has obscured the

potential role of other Government agencies

and of non-Federal lands, which comprise

about 80 percent of the Nation’s commercial

forest, in meeting future U.S. economic and

social needs, In addition, little attention is

given to public policies that may affect the

private sector’s ability to compete in world

markets, obtain capital to develop timber resources, and develop more efficient forest

management and wood production techniques,

In short, the business of increasing the Nation’s ability to maximize benefits from its immense endowment of timber resources transcends the Forest Service, yet the responsibility

for assessing and planning for these resources

is assigned largely to that agency. If the Forest

Service is to take the lead in advancing U.S.

timber production, it must go beyond Federal

resource management activities and concern

itself with the broader economic issues facing

the forest products industry, as well as with

social issues that could arise.

As a result of RPA, the Forest Service has

both an extensive forest resource data base and

the capacity to project future timber needs, The

next logical step is to use this information to

formulate a national strategy for maximizing

potential domestic and world trade benefits afforded by the U.S. economic position and forest resource endowment.

A variety of organizations have proposed

goal-setting to foster increased timber production from U.S. forests. In 1980, the Forest Industries Council recommended establishment

of “a national timber productivity goal” aimed

at reducing consumer costs and building a

trade surplus in wood products. Similarly, a

recent conference sponsored by the American

Forestry Association and 23 other organizations proposed a “national goal for timber,” including numerical goals for fiber production

to be set through the RPA process.

Congressional Options

Several options are available to Congress

should it determine that national timber production goals are desirable to promote domestic economic, social, and international trade

development,.It could:

1,

2.

3.

Create a commission to recommend goals

for adoption by Congress as U.S. policy for

the management, use, and economic contribution of the Nation’s forests,

Formulate clear congressional goals for incorporation into RPA.

Direct the administration to formulate

specific long-range goals for the Nation’s

forests, including a comprehensive approach to link the resources of government

and the private sector.
.. ——

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

Policy Issue B

Encouraging Research, Development, and Transfer

of Forestry-Related Technology

Improved harvesting systems could increase the amount

of timber recovered from the Nation’s forests.

Findings

●

●

●

●

●

●

Research and development (R&D) in

harvesting systems offer great potential for

immediately increasing the amount of wood

available to the forest products industry.

Nearly 100 percent of the wood brought into

modern mills is utilized, either for products

or energy, but many old mills currently do

not achieve optimal use of materials. As existing mills are replaced with technologically

advanced facilities, further improvements in

product yields and energy efficiency are

probable, even though overall utilization of

raw materials cannot increase appreciably.

Expanded research in the utilization of hardwoods and defective timber could further extend U.S. wood supplies.

Additional basic research in wood chemistry, structure, and mechanical and engineering properties could increase wood’s longterm competitive position relative to other

materials.

Prior research in silviculture, forest management, and wood utilization has provided an

abundance of on-the-shelf technologies, but

many have not been applied extensively in

practice. Economic factors, resistance to

change, and capital limitations are some of

the barriers that limit commercialization of

new technologies. The technology transfer

system for forestry research is not well developed when compared to agriculture, although a basic framework to achieve this

was established by Congress in 1978.

The forest products industry lags behind

other basic industries when its R&D funding

is compared to sales volume and output

value.

● Inadequate consideration has been given to

recent significant increases in the use of

wood fuel and their impacts on traditional

wood products, existing timber stands, and

future silvicultural practices.

Current Policy Status

Responsibility for forestry and wood products R&D is shared by Federal and State

Governments, academia, and the private sector. Lines of responsibility are often blurred,

however, and one sector’s role is not separated

from another. Public agencies and academia

generally undertake basic and applied research, although industry does a considerable

amount of basic research as well. Public agencies venture into developmental areas where

broad social gains may be realized and the

development is long term, high risk, and unlikely to attract private research investment,

Sometimes public agencies undertake applied

R&D when the commercial sector consists of

small enterprises without technical and funding capacity or when R&D will benefit “public

goods” such as wildlife or recreation,

A major barrier to improved R&D cooperation among companies are antitrust statutes.

While antitrust laws permit joint research ventures that are approved and monitored by the

Department of Justice, many firms are wary of

working with competitors for fear of subsequently being judged in restraint of trade, The

pulp and paper sector is particularly hesitant

to join research ventures because of the spate

of antitrust suits brought against some major

producers in the past. While firms in some

industries—such as electronics—have joined

successfully in research consortia, uncertainties about Justice Department interpretation

continue to dampen industries’ enthusiasm for

cooperative R&D.

The 1980 RPA assessment proposed $196

million for R&D planning for the fiscal year

1984 Forest Service budget. Forty-four percent

of the funding would be directed toward growing and protecting timber, 27 percent toward
34 ● Wood Use: U.S. Competitiveness and Technology

inventory and economic research, 14 percent

toward forest products utilization, and less

than 3 percent toward harvesting and engineering. The remaining 12 percent would be distributed among recreation, fish and wildlife,

watershed management, and surface environment. While appropriations for Forest Service

R&D have been much lower than the RPA

target, funding apportionment has followed

RPA recommendations closely. In recent years,

Forest Service research budgets have declined

from $112 million in fiscal year 1982 to $105

million in fiscal year 1983. A budget of $101

million is requested for fiscal year 1984.

The Forest Service research budget clearly

emphasizes growing, protecting, and inventorying trees (7 I percent of the proposed RPA

R&D budget). While silviculture, management,

and forest protection are important means to

increase timber production, improved harvesting systems may provide the greatest immediate payoff in extending the Nation’s timber

supply. The RPA assessment seems to underestimate the potential gains from harvesting

and engineering R&D and recommends that it

comprise only 2,8 percent of the Forest Service

research budget.

In 1976, an estimated 1.4 billion cubic feet

(ft 3

) of usable wood residues were left in the

forest after logging, plus an additional 3 billion

to 6 billion ft3 of tops, branches, and defective

timber. These unused residues constitute approximately one-fourth to one-half of the volume harvested, Wood on other sites remains

unused because the land is too environmentally

sensitive to harvest with existing technology

and must be discounted from the national timber base, Approximately 185,000 acres of the

National Forest System in the Pacific Northwest are in this category. Additional acreage

may be excluded because it is not economically

feasible to harvest,

Improved harvesting systems could facilitate

the economical harvest of small tracts and the

removal of small logs. Manufacturing technologies continue to advance, and previously unusable wood materials and tree species now

can be turned into products or used for energy.

Historically, harvest system development in

the United States has been isolated from R&D

efforts aimed at growing timber and processing forest products and has not been adequately supported by either private or public funding. In contrast, Western European and Scandinavian countries have developed innovative

harvesting technology as a result of wellfunded efforts coordinated among the public

and private sectors.

In the absence of a comprehensive R&D program, the United States has focused largely on

individual machines rather than on integrated

harvesting systems designed to fit the timber

resource, harvesting requirements, and manufacturing processes. Private sector efforts

primarily have taken place by trial and error,

in small job shops, and by adaptation of agricultural equipment. Increased research on the

environmental impacts of harvesting can help

guide the future development of machinery

and harvesting systems. Research on wildlife

impacts and possible effects on soil nutrient

levels may be especially critical in the design

of systems that remove most woody biomass

from sites.

Technology transfer is an important but often

overlooked component of public R&D programs. Transfer of forestry technology has

received less attention than it has in agriculture where new innovations are implemented

rapidly by farmers through the information,

education, and demonstration programs of the

Cooperative Extension Service. The extension

system also is used to disseminate forestry

research findings, but with comparatively little funding.

In 1978, Congress strengthened the framework for forestry technology transfer by enacting three laws to further the general policies

and direction set by RPA—the Cooperative Forestry Assistance Act (Public Law 95-313), the

Forest and Rangeland Renewable Resources

Research Act (Public Law 95-307), and the Renewable Resources Extension Act (Public Law

95-306),

These statutes were intended to give technology transfer and forestry extension higher
priority within USDA structure and among

State and local agencies involved with forestry

and agriculture. The laws emphasize rapid

communication of forestry research and technological information through USDA channels

and through upgrading of Federal assistance

to State and county extension agencies. Funding has been at a low level, however. The Renewable Resources Extension Program, for example, was authorized at $15 million annually, but initial funding of $2 million was not provided to the Cooperative Extension Service until fiscal year 1982 and it has been cut from the

administration’s proposed fiscal year 1984

budget, A small amount of general-purpose

cooperative extension funds is used for forestry

activities.

Congressional Options

Should Congress determine that further action to encourage R&D and transfer of forestry

technology is desirable, various options are

available. Congress could:

1.

2.

3.

4.

5.

Amend either the Forest and Rangeland

Renewable Resources Research Act or

RPA to require periodic assessment of the

Forest Service R&D program for congressional review.

Direct the administration to issue regulations and guidelines to expressly permit

joint research efforts among firms without

interference from antitrust restrictions.

Direct the Secretary of Agriculture to place

greater emphasis on forestry technology

transfer under the framework provided by

the Forest and Rangeland Renewable Resources Research Act, the Renewable Resources Extension Act, and the Cooperative Forestry Assistance Act.

Establish two or three national research

centers of excellence aimed at improved

utilization of wood and wood materials.

The laboratories could be located at universities with strong supporting departments and could emphasize collaborative

research among academia, industry, and

government.

Allocate more funds to the examination of

the effects of intensified forest manageCh. II—Policy Analysis and Legislative Options ● 3 5

ment (including harvesting technology) on

the environment, soil nutrient levels, wildlife, and other resources.

Policy Issue C

Enhancing the Role of the United States

in International Trade of Wood Products

The United States has an opportunity to expand its exports

of solid wood and paper products, but a number of trade barriers must be eliminated or eased if the U.S. wood products

industry is to successfully increase its share of world trade.

Findings

●

●

●

●

●

Rapidly growing global demand and the

comparative advantage of U.S. producers

give the United States a unique opportunity

to expand its role as a supplier of forest products to world markets. The U.S. advantage

is particularly great in pulp and paper.

The character of world trade is changing,

and many of the changes place U.S. producers of all goods and services at a disadvantage. The growing use by many countries

of nontariff trade barriers and foreign government assistance to exporters are detrimental to U.S. exporters of pulp and paper

and solid wood products. Although their use

has declined over the past three decades,

many traditional quotas and tariffs remain,

and these also hinder U.S. exporters.

World economic conditions also have

eroded the advantages of U.S. products. In

particular, the recent global recession and

the strength of the dollar relative to other

currencies have adversely affected U.S. exports.

Many importing nations see the U.S. solid

wood sector of the forest products industry

as an unreliable supplier because of its tendency to lose interest in foreign markets when

domestic recessions abate.

Foreign perception of the United States as

an unreliable trading partner is reinforced

by the U.S. Government’s use of trade sanctions and embargoes as a foreign policy

weapon.
36 ● Wood Use: U.S. Competitiveness and Technology

● Tariffs, quotas, and nontariff barriers inhibit

the increased export of pulp and paper and

solid wood products, but nontariff barriers

probably are the most damaging.

Current Policy Status

The United Nations Food and Agriculture

Organization (FAO) projects that world demand for industrial forest products could be

50-percent higher by the end of the century.

The United States is one of only a few nations

that is well positioned to satisfy this demand,

but its ability to do so is hampered by a number

of factors, ranging from monetary and foreign

policies of the Federal Government to product

standards, While the commitment to expand

international markets for U.S. wood products

must come primarily from the forest products

industry, there are a number of ways the

Government may assist the private sector.

The forest products industry is one of few

basic industries with a sustainable competitive

advantantage over foreign producers. While

the domestic steel and automotive industries

have lost their edge in international markets

to Western European and Japanese producers,

U.S. wood and paper products are becoming

more competitive. There are several reasons

for

●

●

●

this: -

U.S. producers can tap abundant renewable sources of wood that are cheaper than

those of most other nations;

the U.S. wood products industry enjoys

lower production costs than most foreign

firms due to lower energy costs, available

skilled labor, and advances in energy efficiency; and

U.S. manufacturing capacity and access to

forests are well developed,- in contrast to

many competitors with remote forests.

However, the ability of the U.S. forest products industry to exploit this advantage is limited by world economic conditions, domestic

government policies, past industry behavior,

and trade barriers, including tariffs, quotas,

and nontariff impediments. The most severe

and least controllable limitations are worldwide recessions and the strength of the dollar

relative to foreign currencies. The U.S. Government’s past use of trade sanctions and embargoes as instruments of foreign policy also has

tended to undermine world confidence in the

United States as a reliable dealer. Few of these

factors affect forest products any more than

they do other exports, but in some cases tariffs,

quotas, and nontariff barriers specifically

reduce the competitiveness of the forest

industry.

The U.S. solid wood products sector is considered a rather fickle trader by many foreign

customers. Historically, U.S. suppliers have

tended to lose interest in foreign buyers when

domestic demand for lumber and panels increases. While the sector is becoming more aggressive in developing foreign markets for solid

wood products, the strength of its commitment

during a sustained economic recovery remains

untested.

The removal or reduction of tariffs, quotas,

and nontariff barriers could provide a longterm stimulus for U.S. forest products exports,

Although tariffs and traditional quotas have

been reduced since the formation of the General Agreement on Tariffs and Trade (GATT),

many barriers remain. Nearly every major

country that imports U.S. wood products levies

tariffs or quotas, but these almost always affect processed products more than raw materials, Without tariff and quota reductions, the

United States can expand exports of logs,

woodpulp, and rough lumber, but similar expansion of finished lumber, panel products,

and paper exports may be more limited.

Negotiation of tariffs and quotas is dealt with

in GATT by the U.S. Trade Representative. Increasingly, GATT negotiations have focused on

nontariff barriers, too, but GATT codes on

these barriers are often vague and difficult to

enforce. Nontariff barriers, however, may be

a more potent deterrent to increased U.S. wood

products exports than tariffs and quotas. Reduction of nontariff barriers probably can be

handled best through bilateral negotiations

with specific nations or trading associations

and will require both government and industry

involvement. The National Forest Products Association recently began a cooperative effort

with the USDA Foreign Agricultural Service
Ch. II—Policy Analysis and Legislative Options ● 3 7 —.——. —

(FAS) to improve market acceptance and reduce trade barriers for U.S. lumber and panel

products. There is no comparable program for

pulp and paper products, although both FAS

and the Department of Commerce’s Foreign

Commercial Service are permitted to provide

this assistance.

The formation of export trading companies,

authorized by the Export Trading Company

Act of 1982 (Public Law 97-290), may improve

the competitive position of the U.S. forest products industry in international markets. The act

allows certain exemptions from antitrust law

to permit American firms, including banks, to

band together to export overseas. Some west

coast forest products firms have expressed interest in forming export trading companies, but

whether U.S. producers will be able to duplicate the success of the Japanese is unknown.

Congressional Options

Several options are available to Congress

should it determine that expansion of U.S.

wood products exports is in the national interest. It could:

1.

2.

3.

4.

Clearly establish authority, responsibility,

and capacity within FAS or the Foreign

Commercial Service to assist the private

sector in market development and reduction of nontariff barriers to trade in pulp

and paper products.

Direct the U.S. Trade Representative to

give high priority to identifying and

negotiating reductions in tariffs and

quotas that most severely limit increased

U.S. exports of wood products.

Direct the FAS, Foreign Commercial Service, Forest Service, or other agency to

maintain current information on tariffs,

quotas, and nontariff barriers affecting

trade in wood products.

Direct the Forest Service, FAS, Foreign

Commercial Service, or other agency to

monitor the effect of regulations under the

Export Trading Company Act and to identify legislative changes needed to make

U.S. wood products export trading companies competitive in world markets.

Policy Issue D

Improving RPA Information

for Formulating Forest Policy

The formulation of forest policy requires up-to-date national

level information about forest acreage, inventories, and growth

trends and realistic assumptions about future demands. Improvement in the current system for projecting timber supply and demand is needed if decisionmakers are to have adequate information for the design and funding of timber management programs and assistance to private landowners.

Findings

●

●

●

●

More frequent inventories are needed if

timely, reliable forest information is to be

provided to Congress in RPA assessments.

Each State is surveyed on the average of

once each 12 years, but in some important

timber-producing States the survey cycle is

longer, As a result, national information is

based substantially on estimates rather than

actual, up-to-date field data.

Inventories and growth trends for U.S. forests may be different in reality than those

shown in the 1980 RPA assessment because

of outdated survey information. Past national assessments consistently have underestimated growth and inventories, both in

the national aggregate and on a per-acre

basis. Uncertainties surround current and

projected growth trends and inventories in

the 1980 RPA assessment. In some regions

and for some tree species, estimates may be

overstated; in others, understated.

A major uncertainty concerns the revival

and rapid increase of wood used for fuel—especially for residential home heating. The

phenomenon is so recent that adequate data

on consumption, sources, and trends is lacking. Recent Forest Service and Department

of Energy surveys indicate that residential

fuelwood use increased several times more

rapidIy in the late 1970’s than was anticipated. The proportion of fuelwood that came

from industrially important growing stock

is not clear.

Several trends in landownership patterns

may affect future timber production. Farm-
38 ● Wood Use: U.S. Competitiveness and Technology

—

ers own a declining proportion of the forestland base, while “miscellaneous” private

owners are increasing in numbers. Less than

30 percent of the private forestland has been

held by the same owner for 30 years or more.

Also, about one-fifth of all private forests is

in parcels that are economically less efficient

to manage. Ownership data is improving,

but significant gaps remain, especially in the

South where much of the private forestland

is located.

Better information about the on-the-ground

effectiveness of USDA private landowner

assistance is needed to evaluate Government

policies and assess agency programs. Several

USDA programs are oriented toward farmers, who own a declining proportion of the

forestland base.

Forest Service projections of timber supply

and demand may overstate the future scarcity of timber. These projections are made

using survey data and extrapolations of past

timber growth, landowner behavior, and the

relationship of demand for wood products

to general levels of economic activity and

population. More complete analysis of the

sensitivity of these projections to changes in

key variables is needed for Congress to evaluate proposed Forest Service timber management programs and budgets.

Current Policy Status

The collection and compilation of forest

resource information has been a continuing

function of the Forest Service since 1928,

through congressionally authorized cooperative forest surveys in all States. Information

requirements have increased in recent years

due to the passage of RPA.

Through the Forest and Rangeland Renewable Resources Research Act, Congress explicitly acknowledged the need to “ensure adequate data and scientific information” in the

development of RPA assessments. It directed

the Secretary of Agriculture to “make and keep

current a comprehensive survey and analysis

of the present and prospective conditions of

and requirements for renewable resources of

the forests and rangelands of the United

States . . . .“

Provision of up-to-date national forestland

statistics and identification of trends are

perplexing problems for the Forest Service

because of the timing of State surveys. Forest

surveys are statistically reliable, but they are

conducted only periodically and irregularly in

many States. As a result, the 1980 RPA assessment was based in part on adjusted field data,

since 22 State surveys were compiled before

1970. Scheduling of forest surveys accelerated

temporarily after the 1978 Research Act, but

recent budget cutbacks have again slowed the

inventory schedule.

Up-to-date survey information is crucial,

especially in States where non-Federal lands

make an important contribution to timber supplies, particularly in the South and the East.

Private forestlands comprise 72 percent of the

commercial forestland base and 80 percent of

timber supplies and are expected to play an increasingly important role in future forest production, Most of this land is not owned by the

forest products industry, and is subject to

greater fluctuation in use and ownership than

are public and industrial lands. The RPA estimates that, between 1962 and 1977, private

nonindustrial lands declined by 26 million

acres and forest industry holdings increased

by 7 million acres, The net decline in private

lands was 19 million acres. In some States,

State and county lands also play an important

role, particularly in the North Central and

Northeastern regions.

Better land ownership data could assist in

formulating and evaluating the effectiveness of

forest resource policy. The Forest Service obtained national and regional information about

forestland owners incidentally from a 1978

USDA rural land ownership survey, but the

study was not aimed at forest owners and, as

a consequence, provided insufficient information on owner motives and financial capability. As a result, comprehensive ownership data

is available from only 11 Northeastern and

Middle Atlantic States where the Forest Service has undertaken detailed surveys, While

ownership information has improved, critical
Ch. II—Policy Analysis and Legislative Options ● 3 9

gaps remain, particularly in parts of the South

where nonindustrial lands predominate,

Upgraded information about wood fuel use

also is needed, since it now accounts for more

than half of the wood consumed in the United

States. The forest products industry burns

about two-thirds, obtained primarily from

manufacturing byproducts such as residues

and pulping liquors. However, use of residential fuelwood has increased dramatically and

now amounts annually to over 40 million ovendry tons. Much of this tonnage probably comes

from industrially inconsequential sources,

although data is fragmentary. If fuelwood use

continues to grow, however, consumers could

compete with industrial markets in some areas,

unless steps are taken to integrate wood fuel

use into forest management and industrial

wood systems,

Because of the overriding importance of nonFederal lands, closer coordination and greater

consistency are needed between the RPA

assessment process and a parallel USDA

assessment and program conducted under the

Soil and Water Resource Conservation Act

(RCA) of 1978 (Public Law 95-192). RCA is

limited to non-Federal lands and is oriented

towards agricultural activities, but private

forestlands are included under both RPA and

RCA. Moreover, some key elements of Federal

landowner assistance programs are provided

by agricultural agencies such as the Soil Conservation Service, the Agricultural Conservation and Stabilization Service, and the Cooperative Extension Service.

Because of the recent origin of the RPA and

RCA processes, it is not surprising that inconsistencies in their initial assessments have occurred. The Forest Service and the Soil Conservation Service have different missions and

therefore different orientations and purposes

in compiling forestland information. However,

estimates of non-Federal forestland provided

to Congress in the 1980 RPA assessment and

the initial RCA assessment differed by tens of

millions of acres—a discrepancy too big to be

ignored. Most of this discrepancy is attributable to different land classification systems

used by the two agencies, but some of it probably reflects the timing of field surveys—all of

the Soil Conservation Service data was collected during 1976-77, when only part of the

Forest Service data was current. USDA plans

to use common non-Federal forestland figures

in future assessments, and the two agencies are

working to resolve the discrepancy.

Forest Service planning and budget requests

for timber management programs on public

and private lands are affected by projections

of future need for wood. The most recent Forest Service projection made in the late 1970’s

shows increasing scarcity of timber in the next

50 years. This forecast is based partly on outdated (or adjusted] survey information, extrapolations of past trends in landowner behavior

and timber management, and a wide range of

assumptions regarding future economic conditions that are subject to significant change,

particularly over the long time periods used in

the forecast. Some analysts argue that these

projections overestimate demand largely as a

result of assumed high demand for housing and

an overstatement of the gross national product growth, Timber growth trends are uncertain. Budget requests based on these projections may, as a result, place undue emphasis

on timber management. Because it is difficult

to forecast future demand and supply with any

accuracy, projections based on a single set of

assumptions are of limited value,

Congressional Options

Several options are available to the Congress

if it decides that improrved information is

needed for policy formulation. It could:

1.

2.

Direct the Secretary of Agriculture to

schedule State forest surveys to ensure that

current information is available in key forestry States (those with a predominance of

timber and changing conditions) for RPA

assessments. Direct the responsible USDA

agencies to identify options and costs for

updating information on forestland conditions prior to production of an RPA

assessment.

Direct the Secretary of Agriculture to identify and evaluate options for coordinating
40 ● Wood Use: U.S. Competitiveness and Technology

3.

4.

and improving consistency of RCA and

RPA assessments and programs affecting

non-Federal forestland.

Direct USDA to expand its efforts to

monitor fuelwood use and landownership

patterns at regional and national levels to

improve the reliability of RPA data.

Direct the Forest Service to provide alternative projections of future timber supply

and demand and to identify the effects of

changes in key variables on projected

timber demand, supply, and prices.

Policy Issue E

Identifying Timber Management Needs

U.S. timber supplies can meet probable demand for forest

products through 2030 if current management trends continue. Application of existing management technologies could

increase timber growth far beyond current levels, but institutional, technical, and financial barriers must be overcome first.

Findings

Timber harvest levels 50 percent greater

than those of the high-demand period of the

1970’s can be sustained for several decades

without major changes in existing management technologies for growing, harvesting,

and processing wood according to Forest

Service base-level supply projections.

While timber growth presently is increasing

at a steady rate, other factors could significantly alter the future supply situation. One

factor is wood fuel consumption, which recently has risen dramatically, although current data is inadequate to assess the implications for industrial timber supplies. Another

factor is forestland conversion to nontimber

uses. Most acreage losses have been on private lands as a result of shifts to agricultural

and urban uses, USDA statistics vary significantly as to the exact magnitude of the shift.

Wilderness set-asides on Federal lands have

contributed somewhat to the decline in commercially available timberland, but wilderness areas generally consist of less productive, inaccessible sites, so that economically exploitable timber volumes are small in

relation to the acreage removed from production.

●

●

●

Timber management practices applied today

will not have an appreciable effect on timber

supplies until after 2010. Management proposals to reduce projected scarcities will require capital investments in the range of

$10 billion to $15 billion over a 50-year

period, mostly for softwood reforestation on

private nonindustrial lands.

In the absence of production goals for U.S.

forestry, the need for investments of this

magnitude is not well established, Forest

Service models of long-range timber demand

and supply predict increasing timber scarcities, particularly for softwoods, but the

models use liberal demand assumptions and

conservative supply assumptions, Uncertainty about future wood demand is a major constraint to private investment and casts

doubt, too, on the need for public expenditure.

Management programs to increase softwood

supplies may need to be reevaluated so that

less costly alternatives (e.g., improved

management of existing hardwoods) receive

more consideration for private nonindustrial

forest (PNIF) lands.

Current Policy Status

Increasing the productivity of U.S. forests

has been the major purpose of forest policy for

nearly 80 years. Fears of possible timber famine

have not panned out, in part because of the success of public programs and private initiatives

to conserve supplies, reduce the hazards of fire,

insects, and disease, and improve the utilization and management of forestland. U.S. forestland today provides more wood for industrial use than that of any other nation, even

though the United States ranks third in exploitable growing stock.

The domestic timber supply situation has improved dramatically over time, It probably will

continue to improve, affording opportunities

to expand the contribution of U.S. forests to

the economy. Growth trends are highly favorable for greater production, even assuming the

continuation 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 biologically possible on a sustained basis. Net annual roundwood growth, now over 20 billion

ft

3 has been increasing since 1952, although

this is expected to taper off in the decades to

come unless appropriate management practices intervene. Standing inventories are increasing rapidly, from 600 billion ft 3 in 1952

to 711 billion ft3 in 1976, and are expected to

continue to increase. Supplies of preferred

species, especially high-quality softwoods, are

tighter, however, and there are important regional differences.

Technological advances also favor increased

production and have contributed to the improved timber supply situation. More efficient

manufacturing processes have broadened the

range of usable materials to include less

valuable and underutilized species such as lowgrade hardwoods and habe enhanced the prospects for use of “nongrowing stock materials”

[timber not counted in the standing inventories

cited above). I n addition, developments in harvesting technology’ have improved recovery of

materials previously’ left on harvest sites,

although comparatively low levels of R&D) have

hindered progress toward integrated harvesting systems.

Although timber supply prospects are on the

whole optimistic, there are some important

caveats, For example, residential fuelwood

consumption skyrocketed during the 1970’s.

Most fuelwood is thought to come from

sources that are not important to the industry,

but high levels of fuelwood removal for a protracted period could tighten industrial supplies

if appropriate management strategies are not

adopted. Commercial forest acreage has declined recently, mainly because of the conversion of forestland to agriculture and developmental uses; continued decline is anticipated.

Moreover, PNIF land, on which the industry

increasingly depends for supplies, typically is

not owned primarily for timber production,

and some of this land is in parcels too small

to benefit from “economies of scale” in management and harvest.

Management technologies applied to U.S.

forests could greatly increase growth, but this

is a long-term proposition because of the long

growing cycle of trees. Most of the 482 million

acres of commercial forestland in the United

States is not managed primarily for timber

growth; intensive timber management (application of planned treatments to forestland to increase production of industrial roundwood) is

increasing but it is not widely applied.

Because tree crops take at least 30 years to

grow, investment decisions must be made several decades before harvest amid uncertainty

about future timber markets and the future

state of technology. Intensive timber management opportunities currently identified by the

Forest Service were sought in response to projections of increased timber scarcity (primarily softwoods) over the next 50 years.

To reduce the projected scarcity, “economic

opportunities for management intensification, ”

or lands where investments would yield 4 to

10 percent or more in constant 1977 dollars,

have been identified on 30 to 35 percent of the

commercial forestland base. These opportunities will be expensive to take advantage of

because they would require a total investment

of $10 billion to $15 billion over a 30- to 50-year

period, but they could increase growth significantly on treated lands 30 to 50 years from

now. Nearly all of the identified opportunities

involve reforestation or conversion of hardwood timber stands to softwood, mostly on

PNIF lands.

Shifts of land between agriculture and forestry are important but difficult to assess in

terms of acreage available for timber management. During the 1970’s, agricultural land requirements grew so quickly that USDA conducted a study identifying “potential cropland’’–land not used for crops that could be

economically brought into crop production, including about 31 million acres of private forestland thought to have a high or medium potential for crop use. A similar assessment of

marginal or highly erosive cropland that could
42 ● Wood Use: U.S. Competitiveness and Technology

be more suitably used for timber growing than

crop production has not been undertaken on

a comprehensive basis, but it could help determine long-term priorities for agriculture conservation programs if current grain surpluses

and cropland set-aside programs continue. In

addition, some marginal agricultural land

reverts naturally to forestland each year but is

usually poorly stocked with commercial species for quite some time, Because tree planting

on agricultural land usually is cheaper than on

harvested sites, determining the extent of such

acreage and its management opportunities

would be useful.

Management needs are difficult to establish

without clarifying the role that wood can,

could, or should play in the domestic and international economy. Economic models, such as

those the Forest Service uses to project future

supply and demand for wood, may be more

useful for identifying alternative strategies for

achieving goals once goals are set, than for establishing the goals themselves. The Forest

Service demand projections, for example, have

been criticized for overstating likely future demand for wood and for understating likely supply—and therefore may not provide a sufficiently accurate basis for formulating policies for timber management programs and for

budgeting public or private expenditures.

Congressional Options

If more refined information about timber

management needs is considered an important

objective, Congress could:

1.

2.

Direct the Forest Service to supplement its

previous assessment of “economic opportunities” for timber management with a

separately conducted analysis of hardwood management opportunities to gain

incremental improvement in timber quantity and quality without the need for expensive stand conversion and planting of

softwood species.

Direct USDA to undertake a “potential

forestland” management study to determine the extent of marginal or erosive agricultural land that may be better suited for

timber production than crop or other agriculture uses.

Policy Issue F

Establishing Public and Private

Management Priorities

Timber growth and harvest can be increased on all forest

land ownerships. However, the potential for increased output and the means for stimulating production differ among

the three major ownership groups.

Findings

Government incentives for increased timber

production on PNIF lands are modest and

their results are complicated by diverse landowner attitudes, financial capabilities, and

objectives. Greater emphasis on small-scale

forestry research, technical assistance, education, and information programs probably

would provide a broader stimulus to productivity than increased financial assistance,

given the limited Federal funds available.

The private sector will play the key role in

funding timber management on its land, although government incentives may continue

to supplement private efforts. The forest

products industry contributes significantly

to encouraging PNIF management through

technical assistance programs and leasing

arrangements; industry efforts of this sort

could accelerate if Federal funding remains

low, Several financial institutions now offer

timberland investment programs that may

channel additional capital into forest management,

To help ensure adequate future wood supplies, the forest products industry could intensify management on its own lands, which

generally are located near mills and are

highly productive, Existing tax laws allowing capital gains treatment of timber income

seem to have encouraged the industry to undertake more intensive management of its

lands, although a conclusive cause-effect

relationship between this tax incentive and

management intensity has not been estab-
Ch. II—-Policy Analysis and Legislative Options • 4 3

lished. Many nonwood-based corporations

have substantial forest holdings that also afford added management opportunities.

• Timber production on Federal lands could

be increased in the long run through more

intensive management of lands allocated to

this purpose, The RPA program endorsed by

Congress proposed upgraded management

on productive national forest land by 2030,

but its implementation will depend on

whether adequate Federal funds are appropriated.

Current Policy Status

U.S. timber inventories have been increasing for several decades and will probably continue to do so under current levels of management. Supplies could be increased more rapidly, however, through greater implementation

of existing intensive management technologies.

Opportunities for achieving more intensive

management vary among the three major ownership groups—private nonindustrial, forest

products industry and Federal–because of differing ownership objectives, financial resources, and land characteristics such as potential productivity, tract size, and location,

PNIF lands comprise 58 percent of the commercial timberland in the United States and

contribute nearly half of the raw material used

by the forest products industry. In the East,

where 90 percent of the PNIF lands are located,

they contribute an even larger portion of timber

supplies,

Prospects are good for increased production

from PNIF lands, Growth on these lands is increasing more rapidly than on other ownerships, and PNIFs generally can be expected to

enlarge their contribution to timber supplies

under current levels of management, Substantially greater timber supplies from PNIFs could

be achieved in the long term through more intensive management, “Economic opportunities

for management intensification” have been

identified on 79 million to 124 million acres of

PNIF lands, but these opportunities would be

expensive ($6 billion to $9 billion) to implement. In addition, impediments such as market

uncertainties, diverse landowner objectives,

lack of awareness about investment opportunities, and small tract size may inhibit management investment.

Federal assistance to PNIF landowners includes research, education, technical assistance, and direct financial assistance through

tax incentives and cost-sharing programs. Several USDA agencies in addition to the Forest

Service provide service—i.e., the Agricultural

Stabilization and Conservation Service, the Soil

Conservation Service, the Cooperative Extension Service, and the Farmers Home Administration, Some programs channel aid to

private owners through State forestry agencies.

An interagency agreement on forestry defines

individual agency responsibilities and coordination of forestry-related assistance.

“The three 1978 laws that placed increased

emphasis on State and private forestry were the

Cooperative Forestry Assistance Act, the Forest and Rangeland Renewable Resources Research Act, and the Renewable Resources Extension Act. Still, the executive branch has

given State and private forestry a low priority, proposing a 60-percent budget reduction for

fiscal year 1984 in Forest Service support for

State and private activities.

Several Federal tax provisions and costsharing programs provide timber-related

benefits to PNIF owners. Capital gains treatment of timber income is by far the biggest of

these (entailing a subsidy of about $180 million

to individuals in fiscal year 1983) but does not

require tax savings to be reinvested in management. Other tax incentives, such as tax credits

for reforestation costs, explicitly require management, but on a limited basis and at far less

Federal cost ($10 million to individuals in fiscal

year 1983).

Direct cost-sharing is provided by the Forestry Incentives Program (cut from the proposed fiscal year 1984 budget) and the Agricultural Conservation Program, administered by

the Agricultural Stabilization and Conservation

Service in conjunction with the Forest Service.

A criticism of these cost-sharing programs is

that they may be used by people who would
44 ● Wood Use: U.S. Competitiveness and Technology

undertake timber management activities

whether or not Federal funds were available.

Historically, the cost-sharing program that

had the greatest impact on private nonindustrial tree planting was not a forestry program,

but USDA agricultural program called the soil

bank. Established by Congress in 1954, the now

defunct soil bank paid farmers to keep some

of their land out of production for at least 10

years and also provided cost-sharing assistance

for tree planting. Although not a forestry program per se in that its key purpose was to reduce erosion and grain surpluses, PNIF land

planted in trees during the high point of the

soil bank era (1958-62) has never been surpassed. Soil bank plantations currently are

reaching maturity in the South and are important to the region’s timber supplies.

The present agricultural situation may be optimal for retiring some land from crop production for a protracted period. Grain surpluses are enormous, and erosion levels on

some land are very high, especially on vulnerable cropland brought into production during

the high demand years of the 1970’s. In March

1983, USDA announced that farmers had enrolled 82 million acres of cropland for conservation use in its Payment-in-Kind (PIK) Program. The program is temporary, but longer

term conservation programs are under consideration. Thus, there may be opportunities to

meet national objectives related to farm income, soil conservation, and forestry through

an extended program to encourage farmers to

plant trees on highly erosive cropland better

suited for timber production. Planting costs on

idled cropland are less than on harvested areas

where stand preparation must be conducted,

but annual payments to farmers under the soil

bank program were high. From a timber management perspective, a soil bank approach

would not be cost efficient, but the cost may

be more acceptable if other public objectives

are taken into consideration. Alternative systems for cost-effective agricultural land retirement now under consideration do not necessarily entail annual payments to farmers.

The private sector may provide more assistance to PNIF owners in the future if Federal

budgets stay low, Many forest products firms

conduct programs to expand wood supplies in

their procurement areas by providing advisory,

financial, and operational services to local

nonindustrial landowners. Some firms lease

PNIF lands under long-term contracts that provide owners with regular income while their

lands are managed for timber production.

More recently, financial institutions have

begun marketing limited partnerships that

could raise investment capital for timber

management on private lands while providing

tax shelters and future income to the investors.

The effect of these limited partnerships on

private forestland productivity is not yet

known.

The forest products industry owns 14 percent of the Nation’s commercial forestland and

44 percent of the highly productive commercial land—more than any other ownership

group. Industry lands provide about one-third

of the Nation’s commercial harvest. Industrial

lands have important potential for increasing

U.S. timber production because they have high

natural productivity, lie in large contiguous

parcels, and tend to be located near mills. Furthermore, the large forest products firms that

own the most industry land generally have access to investment capital, and timber production is the major landownership objective of

these firms. Evidence suggests that industry

lands are being managed more and more intensively, but a significant portion are still

nominally managed or unmanaged altogether.

Capital gains treatment of timber income,

which cost the Department of the Treasury

$225 million in foregone corporate taxes in

fiscal year 1983, may have encouraged industry investments in timber management. However, a direct cause-effect relationship is not

clear since beneficiaries of the provision are

not required to reinvest their tax savings in

management, Other factors may have also contributed to the increase.
Ch. II— Policy Analysis and Legislative Options ● 4 5

Federally owned lands comprise 18 percent

of the Nation’s total commercial forestland and

provide about 15 percent of the timber harvested. Not all public lands classified as ‘‘commercial” are managed for timber production.

Some have been allocated to other uses such

as recreation or wildlife habitat. In addition,

wilderness set-asides have removed 10. z million acres of Federal commercial acreage from

timber production, and management activities

are restricted on additional acres that are being considered for wilderness. The law allows

some flexibility for temporary increases in

timber harvest on Federal commercial lands,

but statutory changes would be needed to allocate more land to timber production under

multiple use planning processes.

The Forest Service maintains that all economic opportunities for management intensification on national forest land are currently

scheduled or planned, Although details have

not been provided, such management would

increase timber production on Federal lands

in the future, but would require a significant

increase in funding for planting and timber

stand improvement.

Congressional Options

Numerous options are available to Congress

should it determine that Federal incentives for

timber management need to focus on the most

cost-effective lands. Congress could:

1. Direct the Department of the Treasury, in

cooperation with USDA, to report on the

impact and effectiveness of current tax

treatments and tax incentives in encouraging timber management and on alternative tax approaches for congressional con2.

3.

4.

5.

6.

sideration, Alternative approaches could

include expanded ‘‘intensive management investment tax credits to replace or

supplement current capital gains treatment of timber income or tax incentives

to encourage expansion of private sector

landowner assistance programs.

Increase Federal PNIF assistance programs for research, education, extension,

and technical assistance programs that are

general in application,

Focus Government programs for direct

Federal cost-sharing to landowners where

important conservation objectives would

be served by tree planting, such as on

erosive or marginal cropland ill-suited for

crop production, while relinquishing most

cost-sharing assistance on other lands to

the forest industry and financial institutions that are better able to determine cost

effectiveness,

If general cost-sharing programs are maintained, direct USDA to establish priorities

for Federal cost-sharing assistance to PNIF

landowners based on factors such as tract

size, potential productivity, and proximity to timber markets,

Direct the administration to intensify

timber management on Federal lands allocated to timber production. Appropriate

the funds required to implement intensified management programs,

Initiate hearings and other deliberations

to investigate alternative timber management and timber sales procedures for Federal lands, such as a greater industry role

in timber management activities in return

for harvesting privileges.
CHAPTER Ill

World Markets for U.S. Wood Products
—

Contents

Page

Summary . . . . . . . . .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49

World Markets for U.S. Forest Products .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. 50

Established Markets for Pulp and Paper Products . . . . . . . . . . . . . . . . . . . . . . . . . . . . 52

Established Markets for Solid Wood Products and Raw Materials . . . . . . . . . . . . . . 57

Barriers to U.S. Trade in Wood Products . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 60

Tariffs and Traditional Quotas . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 60

Nontariff Barriers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 62

Other Factors Affecting Exports of Wood Products . . . . . . . . . . . . . . . . . . . . . . . ... 64

U.S. Imports of Forest Products ..... ...... . . . . . . . . . . . . . . . . . 66

Solid Wood Products . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 67

Pulp and Paper Products . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 68

List of Tables

Table No. Page

6. Pulp and Paper Trade Patterns, by U.S. Region, 1976 . . . . . . . . . . . . . . . . . . . . . . . 51

6. Solid Wood Trade Patterns, by U.S. Region, 1976 . . . . . . . . . . . . . . . . . . . . . . . . . . 51

7. U.S. Exports of Solid Wood Products, 1981. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 57

8. U.S. Imports of Solid Wood Products, 1982 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 67

9. 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. Wood

Relative Importance

... ...

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

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

by Area

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

Current General

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

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

Products Imports, 1964-80 . . . . . . . . . .. . . . . . . . .

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

... ,

. . . .

. . . .

. . . .

. . .

. . . .

. . . .

. . . .

Page

51

52

53

54

55

66

67

67
CHAPTER Ill

World Markets for U.S. Wood Products

Summary

The United States is a major importer and

exporter of wood products. Since 1950, U.S.

exports of forest products, in constant (de -

flated) dollars, have risen 400 percent, while

imports have increased by roughly 75 percent. Although the United States is still a net

importer of forest products, the balance-of-payments deficit has narrowed, particularly since

1978. This is due primarily to increased exports

of pulp and paper products and decreased imports of lumber caused by a precipitous decline

in the housing market.

Growth in world demand for forest products may result in a 50-percent increase in

consumption by 2000. In the next several decades, therefore, the United States has man y

unique opportunities to increase its exports,

particularly in paper products. It has both the

manufacturing capacity and the forest resource

needed to expand production, and, unlike that

of many traditional wood-producing nations,

its inventory is increasing and accessible. This

gives the U.S. forest products industry a sustainable advantage in world markets. Many of

the world’s forests, especially in Latin America

and the eastern Soviet Union, are remote and

inaccessible, and the investment needed to

bring these forests into commercial production

may be prohibitive, Southeast Asia, another

major wood-producing area, has been heavily

deforested, and harvesting rates that prevailed

in the 1970’s probably are not sustainable.

Most of the world’s increased forest products consumption probably will come from

industrialized nations. Major foreign markets

for U.S. forest products in the future are Western Europe and Japan, which will probably rely

more heavily on U.S. woodpulp and paper. Promotion of U.S. homebuilding techniques may

be instrumental in expanding markets for lumber and panel products as well. U.S. producers

will have little trouble increasing exports of

raw materials such as logs, wood chips, waste

paper, and woodpulp, The United States also

is 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 o

expand its exports of processed products such

as lumber, panels, and paper. Efforts to ease

or eliminate some of these barriers are underway, although there is little likelihood that the

United States will gain free access to Western

European and Japanese markets. In addition,

U.S. exporters are at a disadvantage on world

markets due to the overvaluation (strength) of

the dollar against foreign currencies and

worldwide recession, Improvements in these

financial conditions probably will stimulate exports of wood products even without substantial progress in reducing trade barriers. The

formation of export trading companies, now

permitted under U.S. law, also may improve

the competitive position of U.S. exporters,

The United States probably will continue

to import substantial quantities of lumber,

woodpulp, and newsprint from Canada.

Canada’s proximity to major consuming

regions of the United States, the availability of

low-cost transportation, and the distribution of

the Canadian softwood resource combine to

make Canadian products competitive in U.S.

markets.

49
50 ● Wood Use: U.S. Competitiveness and Technology

World Markets for U.S. Forest Products

The United States has an unprecedented opportunity to expand its exports of many forest

products. There are three principal reasons for

this: 1) world demand for paper and solid wood

products are expected to grow rapidly, 2) many

established wood-producing nations are confronted with diminishing wood supplies, and

3) the United States has both an abundant wood

resource and a highly developed manufacturing capacity compared with most other countries.

The United Nations Food and Agriculture

Organization (FAO) projects that world demand for industrial roundwood will grow by

about 2 percent per year for the next 20 years.1

According to FAO, consumption of paper and

paperboard is expected to increase by 75 percent, wood-based panels by 55 percent, and

lumber by 25 percent between 1980 and 2000.2

Although these projections are not necessarily accurate, they do point out prospects for

growth in world forest products consumption.

Much of this increase is expected to occur in

the developed countries of Western Europe,

North America, and Japan, although demand

for paper and solid wood products in developing nations is expected to increase as well.

Regional trends in industrial roundwood production suggest that traditional suppliers cannot continue to increase production at past

rates, and some probably will not even be able

to maintain present rates. Wood supplies from

the western Soviet Union, which are important

to Eastern and Western Europe, declined during the 1970’s and probably will continue to

decline. While the U.S.S.R. has vast softwood

forests in Siberia, much of this area is inaccessible and manufacturing capacity is lacking.

Western Europe, which has depended on the

Soviet Union for some of its wood, can expand

its 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: A

Frame~~rork fc)r Forest Renewal, Ottawa, Canada: Sept. 2, 1982,

p. 2.

‘Cited i n ‘‘A Forest Sector Strateg~ for Canada, ’ discussion

paper Sept. 30, 1981, p. 7.

enough to compensate for declining Soviet supplies coupled with rising demand. Timber resources in the Far East, which supply the majority of Japanese wood imports, are shrinking.

Recent hardwood production levels in Far

Eastern countries outside Japan probably cannot be sustained through 2000, and some of

these nations are beginning to restrict log exports.

Many Far Eastern countries, especially Japan, will become more dependent on imports

from other regions to satisfy growing demand

for forest products. Although Latin America

has vast acreages of forests, it will probably not

become a major competitor with U.S. forest

products on world markets before the turn of

the century. The situation in South America

is similar to the Soviet Union’s—forests are

remote and inaccessible, and the capacity to

process more than a fraction of the potential

harvest does not exist. Some past efforts to

establish forest products manufacturing industries in Brazil have failed, and the enormous

capital requirements to build South America

as a major world supplier of forest products

(other than pulp) by 2000 are almost certainly

beyond the means of these developing nations.

In contrast, the forest resource of the United

States is increasing. Between 1952 and 1977,

growing stock on its commercial forestland increased nearly 20 percent.3 Harvest levels have

been remarkably stable, from 10 billion to

14 billion cubic feet (ft3

) per year since the early

1900’s. U.S. forests can support substantially

larger harvests, even with increasing domestic

demand.

U.S. trade in forest products has different effects in different areas of the country, depending on the availability of supplies from foreign

and domestic forests and on manufacturing capacity (tables 5 and 6), In 1976, the Great Lakes

3U, S. Department of Agriculture, Forest Service, ArI Analysis

of the 7’imber Situation in the Undited States, 1952-2030, Forest

Resource Report No. 23 (Washington, D. C.: U.S. Government

Printing 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 balance

Region (millions of dollars) supplier (millions of dollars) customer (millions of dollars)

Pacific Northwest. ., . 141 Canada 309 Japan 168

South Atlantic . . . . . . . 15 Western Europe 449 Western Europe 434

Gulf . . . . . . . . . . . . . . . . 26 Western Europe 485 Western Europe 459

North Atlantic . . . . 341 Canada 354 Western Europe 13

South Pacific . . . 23 Japan 117 Asia 94

Great Lakes . . . . . . . . . 755 Canada 238 Canada -517

North Central . . . . . . . 158 Canada 19 Canada 139

South Central . . . . . . .

—

— — 9 Mexico 9

Alaska . . . . . . . . . . . . . — — 67 Japan 67

aExcludlng waste Paper

SOURCE” 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 balance

Region (millions of dollars) supplier (millions of dollars) customer (millions of dollars)

Pacific Northwest . . . . . . . . . . . . . . . . 422 Canada 1,246 Japan 824

South Atlantic . . . . . . . . . . . . . . . . . . . 103 Far East 40 Europe - 6 3

Gulf . . . . . . . . . . . . . . . . . . . . . . . . . . . . 130 Far East 54 Europe - 7 6

North Atlantic . . . . . . . . . . . . . . . . . . . 342 Canada 126 Europe -216

South Pacific. . . . . . . . . . . . . . . . . . . . 82 Far East 90 Japan 8

Great Lakes . . . . . . . . . . . . . . . . . . . . . 627 Canada 173 Canada -454

North Central . . . . . . . . . . . . . . . . . . . 230 Canada 36 Canada -194

South Central . . . . . . . . . . . . . . . . . . . 1 Mexico 6 Mexico 5

Alaska. . . . . . . . . . . . . . . . . . . . . . . . . . 1 Canada 77 Japan 76

aExcluding 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 net

importers of paper and pulp, most of which

came from Canada, while other regions were

net exporters. Conversely, the Pacific Northwest, Alaska, and the South Central region

were net exporters of solid wood products, although the trade surplus in the Pacific Northwest is much larger than the deficit in any

other single region. Efforts to increase exports

are likely to benefit the Pacific Northwest,

Alaska, and the Southern regions (South Atlantic, Gulf, and South Central States). The Great

Lakes States and the North Central region,

which are close to cheap water transportation

and Canadian softwood forests, probably will

remain net importers of most forest products.

For at least the past two decades, U.S. exports of forest products have increased (fig. 2),

but in general, the United States still is a net

importer. This may be changing, Since 1978,

Figure 2.— Value of U.S. Exports of Wood

Products, a 1964.80

aWood products here Include waste paper and paperboard, and do not include

converted products (numbers for waste paper exports obtained by phone conversation with API representative)

SOURCES: United Nations Food and Agriculture Organization, 1980 Yearbook

of Forest Products and 1975 Yearbook of Forest Products American

Paper Institute, personal communication.

30
52 • Wood Use: U.S. Competitiveness and Technology

the U.S. deficit in forest products trade has narrowed sharply, primarily due to an increase in

exports of pulp and paper products (fig. 3).

In 1982, the United States exported forest

products (paper, paperboard, logs, lumber,

railroad ties, wood-based panels, woodpulp,

and wood chips) valued at $7.3 billion. The

largest markets for these products were

Western Europe, Canada, and Japan, markets

that can expand considerably. There are also

opportunities to develop totally new markets.

While world markets offer the United States

an opportunity to sustain a positive balance of

trade in forest products, it is unlikely that the

United States will reduce or curtail its imports.

The United States is a major importer of softwood lumber, newsprint, and woodpulp, most

of which comes from Canada. Reliance on inexpensive Canadian products, in fact, enables

the United States to develop greater export

capacity in other product lines, such as linerboard, clear lumber, panels, printing and writing papers, and converted paper products,

many of which have higher value added than

imports,

Established Markets for Pulp

and Paper Products

In 1979, international exports of forest products amounted to about $46 billion, nearly

3 percent of total world trade. Roughly onethird of this involved paper and paperboard.

In 1982, U.S. exports of pulp and paper totaled

$4.3 billion. In deflated dollars, this was slightly

lower than 1980 levels, reflecting worldwide

recession, the strength of the dollar against

foreign currencies, and, in some cases, protectionist pressures. 4 Between 1972 and 1981,

however, the tonnage of U.S. exports of woodpulp has increased 63 percent and paper, paperboard, and converted products by 50 percent, Waste paper exports increased 450 percent between 1971 and 1981.

U.S. pulp and paper producers are in a better position to expand exports than are producers of lumber, panels, and other solid wood

products for several reasons. Demand for pulp

— .

4American Paper Institute, International Department, “Exports

of Pulp, Paper, Paperboard, and Converted Products to World

Markets–1981” (New York: American Paper Institute, 1981].

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

6

t

1964 1866 1966 1970 1972 1974 1976 1978 1960

Year

Wxlct pmduata ham hcluda -towand p@OrbWd and do not lnatudaconWtOdPC%hms. Wlttl ma OxcOptbn d Wmto

WW-1 H--W* -f-rcomponmt d product$1$ IncludMt In totat tonnage. In tha caae of wuM. paPU md

papubmd, 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 demand for solid wood products. Moreover, the

pulp and paper sector of the forest products

industry is highly capital intensive, production

is large-scale, and the sector must operate very

close to capacity to maintain profit margins.

This situation provides strong incentives to

maintain lasting agreements with all customers, domestic or foreign. In addition, market

pulp and many types of paper are commodity

(or standard) products in world markets, while

lumber and panel products tend to be specialties overseas. Producers of lumber and panels

often must devote substantial effort to create

foreign demand through the promotion of U.S.

building techniques and product specifications

and performance. In contrast, demand for most

U.S. paper products already exists, Finally, due

to a combination of labor and resource availaWood Products ● 5 3

bility, energy costs, and production efficiency,

U.S. pulp and paper are fully cost competitive

in world markets. s

Western Europe

Western Europe is the largest single market

for U.S. pulp and paper products. It accounted

for 49 percent of U.S. exports of woodpulp and

21 percent of U.S. exports of paper, paperboard, and converted products, Over the past

decade, however, Western Europe’s imports of

U.S. paper, paperboard, and converted products have declined in both percentage and tonnage, 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 Sector 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 and

Africa

1972 1981

I 1

SOURCE 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

0

Europe Canada Mexico Central South Middle East Japan

America America and

Africa

Oceania Other

1972

I 1

1981

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 Scandinavia to other Western European countries.

Scandinavian woodpulp prices have been rising because major producers are paying much

higher prices for pulpwood than their North

American counterparts (fig. 6). As a result,

Scandinavian producers are facing losses of

Western European pulp markets. In addition,

Scandinavian production costs are considerably higher than those of North American competitors, and many marginal Scandinavian

mills are closing.6 Scandinavian producers are

increasing their papermaking capacity in integrated mills which are efficient enough to

produce paper at prices competitive in the

European Community, displacing imported pa-

‘J.w. carriwn “International Outlook for Pulp, Paper and

Paperboard Products, ” Paper Trade Journa], 165(6): p. 22,

Mar. 30, 1981.

per from other sources. The trend toward integration has focused on high value products,

which will probably force higher reliance on

North American kraft linerboard as well as

pulp. In the short run, Scandinavian paper

probably will continue to satisfy a large part

of Western Europe’s paper demand, but the

capacity to increase production is limited. In

the long run, particularly with an economic

recovery, Western Europe is expected to increase its reliance on North America for paper

products. 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, August

1981, 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 1980

Year

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 Western

Europe has fallen in the last decade, the mix

of products has changed significantly. Western

Europe now is importing larger amounts of

printing and writing papers and bleached

paperboard than in 1972, while imports of unbleached kraft linerboard (primarily used in

making corrugated boxes) have fallen. In the

future, Western Europe is expected to increase

its imports of paper in which woodpulp accounts for relatively large shares of the product

value, such as in newsprint and linerboard.

Canada

In 1981, Canada imported 15 percent, or

almost 700,000 short tons, of the U.S. paper,

paperboard, and converted products and a

smaller percentage of its woodpulp. Exports

of paper products to Canada have increased

65 percent since 1972 and are expected to continue to rise. Over half

printing, writing, and

98-8290-83-8

of these exports are

converted products

(paper which has been converted to product

form, such as envelopes, corrugated and other

boxes, tissues, and paperboard cartons and

drums).

Although Canada is a major paper producer

itself, well equipped to compete in world

markets for paper products based on softwoods, it lacks a hardwood resource. As a

result, Canada is expected to rely on its North

American neighbor for paper products that require significant amounts of hardwood pulp.

In addition, Canadian pulp, newsprint, and

other writing papers are cost competitive with

U.S. products.

Japan and the Far East

In the past decade, U.S. exports of paper,

paperboard, and converted products to Japan

and the Far East have tripled (fig. 3). Most of

this 1arge increase was due to an expansion of

Japanese imports of unbleached kraft linerboard, bleached paperboard (for which Japan
56 ● Wood Use: U.S. Competitiveness and Technology

has almost no domestic production capacity),

and newsprint (largely due to U.S.-Japan joint

ventures).

Japan is a major paper producer, It ranks second in paper and paperboard and third in pulp

worldwide. However, it is facing increasing

costs for raw materials, energy, and pollution

controls that threaten to place many grades of

Japanese paper among the world’s most expensive .

l1 12 Exports of paper, paperboard, and

converted products to Japan alone have increased almost 14 times in the last decade, accounting for most of the expansion into Far

Eastern markets for U.S. paper. This increase

reflects Japanese difficulties in obtaining inexpensive raw materials for their pulp and paper

mills and an unfavorable climate for investment in milling capacity. l3 As a result, the

Japanese have relied more heavily on imported

pulp and paper to satisfy growing demand for

paper and paperboard products. l4 15

About half of the raw material used in Japanese pulpmills is hardwood pulpwood and log

processing residues, with most hardwood logs

imported from other Far Eastern countries.

The levels of hardwood harvesting prevalent

in the 1970’s in these countries probably are

not sustainable through the end of this century.

This looming problem, combined with a growing tendency for some Far Eastern nations to

shift exports from logs to processed products,

means that the Japanese probably will rely

more heavily on North America for wood

chips, woodpulp, and paper in the future. *e

Competition among the United States, Canada,

Oceania, Southeast Asia, and Chile for Japa11’’ 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 draft

report to Congress in compliance with the Alaska National Interest Lands Conservation Act, Apr. 1, 1982, p. 39-40.

14Y. Shioti, and A. p. ~hnie~nd, “RWent Tmn& in the Wod

Industry 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 paper

be quite intense. l7 18

markets, however, may

Countries in the Far East and Oceania, other

than Japan, imported 11 percent of U.S. paper,

paperboard, and converted products exports

in 1981, up from 9 percent in 1972, In tonnage,

exports to these countries increased by 80 percent in the last decade. Woodpulp exports to

Far Eastern countries other than Japan have

remained stable in terms of percentage, accounting for just over 10 percent of U.S. woodpulp 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 become

more competitive in the Chinese market. l9

Other Markets

The United States sold nearly 16 percent of

its woodpulp and 40 percent of its paper, paperboard, and converted products to Mexico,

Central America and the Caribbean, South

America, the Middle East, and Africa in 1981

(figs. 4 and 5). These percentages have remained fairly stable over the last decade,

although woodpulp exports fell slightly,

primarily due to fewer sales to South America.

Mexico’s value share of U.S. paper, paperboard, and converted products exports doubled

and the tonnage tripled (fig. 4). These large increases occurred despite stricter licensing requirements and import duties that cut Mexico’s

imports of U.S. packaging and industrial converting grades of paper. Nevertheless, Mexico

remains the biggest single purchaser of U.S.

printing, writing, and tissue paper, while im1

7

1 bid., pp. 4546.

IODavid R. Darr, “The Impacts of International Trade on

Domestic Markets,” Proceedings, The Impact of Change on the

Management 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 paper

and paperboard as well.

South America, with over 13 billion acres of

exploitable forest, became a net exporter of

woodpulp during the past decade. On the other

hand, its imports of U.S. paper, paperboard,

and converted products increased by nearly 50

percent, The immense forest resource of South

America could become a major world source

of wood, but this is not likely to happen in the

near future. The continent does not have the

transportation and manufacturing capacity to

support increased production of processed

wood products, and the amount of capital required to develop this capacity is probably

beyond the immediate means of these nations.

Technologies for using South American mixed

hardwoods exist, but substantial investments

must be made before these forests can be fully

exploited. South American markets for U.S. paper and paperboard may continue to be fairly

strong for the next few decades.

The United States also should have a strong

competitive position in supplying paper to the

Caribbean, Africa, and the Middle East in the

future. Caribbean markets have the advantage

of proximity to the highly productive forests

of the American South, which means ample

supplies and lower transportation costs. Exports of both woodpulp and paper products to

this region probably will expand, Africa and

the Middle East have little forest area and lack

the capacity to exploit what few trees do exist, Africa and the Middle East accounted for

12 percent of U.S. paper and paperboard exports in 1981, up from 9 percent in 1972. Continued economic growth in this region probably will mean expanding markets for all products,

Established Markets for Solid Wood

Products and Raw Materials

In 1982, the U.S. exported solid wood products* valued at $2,6 billion—down from

$3.2 billion in 1979–reflecting the effects of

worldwide economic recession.20 Over 40 percent of the 1981 value was in logs and timber,

of which 75 percent was softwood logs exported to Japan. Lumber and railroad ties accounted for 34 percent of solid wood product

exports, and the remainder was divided among

pulpwood, wood chips, wood wastes and fuels,

and wood-based panels (table 7). The major

market areas are Western Europe, Canada, and

Japan.

.

*Logs, timber, pulpwood, wood chips, waste and fuels, lumber

and railroad ties, and wood-based panels.

ZOThe figure for 1979 differs from the $3.8 billion that the National Forest Products Association cites in increased Wood Products Exports: A Bonus for the Industry and Nation, International

Trade Committee (Washington, DC.: National Forest Products

Association). OTA figures are based on unpublished data from

the U.S. Department of Commerce, International Trade Commission. NFPA also cites Department of Commerce data, but

it is not disaggregated to permit detailed comparison.

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

Quantity Value Percent

Product (thousands) (thousands of dollars) of value

Logs and timber (board ft) . . . . . . . . . . . . . . . . 2,534,224 $1,094,716 40.760/o

Hardwood . . . . . . . . . . . . . . . . . . . . . . . . . . . . 157,125 91,868 3.42

Softwood . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,377,099 1,002,848 37.34

Pulpwood (cords) . . . . . . . . . . . . . . . . . . . . . . . . 176 9,911 0.37

Wood chips (short tons) . . . . . . . . . . . . . . . . . . 3,546 290,184 10.80

Wood waste, wood fuel . . . . . . . . . . . . . . . . . . . NA 12,894 0.48

Lumber and railroad ties (board ft) . . . . . . . . 2,374,055 923,784 34.40

Hardwood lumber. . . . . . . . . . . . . . . . . . . . . 381,481 243,026 9.05

Softwood lumber . . . . . . . . . . . . . . . . . . . . . . 1,903,809 655,544 24.41

Railroad ties . . . . . . . . . . . . . . . . . . . . . . . . . . 88,765 25,214 0.94

Wood-based panels . . . . . . . . . . . . . . . . . . . . . . NA 354,293 13.19

Softwood plywood and veneer. . . . . . . . . . . NA 189,727 7.06

Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . NA 164,566 6.13

Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — 2,685,782 100.0

SOURCE U S International Trade Commission
58 ● Wood Use: U.S. Competitiveness and Technology — —

The United States exports substantially larger quantities of raw materials (e.g., logs and

chips) than most other exporters of solid wood

products. There is some pressure, particularly on the American west coast, to limit log exports in favor of lumber and panels. However,

while log exports may create fewer jobs per

unit of volume in the United States than exports of processed products, the average dollar

value of softwood logs exported to Japan is

higher than the average value of exported softwood lumber, * Log exports, therefore, are

more valuable in creating foreign exchange

and help to maximize the value the United

States realizes on its raw materials.

Western Europe

Twelve percent of U.S. softwood lumber exports in 1981 went to Western Europe. Although this portion is substantially smaller than

in the preceding decade, for the past 30 years

softwood lumber exports to this area have been

increasing slowly, though erratically. Western

Europe historically has imported clear Douglas-fir and southern pine lumber, but the increasing popularity of platform frame (2 x 4)

construction in some countries may open markets to a wider range of sizes and grades of

these softwood materials.

The most important market for U.S. hardwood lumber is Western Europe, which is a

major customer for hardwood logs and veneer.

U.S. exports of these products to the European

Community and Spain have tripled since 1977.

Given Western European tastes for fine furniture, markets for hardwood lumber and logs,

particularly high-quality logs suitable for

veneer, may be larger in the future.2l Presently, however, some countries are concerned

about oak wilt, a U.S. oak fungus which reportedly 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 imports

are high value species. Also, the Japanese lumber manufacturing 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 American

Foresters Annual Convention, Sept. 20-22, 1982, Cincinnati,

Ohio, p. 14.

mitted in imported goods. 22 Solving this problem could pave the way for more U.S. hardwood exports.

Western Europe is the biggest buyer of U.S.

panel products, mostly softwood plywood. The

trend toward platform frame construction already visible in the United Kingdom, is expected to create even larger markets for U.S.

plywood, 23 The potential for this expansion is

strong, particularly if efforts to reduce or

eliminate Western European tariffs on plywood are successful.24

Canada

Between 1950 and 1981, Canada’s imports of

lumber from the U.S. increased over sevenfold,

with most of the growth in softwood lumber.

Much of the lumber exported to Canada consists of species, grades, or sizes not available

there—redwood, for example. In 1979, Canada

accounted for 30 percent of U.S. lumber exports. Log exports to Canada, which have increased almost tenfold since 1950, account for

about 10 percent of the logs that the United

States sells abroad.25

With Canada so near, some U.S. producers

can supply products to local Canadian markets,

which in some cases may be cheaper than Canada’s own goods. This situation probably will

not change, but the United States undoubtedly will continue to import more solid wood

products from Canada than it exports there in

the foreseeable future. The United States probably will remain reliant on cheaper Canadian

lumber for quite some time.

Japan

Japan is by far the biggest Far Eastern buyer

for U.S. solid wood products. Most of these imZ~Nationa) Forest products Association and the U ,S. Foreign

Agricultural Service, Forest Products Industry FAWNFPA

Foreign Market Development Plan FY 82 (Washington, D, C.: National Forest Products Association, Internatiorml Trade Division,

Sept. 1, 1981), p. 2,

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

aiNationalForest products Association and the U,S. Foreign

Agricultural 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 United

States is the largest supplier and the Soviet

Union is the second largest.28 The United States

also exports substantial quantities of wood

chips, woodpulp, and softwood lumber to Japan, along with a variety of other products, including hardwood logs and lumber, wood panels, waste paper, and pulpwood. Between 1979

and 1981, U.S. log exports to Japan, which

represent over half the value of all U.S. solid

wood products sent there, decreased 13 percent, while exports of all other solid wood

products increased. The outlook for continued

log and wood chip exports to Japan is favorable, although other suppliers in New Zealand,

Canada, the eastern Soviet Union, and Chile

probably will compete.

There is great potential to expand lumber exports to Japan to satisfy the nation’s growing

housing needs, North American standard sizes

and grades of lumber, however, are not well

suited to Japanese construction standards and

methods, but while both the United States and

Canada are aggressively promoting North

American platform frame construction, only

a small fraction of Japanese homes are built this

way. Traditionally, the Japanese use wood as

both decorative and structural components of

their houses by leaving wood framing members

exposed for esthetic appeal. U.S. construction

grade lumber usually is not suitable for these

purposes. There has been some progress in

adapting Japanese inspections and standards

to U.S. products, and some industry analysts

see this as a promising development for increased exports of U.S. lumber to Japan .27

Canada has been quite active in courting

Japanese lumber markets, too, although a

significant portion of the lumber Canada sends

there consists of squared logs that are sawn to

final dimensions at their destination. In the

future, Canada probably will provide strong

competition to U.S. producers. Furthermore,

Canadian producers have been more willing

than their U.S. counterparts to saw lumber to

the metric sizes preferred in Japanese (and

other world) markets.

Zelllcrease(] WrOOd Produ[:ts E,xports, Op. cit., P . 27.

ZT1bid,, p. 28.

The availability of logs to Japan is another

factor that could limit progress in promoting

exports of U.S. lumber. Japanese lumber is protected by tariffs, but logs are imported dutyfree. Japan may continue to import mainly logs

as long as it has access to them, even if it adopts

Western construction methods using U.S. lumber grades. 28 29

There are also opportunities for increased

softwood plywood exports to Japan. These opportunities, like opportunities to export softwood lumber, depend to some extent on Japanese acceptance of platform frame construction. The Japanese plywood industry, which

produces mainly hardwood plywood, is the

second largest in the world and is protected

by a number of tariff and nontariff barriers

discussed in more detail below,

Other Markets

Other encouraging markets for U.S. solid

wood products exist elsewhere. Increased

trade in these products shows promise in the

Far East, particularly China. Exports of softwood logs to China have increased, which

some analysts see as the first step to opening

Chinese markets for other wood products. so

Trade with mainland China is difficult,

however, and conditions uncertain, Hong

Kong, South Korea, Taiwan, and Singapore, all

rapidly growing and industrializing, lack adequate forest resources, Australia and New Zealand are attractive markets for U.S. solid wood

products because these countries have high

purchasing power and similar business practices. Australia may offer particular near-term

potential for U.S. exporters, but it has a policy

encouraging self-sufficiency in forest products.

New Zealand is and probably will continue to

be a net exporter of wood products,

Many South American nations are heavily

forested and probably will continue to protect

Z8John V, Ward, Director, International Trade, National Forest

Products Association, letter to I,ouis Murphy, U.S. Department

of Commerce, Office of International Sector Polic}’ \\’ith attachments, Sept. 19, 1981.

zSDarr, op. cit., pp. 29-30.

Sopersona] communication with John V. Ward, Director, I International Trade, National Forest Products Association.
60 • Wood Use: U.S. Competitiveness and Technology

their own forest industries. Many of the people of South America are extremely poor, and

there is a limited clientele among those wealthy

enough to afford foreign goods. Even as affluence increases, cultural preferences may not

stimulate much demand for wood. In Chile, for

example, a wooden house is seen as a sign of

poverty.

The most promising South American markets are probably Argentina and Venezuela,

Argentina has a European-like culture with

European housing tastes. Venezuela, strengthened by its petroleum exports, has a high standard of living and ambitious development plans.

Its current housing shortage is tremendous.

However, the recent drop in world oil prices

have hurt Venezuela, and its potential as a major importer of U.S. solid wood products probably 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 more

important customers for the United States.

Enriched by oil export revenues, Egypt,

Saudi Arabia, and the other oil exporting countries of the Arabian peninsula, have set off a

huge construction boom. There is potential for

growth in this Middle East market in modular

or prefabricated buildings and building components as well as lumber, plywood, panels,

and other solid wood products.32 These countries have almost no forest resources or industries of their own, but they do have liberal

trade policies, Their populations are small,

however, and it is possible that these markets

can be saturated quickly. They, too, have been

hurt by falling oil prices, which could limit

their near-term potential as solid wood importers.

sZJ[)hn R. Forrest, world Trade Opportunities in Wood Products, presented to Forest Industries Advisory Council, February

1982, p. 8.

Barriers to U.S. Trade in Wood Products

World trade in forest products is shaped not

only by the general forces of supply and demand but also by tariffs and traditional quotas,

nontariff barriers or distortions, and economic

and governmental performance. Since World

War II, the General Agreement on Tariffs and

Trade (GATT) has been very effective in reducing its members’ tariffs and traditional quotas, *

and the subsequent growth of international

commerce has been impressive. However, the

use of nontariff barriers (NTBs) also has grown

and often poses a more potent threat to free

trade than tariffs and quotas. Governmental

policies and worldwide economic conditions

also exert a powerful influence, as the recent

global 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 and

usually codified into law.

a set of negotiated rules to govern world trade.

The United States, the principal creator of

GATT, always has seen it as a vehicle for reducing tariffs, quotas, and other trade barriers

and GATT has been successful indeed in easing both tariffs and traditional quotas of

member nations. Many tariffs and quotas remain, however, and these can be very influential in determining the character of trade in

forest products.

In general, tariffs and traditional quotas

restrict imports of processed products, such as

lumber, plywood, paper, paperboard, and panels, more than raw materials. Even nations

whose forest resources are small or nonexistent often restrict imports of processed products, preferring to import raw materials such

as logs, pulpwood, wood chips, and woodpulp,

to capture the value added employment in

processing them.

While GATT has effectively reduced the general level of tariffs, it does permit preferential
Ch. III— World Markets for U.S. Wood Products • 61

.

trade agreements. These can be particularly

troublesome for forest products exporters in

the United States. Preferential trade agreements include customs unions, common markets, and free trade associations, and provide

for the reduction or elimination of tariffs or

quotas from participating countries, Imports

from nonparticipants are subject to quotas or

regular most favored nation (MFN) rates, preventing nonmembers from competing fully in

preferential areas. This is particularly important in Western Europe, where countries of the

European Economic Community (EEC, or

Common Market) and the European Free Trading Association (EFTA) are better able to compete in Western European markets for solid

wood and paper products than the United

States. Swedish papers, for example, are assessed lower tariffs in the European Community (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 comparative disadvantage, restructuring of Western European paper markets is expected to lead

to expanded markets for North American kraft

linerboard and kraft pulp.33 Opportunities for

increased U.S. exports of all types of paper and

paperboard depend on implementation of recently negotiated tariff reductions and Western

European ability and willingness to resist

growing protectionist tendencies in its own

paper industry, Pulp exports are not subjected

to any significant tariff in the EC.

Japan also maintains tariffs on paper and paperboard. Under the latest round of GATT

negotiations in the 1970’s (the so-called Tokyo

Round of Multilateral Trade Negotiations), the

Japanese agreed to lower some tariff rates by

1987. Under strong pressure from the United

States, some of these tariff reductions were accelerated. In January 1983, the Japanese cut

tariffs slightly on kraft paper and paperboard,

while most other wood and paper tariffs went

unchanged.

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

‘

s

’’ The American Paper Industry: An International Profile,”

op. cit., p. 12.

Under the so-called Kennedy Round of Multilateral Trade Negotiations in the late 1960’s,

Canada and the United States agreed to certain tariff reductions for paper products. As a

result, the United States eliminated its duty on

printing and writing paper and lowered tariffs

on other products. Canada reduced its tariffs

on printing and writing papers, but failed to

bring tariffs on linerboard, bleached board, and

recycled paperboard to the same level.34 Furthermore, the two countries disagree on tariff

reductions on other types of paper. These disagreements currently are being negotiated.

U.S. solid wood products also are affected

by tariffs and quotas in the European Community. Technically, softwood plywood is

duty-free but subject to a restrictive quota.

Above the amount allowed by the quota, European Economic Community tariffs on softwood plywood are 11.6 percent. Recently, the

French Government petitioned for a quota on

imported softwood lumber, but this quota probably would be temporary if enacted. 35 T h e

Tokyo Round was successful in easing some

Western European barriers to solid wood products trade. By 1987, the EC’s tariffs on wood

products will be sharply reduced, with no tariff

on logs or most types of rough lumber, a 4 percent tariff on finished lumber, and a 6 percent

tariff on most veneer. Softwood plywood, however, still will be subject to a duty over quota.

Japanese tariffs on plywood and lumber are

of more concern. While Japan welcomes imports of logs and some types of rough lumber

duty-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 sawmills

and finishing plants is one of its industries

“targeted” for special protection, and progress

in achieving tariff reductions probably will require some concessions from the United States.

While many U.S. producers do not consider

lumber 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, January

1983.
62 • Wood Use: U.S. Competitiveness and Technology

are higher, and many producers prefer that

they be cut.

Other Far Eastern nations also levy tariffs

that are generally higher on processed products

than on raw materials.

Mexico, which is not a member of GATT,

maintains strong protectionist measures and

enforces high tariffs and import licensing requirements, with tariffs on forest products

ranging from 10 percent on lumber to 70 percent on particleboard. Tariff barriers also tend

to be strong in South America. Brazil, in order

to protect its developing forest industry, maintains tariffs ranging from 45 percent on pulpwood logs to 160 percent on plywood. While

some other South American tariffs are not as

stringent as Brazil’s, they are still high, and

other import regulations often discourage

wood product imports. Chile, with a 10 percent

across-the-board tariff, maintains the lowest

rates, but Chile is a net exporter of wood.

Nontariff Barriers

NTBs or distortions are growing in importance, but they are often difficult to identify.

The effects of NTBs are equally difficult to

measure, but there is little debate about

whether they are potent hindrances to trade in

forest products, Recent additions to GATT

rules established some codes of conduct regarding some NTBs, but the new codes are not

comprehensive and will be hard to enforce,

Some NTBs, such as product standards, have

affected forest products exports significantly,

Others have been less important, but may have

more impact in the future as the use of NTBs

expands. There are seven types of NTBs—

quantitative restrictions, nontariff charges on

imports, government intervention in trade,

product standards, administrative practices,

discriminatory ocean freight rates, and restrictions on export-related services.

Quantitative Restrictions

New-style quantitative restrictions or informal quotas on trade take many forms and have

become more popular in recent years. The

most frequently used types are new forms of

quotas, embargoes, orderly marketing agreements, and voluntary export restraints. For

forest products, many countries use embargoes, particularly to protect domestic resources

and processing industries. Indonesia, Malaysia, and the Philippines place major restrictions

on exports of hardwood logs in an effort to conserve stocks. The United States does not permit exports of logs harvested from National

Forest System land or the substitution of National Forest System logs for exported logs produced from private lands.

Nontariff Charges on Imports

Nontariff charges on imports often take the

form of taxes levied at various points in the

product’s distribution channel. Both Western

Europeans and the Japanese levy value added

taxes. In Sweden and Norway, where tariffs

are fairly low, stiff value added taxes are levied

on both domestic and foreign forest products.

Government Participation in Trade

Government participation in trade can involve countertrade (a form of barter), purchases

by national enterprises or trading companies,

and government procurement policies. None

of these is a significant barrier to U.S. forest

products exports at present, but countertrade

in particular could become much more important in the future. Countertrade consists of

agreements, usually between nations, to purchase certain quantities and types of products

from each other, These arrangements are becoming much more common in East-West

trade, and many Communist countries prefer

countertrade arrangements to other types of

trade. A countertrade agreement between Japan and the Soviet Union includes the exchange of Japanese construction machinery for

Siberian timber. The Chinese have shown a

preference for countertrade as well and may

want to link future imports of forest products

to exports of Chinese goods. The Japanese and

Western Europeans have been willing to engage in countertrade agreements with Communist 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 technique could deter U.S. exports of solid wood

and pulp and paper products.

Product Standards

Health, safety, and other product standards

often limit imports, although not all product

standards are developed and used specifically

to block imports. This type of NTB is particularly important in forest products. Standards

can inhibit trade in many ways, Some are difficult or expensive for foreign producers to

meet; some countries enforce standards, but

do not publish them. Some change standards

frequently, creating uncertainty for foreign

producers interested in exporting, Finally,

some standards are simply interpreted in arbitrary ways. The Japanese generally are acknowledged to use product standard barriers

much more frequently than most other nations.

Plywood is one of the U.S. products most adversely affected by current standards. For example, German standards on preservatives restrict the types of plywood that are imported

from the United States. Japanese standards for

plywood knots, adhesive strength, and “white

pockets’’—fungus remnants in Douglas-fir plywood—have dampened U.S. plywood sales.

These standards recently have been loosened,

but they still may limit U.S. plywood exports

to Japan. Significant reduction of these plywood trade barriers could benefit substantially both Pacific Northwestern and Southern producers.

Standards also are troublesome for U.S. paper producers. EEC has agreed, under the

Multilateral Trade Negotiations, to reduce

tariffs on kraft linerboard, but will not apply

the reduction if the product contains 20 percent or more hardwood pulp. Most U.S. linerboard currently meets this ceiling, but industry

trends have led to greater use of hardwood

pulp. As a result, this standard may be more

restrictive in the future,

Administrative Practices

The rules that a country

as barriers to trade, as can

establishes can act

the way these rules

are implemented and enforced. The most common types of administrative practices that can

hinder trade include arbitrary methods of customs valuation, arbitrary product classification, inspection procedures, and licensing procedures. These barriers, which are used by

nearly all nations, undoubtedly affect forest

products trade. Mexico, for example, recently

imposed new licensing requirements which effectively reduce imports of U.S. paper products. Recent revisions to GATT include codes

on customs valuation, product classification,

and import licensing procedures, but the details of these rules are not yet developed and

their eventual impact is unknown.

Ocean Freight Rates

One-way ocean freight rates for certain commodities usually are set by conferences of nations, Many U.S. producers maintain that these

rates discriminate against them. In fact, the

American Paper Institute lists higher U.S. shipping costs as a disincentive to exporting certain grades of paper, particularly printing,

writing, and specialty papers. so

Recent proposed changes in the regulation

of ocean-liner conferences also concern U.S.

paper producers. The 98th Congress is considering legislation that would largely exempt

ocean-liner conferences from antitrust laws

and which, if enacted, might result in significantly higher shipping rates in the view of

some U.S. analysts.

Restrictions on Export-Related Services

Exporters require a broad range of services

if they are to market their products successfully

in overseas markets. Many countries have barriers against American banks and insurance

companies and also may limit the ability of

foreign firms to get local financing and insurance. While these barriers do not necessarily

discriminate against any particular country or

product, their existence may inhibit U.S. exports of solid wood and paper products.

@’The American Paper Industry: An International Profile, ”

op. cit., p. 10.
64 ● Wood Use: U.S. Competitiveness and Technology

Other Factors Affecting Exports of Wood Products

Tariffs, quotas, and NTBs undoubtedly curb

the ability of U.S. producers to export solid

wood and pulp and paper products, but, while

removal of these distortions would alter the

nature of international commerce, the most

dramatic stimulus to trade would be the improvement of the global economy. In all, there

are five important factors that affect the volume

and type of products traded—global economic

conditions, currency exchange rates, private

business attitudes, government policies that

hinder exports, and government assistance to

exporters.

Global Economic Conditions

In recent history, it has become increasingly difficult for nations to maintain separate

economic identities. One-seventh of all U.S.

jobs now depend on exports, and the situation

is similar in most of the world’s developed

economies. The current global recession has

damaged nearly all segments of the wood industry (although exports of most paper products have performed remarkably well under

such adverse conditions) and has probably hurt

U.S. wood exports far more than have NTBs,

Economic recovery is likely to stimulate offshore demand for U.S. forest products much

more than the removal or reduction of any

trade barrier, although this is not meant to

minimize the importance of efforts aimed at

easing those barriers.

The recession is complicated further by the

world financial situation. High interest rates,

largely a function of U.S. monetary and fiscal

policy, mean that Third World countries heavily in debt are having serious problems refinancing those debts. Many are turning for help to

the International Monetary Fund, which will

impose austerity programs in return for financial assistance. While this makes a certain

degree of sense, it also makes it harder for these

countries to import goods or to stimulate their

own economies. It also makes it more difficult

for U.S. producers to penetrate these markets.

Currency Exchange Rates

The value of the dollar relative to other currencies affects the prices and competitiveness

of American goods overseas, For the past few

years, the dollar has been very strong on world

markets, rising sharply against the yen, the

deutsche mark, and the franc between June

1980 and November 1982. Although it has fallen slightly since then, the dollar still is highly

valued, particularly against the yen, considering the U.S. trade deficit with Japan,

The dollar is likely to remain strong as long

as U.S. interest rates are significantly higher

than foreign interest rates. Prolonged balanceof-payments deficits in the United States ordinarily would lead to devaluation of the dollar

against other currencies, but this has not happened. High interest rates in the United States

and the huge Eurodollar market have overwhelmed other currency adjustments, and, until these adjustments are made, U.S. exporters

will have a disadvantage on world markets.

U.S. interest rates are particularly high compared with those in Japan, which keeps its own

interest rates low by preventing foreign entry

into Japanese financial markets. 37

Private Business Attitudes

World perceptions of private U.S. business

attitudes can have a major impact on trade. Until recently, the U.S. forest products industry

was believed to be somewhat unreliable or unwilling to make long-term commitments that

many importers want. According to one analysis, the U.S. forest products industry has never

made a concerted effort to export its products,

but is now beginning to see offshore markets

as a strategy for survival.38 Responding primarily to the enormous demands of the domestic

market for forest products, the industry has

tended to view exports as something to do with

its 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 domestic

demand picks up. In part, foreign protectionist

practices limit imports of U.S. products, especially during downturns, but the reputation of

U.S. producers still persists.

This “American Market Syndrome” is

changing. The National Forest Products

Association, representing a large portion of the

Nation’s solid wood products sector, has

launched a cooperative effort to develop

foreign markets for lumber, plywood, and

panels with the U.S. Department of Agriculture’s [USDA) Foreign Agricultural Service

(FAS). The project largely involves working

with foreign governments in removing or reducing NTBs to trade in solid wood and promoting the use of U.S. wood products abroad.

Over the last three decades, FAS has had an

excellent record in promoting agricultural exports and its success bodes well for the future

of exports of solid wood products.

A key element in U.S. producers’ establishing

their reliability as world suppliers of forest

products is their performance when domestic

demand rises, The commitment of these producers to foreign markets has yet to be fully

tested, As the U.S. economy recovers and domestic demand for wood products increases,

the behavior of U.S. firms that have expressed

interest in foreign trade will be watched carefully,

Government Policies That Hinder Exports

Government as well as industry shapes world

perceptions of the United States an unreliable

trading partner, Increasing willingness by the

U.S. Government to use export controls—embargoes, sanctions, and other export bans—has

hurt U.S. producers. While the Federal Government has not applied trade sanctions specifically in forest products, its readiness to use them

as an instrument of foreign policy (or as a

weapon) probably has harmed all U.S. exporters to some degree.

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

Taxation of foreign earned income also may

hamper the ability of U.S. producers to promote products overseas. The United States is

the only major industrial country that taxes on

the basis of citizenship rather than residence.

Nationals of other countries generally are taxed

only in the country where they live, Because

American citizens must pay U.S. taxes on income earned abroad, it is very expensive for

U.S. companies to keep American executives

overseas, and to maintain marketing support

in foreign countries,

Uncertainty over the interpretation of the

Foreign Corrupt Practices Act may also hinder

exports.

Government Assistance to Exporters

Several U.S. Government agencies affect

trade policies and offer assistance to exporters, They include:

●

●

●

●

●

●

●

the Office of the U.S. Trade Representative, a cabinet-level official who represents the United States in both GATT and

bilateral trade negotiations;

the Department of State, which is involved

in trade negotiations;

the Department of Commerce, which

maintains the Foreign Commercial Service

and otherwise assists U.S. exporters and

which also administers export controls;

USDA, which maintains FAS, now assisting wood products exporters;

the Department of Treasury, which helps

set international economic and monetary

policy;

the National Security Council and the Department of Defense, both of whom play

an active role in policies on export controls; and

others who provide assistance, including

the Export-Import Bank, the Small Business Administration, the Overseas Private

Investment Corporation, and USDA’s

Commodity Credit Corporation.

As noted, FAS recently has been authorized

to help solid wood products exporters. However, there is no comparable assistance at present available to U.S. paper producers. The For-
66 ● Wood Use: U.S. Competitiveness and Technology

—

eign Commercial Service, while it is empowered to provide this service, is organized

along regional rather than commodity lines and

probably is unable to provide the type of export assistance offered by FAS. While there is

no legal restraint on FAS offering assistance

to U.S. paper producers, the agency is currently too understaffed both in the United States

and abroad to provide this additional service.

Nevertheless, the paper industry has shown

little interest in FAS assistance to date.

The U.S. Government does not provide the

level of export assistance that some other

governments do. Assistance from the U.S.

Trade Representative and the Departments of

Commerce and Agriculture are available, but

no agency provides the kind of comprehensive

information and assistance given, for example,

by the Japan External Trade Relations Organization (JETRO). Generally, the U.S. Government does not confer direct export subsidies

that would be acceptable within the GATT

framework. More common than direct financial assistance are certain forms of tax assistance. One such program, the Domestic International Sales Corporation (DISC), provides

special subsidies for export sales that allow corporations to defer some taxes. This program

has been found illegal by a GATT tribunal

under the Tokyo Round subsidies code, and the

Reagan administration has committed itself to

a reappraisal of the program as a result. Abolition or dilution of DISC, according to the

American Paper Institute, could hinder future

plans for exports.40

Another program that can aid U.S. producers

in expanding exports is a new law allowing

American firms, including banks, to form export trading companies. It is intended to help

small and medium-sized companies band together in order to export. Certain exemptions

from current antitrust law may permit new

forms of cooperation, but it is too early to

assess 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 products has increased over 250 percent since 1950

(fig. 7). The constant (deflated) value of wood

imports has increased by 75 percent since 1964

(fig. 8). While the United States has been a net

importer of forest products for at least 20 years,

the balance-of-payments deficit has narrowed

sharply. In 1979, the deficit was over $2.6 billion, but dropped to less than $1.7 billion in

1982. In 1982, for the first time in recent history, the United States became a net exporter

of solid wood products (roundwood, sawwood,

and panels), primarily because the value of imports dropped more than the value of U.S. exports during the recent recessional The United

States remained a net importer of pulp and

paper, although the trade deficit in pulp and

paper dropped by more than $400 million.

41U .s, Department of Commerce, International Trade Commission, unpublished data, 1983.

Figure 7.—Tonnage of U.S. Wood Imports,

by Product, 1950.79

o 14

2

0

1950 1954 1958 1962 1966 1970 1974 1978

SOURCE: U.S. Department of Agriculture, Forest Service, An Ana/ysis of the

Thntxw S/tuaf/on in the Unlfed States 1952-2030, Forest Resource

Report 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 solid

wood products* totaled nearly $2.3 billion,

down from over $3.5 billion in 1979, with

almost 70 percent of 1982 imports of solid

wood products consisting of softwood lumber

from Canada (table 8). For over 30 years, imported Canadian lumber has accounted for a

growing share of the volume of U.S. lumber

consumption, rising from less than 7 percent

in 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 during

downturns in U.S. homebuilding activities.

The current recession has caused the volume

of all imported lumber to drop from 11.6 billion

board ft in 1978 to 8.9 billion board ft in 1982.

Declining lumber imports between 1981 and

1982 accounted for over 70 percent of the total

decrease in U.S. imports of solid wood products.

The U.S. probably will continue to be a major

m

importer of solid wood products. No sigFigure 9.— Relative Importance of Canadian

Softwood Lumber Imports, 1950-82

5

1950 1955 1960 1965 1970 1975 1980 1985

SOURCES: 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 Report No. 23 (Washington, D. C.: Forest Sewice, December 1982). National Forest Products Assoclatlon, personal communication international Trade Commission, personal communication.

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

Quantity Value Percent of

Product (mbfa

) (thousands of dollars) total value

Logs and timber . . . . . . . . . . . . . . . . . . . . . 117,032 $26,430 1 .2 ”/0

Hardwood . . . . . . . . . . . . . . . . . . . . . . . . 18,268 3,500 0.2

Softwood . . . . . . . . . . . . . . . . . . . . . . . . . 98,764 22,930 1.0

Pulpwood (including chips) . . . . . . . . . . . NA 56,248 2.5

Wood waste, fuel . . . . . . . . . . . . . . . . . . . . NA 8,446 0.4

Lumber and railroad ties . . . . . . . . . . . . . . 9,200,075 1,665,312 73.2

Softwood lumber . .................8,973,652 1,567,931 68.9

Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . 226,423 97,381 4.3

Wood-based panels . . . . . . . . . . . . . . . . . . NA 519,585 22,8

Hardwood veneer and plywood . . . . . . NA 402,798 17.7

Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . NA 116,787 5.1

Total . . . . . . . . . . . . . . . . . . . . . . . . . . . $2,276,021 100.0 ”/0

ambf ~ 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 are

foreseen, 42 although the declining availability

of tropical veneer species from Southeast Asia

may limit U.S. hardwood imports before the

end of the century.

Pulp and Paper Products

In 1982, the United States imported woodpulp and paper products worth $5.3 billion,

and its balance-of-payments deficit in these

products was over $1 billion, considerably less

than in 1979 when net imports were over $1.4

billion, Imports of fine papers (mainly news42An~]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 woodpulp

accounted for almost 30 percent (table 9).

About 90 percent of all pulp and paper imports

came from Canada.

No major changes in the patterns of U.S. imports of pulp and paper are expected. Although

the United States also is exporting increasing

amounts of woodpulp and paper, many States

of the Northeast, the Great Lakes, and the

Midwest are deficient in softwoods needed to

manufacture newsprint. The proximity of Quebec and Ontario, with large softwood resources, gives Canadian producers advantages

in exporting these products to needy U.S.

markets,

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

Quantity Value Percent of

Product (sta

) (thousands of dollars) total value

Woodpulp . . . . . . . . . . . . . . . . . . . . . . 3,656

Paper products . . . . . . . . . . . . . . . . . . NA

Waste paper . . . . . . . . . . . . . . . . . . 132

Building paper . . . . . . . . . . . . . . . . 187

Industrial

Paperboard . . . . . . . . . . . . . . . . . 76

Fine papers . . . . . . . . . . . . . . . . . . . NA

Miscellaneous b . . . . . . . . . . . . . . . . NA

Total . . . . . . . . . . . . . . . . . . . . . . .

a~t . ~h~~ t~”.s

blndustflal papers, packaging, and mlscellafleous PaWr

SOURCE. US International Trade Commission.

$1,493,241

3,826,595

24,291

44,099

23,173

3,328,696

406,336

$5,319,985

28.1 0/0

71.9

0.5

0.8

0.4

62.6

7.6

1 00.00/0
Ch. III— World Markets for U.S. Wood Products ● 69

0
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 2030

13. 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 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

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CHAPTER IV

Wood Use in the United States

Summary

Americans currently consume about onefourth of the world’s forest products and have

the highest per capita consumption in the

world. At the same time, the United States is

the world’s largest producer of wood products,

accounting for about 35 percent of total global

output of paper, 45 percent of all plywood, and

20 percent of softwood lumber.1

While the contribution of wood to the domestic economy has been declining over the past

50 years (fig, 10), it continues to be valuable in

construction, shipping, packaging, and communications. Wood’s future role in the national

materials mix is difficult to forecast, but wood

should continue to be an important raw material in the foreseeable future. Whether its contribution to the economy expands or decreases

will depend on several factors:

●

●

●

●

●

the relative availability and price of wood

compared to alternative materials,

technological advances affecting uses for

wood and other materials,

the business acumen of the forest products

industry compared to its competitors,

government policies that encourage or inhibit use of wood relative to other materials, and

consumer preferences.

Wood is made into thousands of products,

but a few uses dominate today’s market, Once

again, after a period of decline, energy is the

highest volume use for wood in the United

States. Over half of the wood removed from forests in the early 1980’s ultimately was burned

for energy. Much of this consisted of pulpmill

wastes, but a growing percentage was fuelwood used for residential heat and commerFigure 10— Relative Importance of Industrial

Raw Materials, 1920-77

100 r

Agricultural nonfood, and wildlife productsa

1920 1940 1960 1980

Year

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

products

blnciudes miner~ construction materials, metal ores, chemical and fertilizer rnaterlals, abrasives, and other minerals

SOURCE U S Department of Agriculture, Forest Service, An Ana/ys/s of the TIrnbar 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 energy

use, while the remaining 35 percent is burned

for home heating. Future levels of fuelwood use

are difficult to predict; however, continued but

probably slower growth in residential and

commercial use of wood energy is likely in

the Eastern United States for at least the next

decade.

Over half of the solid wood products consumed, 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]apcr

R-22 (Washin@on, DC,: Kew}urces for the Future 1$)80), p. 5F15,

*Wood consumption for other forest products decreased in

1981 because of the economic recession while fuelw’ood consum pt ion cent i nued at a high rate,

73
74 ● Wood Use: U.S. Competitiveness and Technology

other panels, are used in construction, mostly

single-family housing. After World War II, a

trend toward building large detached homes

developed and increased the demand for wood,

even though construction methods became

more efficient. In the future, growth in housing and related demand for wood may slow due

to the higher cost of homeownership, shrinking household size, and possibly an increasing

proportion of multifamily dwellings.

Demand for pulp and paper products has

grown dramatically in recent decades, and

prospects are good for continued growth, However, paper products face increasing competition from other materials, particularly plastics.

Electronic communications may alter paper

consumption patterns in the future, but the

magnitude and direction of possible shifts are

uncertain. The immediate effect of computers,

word processors, and office copying equipment has been to increase demand for some

types of paper.

Forest products have a variety of uses in

manufacturing, shipping, and heavy industry.

With the exception of pallets, demand for

major industrial products made from wood

have either leveled off or declined as usage has

changed or as other materials have replaced

wood. Nevertheless, wood will continue to be

valuable for a wide range of minor industrial

and specialized applications.

Chemicals and cellulosic fibers are also produced from wood. The $1.5 billion cellulosic

fiber industry, which makes rayon and acetate,

uses refined wood cellulose as a basic raw

material. over $500 million in other silvichemicals are also produced from wood each year.

These silvichemicals include lignin byproducts, food additives and flavorings, and naval

stores. Wood also can be used to make many

products now made with petrochemicals. Production of chemicals as byproducts of wood

manufacturing probably will continue, but

widespread replacement of chemicals now

made from petroleum is unlikely. However, intensified research on wood chemicals, particularly lignin, could lead to new products of

considerable value.

Although the United States is the world’s

largest producer and consumer of wood products, with demand increasing since 1950,

wood’s importance to the domestic economy

has declined. The value of timber products as

a proportion of the value of all industrial raw

materials has been dropping for more than 5 0

years, from about 40 percent of the total in 1920

to about 27 percent in 1977. In part, this is

because some traditional uses for wood have

decreased in importance and because nonrenewable products, such as plastics and metals,

are competing successfully in forest products

markets. The rising value of nonrenewable raw

materials may be other factors accounting for

the decline. An expanding role for wood in

the economy is possible if the price and availability of nonrenewable materials become

less competitive. Otherwise, industrial uses

for wood are not likely to expand significantly.

Wood’s future also may depend on the development of new wood products to compete

with nonwood products as well as the development of composites that combine wood and

nonwood materials. For example, new wood

building materials are available which could

expand current wood markets or open others

in the coming years. New super-strength paper

and paperboard products, currently in developmental stages, also could have some structural applications. Composite materials made

of wood in combination with fiberglass, plastics, or metal have demonstrated superior performance for some applications, but currently are not widespread in use.

In 1980, the Forest Service issued projections

of future timber demand, supply, and consumption as part of an assessment process required by the Forest and Rangeland Renewable

Resources Planning Act of 1974. These projections, which are the basis for many Forest Service timber management programs, show rapidly rising timber consumption in the next 5 0

years, accompanied by rising timber prices and

declining softwood timber inventories after

20100
Ch. IV— Wood Use in the United States ● 75

According to the projections, timber consumption from domestic forests will rise from

over 12 billion cubic feet (ft3

) in 1976 to nearly

23 billion ft3 in 2030. Consumption of hardwoods is expected to rise somewhat faster than

consumption of softwoods, Hardwood consumption, which accounted for less than onethird of the 1976 timber harvest, is expected

to reach nearly 40 percent by 2030.

Another change shown in the projections is

a substantial shift of harvest from the Pacific

Northwest to the South, The South’s share of

the softwood harvest is projected to increase

from 45 percent in 1976 to 53 percent in 2030,

and its share of the hardwood harvest from 51

to 59 percent during the same period, Recent

data, however, shows larger inventories and

faster growth in the Pacific Northwest than the

older data indicate, a difference that probably

will dampen the regional shift.

The 1980 projections may overstate future

timber consumption and price rises due

mainly to possible overestimates of demand

and underestimates of timber growth. T h e

large projected increase in timber demand in

the future stems primarily from assumptions

about economic activity, housing starts, and

home characteristics that many analysts think

are too optimistic, Future timber supply estimates are based on static forest management

and short-term supply assumptions that probably understate future growth potential. However, because projections of southern softwood

inventories are being revised downward to

conform with more recent survey information,

the future supply picture is somewhat uncertain. underestimates of future supply also may

be offset somewhat by possible overestimates

of commercial timber acreage.

The forest products industry employs almost

2 percent of the Nations’s full-time work force

and contributes almost 2 percent of the gross

national product (GNP). The industry contains

two major sectors: 1) pulp and paper, and

2) lumber and panels (solid wood), The lumber

and panels sector employs more people than

does the pulp and paper sector, but pulp and

paper contributes a higher value added.

Historically, primary processing operations,

including logging, lumber and panel manufacture, pulping, and papermaking have been concentrated where inventories of raw materials

are greatest, mostly near the abundant softwood forests of the Pacific coast and the South.

Secondary processing (the manufacture of

goods such as boxes, cartons, paper products,

trusses, and furniture) tends to be located

closer to markets, mainly in the Eastern United

States.

The financial performance of the forest products industry has been roughly equal to that of

other industries over the long term. However,

in periods of recession, the lumber and panel

products sector has been particularly vulnerable because of its heavy dependence on highly

cyclical homebuilding activity.

The forest products industry is fairly competitive, but there are several leading companies. In 1978, the top four firms accounted

for nearly 15 percent of sales. One of the major

factors that appears to correlate with industry

dominance is landownership. The top 40 firms

in sales own 80 percent of all forest industry

land, which totals 68.8 million acres or about

14 percent of all U.S. commercial forestland.

Another factor associated with industry leadership is diversification. The largest firms often

produce both paper and solid wood products,

while smaller firms are more likely to specialize. Neither landownership nor diversification,

however, is necessarily a determinant of industry dominance.
76 ● Wood Use: U.S. Competitiveness and Technology

History of Wood Use*

Wood is probably the most versatile of all materials, adaptable to a broad range of uses and

functions (table 10). For millenia, wood in its

most rudimentary forms—firewood and logsprovided humanity with fuel, water transportation, shelter, and food. Ancient peoples inZInformation on the history of wood use can be found in Robert

L. Youngs, “Every Age, the Age of Wood,” Interdisciplinary

Science Reviews, vol. 7, No. 3, 1982, pp. 211-219; and in Elgon

Glesinger, ~~e Coming Age of Wood (New York: Simon &

Schuster, 1949).

Table 10.—Representative Uses for Wood

Uses/Examples

Construction:

Residential housing construction and upkeep, mobile

homes, and light commercial structures; arches and

beams 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, and

light airframes

Wood fuel:

Fuelwood, woodchips, mill residues, etc.:

Residential home heating and cooking, forest

products industry process energy, electricity

generation

Liquid and gaseous fuels:

Potential supplement for petroleum and natural gas

as a fuel or alternative petrochemical feedstock

Chemicals and cellulosic fibers:

Rayon and cellulose acetate:

Clothing fibers, tires, conveyor and transmission

belts, ribbons, films, etc.

Silvichemicals (naval stores and pulping byproducts):

Used in production of synthetic rubber, chewing

gum, rosin bags, inks, adhesives, paints, soaps,

detergents, solvents, odorants, bactericide, drilling

mud thinners, dispersants, leather tanning agents,

water treatment, pharmaceuticals, etc.

Food and feed products:

Feed molasses, animal fodder, vanillin flavoring, food

grade 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 from

it, such as resins, oils, and medicines. The

basics of producing paper were known to the

Chinese by the first century A. D., and similar

processes, developed separately, apparently

were known to the Mayas and Incas, In the

19th century, papermaking machines became

common in Europe and the United States, enabling high-volume production. Wood’s abundance or scarcity among nations has been a

contributing impetus to warfare for hundreds

of years. For example, colonial resentment of

Britain’s earmarking of “crown timbers” for

shipbuilding is said to have exacerbated tensions leading to the American Revolution. 3

Other instances have occurred as recently as

World War 11,4

The extensive forests of colonial America

were considered to be an obstacle to agriculture and settlement. Nonetheless, the superabundance, low cost, and workability of wood

permitted its easy substitution for more suitable, durable, and as-yet unavailable but

scarcer materials for shelter, transportation,

and tools. The U.S. industrial revolution depended on wood for fuel and tools until fossil

fuels, iron and steel replaced it.

Wood was the most important source of energy in the United States a century ago, providing an estimated two-thirds of industrial and

residential fuel needs. When the advantages of

fossil fuels to an increasingly urbanized and

industrialized society became obvious, wood

fuel use began to decline, both in proportion

to total energy use and in absolute quantities.

It recently has increased again as a way to beat

rising energy prices.

Wood served an important but temporary

function 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.: Harvard

University Press, 1926), pp. 231-280.

4The role of wood in World War 11 is discussed in Elgon Glesinger, Nazis in the Woodpile: Hitler Plot for Essential Raw

Material (Indianapolis and New York: Bobbs-Merrill, 1942).
network of roads, bridges, and railroads. s In

some areas, wooden roads were formed by laying logs in a corduroy pattern; planks or wood

blocks also served as road pavement. The

tracks, not just the ties, of early railroads were

built of wood. In 1910, at the high point of

railroad expansion, an estimated one-fourth of

all wood consumed in the United States was

for railroad ties,6

‘See Don H. Berkebile, “Wooden Roads, ” Lee H. Nelson, “The

Colossus of Philadelphia, ” and John H. Nelson, “Railroads: Wood

to Burn, ” In Alaterial Culture of the It’ooden Age, Brrmke Hindle

(cd.) (Tarrjrtown, N.}’.: Sleep} Hollow Press, 1981), for a discussion 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 100

years have resulted in many new wood products (table 11), a variety of reconstituted structural wood products, and composite products

that join wood with other materials to improve

its strength. Many of these products have comparable or superior performance to lumber, yet

allow fuller recovery of the resource, Much of

the paper and paperboard now produced in

this country is made from southern pine species, which were considered unsuitable for

papermaking before adaptation of the kraft

sulfate process in the 1930’s. Now, hardwoods

are used increasingly throughout the industry

as technology expands to take advantage of

these cheap and abundant materials.

Table 11 .—Taxonomy of Major Forest Products

Status of

Product Description Iifecycle Major end use

Lumber type products

Boardsa

Dimensiona lumber

Timbers

Parallel laminated

veneer (PLV)

Utility poles

Panel type products

Plywood

Hardwood

Particleboard

Medium-density

fiberboard

Semirigid insulation

board

Rigid insulation

board

Waferboard

Oriented strand

board (OSB)

Corn-Ply

1“ thick, 4“ to 16’, > 1“ wide

2“ 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 and

timbers, made from wood veneers

laminated 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 laminated

with grains of adjacent veneers

perpendicular. Usually 3 to 5 plies (veneers)

Flat panels made of individual wood fibers,

usually glued together

Flat panels, less than 1.5” thick, cut to

size of 4’ x 8’, composed of very small

wood 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 by

interfelting

Same as semirigid insulation board

Flat plywood-like panels made with flat,

nonalined wafers or large chips of wood

glued and pressed together

Flat plywood-like panels made with aligned

strands or ribbon-shaped pieces of wood.

Sometimes crossbanded (strands in

different layers oriented perpendicular to

adjacent layers), sometimes veneered

Flat plywood-like panels or lumber-like

pieces, with particleboard cores and

wood veneer faces

M

M

M

G

M

M

M

M

M

D

D

G

G

General purpose

Structural framing

Structural framing beams, and large

supports

Structural framing and supports. Can also

be used in millwork and molding

Transmission lines

Structural sheathing, flooring, and a variety

of semistructural uses

Floor underpayment, facing for architectural

concrete, 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 in

structural 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 of

Product Description Iifecycle Major end use

Paper products

Unbleached

kraft paper

Bleached

kraft paper

Newsprint and

ground wood

printing papers

Corrugating medium

Linerboard

Paperboard

Coated paper

Specialty papers

Tissue paper

Other products

Rayon

Acetate

Cellulosic films

Brown, somewhat coarse, stiff paper

manufactured primarily by the kraft sulfate

process from hardwoods and softwoods

White fine textured paper manufactured by

either the kraft sulfite process or the kraft

sulfate process from either softwoods or

hardwoods. The better papers are

provided from softwoods

Coarse textured paper of low strength and

limited durability, which tends to yellow

with age. It is manufactured from

mechanical and semimechanical (particularly

chemically treated) pulp, which uses either

hardwoods or softwoods

Coarse, low-strength paper produced

primarily from sulfite pulping of hardwoods

Stiff, durable, thick paper made primarily

from unbleached kraft paper made by the

sulfate process

Stiff paper of moderate thickness made

primarily from bleached sulfate kraft pulp

Printing papers that have been coated with

materials that improve printability and

photo reproduction

Diverse group of products ranging from

thin filter papers to stiff card stock

Thin, soft, absorbent papers manufactured

primarily from chemical groundwood pulps

Synthetic fiber produced by the viscose

process using pure cellulose produced by

the dissolving pulp process. Rayon has

properties similar to cotton

Synthetic fibers produced from dissolving

pulp-like rayon, but further chemical

treatment make them water resistant with

properties more like nylon or orlon

Film made from dissolving pulp by the

rayon and acetate processes, but

extruded 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 and

paperboard for packaging

Printing of newspaper and for other

printing uses not requiring durability

Corrugated boxes as dividers and

stiffeners between the paperboard liners

Heavy duty shipping containers and

corrugated boxes

Milk cartons, folding boxes, and individual

packaging

Magazines, annual reports, and books

Cigarettes, filter papers, bonded papers

(with cotton fibers) index cards, tags, file

folders, and postcards

Toweling, tissues, and hygenic products

Woven cloth as a cotton substitute

Woven cloth as a substitute for nylon and

other petroleum-derived synthetic fibers

Packaging (cellophane) protective

coverings, photographic applications,

transparent drafting and graphic materials

NOTE B = beginntng; G = growing; M = mature; D = declintng

a Nomlnal 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 used

primarily by the forest products industry,

Since the 1973 oil embargo, wood has re- which meets a high proportion of its energy

emerged as an important domestic source of needs by burning wood wastes, and by homeenergy. Energy extracted from wood in 1981, owners for residential heating. The potential

including milling and pulping wastes, repre- of wood as an energy source is analyzed in the

sented 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 recently became available, due to independent surveys conducted by the Department of Energy

(DOE) and the Forest Service, Both the DOE

survey and the preliminary Forest Service

survey show that residential fuelwood use is

far greater than previously reported.

Over 130 million dry tons (1 dry ton = 1 cord)

of wood were burned for fuel in 1980, according to a DOE survey.8 This tonnage represents

about 2.2 quadrillion Btu (2.2 Quads) of

energy—about 3 percent of total domestic

energy consumption.9 On the basis of the more

conservative Forest Service estimate of residential fuelwood use, OTA estimates that about

55 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, OTAE-124, 1980).

‘U.S. Department of Energy, Estimates of U.S. Wood Energy

Consumption From 1949 to 1981, stock No. 061-003 -00266-8

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

1982),

‘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 purposes (table 12). *

About 60 percent (81 million short tons) of

all wood energy was used by the forest products industry in manufacturing. The remaining 42 million to 48 million short tons were

used primarily for residential home heating.

Prospects for Further Growth in Wood Fuel Use

Since the forest products industry already

derives a large percentage of its energy requirements from wood, the areas where wood

fuel use grows the most in the future probably

will be in residential and commercial (e.g., hospital and nonwood manufacturing) applications.

In contrast to wood fuel byproducts used by

the forest products industry, residential fuelwood use almost always involves removal of

——- ——

*In 1981 and 1982, the proportion of removals used as wood

fuel probabl~r exceeded 55 percent, due to continued growth in

residential fuelwood use and a decline in forest products industr~’

removals resulting from the economic recession.

of Wood Fuel Removals, 1980

Million tons of

1980 quantitites of wood removed oven-dried wood

Wood (bark excluded) for forest products industry (estimated at

11.6 billion cubic feet) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 160

Bark portion of forest products industry removals . . . . . . . . . . . . . . . . . . . . . . 21

Residential 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 wood

needed to produce the

1980 wood fuel consumption Quads equivalent amount of energy

Industrial (including mill residues, and

spent pulping liquors) . . . . . . . . . . . . . . . . . . 1.4 . . . . . . . . . . 81

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

Total 1980 wood fuel consumption . . . . . . . 2.2 123

NOTE: 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 wood

fuels 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 ued

to 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 (draft

report), U S. Departmen! of Agriculture, Forest Service, Forest Products Laboratory, March 1963, p 1, p 17, and

table 4, conversation with Robert B Phelps, Research Forester, Demand Price and Trade Analysls, Forest Resource

Economics Research Staff, U S. Department of Agriculture, Forest Serwce, May 26, 1963, letter from John G

Haygreen, Professor and Head, Kauferf Laboratory, Department of Forest Products, College of Forestry, University

of Minnesota, to James W Curl in, Project Director, Off Ice of Technology Assessment, U.S Congress, letter dated

Nov 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
80 • Wood Use: U.S. Competitiveness and Technology

wood from forests specifically for fuel. Many

variables will influence trends in this area, including the abundance and accessibility of fuelwood, the relative price and availability of nonwood fuels, and personal preferences of homeowners. In the short term, all of these variables

appear to favor increased fuelwood utilization,

although probably not at the rapid rate of increase of the late 1970’s.

Current residential fuelwood use is significantly above levels projected by the Forest

Service in its 1980 assessment under the Forest

and Rangeland Renewable Resources Planning

Act of 1974 (Public Law 93-378). The projections said that residential fuelwood use would

grow progressively from an estimated 6 million

cords in 1976 to 26 million cords in 2030, Recently, however, the Forest Service revised its

forecast to reflect new evidence of rapidly increasing consumption. The new forecasts, issued in a draft supplement to the 1980 supplement, show wood fuel use quadrupling within

the next 50 years, reaching nearly 200 million

cords annually. Much of this increase may reflect rapid growth in commercial use of wood

fuels as well as residential fuelwood. While

these projections cannot be made with certainty, it does seem probable that wood fuel use

will significantly exceed the Forest Service projections made in 1980, even if it falls short of

the revised estimates.10

Demographic and technological trends favor

continued growth in fuelwood use for residential home heating, although probably at slower

rates than in the 1970’s. In forested regions,

fuelwood is easily accessible to the increasing

proportion of the population living in suburban and rural communities.

The availability of highly efficient wood

burning stoves, inexpensive chain saws, and

log splitters makes it possible for many rural

IOThe initita] estimate and forecast are contained in U.S. Department of Agriculture, Forest Service, An Analysis of the Timber Situation in the United States 1952-2030 (Washington, D. C.:

U.S. Government Printing Office, 1982), p. 67; the revised projections are contained in the Forest Service’s Review Draft;

America Renewable Resources: A Supphment to the 1979 Assessment of the Forest and Rangeland Situation in the United

States, preliminary draft subject to revision, Feb. 4, 1983, p. 15.

and suburban residents to meet a high proportion of their home heating needs from nearby

woodlands. In some instances, as in the case

of national forests, firewood is provided at little or no cost to people willing to remove it.

There has been a tenfold increase in firewood

permits issued for national forests since 1971,

representing a rise in wood removal from about

400,000 cords per year to about 4 million

cords. * Other arrangements such as fuelwood

purchasing cooperatives can reduce firewood

costs below what individual purchasers must

pay.

Increased wood fuel utilization by small nonwood industrial and commercial firms is also

probable. Such firms currently account for a

small portion of wood fuel consumption, but

increasing numbers of companies in regions

with abundant wood supplies find wood competitive with petroleum and natural gas fuels.11

Wood also has certain economic advantages

over coal, since wood boilers generally require

lower capital investment for air pollution controls. Use of wood fuel in industrial processes

and for electricity by public utilities is occurring in some areas,

Wood Fuel Use by the Forest Products Industry

Between 1972 and 1981, wood fuel use by the

energy-intensive pulp and paper sector increased from about 40 to 47 percent of the total

energy consumed by this part of the forest

products industry. Wood fuel provided about

73 percent of the solid wood industry’s energy

needs in 1981.12

Because it already uses most pulping and mill

residues, the forest products industry will find

it more difficult to burn much more wood,

Much of the remaining residues not burned for

——

*information on fuelwood removals from national forests provided by the Forest Service.

llsee char]= E. HeWett ancl William ‘r. Gladden, Jr., ikfarket

Pressures to Use Wood as an Energy Resource (Hanover, N. H.:

Dartmouth College, Thayer School of Engineering and Resource

Policy Center, June 1982) for regional prices of wood and other

fuels on a Btu equivalent basis.

IZNationa] Forest Products Association, “Industrial Energy

Conservation Program 1981 Report for Lumber and Wood Products” (Washington, D. C.: National Forest Products Association,

June 24, 1982),
energy are used to make composite wood products or silvichemicals. Further increases in

energy self-sufficiency may require the recovery of logging residues now left in the forests,

harvesting of wood specifically for fuel use,

and the development of more energy-efficient

processing methods.

To date, nearly all wood energy is derived

from the direct combustion of wood and wood

byproducts. Wood also can be gasified or converted to liquid alcohol fuels that could substitute directly for fossil fuels. Several smallscale technologies for wood gasification are

commercially available at this time although

the Btu content of the gas is low. To date, no

commercial facilities to produce alchohol fuels

from wood have been constructed. One technological barrier to commercialization is the

inability to convert economically large quantities of lignocellulosic materials. 13

Wood in Construction

With the exception of fuel, more wood is

used for construction than for any other single

application. In 1976, construction accounted

for about 60 percent of the lumber and twothirds of the plywood consumed in the United

States. Major demand comes from the homebuilding industry, followed by residential

upkeep and repair, and nonresidential construction (table 13).

The relationship between new construction

and demand for wood has both positive and

negative implications for the solid wood products sector. The industry has benefited from

the increase in the number and size of new

single family homes which has occurred since

World War II, because they use more wood

than multiunit or manufactured housing. However, residential construction is highly cyclical,

with more pronounced highs and lows in economic activity than most other industries. As

a result, the solid wood products sector sometimes is strained to meet demand during peak

building years, such as the peak between 1972

13u ,S. Depaflrneni of Energ}’, Report of the Akohol ~’uek polic~’ Review (Washington, D. C.: U.S. Government Printing Office, 1979),

Ch. IV—Wood Use in the United States ● 8 1

and 1976 when housing starts exceeded 2 million annually. On the other hand, it sometimes

is severely depressed, as has been the case

since 1981 when housing starts fell to about 1

million per year. *

The amount of wood used in each housing

unit varies according to construction materials

and methods, the structure’s type and size, architectural design, building codes, and region.

Major changes in residential building materials

have occurred since 1950, including greater

use of plastics, metals, and masonry as substitutes for wood. Modern construction techniques, including use of prefabricated roof

trusses and floor joist systems and factory

prepared doors, windows, and cabinets, also

tend to reduce the amount of wood used per

unit of floor space.

Wood nonetheless remains the dominant material for homebuilding. Although wood use per

square foot has declined, the overall size of

single 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 years

during the 1970’s, housing starts exceeded 2 million per ~ear

(1971, 1972, 1973, 1977, and 1978), Post-Wor]d W’ar 11 low points

were in 1975 (1.2 million starts), 1981 (1.1 mi]]ion), and 1982 (1.1

million).

*

Photo credit’ U S Forest Service

New home construction is the most important single use

of solid wood products
82 . Wood Use: U.S. Competitiveness and Technology

. . .

. . .

. . .
the post-World War II era. As a result, the

amount of wood used per unit has increased

slightly over the last two decades.l4

Floor area of the average new single family

house has increased over 70 percent between

1950 and 1979.15 The proportion of new single

family homes with garages increased from 40

percent in 1950 to 76 percent in 1980, including

over 60 percent with room for two or more

cars.

l6 The exterior walls of 42 percent of all

new single-family houses were wood in 1980

as compared to 32 percent in 1959.17 These architectural trends have been offset somewhat

by other trends that reduce wood use, such as

more split-level and two-story houses and

fewer porch and roof overhangs.

Long-term trends in housing demand depend

on several interrelated factors, including:

. demography,

• general economic conditions and per capita income,

• national housing and financial policies,

● housing affordability, and

• cultural and personal housing preferences,

Throughout the 1970’s, many housing experts projected a continued upward swing in

housing starts through 1990 and perhaps to

2000. The expected increase in housing demand was linked more to the “baby boom” generation reaching prime home-buying age than

to economic factors and government policies

that affect construction and affordability, The

demographic demand for housing in the 1980’s

and 1990’s theoretically should be high. The

number of Americans in prime household formation ages (24 to 35) will peak around 1985

and will continue at near record levels until

1990 before tapering off.l8

14(J n i \,erslt}, of Wisconsin Extension, Environmental Awareness Center, Housing and Wood Products Assessment, final

report to the LJ, S, Congress, office of Technology Assessment,

Dec. 10, 1982, p. 21ff.

1

5

1 bid., p. ZZ, It should bc noted that square feet of finished

floor 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.Sjcjen t‘s (,’omm ~s.sjon on Hou,sjng IWashington, E). (;,: [J, S. (jo\rernment Printing office, 1 982), p. 67,

Ch. IV— Wood Use in the United States ● 83

The length and severity of the housing downturn in the early 1980’s, however, has resulted

in reevaluation of these projections. Some analysts anticipate new home construction to rebound to record levels when economic conditions improve, as it did in the seven previous

housing cycles after World War II. Others,

more pessimistic, say that a profound change

is occurring in the U.S. housing market because the cost of homeownership is rising

faster than family income, Such conditions are

likely to limit the construction of detached

single-family homes, and residential housing

needs increasingly may be met through rehabilitation of older units, conversion of existing

single-family units to multiple units, more new

multifamily units, and manufactured housing,

These events would reduce projected wood use

in new construction but also could expand

markets for wood in home improvement.

Pulp and Paper Products

The United States reports the world’s highest

per capita consumption of paper and paperboard products at 600 pounds per person per

year. U.S. production of paper and paperboard

amounted to about 64 million short tons in

1981, while domestic consumption amounted

to 68 million short tons.l9

Woodpulp is the primary raw material for all

but a small portion of paper products, displacing cotton and other raw materials that dominated in the past. Annual woodpulp production has increased steadily, from about 15

million short tons in 1945 to about 53 million

short tons in 1981.20 Still, the United States imports slightly more pulp than it exports, and

it manufactured 53.6 million short tons of pulp

into paper and paperboard products in 1981.

Pulp and paper manufacture has grown more

efficient as wood prices have risen. Early pulpIBAmerican paper Institute, Statistics of Paper, Paperboard and

Wood Pu]p— 1982, data through 1981 (New York; American

Paper Institute, 1982), table 1.

ZO1 981 figure is from Ibid., p. 52; 1945 figure is from U.S. Department of Agriculture, Forest Senice, .4n Anal~sLs of the Tinber Situation in the United Sta(es, 1$?.52-20.?0, Forest Resource

Report No. 23 (Washington, D. C.: LJ.S. Government Printing office, December 1982), p. 61.
84 . Wood Use: U.S. Competitiveness and Technology

ing processes were limited in the tree species

they could use as raw material, but over time

the industry has developed processes that can

exploit a wider variety of species. Over the past

40 years, for example, hardwood use has increased so that it now accounts for over a quarter of the pulpwood utilized. The industry also

relies heavily on chips and sawmill residues

that are the byproducts of solid wood product

manufacture, to the extent that they comprise

over 40 percent of the wood used for pulping.

Fifteen million short tons of recycled wastepaper were used in domestic pulp and paper

production in 1981, compared to 12 million

short tons in 1970.21

Research has expanded the number of products that can be made from paper. Several thousand different kinds of paper and paperboard

(a stiff, heavy paper) can be manufactured.

These range from fluffy absorbent tissues to extremely stiff board-like materials and experimental super-strength papers that match the

strength and/or weight characteristics of some

light structural metals.

Woodpulp use is evenly split between paper

and paperboard production. The most important paper products include printing and writing papers (51 percent), newsprint (17 percent),

tissues (14.5 percent), and packaging (17.7 percent) (table 14). Linerboard, a kraft paperboard

used for boxes, shipping containers, and packaging, accounted for 46.4 percent of the paperboard produced in 1981. Packaging is a rapid-

...—21 American paper lnsti~te, Statistics of Rper, Paperboard and

Wood PIJ]p-1982, p. 50.

ly growing market, comprising nearly 60 percent of domestic paper and paperboard production in 1981.

Increasing domestic and worldwide demand

for paper and paperboard are anticipated. The

Department of Commerce, for instance, forecasts a 3 percent annual growth rate through

Photo credit: U.S. Forest Service

Researchers at the USDA Forest Products Laboratory are

investigating new papermaking technologies
Ch. IV—Wood Use in the United States ● 8 5

Table 14.—U.S. Production of Paper and Paperboard

in 1981 and Projected for 1984 (thousand tons)

1981 1984a

Paperboard . . . . . . . . . . . . . . . . . . . . . . . . . . . 14,558 15,360

Kraft fiberboard . . . . . . . . . . . . . . . . . . . . . 1,067 1,140

Other kraft paperboard . . . . . . . . . . . . . . . 4,717 5,070

Bleached paperboard . . . . . . . . . . . . . . . . . 3,926 4,100

Recycled paperboard.. . . . . . . . . . . . . . . . 7,070 7,150

Total paperboard . .................31,338 33,020

Paper

Uncoated free sheet . . . . . . . . . . . . . . . . . 7,882 8,720

Coated free sheet and groundwood . . . . 4,951 5,340

Uncoated groundwood . . . . . . . . . . . . . . . 1,440 1,540

Bristols and other . . . . . . . . . . . . . . . . . . . 1,530 1,580

Total printing and writing . ..........15,803 17,180

Newsprint . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5,238 5,730

Unbleached kraft . . . . . . . . . . . . . . . . . . . . . . 3,891 3,760

Bleached regular and industrial. . . . . . . . . . 1,603 1,670

Tissue . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4,485 4,730

Total paper . . . . . . . . . . . . . . . . . . . . . . .. .31,020 33,070

Total 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 printing

papers are expected to have especially promising potential, with anticipated growth rates

that are twice that of the paper sector as a

whole. particularly high prospects for growth

lie in the export markets, especially in the expanding industrial economies of Asia. Continuation of the adverse economic conditions

of 1982, however, could dampen these prospects.

Some experts believe that paperboard will account for a larger share of paper sector production due to increased paperboard demand

and slower growth in other paper (nonpaperboard) markets. For example, paper has lost

part of the packaging market to plastics, although in some instances plastics have been

combined with paper to produce composite

products. Electronic communications and information processing ultimately may displace

some paper now used in writing, copying,

printing, and business forms. To date, however, electronic communications have provided high-volume markets for paper use in office copiers and word processing equipment.

ZZU.S. Department of Commerce, Bureau of Industrial Economics, 1982 U.S. Industrial Uutlook (Washington, D, C.: U.S. Government Printing Office, 1982), p. 43.

Other Wood Products

Furniture and Other Manufactured Products

Wood is an important manufacturing material, Furniture and other products accounted

for about 10 percent of lumber, veneer, and

plywood and 40 percent of hardboard and particleboard used in 1976.23 Furniture alone accounted for well over half the wood used in

manufacturing, with the remainder used for a

variety of small volume items, including signs,

displays, sporting goods, musical instruments,

boats, tools, and coffins.

After rising during the previous decade, the

volume of wood used in furniture and other

manufactured goods began to decline during

the early 1970’s due to the increased use of

materials such as metals and plastics, more efficient use of wood in manufacturing, and the

small number of new products made from

wood. Wood use in furniture also depends on

consumer preferences. During the 1960’s and

1970’s, plastics and metals were substituted for

wood in some popular styles of furniture, but

between 1972 and 1977, wood apparently regained popularity .24

Shipping and Industrial Uses

During the past 15 years, the production of

wooden pallets to store and ship materials has

expanded. This growth reflects the increased

use of palletized materials handling systems

and the increased volume of manufactured

goods shipped. The expanded use of pallets has

offset the rapid decline in wood used in shipping containers and crates, which have been

rapidly replaced by plastic containers and

metal barrels. Further increases in pallet production are expected by the Forest Service. 25

Other industrial markets have declined significantly due to the substitution of other

materials and the development of better wood

preservatives. Railroad ties, once one of the

highest volume uses for wood, accounted for

only about 1.5 billion board feet of lumber in

23An Ana]J,SiSoff~e~i~&rs~~ua ~ion, op. C it,, p. 33.

ZaIbid., p. 35.

ZSIbid., p. 37-38.
86 • Wood Use: U.S. Competitiveness and Technology

1976.

26 Nonetheless, demand for railroad ties

has edged upwards since the 1960’s. Future

trends in railroad tie use will depend on the

competitiveness of alternatives such as concrete ties and public and private commitment

to maintaining, improving or expanding domestic railroads. Other uses for wood, such as

telephone poles, pilings, barrel staves, and

mine timbers, have declined by about one-third

since 1952, to 379 million ft3 in 1977.

Chemicals and Cellulosic Fibers From Wood

Wood is the primary raw material from

which highly refined cellulose is taken to make

rayon and cellulose acetate filaments. Rayon

and acetate are found in many products, including automobile tires, lacquers, and explosives,

The volume of cellulosic fiber production

peaked in 1969,27 and shipments in 1981 were

valued at $1.5 billion.28 Although the market

is now dominated by noncellulosic fibers such

as polyester, some analysts believe that woodbased rayon and acetate will become more

competitive with noncellulosic fibers produced

from petrochemicals if energy costs increase. Cotton is another major competitor

with rayon, but the degree to which rayon can

displace it will depend on worldwide demand

and the supply of cotton. The success of rayon

and acetate will depend, too, on improvements

made in these fabrics.

The forest products industry also produces

silvichemicals valued at over $500 million per

year (table 15). Primary silvichemicals include

naval stores (e.g., rosin, pine oils, and turpentine) and a variety of byproducts from pulping,

including lignin products and vanillin. 29

Technologies exist for wood to replace virtually all of the chemicals and plastics made

from petrochemicals, although the most likely 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 potential

to be great for providing unique chemicals not

now available. Lignin, now primarily burned

for energy during the pulping process, may be

especially promising. While lignin can be used

to make a variety of organic chemicals, it is difficult to process and less than 3 percent remaining after pulping is recoverable for chemical production. Additional research on lignin’s

complex molecular structure, which is not well

understood, is needed before the potential of

lignin can be realized. Advances in biotechnology also may increase chemical production

from wood. 30

Nutritional Products

Wood fermented by yeast

eral high protein products to

to supplement human diets.

products include:

can produce sevfeed livestock and

These nutritional

roughage used in animal and some human

foods;

wood molasses, a sugar substitute;

single-cell protein for animal and human

nutrition; and

flavorings, such as vanillin.

The value of wood-based feed and food products in 1977 was about $40 million. Vanillin,

which is used as a substitute for vanilla beans

in ice cream and other products, accounted for

three-fourths of this total. al

Advanced Wood Materials

Research by the U.S. Forest Products Laboratory has shown the feasibility of producing

paper that is stronger than the wood from

which it is made, In fact, this “superpaper”

substantially exceeds the specific strength- and

stiffness-to-weight ratios of all common structural materials. If such high-strength papers

also can be made moisture resistant, maintaining their stiffness and dimensional stability,

they could be used for a wide range of applications 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 annual

growth in

Average Annual production

Product ion pricea

value (1963-77)

Product Unit (millions of units) ($/unit) (millions of dollars) (percent)

Naval storesb

Gum rosin . . . . . . . . . . . . . . . . . . . . . . lb

Steam-distilled rosin . . . . . . . . . . . . . lb

Gum turpentine . . . . . . . . . . . . . . . . . gal

Steam-distilled turpentine . . . . . . . . gal

Pine oil. . . . . . . . . . . . . . . . . . . . . . . . . gal

Other terpenes . . . . . . . . . . . . . . . . . . gal

Subtotal . . . . . . . . . . . . . . . . . . . . . .

Sulfate mill products

Crude tall oil . . . . . . . . . . . . . . . . . . . . lb

Crude tall oil, used as such

or sold . . . . . . . . . . . . . . . . . . . . . . . lb

Distilled tall oild . . . . . . . . . . . . . . . . lb

Tall oil rosin . . . . . . . . . . . . . . . . . . . . lb

Tall oil fatty acids . . . . . . . . . . . . . . . lb

Sulfate turpentine (refined). . . . . . . . gal

Heads fraction, pitch . . . . . . . . . . . . . lb

Sulfate Iignin . . . . . . . . . . . . . . . . . . . lb

Dimethylsulfide . . . . . . . . . . . . . . . . . lb

Dimethylsulfoxide . . . . . . . . . . . . . . . lb

Subtotal . . . . . . . . . . . . . . . . . . . . . .

Sulfite mill products

Lignosulfonate, Ca-base . . . . . . . . . . lb

Lignosulfonate, Na-base . . . . . . . . . . lb

Lignosulfonate, otherf . . . . . . . . . . . . lb

Lignosulfonate, totalf . . . . . . . . . . . . . . lb

Ethyl alcohol, 190-proof . . . . . . . . . . gal

Vanillin . . . . . . . . . . . . . . . . . . . . . . . . . lb

Torula food yeast, dry . . . . . . . . . . . . lb

Acetic acid, glacialg

. . . . . . . . . . . . . . lb

Subtotal . . . . . . . . . . . . . . . . . . . . . .

Miscellaneous products

Arabinogalactan . . . . . . . . . . . . . . . . .

Charcoal briquettes . . . . . . . . . . . . . . lb

Active carbon, from wood . . . . . . . . lb

Hemicellulose extract . . . . . . . . . . . . gal

Wax, from bark . . . . . . . . . . . . . . . . . . lb

Extracted bark powder . . . . . . . . . . . lb

Subtotal . . . . . . . . . . . . . . . . . . . . . .

Grand totoal . . . . . . . . . . . . . . . .

NA = Not applicable

%arload or wholesale price, f.o.b mill

bNaval stores data pertain to crop year, April 1 to March 31

cvalue accounted for under other headings

dlncludulng acid-refined tall Oil.

elncluding Ii gnosul fonates made from su I fate I i9ni n

‘Estimated

gMade from NSSC spent pulping liquors

26

246

0.73

2.54

9.49

2.32

0.27

0.23

1.50

1.25

2.00

1.00

$7.0

56.6

1.0

3.2

19.0

2.1

$89.2

- 15“/0

- 6

- 1 5

- 8

0

1,518

214

103

406

359

20.61

300e

60e

8

e

1

e

534

109

516

1,160

5

5.6

16

8

NA

1,100

50e

2

1.2

35

0.09 (c) + 3.1

0.09

0.19

0.20

0.27

1.10

0.05e

0.05e

0.37

0.54

0.05

0.06

0.04

0.06

1,00

5.35

0.40

0,20

NA

0.06

0.25

0.09

0.22

0.06

19.3

19.6

81.2

96.9

22.7

15.0e

3.0e

3.0

0.5e

$261.2

26.7

6.5

20.6

(c)

5.0

30.0

6.4

$96.8

NA

66.0

12.5e

0.2

0.3

$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 innovations

for paper-based structural materials, they eventually may play a role in residential construction. However, considerably more research

and development are needed before superstrength paper can be marketed.

Solid wood products have been designed to

compete directly with structural steel and concrete in some uses. Large laminated beams and

arches, frequently bent into various shapes,

have entered new markets, including the construction of large indoor sports arenas, convention centers, churches, and domes,

In addition, all-weather wood foundations

and underfloor plenum systems can compete

with masonry, block or cast-in-place concrete
88 ● Wood Use: U.S. Competitiveness and Technology

in new homes. The all-weather wood foundation is made of preservative-treated plywood

and lumber placed partially below ground

level, The underfloor plenum system provides

a sub-floor area through which warm or cool

air can be distributed throughout the house for

heating or air-conditioning, thus eliminating

ductwork. Properly constructed, the plenum is

rot- and insect-resistant.32 Widespread use of

either system would significantly increase

wood use in home construction; e.g., the underfloor plenum system requires 20 percent

more wood compared to slab built houses.33

Though wood foundations are cost competitive with conventional foundations, they are

not yet widely accepted. Reasons for this may

be related to a conservative building construction industry, buyer reservation, and the reluctance of building tradespeople to adopt new

technologies.

Many new wood products displace more traditional wood products such as plywood or

lumber rather than competing with other materials. These products may help maintain

traditional wood markets but do not usually

open new ones. Often the net effect is to reduce

the volume of wood used. Prefabricated roof

trusses, for example, have not expanded wood

markets significantly but have replaced larger

dimension 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 produced

in the mid-1970’s, has rapidly expanded into

furniture markets formerly held by particleboard and other panels. New types of particleboard include panels made from strands (thin

shavings or slivers of wood), flakes or wafers,

sometimes with veneer faces. These panels,

first introduced in the United States and

Canada in the mid-1970’s, compete with softwood plywood in structural uses.

New panel products made from reconstituted wood are expected to replace plywood

for sheathing and underpayment (floors). The

same trend seems to have occurred in furniture

manufacturing where plywood and particleboard have replaced lumber as furniture corestock, and medium-density fiberboard, in turn,

has replaced much of the plywood and particleboard. Shipping pallets are replacing wood

boxes and containers for materials handling.

New types of pallets, made with plywood decking, particleboard, or medium-density fiberboard, may replace some hardwood pallets in

the future.

Composites that combine wood with other

materials are not common, but their use is

growing. Composites made by laminating plastic or metal skins to a wood core are currently

used in a number of industrial applications

calling for strong, durable, corrosion-resistant

materials. Cement board made from wood and

cement and insulation made from wood and

foam are two other applications of composites.

Advanced materials, such as dimension lumber

substitutes made from wood particles and high

tensile strength glass fibers, could further

broaden 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. Under

riodically has analyzed the U.S. timber situa- the National Forest Management Act of 1976

tion. The Forest and Rangeland Renewable Re- (Public Law 94-585), the Forest Service also

sources Planning Act of 1974 directs the Sec- prepares a national renewable resource proretary of Agriculture to prepare an assessment gram updated at 5-year intervals. The latest
Ch. IV—Wood Use in the United States ● 8 9

assessment, issued in 1980, presents projections of timber demand, supply, and prices

through 2030.

From each assessment, alternative programs

for the use and management of the Nation’s

renewable resources are prepared, and these

in turn form the basis for formulating Federal

budgets. The 1980 assessment forecasts increasing timber scarcity coupled with rising

prices and demand for timber products during

the next 50 years. This scarcity, according to

the Forest Service, will have “significant

adverse effects on primary timber processing

industries, timber inventories, consumers of

wood products, and the environment.” 34

The 1980 projections probably overstate the

future scarcity of timber, primarily because of

overestimated demand.35 The forecasts that appear in the 1980 assessment were prepared in

the late 1970’s, and many significant changes

in the Nation’s economic outlook have occurred since then that alter expectations about

timber demand and other assumptions used in

the model. Recognizing these changes, the

Forest Service currently is modifying both the

1980 forecasts and the forecasting process to

include updated assumptions about future conditions and to provide a range of future outcomes.

While it is useful for planning purposes to

project future timber demand and supply, it is

important to recognize the shortcomings of

mathematical modeling when it is applied to

public administration and public policy. The

complexity and sophistication of the econometric models used in forecasting often give

the illusion of certainty and accuracy, while

in fact the most complex models may provide

information that is no more reliable than offthe-cuff estimates or professional intuition, The

primary value of modeling maybe less in predicting future conditions than in evaluating the

relationships between certain economic conditions and the timber situation, The usefulness

of the Forest Service’s projections for policysiAn An~jYS~S of tk Timber Situation, op. Cit., P. Xxiii.

aspersona] communication from Bruce R. Lippke, Weyerhaeuser Co., to R, Max Peterson, Chief, Forest Service, Mar. 17,

1983.

making will be greatly enhanced by considering a range of assumed conditions in developing estimates of future timber situations, rather

than merely providing specific estimates of

timber demand and supply based on a single

or narrow set of assumptions.

The next assessment by the Forest Service

probably will describe a broader range of possible futures, The 1980 assessment reflects little

recognition and analysis of factors that affect timber consumption and presents only a

single most-likely-case scenario—that timber

will become more scarce, based on demand rising faster than supply. While this projection is

within the range of possible futures, there are

two reasons to doubt that it is the most likely

outcome: 1) estimates of future economic

growth and demand for timber products are

too optimistic and are much more likely to be

overestimated than underestimated, and

2) while the long-term national timber supply

may be understated, projections of supplies of

softwoods from certain regions may be overestimated.

Demand Projections

Projections of demand for wood cover a wide

range of products, including lumber, panels,

fuel, pulp, and paper. Future consumption for

all products is linked to the level of general

economic activity, and demand for many goods

is estimated by indexing product use to the

GNP. Demand for wood products used in housing is forecast separately.

Housing Demand

The Forest Service’s 1980 assessment forecasts rapidly rising consumption of lumber and

plywood as a result of projected high levels of

new home construction like those of the early

and mid-1970’s. Since these projections were

made, however, there have been significant

changes in the housing market that may have

a long-term impact on the strength of future

demand, home size and type, and consequently

the amount of wood products used in construction. These changes and several others, all

point to future consumption of wood products
90 Ž Wood Use: U.S. Competitiveness and Technology

below the levels forecasted in the 1980 assessment. A downward revision of Forest Service

projections therefore is justified because:

●

●

●

●

In the Forest Service model, a substantial

portion of future new construction is “replacement” housing, i.e., those units built

when existing houses are abandoned or

razed. However, the model assumes replacement rates will be sustained at levels

much higher than in the past, except during the 1960’s when a larger proportion of

wartime housing was replaced. Unless repair and remodeling decrease dramatically, it is likely that future replacement rates

will be much lower than forecasts indicate.

Since housing unit replacements account

for nearly half of all future homebuilding

used in Forest Service forecasts, adjustment of the replacement rate will substantially effect the projected pace of construction,

Housing affordability affects housing demand, unit type, and home size, but it is

not adequately reflected in Forest Service

projections. Home prices increased rapidly relative to household income in the

1970’s, partially as a result of inflation and

low real interest rates, conditions not likely

to be duplicated in at least the next decade

or two.

Reduced housing affordability and household size both point to decreasing home

size in the future. However, whether or not

average unit size will reach 2,000 ft2 b y

2030, as the Forest Service estimates, is

uncertain; it is not unlikely that home size

could stabilize or even decrease within 50

years.

Household size, lifestyle, and consumer

preference also could significantly effect

the type of housing built. The Forest Service forecasts multifamily and mobile home

units declining as a proportion of construction in the future and single-family

detached units accounting for a growing

share. It is probably equally likely that

multifamily units and mobile homes will

account for a stable or increasing share of

future construction. Single-family homes

use more wood products than either multifamily units or mobile homes per unit of

floor space.

These are among the many reasons to doubt

that the strong homebuilding activity of the

past will recur, yet they are not adequately

recognized in 1980 Forest Service forecasts,

For the last 4 years, the homebuilding industry

has been depressed. The extent to which current conditions will continue or how the industry will respond to recovery is unknown.

It is possible that a full recovery could lead to

more housing construction in the future, particularly since housing demand by the baby

boom generation is expected to be strongest in

the 1980’s. This is based primarily on demographics, however, which is only one of a

number of things that affect housing demand.

Demand for Timber in Other Uses

Demand for wood products other than for

new housing is, in general, tied to the level of

economic activity and population expected in

the next 50 years. Forest Service estimates of

future GNP and disposable personal income

are based on projections made by the Department of Commerce’s Bureau of Economic

Analysis (BEA). The BEA projections show

future annual GNP growth of 2.0 to 3.7 percent,

leading to a quadrupling of GNP by 2030 and

thus to a substantial increase in demand for

wood.

While these GNP forecasts are not inconsistent with past trends, some private sector timber

demand forecasts use slightly lower estimates. 36 The 1980 assessment, however, gives

little consideration to the effects of different

assumed levels of economic growth on wood

demand, except to note that consumption of

lumber and plywood are insensitive to changes

in GNP growth in the short run.37 There is a

great deal of uncertainty in any forecast of ecos6Discussion of timber consumption forecasting models and

assumptions used in various models can be found in Perry R,

Hagenstein, and William E. Bruner, Timber and Wood PJwducts

Supply and ~mand Analysis, contract report to the U.S. Congress, 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 considerable

impact on future wood needs, This impact is

not adequately recognized in the 1980 assessment.

Supply Projections

Actual future timber supply probably will be

much different than projected in the 1980

assessment, but the magnitude and direction

of the difference are not clear. Timber supply

forecasting is complicated by the fact that the

Forest Survey, conducted under Forest Service

auspices, which provides information on forest

acreage, timber stocking, and growth, is done

at 10 to 15 year intervals and is not completed

simultaneously in all States (see ch, VI for

detailed discussion). At any given time, therefore, forecasters may be using inventory and

growth data ranging in age from 1 to 15 years,

and, as recent surveys have shown, outdated

information can be inaccurate. New surveys

completed since the 1980 assessment show that

the softwood supply in the Pacific Northwest,

present and future, definitely was underestimated, but that the future softwood supply in

the South, particularly on nonindustrial private

forestland, may be significantly overstated.

Overall, the Forest Service’s supply projection process probably produces very conservative estimates of nationwide future timber

growth for three reasons:

● Forest Service projections are based on

short-term supply curves. These show that

even large increases in stumpage prices

produce only very modest increases in timber harvest. This relationship seems reasonable in the short run, since it takes 30

or more years to grow mature timber.

However, in the longer run, covering the

50-year projection period used in the 1980

assessment, timber supply is probably

much more responsive to stumpage prices

than short-run analysis indicates. With rising stumpage prices, a much broader

range of investments in timber management to increase future supply is feasible,

●

●

The 1980 assessment projections assume

no increase in management intensity over

1970’s levels, which may be unreasonable

because higher stumpage prices probably

would prompt many landowners to invest

more heavily in timber management.

The Forest Service forecasts rely on extremely conservative conversion rates to

translate wood products consumption into

demand for raw timber, The amount of

timber required for wood products is affected by manufacturing technology and

forest utilization, and there are many currently available technologies that can reduce the amount of roundwood needed to

make a wide variety of goods. In addition,

technological advances have made it possible for woody biomass, previously considered waste, to be used in product manufacture. Rising stumpage prices are likely to

stimulate investment in more efficient

manufacturing equipment as well as an increase in use of forest biomass, both of

which tend to increase the supply of usable

wood. The effects of increased forest utilization and more efficient manufacturing

technology probably are understated in the

1980 assessment,

Timber Consumption Projections

According to the 1980 assessment, timber

consumption from domestic forests is projected to rise from over 12 billion ft3 in 1976

to approximately 23 billion ft3 in 2030 (fig. 11),

The greatest rate of projected increase takes

place between 1980 and 1990, due mainly to

the strong housing demand of the baby boom

generation, now entering the 28- to 35-year-old

age group of primary homebuyers.*

Most of the increase in timber consumption

between 1952 and 1976 was supplied by softwoods, whose use rose from 7.2 billion ft3 t o

nearly 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 with

1990 consumption. However, attaining these levels by 1990 requires a substantial increase in short-term consumption.
92 ● Wood Use: U.S. Competitiveness and Technology

——

Figure ll.—Domestic Timber Consumption, 1952-2030

Actual

I

1

I I

1950 1980 1970 1980 1990 2000 2010 2020 2030

Year

_ Total - - - Softwood

SOURCE: Adapted from the U.S. Department of Agriculture, Forest Service, An

Anatysis of the Tlmtnx Situation In the United State$ 195Z-~, Forest

Resource Report No. 23 (Washington, D. C.: U.S. Government Printing

Office, 19S2), p. 202-215.

trast, remained relatively stable at about

3 billion to 3.5 billion ft3 By 2030, a large portion of the increased timber consumption from

domestic forests is projected to be in hardwoods, primarily for paper, pallets, and hardwood veneer for furniture. Hardwood use is

projected to rise to nearly 9.0billion ft 3 

u p

from nearly 2.9 billion ft3 in 1976–a jump of

over 300 percent. Softwood consumption is expected to rise by 50 percent, to 14,0 billion ft3

Regional Timber Production

Forecasted regional distribution of timber

production through 2030 indicates that softwood operations will continue to shift to the

South (fig. 12). This shift projected in the 1980

assessment reflects a decline in production in

the Pacific Northwest, thought to be caused by

a drop in timber inventories due to overcutting

on forest industry land. * Since the 1976 projection was made, however, a resurvey in the

Pacific Northwest shows that timber growth

on forest industry land is significantly higher

than had been previously estimated, and it is

likely that new Forest Service projections now

in preparation will reveal a much smaller decline in Pacific Northwest harvests. In addi-

*“Overcutting” means harvesting more than net growth per

unit of time, or cutting above the level of sustainable yield.

Figure 12.- Softwood Timber Production:

Regional Distribution, 1976 and 2030

Pacific coast

40 ”/0

North

7%

Rockies

80/0

South

450/0

1976

Pacific coast

270/o

Rocl

1

North

9%

South

53 ”/0

2030

SOURCE: U.S. Department of Agriculture, Forest Service, An Ana/ysls of ttre

Timber Sltuat/on In the United States, 1$52-2030, Forest Resource

Report No. 23 (VWehlngton, D. C.: US. Government Prlntlng Off Ice,

1982), p. 202-215,

tion, recent information shows that projected

southern softwood supplies are probably too

high. Forecasts are being revised to reflect

these changes.

In 1976, the South produced 51 percent of

the hardwood harvest, with the North produc-
———.

Ch. IV— Wood Use in the United States ● 9 3

— —

ing 46 percent. Only 3 percent came from the

Pacific coast. The 1980 assessment shows

slight shifts in hardwood production by 2030,

with the South’s share increasing to 59 percent,

the North declining to 39 percent, and the

Pacific 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 not

necessarily mean a decline in actual or volume

production. In the Pacific Northwest, where

the share of softwood harvest is projected to

drop from 31 to 21 percent of the national total,

volume production is projected to increase by

70 million ft3

. In the South, where projections

indicate an increase from 45 to 53 percent of

the national softwood harvest, the increase in

volume production is nearly 3.3 billion ft3

.

1976

2030

SOURCE: U.S. Department of Agriculture, Forest Service, An Analysls of the Timber S/tuatlon /n the Urrlted Stales, 1562-2030, Forest Resource Report

No. 23 (Washington, D.C : U.S. Government Printing Office, 1982), p

202.215

The hardwood situation is similar. The

South’s hardwood production is expected to

more than triple, increasing from 1.7 billion to

5.4 billion ft3

. The North is projected to increase its volume production from 1.5 billion

to 3.6 billion ft3. In the West, hardwood har

vest levels projected to increase by 37 million

ft3 by 2030.

Harvest by Ownership

Projections of the timber harvest by ownership also show major shifts in the contributions

of various forest land owners. In 1976, the private sector accounted for nearly three-fourths

of the softwood roundwood supplies, Private

industrial and nonindustrial ownerships each

produced about 36 percent of the total softwood harvest (fig. 14). The public sector accounted for the remainder, with the National

Forest System producing nearly 19 percent of

the Nation’s softwood harvest,

By 2030, the public sector is expected to contribute a slightly smaller share, while in the

private sector, the forest industry’s share drops

to 27 percent and the nonindustrial landowners’ share goes up to 47 percent. For the private

nonindustrial group, this change means increasing production by 94 percent over 1976

levels, or by about 3.2 billion ft3

, Despite share

decreases, the harvest from forest industry

lands is projected to increase slightly, by about

354 million ft3

. Similarly, national forest production is projected to increase by 928 million

ft3

, or by about 52 percent over 1976 levels.
94 ● Wood Use: U.S. Competitiveness and Technology

Figure 14.— Softwood Timber Production: No major changes in regional distribution of

Distribution by Ownership, 1976 and 2030 hardwood harvests are projected, although all

PNIF

360/o

National

Forest System

19%

ownerships are expected to-harvest more hardwoods to meet increasing forest products industry needs. The projected increase is greatest

from private nonindustrial lands, which are

projected to expand hardwood harvests by 180

percent, from 2.5 billion ft3 to approximately

7 billion ft3

.

ublic

Y “/0

1976

PNIF

Industry 7% ‘

27%

2030

SOURCE: U.S. Department of Agriculture, Forest Sarvlce, An Analysls of the Thnber Situation In tbe United States 1!MXW30, Forest Resource Report

No. 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 work

to the combination of the pulp and paper prod- force.” The pulp and paper sector is the fourth

ucts and the solid wood (lumber and panel)

products sectors (fig. 15). This industry con- ~au.s< Depafirnent of Commerce, Bureau of Industrial ECOtributes 1.7 percent of the total gross domestic nomics, 1981 U.S. Industrial Outlook for 2W Industries With Pro

jections 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

Roundwood Pulp

— Pulpwood Pulpwood — Chemical

— Sawlogs and veneer logs – Semichemical

— Other — Mechanical

— Dissolving

Lumber, including presslam

Panels:

— Solid-wood panels (plywood and veneer)

— Reconstituted wood panels

(fiberboard, particle board,

waterboard, oriented strandboard)

—

—

—

—

Construction

Furniture-making

Packaging (pallets, crates)

Finishing work

SOURCE Off Ice of Technology Assessment

largest producer of nondurable goods, and the

lumber and panel products sector is the eighth

largest producer of durable goods in terms of

value of GDP.

The characteristics and performance of the

two sectors are quite different. These differences are less, however, in the case of the

larger diversified companies that manufacture

both solid wood products and pulp and paper.

Such firms often own significant amounts of

forestland and are major employers in many

areas.

- 1

Paper - printing, writing, packaging,

sanitary, other

Paperboard - containerboard, boxboard

setup boxboard, other

Other: rayon, plastics, lacquers, etc.

— Containers and boxes

— Other

Contribution to the Domestic Economy

In 1977, the forest products industry employed about 1.4 million people and contributed over $40 billion in value added. The

lumber and panel products sector employs

more people than the pulp and paper sector,

but the pulp and paper sector ranks higher in

value added by manufacturing, which reflects

the prevalence of automation in papermills.

Lumber and panel products is a significant

consumer of adhesives and resins, preserva-
96 ● Wood Use: U.S. Competitiveness and Technology

tives, and fire retardants. Pulp and paper is a

major user of industrial energy, water, and

chemicals.

Primary Processing

primary processors handle the raw wood material. In 1977, they contributed about 43 percent of the total forest products value added

and employed 37 percent of the labor force of

the forest products industry (table 16). The

largest single employers are sawmills and planing mills, which retain 211,300 workers, followed by papermills which employ 127,000

—-

people. Papermills lead primary operations in

value added and value of shipments, followed

by sawmills and planing mills.

Secondary Processing

Secondary processors in both industry sectors together employ 63 percent of the forest

products labor force and contribute 57 percent

of total value added. Similar to the primary

processors, secondary lumber processors employ more people than do the secondary pulp

and paper processors, but the latter contributes

a higher value added. When measured by all

Table 16.—Number of Employees, Value Added, and Value of Shipments for

Primary and Secondary Forest Products Industry in 1977

Number of Value added by Value of

employees manufacture shipments

Industry (thousands) (million dollars) (million dollars)

Primary Iumber

Logging 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. . . . . . . . . . . . . . . . . . . . . . . . . . . . .

83.3

211.3

294.6

20.9

16.2

127.0

74.6

217.8

15.4

0.3

36.7

183.3

50.4

79.5

196.9

510.1

36.2

176.1

34.5

48.7

123.5

382.8

27.1

63.3

1,410.1

2,418.7

4,974.8

7,393.5

18.4

906.1

5,406.6

3,298.9

9,611.6

23.9

0.4

42.8

4,370.8

866.8

1,789.1

3,388.1

10,414.8

25.9

5,296.2

2,194.5

1,349.6

3,718.9

12,559.2

31.3

57.2

40,164.1

6,230.1

11,969.3

2,091.1

12,613.3

7,598.0

10,596.0

2,179.7

5,147.9

6,162.9

13,350.1

4,921.2

3,482.3

8,029.7

SOURCE: 1977 Census of Marrufacturers, Parts 1 and 2 (Washington, DC.: U.S. Department of Commerce, Bureau of the

Census, 1981).
Ch. IV— Wood Use in the United States • 97

— . —.—.—

parameters displayed in table 16, the two largest secondary lumber subgroups are millwork,

plywood, structural members, and furniture

and fixtures. The two largest paper subgroups

are paperboard containers and boxes and the

catch-all “other converted paper and paperboard products. ” Overall, paperboard containers and boxes contribute the largest value

added of the secondary processors, while furniture and fixtures employs the most people.

Consumption of Industrial Commodities

The forest products industry is a major consumer of several industrial commodities, Plywood and other panels, for instance, require

significant quantities of adhesives and resins,

making plywood manufacture the largest single

adhesives market.39 Other solid wood products

use significant amounts of phenol and urea formaldehyde resins, fire retardants, and preservatives, most of which are petroleum-based.

The pulp and paper sector is the sixth largest

consumer of chemicals in terms of dollar value

purchased. It also uses (but does not consume)

more water for processing than any other manufacturing industry and is a leading industrial

energy consumer. The pulp and paper sector

uses about 7 percent of the Nation’s industrial

energy and 3 percent of all energy consumed

in the United States. Because energy is a significant cost in producing paper, pulp and

paper companies have become industrial leaders in energy conservation and cogeneration.

Structure and Performance

The financial performance of the forest products industry is neither better nor worse than

that of other industries considered together. In

1980, the wood-based companies among the

Fortune 500 trailed other industries in terms

of total return to investors, return on stockholders’ equity, return on sales, and changes

in profits and sales, but 1980 is probably not

a fair comparison because of the severe depression in the forest products industry. overall,

“Peter Gwynne, “Adhesives: Bound for Boundless Growth, ”

Technolog~, January/February 1982.

the pulp and paper sector generally performs

as well as the rest of the economy, while solid

wood products are subject to wide variations

due to their close ties to residential construction.

The performance of any industry—its growth

rate, financial performance, ability to innovate,

and record in entering new markets and controlling old ones—is related to its structure.

Several key structural features appear to affect

the performance of the forest products industry, including the degree of competition

within in the industry, landownership, product mix, diversification, and sensitivity to

economic changes.

Degree of Competition

Industrial structure is commonly thought of

in terms of the degree of competition within

the industry. An industry is described as “competitive” at one extreme if no firm holds a

significant proportion of market power and

“monopolistic” at the other extreme if one firm

controls the whole industry. While there are

probably no industries at either extreme, the

forest products industry is generally considered fairly competitive. In 1978, the top four

forest products firms accounted for almost 15

percent of all wood-based sales, and the top

nine accounted for 22 percent of industry

sales. 40

The lumber and panel products sector is

commonly described as one of the Nation’s

most competitive, with over 30,000 companies,

while the pulp and paper products sector, with

almost 4,000 companies, is less fragmented,

In reality, however, the picture is more complicated than the number of companies alone

would indicate, The lumber industry, the most

competitive component of the lumber and

panel products sector, counts over 8,000

establishments, 80 percent of which employ

fewer than 21 people. However, 50 percent of

qOJay 0’ Laugh] in, and pau] V. Ellefson, “U.S. Wood-Based Industry Structure: Part l—Top 40 Companies, ” Forest Products

Journa], October 1981, p. 56.
98 ● Wood Use: US. Competitiveness and Technology

the total domestic lumber output is produced

by 10 percent of the mills. 4l

There are fewer mills in the panel products

industry—232 softwood veneer and plywood

mills, 366 hardwood plywood and veneer mills,

and 68 particleboard mills, employing about

77,000 people. Whether or not the panel products industry as a whole is more or less competitive than the lumber industry is unknown,

The pulp and paper sector is less competitive

than any major part of the lumber and panel

products sector. There are over 4,000 pulp and

paper establishments, but the 10 largest firms

account for over half the pulp, paper, and

paperboard products manufactured in the

United States.42

Forest Land Ownership

The fastest growing companies in the forest

products industry often own substantial timber

acreage.

43 In 1977, the industry owned about

14 percent “of all commercial forestland or 69

million acres.44 The top 40 firms accounted for

80 percent of this acreage. The same firms accounted for 40 percent of all domestic woodbased sales in 1978.45

Wood is a major portion of the production

cost of lumber, plywood, and paper. Timber

is estimated to account for 72 percent of the

cost of manufacturing lumber, 46 percent of

the cost of making plywood, 30 percent of the

cost of making linerboard, and 18 percent of

the cost of manufacturing white papers. 4 6

Timber costs have stimulated the many dominant forest products firms to maintain fee simple ownership of land, usually near company

mills. 47 Fee simple ownership gives a company

41 u .s. ConWess, office of Technology Assessment, Current

and 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 Stanley

Investment 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 Structure, ” 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 neighboring

private nonindustrial timber owners as well as

a source of less expensive timber when stumpage prices increase. This may serve as a “yardstick” for establishing the local price of timber.

While forest land ownership may be a wise

business strategy for forest products firms, it

can cause local problems. In some southern

communities, timber industry land “banking”

may affect the availability of land for community development, housing, and other purposes.48

Access to high-quality timber has figured

prominently in the performance of the forest

products industry. Since colonial times, industry concentration has shifted from the

Northeast, through the Great Lakes States and

the South, across the Rockies, and to the west

coast to harvest available mature, high-quality

timber and is continuing to shift back to the

South to take advantage of low-cost, fastgrowing softwood stumpage. Expansion of the

industry to the Great Lakes and the Northeast

may be expected in the next several decades

to utilize the large inventories of hardwoods

growing in those regions.

Product Mix and Diversification

Product diversification is another factor that

may be important to the growth of forest products firms. The largest firms tend to produce

both pulp and paper and solid wood products.

Only 12 of the largest 40 companies specialize

in one or the other. Smaller firms often specialize in particular items.

Diversification outside the industry, however, appears to offer no particular advantage.49

During the past 30 years, a number of energy,

packaging, and conglomerate firms have entered the forest products industry to diversify

their operations. The financial performance of

4sJean S. M~refield, Drafi-Forest Products Zn dustry: Socioeconomic Issues Related to Industry Expansion, contract report

to the [J.S. Congress, Office of Technology Assessment, 1982,

p, 14.

4eJay O’Laughlin and Paul V, Ellefson, New Diversified Entrants Among U.S. Wood-Based Companies: A Study of Economic Structure and Corporate Strategy, Station Bulletin 541,

Forestry Series 37 (St. Paul, Minn.: University of Minnesota

Agricultural Experiment Station, 1982), p. 25.
Ch. IV— Wood Use in the United States ● 9 9 ———

these diversified companies in terms of stock

performance, growth, and profit is not clearly

better or worse than the performance of companies whose major line of business is woodbased.

Sensitivity to Economic Activity

There are major differences in how the solid

wood products and the pulp and paper sectors

respond to economic conditions. Because pulp

and paper firms make a variety of products for

a diverse mix of end uses, their growth pattern

follows that of the general economy.50 Such is

not the case for solid wood products companies. Nearly half of the lumber and panels produced are used in new residential construction.

The homebuilding industry, in turn, maybe the

most volatile and unstable industry in the

United States, as it is extremely sensitive to a

number of economic and financial variables.5l

Thus, the solid wood products sector is also

volatile, which may explain why the dominant

firms often make a mix of paper and solid

wood products rather than rely exclusively on

one product line.

Innovation

The forest products industry has a modest

record in developing new products and entering new markets. It devotes most of its research

and development effort to internal process

innovation,

Three components of the lumber and panel

products sector are among the 45 rapid growth

industries whose compound annual growth

rates were between 6 and 20 percent during

the period from 1972 to 1978. These components included wood pallets and skids, wood

kitchen cabinets, and structural wood members

(e.g., laminated beams and arches). Most rapidgrowth industries attribute their success to new

product development, but this does not appear

to be true for the forest products industry.

Historically, new products from the forest

products industry have replaced established

wood 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 wood

products have been eroded by nonwood materials.

Reliable figures on the level of effort and type

of research supported by the forest products

industry are unavailable (see p. for discussion of research and development). It is

unusual for mature industries like the forest

products industry to be dynamic and innovative, The industry is primarily “resource”

oriented. Therefore, innovation seems to be

generally confined to exploring new uses for

wood rather than how wood might be used in

conjunction with other materials.

Regional Distribution

Primary wood processing facilities generally are found where raw materials are most

plentiful—on the Pacific coast and in the South.

Lumber and plywood panels usually are manufactured in the Pacific Northwest and the

South, and nonplywood panel products manufacture is concentrated in the Great Lakes

States and the Northeast. Most pulp and paper

manufacturing occurs in the South, and secondary paper products are made mainly in the

Northeast, both near the largest markets. Location of secondary manufacturing facilities also

depends on transportation costs and other

factors,

Lumber

Ninety-four percent of 1umber is produced

in the South and the West, where high-quality

softwoods are abundant. There are more mills

in the South, but Western mills are generally

larger and produce over two-thirds of the total

U.S. lumber output. The North and East produce only 6 percent of the total U.S. lumber

output (fig, 16).

Plywood and Other Panels

The plywood industry requires high-quality

softwood logs, and therefore it too is located

primarily in the South and West. Plywood panel production, now about evenly divided between the South and Pacific coast, has been

growing 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 produced nearly 47 percent of all U.S. plywood

panels, the South 42 percent, and the Rocky

Mountain States the remainder.

Plywood accounts for about 96 percent of all

panel production. Most of the expansion in the

panel products industry, however, is in nonplywood, unveneered panels like waferboard

and oriented strand board. Manufacturing capacity for these products is in the North Central and Northeastern States and future growth

is expected to center there.

Pulp and Paper

Over half of America’s pulp and paper manufacturing capacity is concentrated in the

South, whose share of total pulp production

was 48 percent in 1947 but grew to 69 percent

by 1976. The West produced 17 percent of the

Nation’s pulp in 1976; the remaining 14 percent came from the East and North Central

areas .52

S~Joan E. Huber, The Kline Guide to the paper ]ndustry (Fairfield, N. J.: Charles H. Kline & Co., 1980), pp. 39-40.

Sixty-two percent of the secondary manufacturing capacity of the paper industry, which

makes containers, bags, sanitary products, and

stationery, is located near major markets in the

New England, North Central, and Middle Atlantic regions.

Wood Fuel

Reliable data is not available on wood fuel

producers, but their locations may be inferred

from patterns of consumption. Since the low

value of wood fuel does not encourage longdistance transport, production generally takes

place close to consumers.

The North and South are by far the leading

consumers of wood fuel (fig. 18), with residential and industrial/commercial use at its greatest in these regions. High levels of home fuelwood consumption in the North probably reflects the abundance there of inexpensive lowquality fuelwood used for heating, and in the

South they reflect the paper industry’s burning of wood waste to power its mills.
Ch. IV— Wood Use in the United States ● 101

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

South

31 ‘/0

Pacific coast

10%0

Rocky Mountains/

Great Plains

6%

Residential

South

360/0

Great Plains

North

37 ”/0

North

44%

Total

Pacific coast

170/0

y Mountains/

Industrial/commercial

Pacific coast

140/0

cky Mountains)

Great Plains

4%,

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 . . . . . . . . . . . . . . . 108

Harvesting Methods. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 109

Site Preparation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 111

Regeneration 4..,... . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 112

Competition, Fire, and Pest Control . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 113

Precommercial Thinning. . . . . . . . . . . . . . . . . .... . . . . . . . . .... ...... . 113

Fertilization. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .... . . . . . . . . ... 113

Commercial Thinning . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 114

Genetic Tree Improvement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 114

Short Rotation Hardwood Culture ..... ....... ..... .... . . . 117

Potential Gains From Intensive Timber Management . . . . . . . . . . . . . . . . . . . . . . . . . 117

Increasing Timber Supplies by Improving Harvest Technology. . . . . . . . . . . . . . . 120

Characteristics of U.S. Forests . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6....0 120

Utilization Opportunities. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 120

Environmental Limitations . . . . . . . . . . . . . . . . . . . . . . . . ..... . . . . . . . . . . . . . . . . . 121

Technology Development Process . . . . ...... ... . . . . . . . . . . . . . . . . . . . . . . . 121

Current U.S. Harvesting Technology and Systems . . . . . . . . . . . . . . . . . . . . . . . . . . . . 121

Harvesting Machinery . . . . . ..... . . . . . . . . . . . . . . . . . . . . . . . . ... 124

Harvet Methods ....... . . .. . . . . . .. . . . . 124

Transportation Systems. . . . . . . . . ...... . . . . . . . ...... ...... ...... . . 126

Training for Woodsworkers ..... ...... . . . . . . . . . . . . . . . . .. ... 127

Research and Technology Transfer . . . . . . . .. . . . . . . . . . . . . . . . . 127

increasing Timber Supplies Through the Manufacture and End Use of

wood Products . . .. . . .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 130

Technological Adjustments to Changes ingrowing Stock . . . . . . . . . . . . . . . . . . . . . 130

Implications of New Wood Products for Fuller Use of Resources . . . . . . . . . . . . . . . 131

Product Recovery in the Solid Wood Products Sector. . . . . . . . . . . . . . . . . . . . . . . . . 132

Product Recovery by the Pulp and Paper Sector . . . . . . . . . . . . . . . . ... . . . . . . . ... 135

Decreasing Energy Requirements . . . . . . . ...... ..... . . . . . . . . . . . . . . . . . . 136

Increased 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 by

Ownership and Section, 1976 . . . . . . . .. ...... . . . . . . . . ... . . . . 118

18. Area of Commercial Forestland and Areas Suitable for Intensive Management

in 25 FIC Study States ...... . . . . . . . . . . . . . . . . . . .. . . . . . .. 119

19. Performance of Timber Harvesting Equipment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. 122

20. Summary of Workers' Compensation Insurance Rates by State for Logging

and Lumbering Workers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ...... 127

21. 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 . . . . . . . . . . . . . . . 116

20. 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 to

the entire cycle of forest products manufacture,

from growing and harvesting trees through end

use, offers major opportunities to extend domestic wood supplies, Economic considerations, however, will ultimately determine the

degree to which they are applied.

Substantial increases in U.S. timber production could result from expanding known

silvicultural practices and management technologies on suitable lands. “Economic opportunities” for intensified timber management

may exist on 30 to 40 percent of all commercial forestland, according to recent studies by

the Forest Industries Council and the Forest

Service. ’ Net annual growth on these lands

could be increased between 11 billion and 13

billion cubic feet (ft3

) per year through application of certain management practices, which

could require an investment of $10 billion to

$15 billion over 30 to 50 years, Most of the opportunities identified involve planting and

management of softwoods, often at a cost of

more than $100 per acre. Hardwood management opportunities have yet to be assessed

comprehensively.

The area of forestland that is likely to be

managed intensively is probably much less

than all the land that is economically qualified. Although 30 to 40 percent of the forestland base may be suitable for profitable timber management, bringing these lands under

such management may be difficult. Private investments in intensive forest management

compete with alternative investment opportu-

‘U.S. Department of Agriculture, Forest Service, An Analysis

of the Timber Situation in the U. S., 1952-2030 (Washington, D, C.:

Go\’ernment Printing Office, 1982), p. 248; and Forest Industries

Council, Forest Productivit~ Report (Washington, DC,: National

Forest Products Association, 1980), p. 46.

nities, many of

rates of return,

which have less risk, higher

and earlier payoffs.

The “economic opportunity” estimates do

not reflect site-specific limitations such as conflicting landownership objectives, small parcels, lack of markets, and site conditions that

make management difficult. These barriers to

intensive management are discussed in detail

in chapter VI.

Existing and emerging harvesting technologies and systems could expand timber supplies by enabling recovery of wood now left

in the forest and by allowing harvest from

tracts now considered inoperable. Conventional harvesting systems now leave substantial quantities of industrially usable material in

the forest at harvest because the cost of removal

exceeds the value of the product. In 1976, about

1.4 billion ft3 of growing stock logging residues

were left on-site as well as two to four times

as much material in tops, branches, rough and

rotten trees, and small stems. Salvageable dead

timber also contains potentially usable woody

material. In addition, some land is excluded

from harvest because of such constraints as

remoteness, difficult terrain, small tract size,

and potential for environmental damage. Development of harvesting technologies and

systems to overcome these problems would increase recoverable timber resources.

A major opportunity for increasing harvesting efficiency may be through a systematic,

integrated approach to growing, harvesting,

and transporting wood for processing. More

effective use of equipment, improved harvesting practices, better training of woodsworkers,

and more efficient transportation of wood to

mills could improve productivity significantly. New harvesting systems also could reduce

105
106 ● Wood Use: U.S. Competitiveness and Technology

—

the potential for environmental damage, Over

the long term, silvicultural systems for growing wood and technologies for harvesting and

processing it could be designed to optimize the

use of timber resources on a continuous basis.

Creative “small tract” harvesting technologies and systems could enhance the potential contribution of private nonindustrial forests (PNIF) to national timber supplies. About

20 percent of the private forestland base is composed of parcels of less than 100 acres—tracts

too small for efficient use of large harvesting

machinery. In addition, improper harvesting

operations sometimes discourage landowners

from harvesting timber from their land because

of damage to remaining trees, impairment of

scenic qualities, and injury to the environment.

Appropriate technologies and harvesting systems specifically adapted to small tracts and

the diverse objectives of small landowners

could expand potential harvest levels from the

PNIFs. While small-tract systems are well developed in Sweden and other Western European nations where most forestland is in small

parcels, they have not been widely adopted in

this country.

Public and/or private entities will need to

place greater priority on the development and

use of improved harvesting systems if their

potential is to payoff. Areas deserving attention include harvesting research and development (R&D), alleviation of environmental impacts, proper training of woodsworkers in the

use of new systems and machinery, landowner

education programs, transfer of proven technologies, and overcoming institutional barriers.

Countries like Sweden have improved harvesting productivity significantly through cooperative public and private efforts, but less than

2 percent of the Forest Service’s R&D budget

in 1976 was applied to harvesting and only

about 70 scientist-years of effort were dedicated to it. A similar pattern exists in academic

research.

Utilization technologies may expand the

use of currently abundant hardwood species

and enable the use of low-quality woody material now underutilized or wasted. Several

existing technologies permit the manufacture

of new high-performance wood products from

currently underutilized materials and species

that could substitute for goods requiring more

expensive and scarcer trees. Softwoods, because of their favorable properties, are now

preferred for most high-volume conventional

products such as lumber, plywood, and some

grades of paper, and manufacturing processes

have been tailored to them. Yet, over one-third

of the total volume of existing U.S. timber is

hardwood, and hardwood inventories are increasing much faster than softwoods. Existing

and emerging technologies can overcome

many deficiencies in hardwood properties and

can enable the manufacture of many products

from hardwoods that are now predominantly

made from softwood. Saw-Dry-Rip, composite

lumbers, and particleboard made from hardwoods could substitute for softwood lumber

and plywood. Advances in mechanical and

chemomechanical pulping technologies,

coupled with newly developed processes for

manufacturing press-dried paper, could expand significantly the use of hardwood for

making paper and paperboard in time.

The U.S. forest products industry now

wastes very little wood in actual manufacturing. As a whole, the industry uses up to 96 percent of its delivered wood, which is either converted into products or burned for process

energy. Despite this high average utilization

rate, some plants are not able to produce a

product mix of the highest value now technologically possible because their equipment is

older and less efficient. As new milling facilities replace the old, energy-efficient, higher

yield technologies can enhance the industry’s

productivity and improve product values.

Wider use of currently available technologies, such as computer-assisted milling, could

reduce requirements for roundwood per unit

of lumber and panels by 20 percent or more.

Nearly half of all industrial wood products are

lumber and structural panels, so increased

yields from these products alone could have a

major impact on the domestic wood supply.

However, increased yields also would reduce
— —

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 wood

entering mills for products or energy. These sawmill

residues are being loaded for transport to a pulpmill

the amount of wood residues available for

energy generation in lumber and pulpmills.

Replacement of such materials by recovery of

additional forest residues and biomass at

harvesting may then become more widespread.

Tradeoffs between improved wood use efficiency and wood fuel production will change

in tandem with relative changes in energy and

product prices.

Existing and emerging manufacturing

processes could improve energy utilization.

The forest products industry now fills a

substantial portion of its energy needs from

wood. The pulp and paper sector in particular

consumes an enormous amount of energy—

over 2 quadrillion Btu in 1981—and furnishes

about half of it by burning processing residues.

Expanded use of mechanical pulping technologies can conserve both energy and the

timber resource by recovering more wood fiber

than can chemical pulping. However, longer

term improvements in chemical pulping,

which now requires large amounts of energy,

could reduce energy needs and may even produce additional energy for outside sale. Pressdrying paper technologies may also reduce energy requirements when commercialized. Biotechnologies, now in the laboratory stage of

development, could be potentially important

in pretreatment or digestion of wood prior to

pulping, thus improving yields and further cutting energy requirements. In addition, in lumber and panel manufacturing, improvements

in drying technologies could reduce energy

needs.

Improved end use of wood materials also

could conserve timber supplies. For example,

a significant reduction in wood needed for residential housing on a per unit basis is possible

through the use of innovative construction

techniques and designs that are currently available but not widely applied. Two of the major

obstacles to adoption of these innovations by

builders are outdated building codes and homebuyers’ conservative tastes.

About one-fourth of the paper pulp produced

in the United States comes from recycled

paper. The practical upper limit for the proportion of recycled paper in finished paper is

being increased regularly as new technologies

are developed. The potential to achieve such

increases is affected by the costs added for the

removal of glue, ink, and other contaminants

and by economic barriers to collecting waste

paper outside of metropolitan areas, Paper and

paperboards suitable for many uses can be produced from pulp composed almost entirely of

recycled fibers.
108 ● Wood Use: U.S. Competitiveness and Technology

— —

Phoft credit: U.S. Forest Service

Residential construction is the single largest use for solid wood products. This house is being constructed with a

truss 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 the

timber available for harvest over the next 30

to 50 years. Beyond this, long-term increases

in timber supplies will vary considerably

among geographic regions and tree species, but

will depend mainly on the area of land under

management and timber growth rates per unit

area. The area of commercial forestland that

can respond profitably to investments in intensive management is a function of such factors

as climate, soil, topography, and the land’s

proximity to wood processing facilities,

Unmanaged forests are generally composed

of tree communities (stands) best adapted to

local ecological conditions. Such stands may

produce large quantities of tree biomass, including deformed stems, roots, limbs, and

foliage in addition to merchantable stems, but

do not necessarily provide industrially useful

wood at optimal growth rates. In managed forests, silvicultural technologies—practices that

cultivate tree crops by controlling forest composition and growth-are employed to enhance

yields of industrially preferred species with
Ch. V— Technologies for Growing, Harvesting, and Using Wood ● 109 — .—

usable trunks and stems. Other objectives, such

as maintenance of wildlife habitat, watershed

management, and esthetics, can be integrated

into timber management strategies but are not

discussed here.

Distinctions between tree biomass and industrial-quality wood are important in assessing

U.S. wood inventories. Such distinctions are

not static, however, because changes in manufacturing technologies can broaden utilization

standards and the range of sizes and species

that are acceptable. Technologies that use

material previously considered undesirable

could effectively increase existing industrial

timber supplies. For example, wood fuel can

be obtained from a broader spectrum of tree

biomass than roundwood alone, and some silvicultural systems have been developed to maximize biomass production for this purpose.

Ideally, a tree crop is harvested when it

reaches the size required by utilization standards and its growth rate has slowed. The series

of silvicultural treatments is then repeated for

another rotation (or the interval between harvests in a managed system). The optimum number, sequence, and timing of treatments depend

on the species, site conditions, and end product, For example, Douglas-fir in the Pacific

Northwest and loblolly pine in the Southeast,

probably the two most important U.S. timber

species, require very different treatment systems.

One or more of eight silvicultural technologies 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; and

genetic improvement.

Harvesting Methods

Harvesting is often considered the first step

of a silvicultural system, because it affects the

successful establishment of new stands. The

best harvesting method depends on the reproduction requirements of the tree species desired in the next crop. Most softwoods, for example, require full sunlight for optimum

growth and regenerate best when an entire

stand is harvested all at once. In contrast, many

hardwoods are “shade tolerant” and reproduce

well when only part of a stand is removed.

Clearcutting—removal of all commercial

trees—is the preferred harvesting method for

most commercial softwood species, including

Douglas-fir and loblolly pine. It is also commonly applied to even-aged hardwoods such

as aspen. When properly conducted, clearcutting has several economic and management

advantages:

● it results in even-aged timber stands that

are uniform in size and can be used for the

same product;

• it allows cost-effective harvesting because

maximum volume is removed in one operation; and

● it provides for optimum regeneration of

species that grow best in full sunlight.

There are also possible disadvantages to

clearcutting:

●

●

●

●

●

regeneration of single-aged, single-species

stands (monoculture) can increase their

susceptibility to widespread insect or disease damage;

uniform stands may not provide desired

kinds of wildlife habitat;

total stand removal can be visually unattractive;

intense logging activity can cause soil erosion and stream sedimentation if improperly conducted; and

removal of all streamside trees may cause

temporary increases in water temperature,

possibly affecting aquatic life until stream

margins regenerate.

Most of these disadvantages can be mitigated

by advanced planning to minimize visual impacts, locating logging roads to minimize soil

losses, reservation of “buffer strips” along

streams, maintenance of wildlife areas, and

limiting the size of the harvest area.

Ch. V—Technologies for Growing, Harvesting, and Using Wood ● 111

Partial cutting methods are less common

than clearcutting and are less important for industrial timber supplies. Selective cutting (a

type of partial cut) involves harvest of a stand’s

largest crop trees and its “weed” trees to give

the residual stand more room to grow. Selective cutting results in an uneven-aged (variousaged) stand and is conducted at intervals on

a continuing basis as trees reach crop size,

Seed-tree or shelterwood cutting removes all

commercial trees except selected “seed trees, ”

which are left to provide seed for the next stand

and sometimes to provide shelter from wind

or intense sunlight, Seed trees are often harvested after the new stand is established.

A relatively new application of a centuriesold harvesting method—the coppice system—

allows stumps to resprout for successive fastgrowing wood crops from the same root system. It is sometimes used for small-diameter

hardwoods intended for fuelwood or chips and

is expected to become more popular as new

manufacturing technologies allow greater use

of small hardwoods.

Site Preparation

Site preparation is often required for successful establishment of a new stand. It involves the clearing of unwanted vegetation or

debris and in some instances the cultivation of

an area prior to regeneration, By exposing bare

soil so that seeds or seedlings can become established and by reducing competition from

noncrop vegetation, site preparation optimizes

conditions for new growth. It is especially

valuable in eliminating competing hardwood

trees and shrubs when hardwood stands are

being converted to softwoods,

There are four site preparation methods that

can be used for Douglas-fir and loblolly pine.

The methods include mechanical treatment,

prescribed burning, herbicide application, and

combinations of these,

In mechanical site preparation, competing

vegetation is physically uprooted, chopped,

and/or removed by heavy equipment. This is

sometimes followed by disking, harrowing, or

bedding. Mechanically prepared sites can be

burned or treated with herbicides to further

reduce competition, Because mechanical site

preparation removes organic matter and

causes significant soil disturbance, concerns

have been raised over its potential effects on

the long-term productivity of the site. In some

cases, mechanical site preparation results in

soil losses from erosion. z In others cases, the

use of heavy equipment may cause soil compaction. 3 The long-term effects of repeated site

preparation on productivity will vary considerably depending on the soil, topography, and

ground cover,

The use of prescribed burning to expose the

soil and control competing vegetation is among

the oldest and least expensive site preparation

methods. It is widely used in the South for

southern pine species and in the West for

Douglas-fir. An area maybe burned either before or after harvesting to remove fuels and

limit the risk of wildfire or to control unwanted

vegetation that often flourishes after crop trees

are removed. Under certain atmospheric conditions, prescribed burning can significantly

lower local air quality. Forest fires, including

both wildfires and controlled burns, constitute

a significant source of particulate emissions nationwide and therefore are a major source of

air pollution.4

Herbicide use has become more common

over the last few decades for site preparation

on large areas. The most commonly used herbicides are the phenoxies, such as 2,4,5-T;

Silvex; 2,4-D; and 2,4-DP. Aerial application

generally has replaced hand spraying techniques because in most cases it is less expen2As discussed in J. Douglass, “Site Preparation Alternatives:

Quantifying Their Effects on Soil and Water Resources,” in Proceedings: Site Preparation Workshop, East Southeast (Raleigh,

N. C.: U.S. Department of Agriculture, Forest Service, and North

Carolina Department of Natural and Economic Resources, 1977).

3However, there may be benefits from reduced competition

for seedlings even though compaction occurs. See J. J. Stransky, “Site Preparation Effects on Soil Bulk Density and Pine

Seedling 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 Air

Quality (Portland, Oreg.: U.S. Department of Agriculture, Forest

Service, Pacific Northwest Forest and Range Experiment Station, 1972), p. 44.
112 ● Wood Use: U.S. Competitiveness and Technology

sive. Some herbicides may be applied either

before or after planting, but application of

others is more restricted because of potential

damage to young seedlings. Herbicides are

widely used in the Pacific Northwest in the

management of Douglas-fir and to a limited extent in the southern pine region.

The widespread use of phenoxy herbicides

has become a major public policy issue, particularly in the Pacific Northwest where public

lands predominate. While human health considerations are central to the debate, other

public concerns have focused on the relative

costs and benefits of herbicide application

compared to other site preparation methods.

Site preparation studies have tentatively suggested that:

●

●

●

●

a ban of phenoxy herbicides in the coastal

Douglas-fir region could reduce annual

Douglas-fir yields by 7 to 17 percent;

careful planning and controls could significantly reduce the hazards of human exposure to herbicides;

nonchemical site preparation methods,

such as chopping, clearing or planting

cover crops, may be almost as effective as

herbicide treatment if properly conducted,

but are likely to cost more; and

many herbicides can replace phenoxies for

site preparation, some of which cost more

and may be more or less effective. s

Regeneration

Regeneration—the establishment of a new

timber crop—is probably the most important

phase in a silvicultural cycle. It establishes the

stocking (density and volume) and kind of species in the stand and, when conducted promptly, minimizes the length of timber rotations.

The three major regeneration methods are

planting, seeding, and natural regeneration.

The best regeneration method depends largely on species, site, and stand conditions after

harvest, Douglas-fir, southern pine, and some

5A case study of herbicide issues in forestry can be found in

K. Green, An Evaluation of Herbicides, Forestry and People: A

Western Oregon Case Study (New York: Council on Economic

Priorities, 1982).

eastern hardwoods often are planted after

clearcutting.

Planting involves setting seedlings in the

soil, either by hand or by machine. Use of containerized stock, i.e., seedlings grown and

planted in small containers, is a relatively recent development that may improve seedling

survival rates and reduce handling problems.

Density, or the number of seedlings per acre,

is an important aspect of planting because it

influences the rate of growth, total timber

volume produced, and individual tree size at

the end of the rotation, In general, high-density

stands produce smaller trees and higher total

volumes, while low-density stands produce

larger individual trees and lower total volumes.

6 Planting is generally the best method

for establishing rapidly growing, genetically

improved trees,

Regeneration by seeding can be accomplished through “seed trees” purposely left on

the harvest area (see earlier discussion of harvesting methods) or from seeds that are collected and sown. Seeding is generally less expensive than planting, but the risk is greater

that a fully stocked stand will not be established

promptly. If supplemental planting or seeding

is required and growth of the next tree crop

is delayed, seeding can cost more than planting. Seeding can also result in high-density

stands requiring precommercial thinning (see

below), which significantly increases costs.

Natural regeneration is the renewal of tree

crops from seeds or sprouts, In many instances, it simply amounts to letting nature take

its course. In other instances, it may be part

of a management strategy. Management actions, such as proper harvesting and site

preparation, may be required to ensure successful reseeding, Seed tree and selection harvesting systems rely on natural regeneration

to produce the next crop of trees.

‘W. Harms and F. Lloyd, “Stand Structure and Yield Relationships 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 competing

vegetation that invades an area immediately

after harvest or planting, unwanted brush and

grasses can redevelop and crowd out new trees

before a stand becomes sufficiently established

to compete effectively for growing space. Control of competition within 3 years after planting loblolly pine can result in growth increases

of up to 300 percent.7 Alternative competition

control methods include herbicide application,

hand cutting, and mechanical cultivation between trees.

Wildfire, insect, and disease control are important in maintaining a healthy and vigorous

stand of timber. Insect control increasingly involves integrated pest management systems

that can reduce losses from insects and disease

through silvicultural methods, selective

chemical pesticides, and improved detection

and forecasting. Most U.S. forestland is now

under organized wildfire control conducted on

a cooperative basis by Federal, State, local, and

private entities. Cooperative efforts also have

played important roles in insect and disease

control,

Precommercial Thinning

There is some evidence that thinning plantations precommercially (before they reach a

marketable size) can increase wood production. Growth of loblolly pine and Douglas-fir

has been improved by precommercial thinning. 89 A disadvantage of precommercial thinning is that it requires expenditures without immediate cost recovery from wood sales, in contrast to thinning delayed until stands reach

pulpwood size. Expanded use of fuelwood

7L. Nelson, C. Pederson, L. Autry, S. Dudley, and J. Walstand,

“impacts of Herbaceous Weeds in Young Loblolly Pine Plantations,” Southern ]ournal of Applied Forestry, vol. 5, 1981, pp.

153-158.

aD. Reukema and D. Bruce, Effects of Thinning on Yield of

Douglas-Fir: Concepts and Some Estimates Obtained b~’ Simulation, General Technical Report PNW-58 (Portland, Oreg.: U.S.

Department of Agriculture, Forest Service, Pacific Northwest

Forest and Range Experiment Station, 1977), p. 33.

9R. Lohrey, “Growth Responses of Loblolly Pine to PreCommercial Thinning, ” Southern ]ournai of Applied Forestry,

VO], 1, 1977, pp. 19-21.

could make precommercial thinning more economical in the future.

Fertilization

Fertilization can increase wood production

substantially for certain species and soil types.

Fertilizer is most commonly applied aerially,

often to large areas. Since the cost of fertilizer

is tied closely to the cost of energy, the future

extent of forest fertilization may depend on

energy costs in relation to timber values. l0

Nitrogen fertilization of Douglas-fir has become more widespread in the Pacific Northwest, and growth response varies with the rate

of application and with site quality. Incremental growth increases from fertilization tend to

peak 3 to 5 years after application, and detectable effects disappear completely after 10 o r

15 years.11 Research results suggest that maximum economic benefit is achieved when nitrogen is applied both 3 to 5 years before thinnings and before final harvest and that lower

quality Douglas-fir sites may benefit more from

fertilization than higher quality sites.

Loblolly pine may benefit from phosphorus

and nitrogen fertilization, although some studies indicate a less consistent response. Fertilization of southern pines is not currently a

common technique ,

l2 yet some firms have

adopted it as a routine practice on responsive

sites.

Following fertilization, nitrogen concentration in nearby streams can reach high levels,

in some cases increasing growth of aquatic

plants downstream from the fertilized area.

Peak concentrations of nitrogen, however, seldom persist for more than a few hours and usuIOS, Gessel, R. Kenedy, and W, Atkinson, Proceedings of Forest

Fertilization Conference (Seattle, Wash.: University of Washington, 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. Department of Agriculture, Forest Service, Pacific Northwest Forest

and Range Experiment Station, 1979), p. 29.

IzH, W. Dugan, and H. L. ~]en, “Estimating fertilizer response

in site-prepared pine plantations using basal area and site index, ” in Proceedings of the First Southern Sihiculture Resource

Conference (Washington, D. C.: U.S. Government Printing Office, 1981,) p. 219-232, USDA Forest Service General Technical

Report 50-34.
114 ● Wood Use: U.S. Competitiveness and Technology

ally return to pretreatment levels within 3 to

5 days.l3 Environmental damage can be reduced if untreated buffer areas are left along

streams, if fertilization is timed to avoid heavy

storms or snow melt, and if fertilizer is applied

during periods of low wind and good visibility so that placement can be well controlled. l4

Recent investigations have tested the potential for increasing nitrogen on poor sites by

growing Douglas-fir in association with red

alder, which adds nitrogen to the soil through

the action of bacteria occurring naturally on

its roots. Preliminary results suggest that the

largest total volume of both species maybe produced by growing red alder for 13 years, removing it, and growing Douglas-fir for 45

years.

15 However, maximum economic return

still comes from growing Douglas-fir without

the alder rotation, because the current value

of red alder is relatively low.

Commercial Thinning

Commercial thinnings—removals of usable

trees to give the residual stand more room to

grow—ideally are made on a 5- to 7-year basis

in both Douglas-fir and southern pine. The first

commercial thinning in Douglas-fir is usually

applied between ages 25 and 30 and in the

southern pines between ages 15 and 20. Commercial thinning maintains optimum spacing

to ensure desired tree size at harvest and provides intermediate investment returns.

Heavy thinning may shorten the time required for final crop trees to reach a specific

size. However, the maximum amount of wood

from both thinnings and mature trees probably

can be produced by removing only the number

of 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. Department of Agriculture, Forest Service, Pacific Northwest Forest

and Range Experiment Station, 1975), p. 9.

141J. Norris and D. Moore, “The Entry and Fate of Forest Chemicals in Streams, ” in J. Krygier and J. Hall (eds, ), Proceedings

of the Symposium on Land Uses and Stream Environment (Corvallis, Oreg.: Oregon State University, 1971), pp. 138-158.

ISWI. Atkinson, B. Bormann, and D. DeBell, “Crop Rotation

of Douglas-Fir and Red Alder: A Preliminary Biological and E;conomic Assessment, ” Botanical Gazette, vol. 140 (Supplement),

1979, pp. 5102-5107.

the rotation. Manufacturing technologies that

allow use of smaller trees could make tree size

less important and lead to longer intervals between thinning or to shorter rotations,

Genetic Tree Improvement

Planting of genetically improved seedlings

ultimately may increase future timber yields

greatly. Since the early l950's, programs to

develop genetically superior trees have been

undertaken by industry, government, and academic institutions. Most of these efforts have

focused upon Douglas-fir and loblolly pine,

First generation tree breeding efforts were

aimed at producing progeny from trees of

superior form and growth (superior trees). Second generation efforts have cross-pollinated or

cloned superior trees to produce improved

planting stock.

increases of 10 to 45 percent in the annual

growth of Douglas-fir plantations have been

reported from the use of improved planting

stock,

l6 Increases of 40 to 80 percent in

southern pine growth rates also have been reported. 17 Genetic improvement appears to be

more advanced in the South than in other timber producing regions, although all regions are

working on its development.

Optimal growth levels are achieved when

plantations of genetically improved trees are

intensively managed under a silvicultural

regime. Such management approaches dramatically boost productivity over what could be expected on natural sites, According to one estimate, improved planting stocks and existing

technology could improve Douglas-fir production by 70 percent and loblolly pine by 300 percent, but these gains are still less than half of

theoretical maximum productivity levels (fig.

19), Further gains could be made through additional advancement in tree genetics and

refinement 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, Research

Paper WD-19, (Washington, D. C,: U.S. Department of Agriculture, Forest Service, 1973],
—

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 produces hybrids that grow faster, produce higher

quality wood or have better form than either

parent tree. Such hybrids can be reproduced

from cuttings (cloned) to supply large quantities of superior planting stock. Poplars probably have been the most successful tree hybrids. Clones developed from cuttings from

conifer species show gains in productivity, but

several problems have been identified, including difficulties in propagating cuttings

from trees old enough to show superior characteristics. Clones developed for superior

growth often have less capacity to accommodate environmental variations and may be

more subject to damage from disease and climatic extremes than trees produced from wild

seeds.

The potential of genetics to improve growing stocks has not been realized as quickly in

silviculture as it has in agriculture because of

the long growing cycle of trees, Genetic improvement of tree species requires far longer

testing periods than for agricultural crops, and

the establishment of improved trees in plantations is an incremental process. The long time

period (5 to 20 years] before trees reach seed-
116 . Wood Use: U.S. Competitiveness and Technology

Figure 19.— Productivity Increases Attributable to Intensive Management

Natural Treated Target a Natural Treated Target a

Douglas Fir Loblolly Pine

Preplant

Target Genetics phosphorous Bedding

Drain and Nitrogen Plantation Natural

plant fertilization establishment growth

aJ’Twget ” value9 for maximum mean annual yield were defined through a theoretical model and observations frOm existing

starrds. The targets are estimates of mean annual yields potentially achievable on plarrtations established at the end of the

century, 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 breeding using traditional techniques. The corresponding commercial application of these advances has taken 50 years or more in the past

because of the repeated breedings necessary

to establish useful strains.

Advances in biotechnology may accelerate

this process greatly.l8 For example, mass prop181mpacts of App]ied Genetics: Microorganisms, Plants, and

Animals (Washington, D. C.: U.S. Congress, Office of Technology

agation of superior clones through tissue culturing is a potentially important development

in forest genetics. Tissue culturing entails in

vitro propagation of living cells in a supportive medium that maintains their viability.

Some forest products firms now are field testing mass propagation of clones produced

through tissue cultures that have been planted

in natural conditions.

Assessment, OTA-HR-132, April 1981), describes new plant

breeding technologies in detail.
—

Ch. V—Technologies for Growing, Harvesting, and Using Wood ● 117

Photo credit: Simpson Timber Co.

Tissue culturing has important implications for forest

genetics. Tissue cultured clones (such as the redwood

plantlets shown above) are now being field tested

by some forest products firms

Short Rotation Hardwood Culture

Improved techniques for hardwood management have received comparatively less attention than management of softwood species. An

important exception is short rotation intensive

hardwood culture aimed at production of biomass for energy.

The oil shortages of the early 1970’s drew attention to the wood fuel potential of fastgrowing trees produced in intensive agricultural-like systems, While both softwoods and

hardwoods have been tested, fast-growing

hardwoods such as hybrid poplar, cottonwood,

willow, and sycamore appear to be the most

promising. These species are less expensive to

regenerate because they can be propagated

from cuttings and can reproduce from stump

sprouts after successive harvests (coppice

systems).

Combinations of genetic improvement,l9 site

preparation, cover crops which reduce competition, cultivation ,

20 fertilization,2l 

a n d

irrigation 22 may be used to increase biomass

production, Biomass yields from intensively

cultivated 4- to 5-year-old hardwoods may yield

25 to 30 short tons per acre per year on the first

rotation and volumes 30-percent greater on

successive crops from the resprouted root

systems. 23

While early research has focused on biomass

for energy, changes in wood utilization standards to allow the use of small timber and modifications in intensive hardwood culture to grow

larger trees could lead to other products. 24

Potential Gains From Intensive

Timber Management

The Forest Service has compared current

average net annual wood growth with potential growth that might occur in fully stocked

natural stands, i.e., natural stands with optimal

density and spacing (table 17), Net annual

lgsee, for example, J. Ranney, J. Cushman, and J. Trimble, The

Short Rotation Wood Crops Program: A Summary of Research

Sponsored by the Biomass Energy Technology’ Division, draft

report (Oak Ridge, Term.: Oak Ridge National Laboratory, 1982).

ZoSee, for example, H. Kennedy, Jr., ‘‘ Foliar Nutrient Concentrations and Hardwood Growth Influenced by Cultural Treatmerits, ” Plant and Soi~, vol. 63, 1981, pp. 307-316.

ZISee, for example, T, BoWersox and W. Ward, “Economic

Analysis of a Short Rotation Fiber Production System for Hybrid

Poplar, ” ]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 of

Engineers Cold Regions Research and Engineering Laboratory,

Hanover, N, H., pp. 207-213.

Z3M. Cannelland R. smith,“yields of Minirotation Closely

Spaced Hardwoods in Temperate Regions,” Forest Science, vol.

26, 1980, Pp. 415-428.

z4p. Larson, R. Dickson, and J. lsebrands, “Some Physiological

Applications for Intensive Culture, ” lntensi~re Plantation Culture,

General Technical Report NC-21 (St. Paul, Minn.: U.S. I)epartment of Agriculture, Forest Service, North Central Forest Experiment Station, 1976), pp. 10-18.
118 ● Wood Use: U.S. Competitiveness and Technology

growth on

Table 17.—Average Net Annual and Potential Growth Per Acre in the United States

by Ownership and Section, 1976a

Farmer

Unit of All National Other Forest and other

Item measure ownerships forest public industry private

North:

Current . . . . . . . . . . . . . . Cubic feet 35 43 36 44 33

Potential . . . . . . . . . . . . Cubic feet 66 63 59 74 66

Current/potential. . . . . . Percent 53 68 61 59 50

South:

Current . . . . . . . . . . . . . . Cubic feet 57 57 54 60 56

Potential . . . . . . . . . . . . Cubic feet 77 71 71 83 77

Current/potential. . . . . . Percent 74 80 76 72 73

Rocky Mountains and

Great Plains:

Current . . . . . . . . . . . . . . Cubic feet 29 30 25 50 25

Potential . . . . . . . . . . . . Cubic feet 60 64 55 74 51

Current/potential. . . . . . Percent 48 47 45 67 49

Pacific coast:

Current . . . . . . . . . . . . . . Cubic feet 49 30 53 80 62

Potential . . . . . . . . . . . . Cubic feet 97 91 88 119 99

Current/potential. . . . . . Percent 51 33 60 67 63

Total:

Current . . . . . . . . . . . . . . Cubic feet 45 35 42 59 45

Potential . . . . . . . . . . . . Cubic feet 74 74 68 87 72

Current/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 rates

can 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 the

United States in 1976 was estimated to be about

60 percent of potential if all forests were wellstocked natural stands. The Pacific coast had

the highest potential production at 97 ft 3 

pe r

acre per year, but growth in 1976 was only

about half of what it could have been.

Differences among timber species, site quality, available management techniques, and

landowner objectives make it difficult to reliably estimate the absolute potential for increased timber production through intensive

silviculture, but substantial increases in peracre productivity clearly are possible if adequate investments are made.

Several factors determine whether a tract of

land might be intensively managed for timber.

These include its biological suitability as well

as its economic suitability. Another factor is

whether or not its owner is willing to make the

investment and has the financial capacity to

do so (see ch. VI for further discussion).

Both the Forest Industries Council (FIC), a

trade group sponsored by the National Forest

Products Association, and the Forest Service

recently published estimates of acreage affording economic opportunities for management

in 25 States.25 26 Both studies used standard discounted cash flow techniques. The financial

feasibility of timber management was based on

estimates of potential wood yields, management costs, and timber values that would produce a positive net present value at specified

interest rates. The FIC study used a 10 percent

rate of return criteria in calculating economic

opportunities, while the Forest Service used a

4-percent rate of return, The Forest Service excluded national forests from its survey, while

the FIC survey did not,

The 25 individual States that FIC analyzed

contain together about 83 percent of the comZsFOr~St Industries council, Forest Productivity Report (Washington, 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. Fiftythree percent of the land considered was determined to be silviculturally suitable for intensive management, and 34 percent was determined to be economically suitable (see table

18).

Both studies concluded that the greatest potential for increasing timber production

through intensive management is in the South,

followed by the Pacific coast and the North.

To achieve the projected potential gains, large

amounts of capital would be required—an estimated total investment over a rotation cycle

of $10 billion under the FIC study to $15 billion

under the Forest Service study.

The FIC and Forest Service estimates of economic opportunities for management provide

useful information given the limited data

available. The projected economic opportunities, however, are probably higher than will actually be realized. Landowner objectives, for

example, which on private nonindustrial forests (PNIF) lands are diverse and seldom include intensive timber management, were not

considered, even though most of the projected

potential increase was on PNIF properties (see

ch. VI for discussion of PNIF ownership objectives). In addition, the studies considered all

commercial forest tracts 1 acre in size and

larger, but the possible effects of tract size on

the economics of intensive forest management

were not addressed.

Table 18.—Area of Commercial Forestland and Areas Suitable for

Intensive Management in 25 FIC Study States (million acres)

Commercial Silviculturally Economically

forest land suitable land suitable land

Mississippi . . . . . . . . . . . . . . . . . . . . . . . . 16.9 11.5 11.2

Oregon . . . . . . . . . . . . . . . . . . . . . . . . . . . 24.4 12.5 10.0

Arkansas . . . . . . . . . . . . . . . . . . . . . . . . . . 18.2 11.6 9.9

Louisiana . . . . . . . . . . . . . . . . . . . . . . . . . 14.5 9.0 9.0

Georgia . . . . . . . . . . . . . . . . . . . . . . . . . . . 24.8 12.8 9.0

Washington . . . . . . . . . . . . . . . . . . . . . . . 17.9 9.4 7.6

Alabama . . . . . . . . . . . . . . . . . . . . . . . . . . 21.3 15.1 7.4

Texas . . . . . . . . . . . . . . . . . . . . . . . . . . . 12.5 8.9 6.5

Florida . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15.3 7.5 6,3

Virginia . . . . . . . . . . . . . . . . . . . . . . . . . 15.9 7.1 6.3

California . . . . . . . . . . . . . . . . . . . . . . . . . 16.3 10.0 6.2

Tennessee . . . . . . . . . . . . . . . . . . . . . . . . 12.8 6.6 6.0

Idaho . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13.5 7.8 5.3

Michigan . . . . . . . . . . . . . . . . . . . . . . . . . . 18.8 7.4 5.0

West Virginia . . . . . . . . . . . . . . . . . . . . . . 11.5 7.2 4.9

Montana . . . . . . . . . . . . . . . . . . . . . . . . . . 14,4 8.1 4.9

North Carolina . . . . . . . . . . . . . . . . . . . . . 19.6 13.6 4.5

South Carolina. . . . . . . . . . . . . . . . . . . . . 12.2 7.3 3.6

Wisconsin . . . . . . . . . . . . . . . . . . . . . . . . . 14.5 4.9 3.3

Missouri . . . . . . . . . . . . . . . . . . . . . . . . . 12.3 9.2 3.1

Pennsylvania . . . . . . . . . . . . . . . . . . . . . . 17.5 2.8 2.4

Kentucky. . . . . . . . . . . . . . . . . . . . . . . . . . 11.9 8.3 2.1

Minnesota. . . . . . . . . . . . . . . . . . . . . . . . . 16.1 4.5 1.7

Maine. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16.9 6.8 1,4

New York . . . . . . . . . . . . . . . . . . . . . . . . . 14.5 3.6 1.4

Total . . . . . . . . . . . . . . . . . . . . . . . . . . . 404,5 213.3 139.0

SOURCE Indlvldual State Productivity reports prepared for the Forest Productivity Project of lhe Forest Industries Coun.

cil, 1978-80
120 ● Wood Use: U.S. Competitiveness and Technology

Increasing Timber Supplies by Improving Harvest Technology

Improved harvesting systems could effectively increase timber supplies by removing more

wood from harvest sites and by opening up

areas that currently are too costly or environmentally sensitive to log. Key areas where improvement can be made include harvesting machinery, harvesting methods, woodsworker

training, and improved integration of all

aspects of harvesting into an organized system.

Developing new, innovative mechanical systems takes 7 to 10 years. Because of this timeframe, current timber characteristics and available technologies for timber extraction and

processing will define harvesting systems in

the next 30 years, In the longer term, it is possible to improve utilization and increase available wood fiber by designing integrated systems for growing, harvesting, and processing

to achieve near-optimal results. 27

Several factors affect the feasibility of increasing timber supplies through improved

harvesting technology:

●

●

●

characteristics of the forests to be harvested;

opportunities for utilizing materials that

harvest makes available; and

environmental constraints.

Characteristics of U.S. Forests

Over the next 20 to 30 years, harvesting systems will reflect the quality and quantity of

trees now growing. These characteristics vary

significantly by region. In the East, average tree

diameters are not expected to change much,

while in the West a decline of 27 percent by

2000 has been projected.28 Hardwood inventories are expected to accumulate in the North

and the South; in the South, softwood producZ7AS discussed inG. W. Brown, W. R. Bentley, and J. C. Gordon, “Developing Harvesting Systems for the Future: Linking

Strategies, 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 Northwest

Forest and Range Experiment Station, Portland, Oreg.

tion may increase on a per acre basis due to

intensive management.

Ownership factors and the economics of extracting timber will also affect harvesting efficiency. For example, private nonindustrial

lands are expected to account for an increasing portion of timber supplies. PNIF tracts are

typically small in size, however, while most

harvesting machinery is designed for large

operations.

Beyond 2010, current and prospective intensive management practices could increase timber supplies and change the character of timber

stands. Replacement of unmanaged stands

with rapidly growing, genetically improved

trees could result in smaller, less defective, and

more uniform trees for harvest.

Utilization Opportunities

Recent technological advances in forest

products manufacturing have increased substantially the opportunities for utilization of

small logs, hardwoods, residues, and defective

or rough timber. Some of the more important

developments include:

●

●

●

●

the use of low-quality wood as filler for

panels and as center portions of laminated

beams and studs,

machines that peel smaller logs for plywood,

processes that make panels from low-grade

hardwood chips and flakes that can

substitute for plywood in some applications, and

new systems for efficient combustion of

wood wastes.

Wider adoption of such processes could expand the use of materials now considered too

costly to remove from the forest for use. According to the Forest Service,29 1.4 billion ft3

of growing stock residues were left on harvest

sites in 1976, along with two to four times as

ZQAn Ana]ysjs of the Timber Situation, op. cit., pp. 264-266.
Ch. V—Technologies for Growing, Harvesting, and Using Wood ● 121

much material in the form of tops, branches,

small stems, and other materials. About 14 billion ft’ of potentially salvable accumulated

dead timber existed in 1977, mostly western

softwood. Commercial timberland also contains tens of billions of cubic feet of defective

trees from commercial species. A greater portion of these materials may have economic potential for use in fuel and industrial applications in the future.

Environmental Limitations

Improper harvesting practices can cause

serious environmental damage. New harvesting technologies and systems could exacerbate

such impacts unless special care is taken in

their design and operation. Harvesting systems

that remove rough and rotten trees and dead

timber over a large geographic area could affect adversely those wildlife species dependent

on such trees for habitat. Also, operations that

totally remove all the fiber produced on sites

may further deplete nutrients in shallow, low

nutrient soils, especially under short rotation

systems. Some States have adopted forest practices laws designed to mitigate damage to soil,

water quality, wildlife, and esthetic resources

caused by harvesting.

New technologies and systems could be developed to overcome some of the constraints

that presently prevent harvest of some forests.

For example, about 185,000 acres of national

forest timberland in the Pacific Northwest are

excluded from the allowable cut base because

of potential environmental problems associated

with harvesting; systems that entail less damage could expand the acreage available. For

many small landowners, small-scale systems

that are well adapted to scenic and esthetic

concerns could broaden the appeal of timber

harvesting. Training of woodsworkers is also

important for reducing environmental effects

during harvest operations.

Technology Development Process

The development of harvesting technology

in the United States has not been an integral

part of the overall timber production system.

For the most part, coordination of efforts

among equipment manufacturers, timber producers, and processors has been limited, even

on a regional basis .30 Development of harvesting systems has not been supported as intensively by either private or public research in

the United States as in Western Europe (see

box B),

In the absence of a strong coordinated R&D

process, the focus has been largely on individual machines rather than integrated systems. In this country, harvesting machinery is

developed primarily in three ways:

●

●

●

Trial and error—often by loggers. While innovation has sprung from this method, it

usually produces designs that meet unique

rather than general needs.

Development in small job shops—sometimes in response to needs expressed by

a logger client. These advancements often

are not fully exploited because of limitations in the size of the production line, investment capital, and the engineering staff.

Development by major equipment manufacturers, Contributions by large firms,

while important, have been small in relation to their potential, partly because the

construction and agriculture industries are

their primary markets.

Current U.S. Harvesting Technology and Systems

In general, U.S. harvesting equipment is classified as either ground-based or aerial. Usually, this equipment is designed to “yard” or

transport timber felled and limbed by chainsaw from stump to landing where it is loaded

as a log onto a truck for transportation to the

mill, Probably 90 percent of the wood fiber in

the United States is processed in this manner.

In the eastern half of the country, pulpwood

is the main product, cut into 100-inch” or

63-inch lengths. Small diameter trees are frequently sheared rather than cut by chainsaw

and are often delimbed by pushing the stem

through a gate. Trees are either yarded to the

landing by skidders or are cut into pieces and

loaded directly onto flatbed trucks. In the West,

30As discussed in Brown, Bentley, and Gordon, “Developing

Harvesting Systems for the Future, ” op. cit., pp. 35-36.
122 . Wood Use: U.S. Competitiveness and Technology

because logs are used predominantly for lum- Aerial harvesting equipment (cables, skylines,

balloons, and helicopters) provide lift to logs

as they are delivered from stump to landing.

ber or plywood, they usually are yarded in 25-ft

lengths or longer.

A description of yarding equipment and the

performance characteristics of each type is

presented in table 19.

31 Horses, tractors,

The cost of harvesting by these means varies

widely depending upon the skill of the crew,

the terrain, the timber size, and the size of the

tract harvested. In general, ground-based operation cost less than aerial systems. For

ground-based equipment, which is best suited

to gentle terrain, costs are usually half those

of aerial machinery. As a result, most industrial

wheeled skidders, and feller-buncher tree processors move logs across the ground surface.

Slsee J. J. Gar]and, Timber Harvesting ~pti0n5, Oregon State

University, 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-bunchers

Horse skidders tree processors Cable and skyline Balloon Helicopter

Timber size capability

Small timber Capable of handling

generally less than all sizes in design

24” Dbha

range of machine

Production potential

Low production High production

Medium to big

timber; small

timber in thinnings

Small to medium Timber weight limit Timber weight limit

timber less than

24” Dbha

High production

possible

Medium to high

production

Medium to high

production; winds

over 25 knots limit

operability

Very high production

but weather

restricts operability

Costs of production

Low Low

Limits on silvicultural system

None None

Low to medium Medium to high High Very high

Thinning in rows or No limitations

strips possible

Generally clearcuts;

partial cuts possible

Suited to clearcuts;

experimental in

partial cuts

Topography limits

Gentle; occasional Up to 35 to 450/o;

short, steep pitches downhill yarding

over 500/o; downhill preferred

yarding preferred

Road access requirements

Up to 30% Deflection necessary

but suited to steep

slopes

Adaptable to

topography within

limits

No limits

Haul road close-to

skid road (300’ to

500( desirable)

Long skid distances

feasible but not

economical

Medium distances

from haul road up

to 1 ,500’

High lead logging

1,500’ approaching

maximum yarding

distance—some

skyline operational

at 5,000’

About 5,000 limit No limit except by

economy

Stream protection

Generally excellent

with proper

practices

Can be excellent

depending on

proximity to stream

and practices;

crossings need

preparation

Good with proper

practices; stream

crossings need

preparation

High lead poor if

logging across

streams, otherwise

good; skylines can

lift log free of

streams

Capable of lifting logs

free of streams;

large landings near

streams are

problems

Excellent protection

Site disturbance

Minimum disturbance;

little slash handling

capability; small

landings 50’

diameter

Medium to high disturbance; soil

compaction potential; damage to

residual stand

possible; slash

handling possible;

medium landings

approximately 75’

diameter

Minimum to medium

disturbance possible

with proper

practices; slash

handling possible;

may damage residual

stand in partial cuts;

medium landings

about 75’ diameter

Minimum disturbance;

slash handling a

problem; requires

100’ diameter

landing + 200’

diameter tie down

area

Minimum disturbance;

slash handling a

problem; requires

100’ diameter

landing + 50’ x 100’

setdown maintenance area

Medium to high

disturbance; soil

compaction potential; damage to

residual stand

possible; slash

handling possible;

medium landings

approximately 75’

diameter

aDiameter at breast heiaht

SOURCE J. J, Garland, ‘Timber Harvesting Options, Extension Service Circular 858 (Corvallls, Oreg : Oregon State Unlverslty, 1980)
——.

Ch. V—Technologies for Growing, Harvesting, and Using Wood ● 123

and nonindustrial forestlands are harvested by

ground-based methods. Costs may range from

a low of $15 per thousand board ft of timber

logged with skidders in favorable operating

conditions to a high of over $200 per thousand

board ft logged with helicopters.

Costs increase rapidly as tree size declines

(fig, 20). Workers must handle more pieces to

produce the same volume of wood, so that as

tree size declines from 10 to 4 inches in

diameter at breast height (4.5 ft above ground),

costs increase by 70 to 80 percent.32 Tract size

also affects harvesting expenses because of

the fixed cost of moving equipment. One researcher, using simulation techniques to estimate the effect of tract size on harvest cost,

found that highly mechanized equipment presently available becomes inefficient as tracts

drop below 100 acres.33 This has significant implications for the future as more wood is obtained from small private nonindustrial tracts.

‘Zj. R. Erickson, “Changing Resource Quality: Its Impact in

Harvesting and Transportation, ” in Impacts of the Changing

Quality of Timber Resources, Forest Products Research Society, Proceedings No. P-78-21, 1978.

33F. W. Cubbage, “Economies of Forest Tract Size in Southern

Pine Harvesting, ” unpublished paper on file at the U.S. Department of Agriculture, Southern Forest Experiment Station, 1982.

Figure 20.—Cost Comparison for Cutting and

Skidding by Diameter Breast Height for

Three Logging Systems

sol

— Chainsaw and

cable skidder

- -- Feller-buncher

and delimbing

4 5 6 7 8 9 10

DBH (diameter breast height) in inches

JRCE’ Adapted from J R Erickson, ‘rChanglng Resource Quality: Its impact

in Harvesting and Transpiration, ” in /mpacfs of the Changing Oua/ify

of Timber Resources, Forest Products Research Society Proceedings

NO P.78-21 , 1978

The skill of equipment operators and other

crew members also is critical in determining

production costs. As in any industrial enterprise, production rates can vary from 65 to 135

percent of normal depending on worker expertise and work habits.

Aerial equipment, while more costly, is better suited to steep terrain than is ground-based

equipment. In the West, aerial equipment is

commonly used on slopes greater than 35 percent. Regulations for State forest practices in

Oregon, Washington, and California, for instance, require its use on steep slopes. Within

the last 5 years, a few small U.S. manufacturers

have placed light, highly mobile and inexpensive cable machines on the market that may be

Photo credit U.S. Forest Service

Helicopter yarding of logs is expensive, but can open up

areas to logging that are too inaccessible or

environmentally sensitive for ground-based

yarding systems
124 ● Wood Use: U.S. Competitiveness and Technology

useful for harvesting small timber in private

nonindustrial forests in steep areas,

The structure of the logging industry also is

an important consideration affecting the current and prospective design of harvesting systems, Some forest products firms maintain

their own logging crews, but independent contract loggers are responsible for a large portion

of U.S. harvesting operations, Most such logging operations are small in scale, In 1977,

there were over 15,000 independent logging

establishments, employing about 83,000 workers, an average of less than 6 employees per

firm. This figure does not include crews hired

by sawmills and pulpmills, farmers or part-time

loggers. According to a 1982 report on Canadian companies’ equipment marketing prospects in the Southeast, forest products firms

have largely disbanded their logging crews in

the region except for areas or conditions where

specialized machines are called for. 34 T h e

small-scale nature of southern logging contractors, averaging about $250,000 invested in

equipment, is a key determinant of equipment

needs.

Harvesting Machinery

Priorities for new developments in harvesting machinery differ by region. To fully utilize

available forest resources in the East, harvesting machines need to be highly mobile, with

low environmental impact, and able to harvest,

handle, and process large numbers of small irregular pieces. Prospects for companies that

develop such machines appear favorable, according to a recent Canadian assessment of the

potential for Canadian firms to penetrate U.S.

equipment markets (see box B).

In the West, including Alaska, harvesting systems for steep terrain are needed that produce

little environmental impact and that can economically deliver timber from thinnings and

wood residue to roadside. Other systems caS4Department of Canadian External Affairs, Market studies

of United States: Canadian Forestry Machinery and Equipment

in the Southeastern United States, prepared by Sandwell International, Inc. (Ottawa, Canada: Canadian Department of External Affairs, August 1982), p. 12.

pable of reaching long distances could provide

access to some presently inaccessible areas,

A systems approach to developing machines

for growing, managing, and harvesting trees

of given specifications for delivery to processing centers35 has not yet been undertaken in

the United States. Most big manufacturers produce machinery primarily for agricultural or

construction markets and only secondarily for

harvesting timber, Much of the harvesting

equipment now available is simply modified

agricultural or construction vehicles. In addition, small, independent contract loggers, who

play a major role in harvesting even in the Pacific Northwest where there are large consolidated tracts of industrial land, are not organized in a fashion that leads to the communication of desired specification for harvesting

systems to machinery designers.

Harvest Methods

Harvesting machinery must be used properly

if it is to be economically and environmentally acceptable. In many cases, machinery currently available can be more effective if new

methods for its operation are devised. For example, small, low-cost skyline yarders designed

for harvesting timber within 300 ft of roads can

be used to reach timber 1,000 ft from roads

using a method called “multispan logging, ”

This system, designed in Western Europe, extends the reach of small yarders by suspending

the cable from supports hung between two

trees and operates much like a ski lift. In many

regions, this method could provide access to

timber too small to be yarded by large expensive systems with long-reach capabilities or to

environmentally sensitive terrain where few

logging roads can be used.

Soil disturbance has become a major environmental concern in many forests. Tractors

have been prohibited from harvesting timber

on sensitive soils on some Federal lands

because of the potential for site damage from

normal 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 way

as it did in the United States. Most equipment was fabricated by individuals or small shops. In

the last 15 years, however, Western European manufacturers have begun to design more complete

systems for harvesting, preprocessing, and transporting wood from stump to mill. Scandinavian

countries have led this transition from a machine to system focus. These countries were forced

to better integrate harvesting with tree growing and processing because of increasing labor costs

and a growing proportion of their timber supplies taken from small, nonindustrial private forestlands—factors that also affect the forest products industry in the United States. In Sweden, where

there are some 247,000 small forest owners, 56 percent of the forestland tracts are less than 62

acres in size. In Austria, over 80 percent of the forest is privately owned and nearly all is in tracts

of less than 500 acres.36

Rapidly rising labor costs threatened to price Swedish wood products out of the world market

in the early 1960’s. Reducing those costs became a national objective and the government, organized

labor, forest owners, and machinery manufacturers banded together to forma cooperative research

organization whose main charge was mechanization of timber harvesting. In 20 years, harvesting

in Sweden was transformed from a high-cost, labor-intensive operation to a low-cost, mechanized

activity.37

The payoff from such R&D can be very high. In Sweden, productivity was roughly 46 ft3 per

worker-day in 1950. By 1975, it had increased about 7.5 times to 350 ft3 per day. The net result

of improved productivity was that Sweden remained a competitor in world markets. Its present

research 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 to

produce a wide variety of small, inexpensive, highly mobile machines that can be used individually or as part of an integrated system. Such machines make it easy for landowners to harvest their

own 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 private

nonindustrial owners has played in increasing supplies of wood to Western European mills. It

is likely, however, to be significant, especially in Scandinavia. Sweden, for example, relies on nonindustrial forests for about 70 percent of its wood. Forest products continue to be the nation’s leading

export commodity, evidence that output from nonindustrial lands remains high and that small

private 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 priority

in Western Europe and Scandinavia. The photo shows a tractor-powered chipper and detachable chip bin

systems is permitted, but costs over twice as

much. As a result, much of the timber effectively is excluded from harvest because it cannot be extracted economically. Recent research

on new methods of harvesting within acceptable levels of soil disturbance and cost may

change this situation. 38

Transportation Systems

Once harvested, timber must be transported

from the forest to processing centers. For processing 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 Tractive Logging Machines, Forest Research Laboratory Research

Paper 44 (Corvallis, Oreg,: Oregon State University, 1981).

composition products, a broader array of options is available to transport wood besides the

standard log common today. These options include whole trees, tree-length logs, chips,

chunks, and compacted bales of residue. An

advantage of using chunks or compacted bales,

for instance, is that more wood fiber can be

packed into a load than with logs, especially

if they are crooked and limby. Transportation

costs thereby are reduced and more timber can

be harvested economically.

Broader transportation questions are raised

with the development of new harvesting systems. These questions include the adequacy of

existing highways and the design of vehicles

capable of dealing with diverse conditions. For

example, most forest roads are designed for log

trucks that bend in the middle. Vans to haul
Ch. V— Technologies for Growing, Harvesting, and Using Wood ● 127

chips or chunks are designed primarily for

highway use and have a different configuration, This means they can neither turn around

nor negotiate curves on standard logging roads

as easily as most logging trucks. In some cases,

bridges and overpasses limit the size of trucks

to be used and would need to be redesigned

or strengthened to accommodate heavier loads

or wider carriers. Highway problems and likely

solutions differ by region. The West has long

haul distances on secondary or low-volume

gravel roads; the East has a more extensively

developed, paved public road network where

load limits and aging bridges are disadvantages.

Training for Woodsworkers

New machines and new methods require

trained crews to use them. As machines become more sophisticated, they usually become

more expensive; abusive treatment or inefficient operation can affect costs significantly,

Unfortunately, woodsworker training has been

given low priority in North America. In Scandinavia, operator training has received equal

emphasis with machine development because

researchers and managers recognize that the

two are closely linked (see box C). Probably half

of the increased productivity experienced in

Sweden can be attributed to operator training

programs. In central Europe, productivity for

a well-trained crew averaged 19.3 minutes per

cubic meter harvested; an untrained crew required 43.5 minutes.39 If similar gains in productivity can be achieved in the United States,

timber now considered too costly to harvest

could be added to the supply base.

Woodsworker training could improve the

logging industry’s safety record and reduce

harvesting costs associated with workers’ compensation payments (table 20). Among industries in 1976, logging had the second highest

injury and illness rate and thus had high compensation rates. Logging is already a dangerous

occupation but may become more so as workers are required to handle more pieces and as

operations 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’ Compensation

Insurance Rates by State for Logging and Lumbering

Workers (cost per $100 of payroll)

State 1974 1978 1980

Alabama . . . . . . . . . . . . . . . . . . . . $9.37 $10.52 $12.52

Arkansas . . . . . . . . . . . . . . . . . . . . . 15.26 18.26 22.00

Florida. . . . . . . . . . . . . . . . . . . . . . . . 13.60 32.59 27.69

Georgia . . . . . . . . . . . . . . . . . . . . . . 13.52 16.10 22.16

Louisiana . . . . . . . . . . . . . . . . . . 29.90 39.68 52.10

Mississippi . . . . . . . . . . . . . . . . . . . . 23.24 34.59 44.36

North Carolina . . . . . . . . . . . . . . . . . 10.47 16.54 28.59

Oklahoma . . . . . . . . . . . . . . . . . . . . . 26.34 32.26 53,35

South Carolina. . . . . . . . . . . . . . . 9.23 16.03 22.29

Tennessee . . . . . . . . . . . . . . . . . . . . 14.08 19.61 17,43

Texas a . . . . . . . . . . . . . . . . . . . . . . 27.06 41.90 14,98

Virginia . . . . . . . . . . . . . . . . . . . . 8.86 15.37 23.69

a

Texas rates were lowered I n 1980 to encou ra9@ @m PIOYm@nt

SOURCE Market Stud~es of the Urr(ted SIafes Canadm Forestry Machinery

and Equipment In the Southeastern Un/ted Stafes (Ottawa Cana

dlan Department of External Affairs, 1982), p 12

Workers’ compensation rates paid by employees for their crews are very high, and contribute significantly to the costs of logging. Injuries and associated costs may continue to rise

unless training programs can improve the safety record.

Training workers also could reduce environmental impacts of harvesting and improve timber management. Since most PNIF lands are

not harvested under a management plan prepared by a professional forester, special woodsworker education could be directed at owners

of private nonindustrial forests. Some owners

personally harvest their own timber, a choice

common in Europe and among some U.S.

farmers. In other cases, owners who do not

perform the harvest themselves may benefit

from learning more about harvesting timber

and be better prepared to make decisions about

harvest programs. Such education may be an

important key to the availability of timber on

private nonindustrial forestlands.

Research and Technology Transfer

If timber supplies are to increase from improved harvesting and land management technologies, additional improvements may be

needed in the present system of forestry-related

research and technology transfer. The United

States does not have a research organization

like the Forest Engineering Research Institute
128 ● Wood Use: U.S. Competitiveness and Technology

Box C.—Marketing Canadian Equipment in the Southeastern United States

Development of small, multipurpose harvesting equipment for use on nonindustrial tracts could

aid in increasing timber supplies from PNIF lands. Such equipment is widely available in Scandinavia and Western Europe, where small tract ownerships are common, but less so in the United

States. Sensing an opportunity for Canadian manufacturers, the Canadian Government recently

undertook a study of the potential market for Canadian-manufactured harvesting equipment in

the Southeastern United States.40

The Sandwell International study, commissioned by the Canadian Department of External Affairs, found “no reasons . . . why Canadian-manufactured forestry machines and equipment could

not obtain an increased market share in the Southeastern United States.” Although some import

duties could affect Canadian competitiveness, favorable exchange rates between Canadian and

U.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 intensive

silviculture with associated commercial and precommercial thinning will establish a need for

smaller, 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 minimize

stream 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). Attachment devices able to run off tractors also were given high potential, due to unique designs by some

Canadian manufacturers. Reforestation equipment was also found to be a promising market if Canadian manufacturers adapted their designs to Southeastern U.S. environmental and topographic

conditions.

The study also assessed marketing strategies. Because many forest products firms have cut

back their own logging operations, the most successful strategy, according to the study, would

be aimed at independent contractors, followed by farmers and other part-time loggers with a need

for attachments running off farm equipment. Dealerships were found to be crucial for successful

marketing, since few loggers were willing to travel more than 30 miles for services. Trade fairs

were 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 more

promising. In addition, cooperative efforts with vocational schools would help train woodsworkers

to use the new machinery and facilitate market penetration by giving operators a chance to test

equipment.

%anadian Department of External Affairs, Mrkot StudfeS.

of Canada, which carries out coordinated research on harvesting. Furthermore, public resources currently directed to harvesting systems research are quite small. In 1976, only 70

scientist-years of effort were devoted to it, and

it comprised less than 2 percent of the Forest

Service research budget.4l Greater emphasis on

R&D may be needed if harvesting systems that

extend timber supplies are to be forthcoming.

41C, W. Boyd, W. W. Carson, and J. E. Jorgensen, “Harvesting

the Forest Resource—Are We Prepared?” Journal of Forestry,

vol. 75, 1977, pp. 401-403.

Traditionally, the formal framework for forestry-related technology and information transfer has been weak in the United States. This

situation may improve over time, however, if

the Renewable Resources Extension Act of

1978 (Public Law 95-306) bringing forestry

more fully into the agricultural extension

system, is adequately implemented.

The 1978 act gives forestry a greater priority in the Cooperative Extension System, which

for nearly 70 years has served as a vehicle to

help 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 fiscal

for periodic development of a National Renew- year 1982, and it has been proposed for deleable Resources Extension Plan, along with tion in fiscal year 1984, As a result, most forcomplementing State plans, to identify renew- estry-related work is conducted with discreable resource priorities in the extension system. tionary funds allocated chiefly to agricultural

The initial program was submitted to Congress activities (see box D).

in 1980. Earmarked funding for renewable reBox D.—Forestry in the Cooperative Extension System

The National Cooperative Extension System is the primary means by which government speeds

agricultural research findings on technology and management to landowners and other members

of the public. Established in 1914 by the so-called Smith Lever Act, the system is comprised of

USDA, land-grant universities, and State and county government extension agencies. Nearly all

of 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 for

many years ($1.6 million in 1979) under general-purpose appropriations or separate appropriations for specific projects. Most of these activities are aimed at encouraging land management

by 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. Extension

forestry activities typically are undertaken in conjunction with other agencies, including the Forest

Service, State forestry offices, the Soil Conservation Service, local conservation districts, and county

agricultural 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 incomeproducing fuelwood thinning, and

● establishment of County Forest Resources Associations in several States.

An organizational framework for increased involvement of the extension system in forestry

was provided by the Renewable Resources Extension Act of 1978. The act called for development

of a National Renewable Resources Extension Plan on a 5-year basis.

In the initial renewable resources extension plan submitted to Congress in 1980, States identified educational and informational “opportunities” associated with extension forestry which would

require 493 staff-years to implement. This compared with 160 staff-years of forestry extension activities in 1980.

Although the 1978 act specifically authorized earmarked Federal appropriations, up to $15

million annually, for renewable resource extension purposes, Federal funding continues at a modest

level. Actual funding ($2 million) was not provided until fiscal year 1982 and has been proposed

for deletion in the fiscal year 1984 budget request. Smith Lever general funding thus may continue

to be the primary source of forestry funds, with forestry competing with other activities for Federal

support.
130 . Wood Use: U.S. Competitiveness and Technology

At present, however, fewer than 10 people ductivity witnessed in agriculture that is atare actively involved in formal harvesting ex- tributable to extension education could be dutension programs, and all forestry-related ex- plicated for forest resources, the timber suptension activities entail only about 160 staff- ply would likely be markedly improved.

years or effort annually, If the increased proIncreasing Timber Supplies Through the Manufacture

and End Use of Wood Products42

More efficient use of wood in the manufacture of forest products could be achieved in

several ways by:

● the expanded use of underutilized tree species, wood residues, and defective materials that are now left in the woods after

harvest;

● the increased recovery of high-value primary products, such as lumber and plywood, from roundwood logs;

● the increased use of manufacturing residues for particleboard and fiberboard;

• increased efficiency in end use of wood

products, such as in the design of houses;

and

• increased recycling of paper.

A variety of products can be made from underutilized trees. Such products may substitute

increasingly for wood products derived from

more costly and scarce raw materials. Application of advanced engineering techniques to end

uses of wood, such as in design and construction, also could improve efficiency by economizing on the use of the resource while maintaining structural quality.

There are additional opportunities to improve raw material use in the mill, In 1976,

over 96 percent of the wood entering mills for

primary processing was either converted into

wood products, such as lumber, veneer, plywood, composite panels, and pulp and paper,

or burned to supply the energy needs of the industry. Although most material is used, prod4Zsee volume 11 of this report for detailed discussion of wood

utilization and manufacturing technologies from which this section is derived.

uct yields can be improved as new mills, able

to process wood more effectively, come on line.

Technological Adjustments to Changes

in Growing Stock

Historically, the U.S. forest products industry

has adapted well to changes in species availability and growing stock.43 As preferred species, sizes, and qualities of wood have become

depleted due to increased demand, processing

technologies have been adjusted to work with

more abundant species and materials previously thought to be unusable.

There are several examples of the industry’s

accommodation to raw materials availability.

Originally, the pulp and paper sector depended

on northern spruce and fir for papermaking.

As inventories of spruce and fir declined in the

early 1900’s, widespread concern arose over

possible shortages, since other species such as

southern pine were thought to be unsuited for

paper. However, the sector, aided by research

laboratories, quickly adapted the kraft sulfate

papermaking process to southern pine, which

now is a major contributor to paper production.

44 In addition, research was initiated on

the use of lesser quality hardwoods in paper,

so that suitable low-grade hardwoods are now

added to the raw materials mix.

qasee, for example, Egon Glesinger, The Coming Age of WOOd

(New York: Simon & Schuster, 1949), in passing, for discussion

of changes in raw materials utilization by the forest products

industry.

44AS discussed in Ibid., pp. 169-172.
—— ——

Ch. V— Technologies for Growing, Harvesting, and Using Wood ● 131

Similarly, plywood producers initially depended on large-diameter, straight western

softwood, As a result of increasing prices for

such timber and uncertainties about future supplies, manufacturers learned to use previously

untried southern pine in the early 1960’s. By

1980, the South produced nearly as much

plywood as the West, generally using smaller

logs,

Implications of New Wood Products for

Fuller Use of Resources

Today, softwoods are preferred for lumber,

plywood, and certain papers. As currently preferred softwood grades become scarcer and

more expensive, the forest products industry

continues to seek ways to use different portions

of the timber resource through the expanded

utilization of hardwood species and the expanded recovery of wood left in the forest after

“merchantable” material is removed.

Hardwood species present major opportunities for greater use. Hardwood inventories,

found mostly in the East, comprise more than

one-third of the Nation’s growing stock and are

multiplying fast, In 1976, hardwoods accounted for 36 percent of the standing timber,

but only 26 percent of roundwood supplies. 45

Existing and emerging technologies can produce materials from hardwoods of similar performance to many products now produced

mainly from softwoods.

In the pulp and paper sector, the increased

substitution of abundant hardwoods in the production of papers suitable for a variety of uses

could relieve resource problems caused by the

economic scarcity of softwoods. While several

technologies could permit greater hardwood

utilization, only about one-fourth of the pulpwood used in the United States presently is

derived from hardwoods.

Current pulping processes can use a broad

range of woody materials, such as wood residues and chips, Over 35 percent of the total

wood used for kraft paper comes from resqsr)erl~,e{~ from An Ana]~’sjs of the 7’irnber Situation, OP. Cit.,

1982, p. 158.

idues. In the Pacific Northwest, nearly 90 percent of the wood used for pulp originates from

sawmill or veneer mill residues.46 The suitability of whole tree chips, including bark and

branches, is now under study; when efficient

segregation methods are developed, these chips

could greatly enlarge the wood resource available for pulp products. In addition, waste paper

now accounts for about one-fourth of the fiber

used in the industry; increased recycling is also

feasible (see box E).

The lumber and panel sector has adjusted its

processes to use smaller logs, as second-growth

timber replaced old-growth and as tree utilization standards changed. This trend will probably continue. The potential of hardwoods in

structural plywood production is being explored, Some studies have concluded that construction-grade hardwood plywood made from

a mixture of high- and low-density species

could be economically competitive with softwood construction plywood.47 Improved methods of drying and seasoning hardwoods48 could

provide additional impetus for their use in

plywood,

Several composite panel products have been

developed for structural application, including

waferboard, oriented strand board, and ComPly in which a particle core is overlaid with

a veneer surface. Nearly all the new panel

products developed in the last 30 years can use

hardwoods and some wood defective for other

uses, thus extending the timber resource.

Waferboard and flakeboard panels (made of

wood wafers or large flat flakes) can be made

from any hardwood species, but the less dense

species are best. Waferboard is unsuitable for

some structural applications but may substitute

for plywood for sheathing. Waferboard has

-D. A. Tillman, A. ], Rossi, and S. O. Simmons, Wood: Its Present and Potential Uses (OTA contract report prepared by the

Envirosphere 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,gazine, June 1981, p. 18.

qasee Walter R, Smith, “New Horizons in Hardwood Utilibation, ” manuscript presented at Forest Products Utilization

Research Conference, Forest Products Laboratory, Madison,

Wis., Oct. 19-21, 1982, pp. 8-9 for a discussion of hardwood

seasoning research.
132 • Wood Use: U.S. Competitiveness and Technology

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 according to a recent report prepared for the Solid Waste Council of the Paper Industry.* Paper recycling

declined 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 about

42.7 million tons of paper were disposed of in landfills or were otherwise not recovered. An estimated 6.2 million tons were diverted, destroyed, or lost in use and therefore were not recoverable

for recycling, and 0.8 million tons were burned to produce energy. About 18.1 million tons were

recovered 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 remaining

15.4 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 corrugated

paper (i.e., box plant cuttings and corrugated containers) obtained primarily from commercial enterprises. The balance consisted of a mix of paper types, the most important of which was newsprint

obtained chiefly from residential users.

Collection of waste paper is difficult, especially outside of urban centers. Furthermore, waste

paper is not always easily separatad from nonfiber contaminants. Eliminating contaminants is often

laborious and inconvenient and is frequently not fully accomplished. Contaminant problems arise

in part from lack of coordination among the industries making, using, and recycling paper. Cooperation among them could be benificial and could greatly reduce obstacles to recycling. If paper converters 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 manufacturers

as potentially competitive. According to industry estimates, waste paper burned for energy production could increase from less than a million tons in 1980 to nearly 9 million tons in 2000. For

this reason, the industry is concerned that municipal efforts to address solid waste disposal problems 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 was

first introduced. Several waferboard plants

now operate in the United States, most of

which are in the Great Lakes States and New

England. 5O

Product Recovery in the Solid Wood

Products Sector

From roundwood, the solid wood products

sector produces a variety of goods, including

dimension lumber, plywood, laminated lumWInitial waferboard plants were established in the Great Lake

States; subsequently, several others were established in New

England. Trends are discussed in Lloyd C. Irland, Wi]dIands

and Woodlots: The Story of New England Forests (Hanover and

London: University Press of New England, 1982), p, 160; and

Henry M. Montrey, III, Current Status and Future of Structural

Panels in the Wood Products Industry, M.S. thesis, Massachusetts Institute of Technology, June 1982, pp. 110-115.

ber, molding, and furniture stock. Leftover

materials generally are shipped to pulpmills

and particleboard plants or turned into other

composite materials. Remaining materials,

such as bark and sawdust, are burned as fuel,

so virtually all of the roundwood—more than

95 percent—is used in some way.

Improving Yields in Lumber Manufacture

Lumber products include dimension lumber,

boards, finish lumber, and timbers. Of all

lumber and panel products produced in the

United States in 1979, almost 70 percent (by

weight) was lumber.5l Available technologies

SIU.S. Depa~ment of Agriculture, Forest Service, U.S. Timber

Production, Trade, Consumption, and Price Statistics, 195G1980,

miscellaneous publication No. 1408 (Washington, D. C.: U.S. Government Printing Office, 1981), p. 10.
Ch. V— Technologies for Growing, Harvesting, and Using Wood . 133

—

Photo credit: U.S. Forest Service

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 lumber

wood, but these technologies would reduce the recovery efficiency with the production of

wood left over for nonlumber wood products. other goods and energy,

About 40 percent of a log entering a typical Several processes could increase lumber resawmill 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. With

new technologies and processes, lumber recovery in mills could reach between 60 and 88 percent for medium-sized logs.52 Material tradeoffs

52 Jerome Saeman, “Solving Resource and Environment Problems by More Efficient Utilization of Timber, ” in The Report ●

of the Presiden t’s Advisory Panel on Timber and the Environment (Washington, D. C.: U.S. Government Printing Office, April

1973), app, F, p. 361.

The best opening face process produces

higher grades and increases recovery of

lumber through computer-assisted selection of sawlines during milling. Laboratory

tests indicate that this process could increase lumber yields by 20 percent and

some in-service tests have confirmed this,

The saw-dry-rip process enables fuller use

of hardwoods by reducing their tendency

to warp and deform and also permits use
134 ● Wood Use: U.S. Competitiveness and Technology

LIVE SAW

EDGE FULL WIDTH

RIP TO LUMBER

●

KILN DRY

GLUE INTO PANEL

FINAL DIMENSION

Photo credit: U.S. Forest Service

I Tne Saw-Dry-Rip process enables fuller utilization

of- logs, particularly hardwoods

of defective timber and wood residues that

were once considered unmerchantable.

The edge-glue and rip process is an innovative sawing and gluing technique

which reduces wood loss and permits use

of low-quality raw materials to produce

high-quality lumber-like products.

Other available processes could improve

product recovery, but would require costly investment by mill owners. Technologies for

composite products, such as Parallel-Laminated Veneer (PLV) and Corn-Ply, can produce

high-quality, lumber-like products from lowquality materials and hardwoods. The dimensions of PLV and Corn-Ply products are not limited by log size and can produce stronger

lumber than conventional manufacturing.

Despite the advantages, the substitution of

composites for dimension lumber may proceed

slowly. Composite lumber manufacture requires expensive equipment, which therefore

Photo credit: U.S. Forest Service

The power backup roller can improve veneer log

yields in plywood manufacture

is more likely to be installed in new mills than

retrofitted in old ones. As existing sawmills are

depreciated, PLV facilities may be built as

replacements, particularly if stumpage values

increase and building codes are modified to

permit the use of PLV lumber.

Potential Improvements in Plywood Manufacture

At present, plywood recovery runs between

47 and 53 percent.53 Less than 1 percent of all

roundwood used in plywood manufacture is

waste, because residues from plywood mills

are used for lumber, particleboard, pulp, paper,

fiberboard, and fuel.

Mills now accept smaller logs than in the

past, and there is an increasing effort to use

hardwood for structural plywood. Many innovations in structural panel manufacturing

have focused on expanded use of hardwoods

and lower grade wood.

Currently, 25 percent of the veneer logs

brought in from the forests are considered unsuitable for peeling .54 Because of the high value

SsKidder, peabody & CO., Inc., A Critical Issue Report: COmPly Waferboard, Oriented Strand Board: Revolution in the Structural Panel Market (Kidder, Peabody & Co., Dec. 24, 1980), p, 14.

SqFrank J. Fronczek, “Preventing Veneer Bolt Spinout, ” reprinted from Modern Plywood Techniques, proceedings of the

Seventh Plywood Clinic, Portland, Oreg., 1979, p. 22.
Ch. V—Technologies for Growing, Harvesting, and Using Wood ● 135

—

of veneer logs, reducing the amount of unusable material can improve the productivity and

profitability of the mill, and some promising

technologies for accomplishing this have been

developed.

Product Recovery by the Pulp and Paper Sector

The increased cost of energy, the rising cost

of both roundwood and sawmill residues, market emphasis on printability and other nonstrength factors, and the abundance of less expensive hardwood timber have all prompted

the pulp and paper sector to consider more

energy-efficient and materials-efficient manufacturing technologies. Now pulp and paper

manufacturers are turning out higher quality

pulps that require less wood per ton of pulp

produced.

In 1978, the pulp and paper sector consumed

approximately 77 million short tons of ovendry pulpwood. Forty-four percent came from

chips and sawmill residues. About 26 percent

was hardwood. Trends in wood use in the past

40 years have moved toward the increased

utilization of hardwood species and increased

reliance on chips and sawmill residues. In addition to mill residues and chips, pulp and

paper manufacturers used approximately 15

Photo credit’ U.S. Forest Service

Modern papermills can achieve fuller wood

utilization and decreased requirements

for purchased energy

million short tons of recycled waste paper for

pulp and paper production. 55

More widespread adoption of mechanical

pulping technologies could further reduce fiber

requirements, For example, it takes an estimated 2.5 short tons of wood to produce 1 ton

of paper through the kraft chemical pulping

process. Only 1,05 short tons of wood is required to produce 1 ton of paper in thermomechanical pulping. With this potential reduction, each 2-percent increase in pulping capacity would require only a 1.7-percent increase

in wood fiber.58

While incremental improvements in current

processes may be important in raising the efficiency of existing mills, the greatest potential for dramatic advances in pulp and paper

manufacture lies in new technologies. Such innovations could enable the use of large quantities of currently underutilized hardwood

species and may even present prospects for

developing superior new papers for specialized

needs. At the same time, new concepts in

energy use and cogeneration could achieve

new levels of energy efficiency, thus freeing

up additional fiber for paper.

Press-drying technology, developed at the

U.S. Forest Products Laboratory, holds promise both for reducing the amount of energy required in papermaking and for enabling the use

of dense hardwood species, such as sweetgum

and red oak, which are not currently used in

large quantities for pulp. Press-drying uses

high-yield hardwood or softwood kraft pulp to

produce linerboard with strength superior to

conventional softwood kraft paper in every respect except tear strength. At the same time,

press-drying can reduce the amount of energy

needed in the drying process by applying pressure to the fiber (pulp) mat as it is dried, in contrast to conventional drying that applies

pressure and heat separately.

ssJoan E. Huber, The Kline Guide to the Paper Industry (Fairfield, N. J.: Charles H. Kline & Co., 1980), pp. 66-67.

wG. Styon, “Impact of North American Timber Supply on Innovations in Paper Technology, ” Paper Trade Journal, May 30,

1980, P. 28.
136 ● Wood Use: U.S. @repetitiveness and Technology

Photo credit: U.S. Forest Service

USDA Forest Products Laboratory scientists have

developed a prototype press-dried paper technology

Paper produced from press-drying kraft red

oak pulp has been shown to have a burst and

tensile strength approximately 13 percent

greater than conventionally dried pine kraft

paper. Compression strength of the press-dried

red oak paper was 50 percent better than the

pine. The lower tear strength of press-dried

hardwood paper may limit its use for wrapping

or sack paper; however, its higher burst and

tensile strength make it suitable for linerboard.

An estimated 19 percent in net energy savings could be gained from the use of pressdrying technology. 57 press-drying also may

reduce equipment requirements in both the

drying section and the pulping process because

of its capability for using unrefined pulp

although this is uncertain because a commercial-scale press-dry paper machine has not yet

been built and operated.58 The major limitation

of press-drying to be overcome before the technology can be used commercially, is the low

speed of the Forest Products Laboratory’s pilotscale paper machine and the resulting slow

production rate.

‘7V, Setterholm and Peter Ince, “The Press-Drying Concept

for Papermaking,” Southern Lumberman, December 1980.

58P, J. Ince, “FPL Press Drying Process: Wood Savings in Linerboard Manufacture, ” TAPPZ, vol. 64, 1981, p. 109,

Decreasing Energy Requirements

The forest products industry now burns

about half the wood entering its mills to meet

internal energy needs. Generally, only lowvalue wastes and residues are used for fuel, but

some residues now used for fuel could be utilized instead in the manufacture of products.

Development of energy-efficient wood processing systems could improve the balance between wood energy and fiber recovery.

The major long-term opportunities for energy

savings are in the energy-intensive pulp and

paper sector. Pulp and paper producers consume about 7 percent of U.S. industrial energy

and about 3 percent of the total energy consumed nationwide. ’g About half of the sector’s

energy requirements currently are met internally by burning wood residues, pulping

liquors, and other waste products,

In the near term, the best prospects for reducing the pulp and paper sector’s energy requirements may be through increasing the use of

mechanical pulping, which uses less energy

than chemical pulping methods and recovers

a higher proportion of the fiber. Another way

may be through expanding the use of recycled

paper.

Over the long term, commercialization of

some experimental pulping technologies, could

help the industry reduce energy needs. One experimental process, an organic solvent extraction process called Organosolv, may permit the

industry to become a net energy producer in

the future. The Organosolv process also may

be capable of using hardwood species and obtaining high fiber yields with little sacrifice in

product strength. The process is still in the developmental stage, but it may be commercially available in 25 years or so.

There are also opportunities for the more efficient use of wood fuels in the solid wood

products sector. In plywood manufacturing,

higher fuel costs have prompted increased interest 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 for

power generation is a common practice in

many plywood mills. One manufacturer reports replacement of propane with plywood

trimmings and scrap in two dryers at a savings

of over 70 percent in fuel costs. Another manufacturer is converting almost all of its wood

sanding dust to energy, producing 40 million

Btu per hour in auxiliary power,

Veneer drying accounts for 70 percent of the

process steam needs of plywood manufacturers. Improved drying processes, aimed at reducing energy consumption and increasing operating speeds, are being developed. One such

process, platen drying, increases recovery by

5 to 15 percent, shortens drying time, reduces

the need for additional drying, and reduces

process steam needs by up to 50 percent.

In lumber production, up to 90 percent of the

heat energy consumed in processing is for drying lumber, usually in a steam kiln that circulates air. Kilns may use natural gas or propane directly or, more often, are heated by

steam coils. Several new drying technologies,

including continuous feed solar, vacuum, and

vapor recompression drying, may gain some

commercial acceptance by 2000, although none

seems likely to completely replace conventional steam kilns.60

Increased Efficiency of Wood Products in End Use

Design improvements in construction offer

a significant chance to increase efficiency in

wood use. Current techniques could reduce

substantially the quantity of wood used for

home construction, particularly in singlefamily detached dwellings, without reducing

the quality of the structure. Two developments

are particularly noteworthy—truss framing and

engineered panel assemblies that combine

sheathing and framing. The use of trusses is

becoming more common for roof and floor systems. Truss framing uses single trusses to

frame floors, walls, ceilings, and roofs together.

Some analysts estimate that it could achieve

‘30Ti]lman, Rossi, and Simmons, Wood: /t.$ Present and pOtentiai Uses, op. cit., p. 3-25.

as much as 30-percent reduction in lumber use

over conventional construction practices, Engineered panel assemblies or stressed-skin

panels used for floors, walls or ceilings which

combine sheathing and framing in sandwich

panels, may also conserve wood. Such assemblies are factory—built, as are trusses, and their

use could reduce the wood wastes on construction sites from cutting and custom fitting, while

still providing structural strength and stiffness,

61

Since lumber production is linked closely to

the housing industry, an upturn in homebuilding could drive softwood log prices up, thus

increasing the incentives for lumber manufacturers to streamline operations and increase

product yields to remain competitive. Low

rates of residential construction could force

many small lumber mills out of business, thus

concentrating production in the larger mills

that tend to be more efficient, Other developments in the homebuilding industry could

also affect the lumber sector, such as moves

toward smaller houses and multifamily dwellings.

In the pulp and paper sector, increased paper

recycling could reduce demands on the resource base (see box E). Approximately onefourth of the paper pulp produced each year

is from recycled paper, with the practical upper limit for using recycled fiber in the pulp

mix increasing as new technologies are developed. The suitability and use of recycled fiber

for current paper products varies significantly. Some products [i.e., bleached paperboard)

are made with little or no recycled fiber, but

in some others one-third or more of the fiber

requirement come from recycled materials

(table 21). In Europe, paper suitable for many

uses is produced from pulp containing as much

as $10 percent recycled fiber. However, the

potential for further increases in recycled

paper use must be weighed against two barriers—the expense of removing glue, ink, and

other materials that normally are present in

61 Trends in wood utilization in construction are discussed in

University of Wisconsin Extension, Environmental Awareness

Center, Housing and C4’ood Products Assessment (OTA contract

report, Dec. 10, 1982).
138 ● Wood Use: U.S. Competitiveness and Technology

Table 21 .–Utilization of Waste Paper by Sector and Major Grade Category, 1980

Quantity of

waste paper Utilization

Industry/grade category Total production used in production ratea

——

Paper:

Newsprint . . . . . . . . . . . . . . . . . . . . 4,672 898 19.2

Tissue. . . . . . . . . . . . . . . . . . . . . . . . 4,375 1,698 38.8

Other grades . . . . . . . . . . . . . . . . . . 21,144 1,125 5.3

Subtotal . . . . . . . . . . . . . . . . . . . . 30,191 3,721 12.3

Paperboard:

Unbleached kraft . . . . . . . . . . . . . . 15,295 912 6.0

Semichemical . . . . . . . . . . . . . . . . . 4,724 1,206 25.5

Recycled . . . . . . . . . . . . . . . . . . . . . 7,071 7,710 109.0

Bleached . . . . . . . . . . . . . . . . . . . . . 3,862 2 0

Subtotal . . . . . . . . . . . . . . . . . . . . 30,952 9,830 31.8

Construction . . . . . . . . . . . . . . . . . . . . 2,558 1,543 60.3

Grand total . . . . . . . . . . . . . . . . . 63,701 15,094 23.7

aRati~ 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 collection

and transportation that limit recycling primarily to metropolitan areas. Recycling reduces the

energy requirements of papermaking significantly. It also reduces municipal solid waste

disposal problems. 62 63

The efficiency of residential and commercial

fuelwood burners is another area where significant advances could be made. Approximately

one-third of the wood fuel burned in the United

States is for home heating.64 This is about equal

to the amount of wood that ends up in paper

and paperboard products each year when

wood fuel consumption by the forest products

industry is subtracted. Firms outside the forest

products industry that use fuelwood commercially now constitute a small but very rapidly

62W, E, Franklin, Paper Recjrcling: The Impacts of Contaminants. 1973-1985, Summar~r and Otrer\’ie}\’ (Kansas Cityt

Mo.: Nlidwest Research Institute, 1975).

63P. Sizifert, R. Se(; tor, and P, C rirea, ‘‘Waste Paper Pulpi n.g With 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, Government Printing Office), p. 74,

growing group. The potential for residential/commercial fuelwood demands to conflict

with forest industry demands for roundwood

may be lessened by more efficient woodstoves,

boilers, and furnances.

The number of efficient small capacity burners—stoves in particular—are growing steadily. Many improvements, such as more air-tight

designs, have increased burning efficiency by

an estimated l.5 percent annually. 65 Technologies capable of even more efficient wood combustion also may reduce air pollution emissions. One example is wood burning stoves

with catalytic converters. As the demand for

wood burning devices spreads, further improvements in efficiency, wood handling, and

fuel 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 Management Sciences, June 30, 1981).
CHAPTER VI

The Forest Resource Base
Page

Summary. . . . . . . . . ✎ ✎ ✎ ✎ ✎ ✎✎ ✎ ✎ ✎ ✎ ✎ ✎ ✎ ✎ ✎ ✎ 143

Characteristics and Productivity of U.S.

Forests . . . . . . . . . . . . . . . . . . . . . . 146

Extent of Domestic Forests . . . . . . . . . . . . . . 148

Variation in Productivity of Forestland ... , 150

Decline in Commercial Acreage . . . . . . . . . . 151

Out-of-Date Forest Surveys. . . . . . . . . . . . . . . 152

Soil Conservation Service Estimates of

Non-Federal Forestland . . . . . . . . . . . . . . . . 153

Anticipated Further Declines in Forest

Acreage . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 154

Availability of Commercial Forestland for

Intensive Management . . . . . . . . . . . . . . . . 155

Growing Stock Volumes . . . . . . . . . . . . . . . . . 156

Resource Implications of Increased Wood

Fuel Demand... . . . . . . . . . . . . . . . . . . . . . . 158

Nontimber Values of Forestland . . . . . . . . . . 159

Ownership and Management of

Forestland . . . . . . . . . . ... . . . . . . . 163

Publicly Owned Forestland . . . . . . . . . . . . . . 164

Forest Industry Lands. . . . . . . . . . . . . . . . . . . 169

Private Nonindustrial Forest Lands . . . . . . . 172

Factors Affecting Implementation of Intensive

Timber Management . . . . . . . . . . . . . . . . . 176

Markets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 180

Stumpage Prices and Market Structure . . . . 180

Information . . . . . . . . . . . . . . . . . . . . . . . . . . . . 181

Length of Ownership . . . . . . . . . . . . . . . . . . . 181

Tract Size .... . . . . . . . . . . . . . . . . . . . . . . 181

Financial Considerations . . . . . . . . . . . . . . . . 182

Federal and State Programs for Private

Forestland Management . . . . . . . . . . . . . . . 183

List of Tables

Table No. Page

22. Countries With Largest Forested

Areas ...*.*. .00.0... . . . . . . . . ..***.* 147

23. Area of Commercial Timberland in the

United States, by Owner Class and

Region, 1977... . . . . . . . . . . . . . . . . . . . . . 149

24. Area of Commercial Forestland in Site

Classes Capable of Producing 85 Cubic

Feet of Wood per Acre or More, by

Ownership, in 1977. . . . . . . . . . . . . . . . . . 151

25. Area of Commercial Timberland in the

United States, by Owner Class and

Section, 1952,1962, 1970, 1977, and

Projections to 2030 . . . . . . . . . . . . . . . . . . 151

26. Screening of Land-Related Management

Constraints on Private Nonindustrial

Forestland in the Southeast . . . . . . . . . . . 155

Table No.

27. Classification of Renewable and

Nonrenewable Resources . . . . . . . . . . .

28. Multiresource Interactions in the

Southeast Resulting From Meeting

Projected Timber and Range Grazing

Demands . . . . . . . . . . . . . . . . . . . . . . . . .

29. Roundwood Supplies and Acreage by

Ownership Class . . . . . . . . . . . . . . . . . .

30. Regional Distribution of Productive

Reserved National Forest Lands in

Wilderness and Their Average

Productive Potential, 1981 . . . . . . . . . .

31. Forest Industry Holdings, 1952-77 . . .

Page

. . 161

. . 163

. . 165

. . 169

. . 170

32. Area of U.S. Commercial Timberland in

Private Nonindustrial Forest Ownership

by Region . . . . . . . . . . . . . . . . . . . . . . . . . . 172

33. Change in Farm and ’’Miscellaneous

Other’’ Ownership: 1952-77 . . . . . . . . . . . 172

34. Average Net Annual and Potential

Growth per Acre in the United States, by

Ownership and Section, 1976 . . . . . . . . . 176

35. Area Planted and Direct-Seeded in the

36,

37.

United States, bisection and

Ownership, 1950-78. . . . . . . . . . . . . . . . . . 179

Costs per Acre of Achieving

Management Opportunities Identified

by the Forest Service and the Forest

Industry Council . . . . . . . . . . . . . . . . . . . . 180

Selected State Activities Related to

Private Forest Management, 1981. . . . . . 187

List of Figures

Figure No. Page

21. Commercial Timberland Area by Type,

1977 . . . . . . . . . . . . . . . . . . ...... 147

22. Major Uses of Land in the United

States, 1978..... . . . . . . . . . . . . . . . . . . . . 149

23. Commercial Timberland Area by

Productivity Class and Region, 1977 . . . 150

24. Timber Inventories by Region, 1976. . . . 157

25. Biomass on Commercial Forestland . . . . 158

26. Ownership of U.S. Commercial

Forestland, 1977 ... ..... . . . . . 164

27. Roundwood Supplies by Ownership

Class; With Base Level Projectionsto

2030 165

28. Timber Self-Sufficiency of Major Timber

Processing Firms . . . . . . . . . . . . . . . . . . . . 170

29. Acres of Private Forest Landownership

Units by Size Class and Region, 1978 . . 174

30. Current and Potential Net Annual

Growth 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 to

meet expected domestic demand for wood

products. U.S. forests also could supply expanded international wood markets or unexpected increases in domestic demand if existing technologies for growing, harvesting, and

processing wood are widely applied. If demand

increases without corresponding adoption of

such technologies, however, land resource constraints could arise. These potential constraints

include the declining size of the forestland

base, private nonindustrial forest ownership

patterns, and other uses for forestland that may

conflict with industrial wood production.

The U.S. forestland base is declining in size

and further reduction is anticipated in the

next 50 years, but how much it will decline

is uncertain. The Forest Service estimates that

27 million acres of commercial forestland were

lost between 1962 and 1977. This drop from

509 million acres to 482 million acres represents a 5-percent reduction over the period.

A primary reason for the decline was the conversion of private forestland to agriculture and

development. Also, some commercial acreage

on Federal land was reclassified as wilderness

and is no longer available for timber production. The decline was visible in all regions, but

was largest in the south, which lost 12 million

acres, By 2030, the Forest Service projects that

commercial forests will decline further to 446

million acres, chiefly because the conversion

of private nonindustrial land to other uses may

continue.

The exact magnitude of the national trend

towards a decline in commercial forestland is

not certain, because up-to-date field surveys

were not available in most States when the

Forest Service acreage estimate was made in

1977. While individual State forest surveys are

highly reliable, they are only conducted every

12 years on the average. As a result, when the

1977 estimate was compiled, forest surveys in

22 States predated l970. The Forest Service adjusted some of these surveys, but not on the basis of field data; other pre-l970 surveys were

used without adjustment. Consequently, the

1977 composite figure may not fully reflect the

diversion of forestland to agriculture and urban uses that took place during the 1970’s and

may not reflect some shifts back to forestland.

Some post-l977 State surveys published by the

Forest Service show far higher rates of decline

in commercial forestland acreage than listed

in 1977, while others show moderate increases.

Divergent estimates of non-Federal forestland by the Forest service and the soil Conservation Service (SCS) need to be clarified

or resolved if Congress is to receive consistent information in congressionally mandated

assessments of land resources. The Forest

Service and SCS, both Department of Agriculture (USDA) agencies, collect data on forestland, but SCS efforts are limited to non-Federal

lands and do not differentiate between commercial and noncommercial forests. For 1977,

the SCS survey showed 74 million acres less

non-Federal forestland than the Forest Service

estimate and a more rapid rate of decline. The

Forest Service figure was reported to Congress

in the 1980 assessment required by the Forest

and Rangeland Renewable Resources Planning

Act (RPA) of 1974, while an assessment for the

parallel Soil and Water Resources Conservation Act (RCA) of 1978 used the SCS figure.

Much of the discrepancy arises from different classifications of forest-range ecosystems that are not of importance to industrial

timber supplies, The remainder of the discrepancy is due in part to different procedures,

methodologies, and judgments about classification of currently forested land that is in or near

built-up areas. In addition, all of the SCS data

was collected in the 1975-77 period and may

143
144 ● Wood Use: U.S. Competitiveness and Technology

reflect some land use changes not captured by

the Forest Service estimates.

The Forest Service and SCS currently are in

the process of developing a common non-Federal acreage figure for use in future assessments of renewable resources. Preliminary activities include identifying areas of disagreement between the two agencies on a State-byState basis. As this report went to press, the

agencies’ were still developing revised acreage

estimates at the national level.

The net effect of an acreage overcount, if it

exists, is uncertain. On the one hand, an overcount of forest area could cause an upward

bias in estimates of current and projected

growing stock volumes. On the other hand,

Forest Service estimates about growth rates

and management intensity are conservative

and consequently may bias the estimates downward (see ch. IV for a discussion of projection

methods).

More up-to-date information about forestland acreage and ownership is needed in Forest Service data used for the periodic assessment and program required by RPA. The long

interval between State surveys is a major cause

of uncertainty about national forestland data,

The interval is probably too long to meet the

periodic reporting requirements of RPA, and

it may explain some of the discrepancy between Forest Service land data and that of the

SCS. Recent cooperative initiatives by the

Forest Service, other Federal agencies, and

State agencies, such as “midcourse” survey updates in key timber-producing States, may help

to improve the timeliness of information. More

detailed data about forest land ownership, especially in the southern United States, could

also improve the information available to

decisionmakers.

Rapidly increasing residential use of wood

for fuel is a major new influence on the U.S.

wood situation, but it is so recent that its

precise effects are hard to determine. Home

fuelwood use may have both positive and negative ramifications for forest resource management. For example, fuelwood harvesting could

complement timber management by removing

“weed” trees, If poorly done, however, fuelwood harvesting could conflict with timber

management by removing trees that are more

valuable for industrial uses. If wood demand

continues to grow and prices rise significantly, competition in the roundwood market could

intensify between industry and homeowners.

The magnitude of these effects is difficult to

analyze. Recent Forest Service and Department

of Energy estimates of residential fuelwood use

for 1981 are seven to eight times greater than

those the Forest Service issued for 1976. Preliminary Forest Service figures indicate that

about 27 percent of the residential fuelwood

cut by landowners comes from trees that potentially contain sawlogs and pulpwood. It is not

known what proportion of purchased fuelwood

comes from industrial growing stock.

Predictive capabilities about tradeoffs between timber production, environmental values, and other forest uses need to be improved. Timber production both affects and is

affected by rising demand for many other economic, social, and environmental uses and values that forestland provides. Both public and

private forests are critically important for

recreation, wildlife habitat, watershed management, soil conservation, environmental quality, landscape esthetics, and other purposes,

While timber production often is compatible

with all of these purposes, and while land

management strategies can be designed to

achieve multiresource objectives, tradeoffs

among resource values are inevitable.

Water pollution and soil erosion can result

when timber management and harvesting are

conducted without adequate attention to proper safeguards. Increased levels of timber harvesting also could intensify conflicts with other

land uses such as agriculture, recreation, wilderness, and wildlife.

The diversity of conditions on U.S. forests

complicates the analysis of such effects beyond

specific sites, but the capacity to trace and

predict multiresource interactions at the State

or regional level is improving as more information becomes available. Current efforts by

the Forest Service and others to develop
———— . —— - — — ———

Ch. V/—The Forest Resource Base • 145 —— ——— —

models of these interactions could improve

understanding of resource tradeoffs involved

in increasing timber production on both public

and private lands.

Forest industry lands have high potential

for increasing national timber supplies. The

recent trend on industry lands has been away

from “extensive” rudimentary forest practices

and toward more intensive management,

which probably will bring higher productivity in the future. Despite this trend, however,

some industry forests are not managed intensively.

The forest industry is in a favorable position

to increase yields on its lands for several

reasons. First, industry lands on the average

are naturally more productive than land in

other ownerships, and tracts are large and tend

to be located close to mills. Second, the large

forest products firms, which own most of the

industry land, ordinarily have access to capital

for major management investments. Third, timber production is the primary ownership objective of these firms. Although the size of the

industrial land base is no longer increasing at

the rate it once did, intensive timber management could enlarge the forest industry’s contribution to U.S. timber supplies significantly.

There is an opportunity for nonwood-based

corporations to play a more important role

in private forestland timber production. Several financial firms recently have offered investment opportunities in private nonindustrial

forestland. The impact of such investments on

forest management and ownership is still unknown, but significant capital may become

available for intensive timber management if

these investment programs continue to grow.

In addition, USDA landownership data suggests that nonwood-based corporations have

major forestland holdings. These properties

may enjoy some of the same advantages as forest industry lands in terms of their potential

for increased production. More information

about nonwood-based corporate holdings

would be desirable to assess their possible contribution to U.S. wood supplies.

Private nonindustrial forest (PNIF) lands

contribute nearly haIf of the industrial wood

used in the United States, and their increased

contribution can be expected as new local

markets develop. Opportunities for more intensive timber management on PNIF lands

exist but are complicated in some cases by

ownership patterns and financial considerations.

The forest products industry obtains 47 percent of its roundwood from PNIF lands, which

account for 58 percent of the U.S. commercial

forestland base. In the South, about 60 percent

of the region’s wood comes from PNIF lands.

Net annual growth on PNIF lands has been

increasing more rapidly than on other ownerships, and this growth rate could double PNIF

output by 2030 if current trends continue. On

the whole, therefore, PNIF lands can be expected to enlarge their contribution to domestic

timber supplies without substantial increases

in timber management activities. Far higher

supply levels could be achieved through intensive management, but there are impediments

to making such investments.

Lack of certainty about future markets, particularly in the North where hardwoods predominate, may discourage small landowners

from investing in timber management activities

that may not provide returns for decades, Also,

many PNIF owners are unwilling to assume

risks such as fire, weather damage, insects, disease or other catastrophes when safer, shorter

term nontimber investments are available.

Changes in land use and ownership also may

affect long-term management investments on

PNIF lands, The total acreage of these lands

is declining, especially in the South, due to

competition from other uses, and further decline is expected in the future. Since PNIF

lands change hands rapidly, only a small proportion is likely to be under single ownership

for the length of time needed to grow a tree

crop. Some PNIF lands are in parcels too small

for economical management. Parcellation may

be increasing in some locales, but regional and

national data is fragmentary and inconclusive,
146 ● Wood Use: U.S. Competitiveness and Technology

— —.— —

Nonfarmers have replaced farmers as the dominant owners of private nonindustrial forests.

These new owners have less predictable ownership objectives, but in some cases they may

have investment capital available for timber

management.

Impediments to PNIF management may not

be as great as many observers traditionally

have believed. In general, higher timber output can be expected even if management levels

remain the same, Still, some PNIF holdings offer appreciable opportunities for more intensive management. The cost effectiveness of

limited public funds available for PNIF management incentives could be improved if directed towards those lands with the highest

management potential. The forest products industry, through landowner assistance programs and long-term leasing agreements, may

be even more important than government in

putting management capital into PNIF lands,

While existing law provides some flexibility

for temporary increases in timber harvest on

Federal lands, statutory changes could be required if more acreage is to be allocated to

timber production. Over the long run, however, more intensive timber management of

lands already open to timber production

could increase national wood supplies significantly. Harvest levels on national forests are

set by a “nondeclining even flow” policy intended to ensure sustained yields in perpetuity, although temporary departures from this

policy are legal under certain circumstances.

For instance, a 1979 Presidential directive

called for accelerated updating of land management plans for some national forests to increase the harvest of mature timber. Because

of the simultaneous nontimber uses mandated

by Federal law, however, major statutor y

changes could be required to open more Federal forestland to timber production than is currently allowed. Some Federal forestland, such

as tracts being studied for possible wilderness

designation, is in an indeterminate status regarding its potential availability for timber production. Nevertheless, more intensive management on lands now allocated to timber harvest

could increase production, provided political

and budgetary constraints are eased,

Characteristics and Productivity of U.S. Forests

The United States ranks third among the nations of the world in exploitable forest-acreage

and growing stock (table 22). * U.S. forests are

highly productive, providing more industrial

wood than any other country, including the

Soviet Union, which has 31⁄2 times more growing stock than the United States.

The suitability of U.S. forestland for timber

is enhanced by favorable climatic conditions,

especially in the Southern States, which result

in greater annual growth and faster timber regeneration than in Canada or the U.S.S.R.

Mature timber can be grown in 30 to 40 years

in the South, for instance, while production of

*No standardized international definitions are used by countries to identify exploitable forest areas. Some countries use more

conservative criteria than others. Canada recently reduced its

estimate of its exploitable forestland area significantly.

similar tree crops in parts of Canada or the

U.S.S.R. may take two to three times longer.

There are well-developed transportation and

manufacturing systems in the most heavily

forested regions of the United States. In contrast, countries like Brazil and the U.S.S.R,

Would require significant investments in

transportation before exploitation of remote interior forests even could begin, The majority

of American processing facilities are located

in the two most important timber areas—the

Pacific Northwest and the South—which are

accessible to the major markets of Japan and

Western Europe, The United States also has a

large number of different forest ecosystems

that provide a wide variety of commercially important softwood and hardwood species (fig.

21).
. . . .

Ch. VI—The Forest Resource Base • 147

Table 22.—Countries With Largest Forested Areas

Industrial

Exploitable Growing stock harvest

forest area (million meters3 over bark)c

(billion ft3)

(million ha) ab Tota l Coniferous Broadleaved 1977

U.S.S.R. . . . . . . . . . . . . . . . . . . 389 74,710 62,000 12,710 10.0

Brazil . . . . . . . . . . . . . . . . . . . . 305 47,088 98 46,990 1,5

United States . . . . . . . . . . . . . 195 20,132 12,906 7,226 11.5

Canada . . . . . . . . . . . . . . . . . . 191 19,645 15,571 4,074 5.1

aEXPl~ltabl~ fOre~t d~fl”ltl~”s differ by country %rne countries such as Canada have restrictive definitionsthat result in

conservative estimateS of exploitable forestland. Vo[ume estimates for the U.S S R. Include growing stock on some 110 mllllon

acres considered to be unproductive forestland

%0 convert hectares to acres, multlply by 2471

C 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 Agro

cultural Organization, Los %corsos Fores ta/es de la American Tropical (Rome, 1981), United Nations Econom rc

Commission for Europe, European Timber Trends and Prospects, 1950 to 2030 (Geneva, 1976), U S Department

of 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, hickory I

o 20 40 60 80 100 120

Million acres

west

Western hardwoods

I 1 I

o 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
148 ● Wood Use: U.S. Competitiveness and Technology

Reversing a historical trend toward apparent

depletion, U.S. timber inventories have been

increasing since at least 1952. Growth patterns

are uneven, however, with irregular patterns

in land clearing, tree planting, and harvesting

causing waves or bulges in the distribution of

tree sizes and species. Most increases in timber

inventories have been in hardwood species, but

most increases in timber demand in the past

20 years have been for softwoods. Although

preferred species generally are in shorter supply than less valuable trees, and regional trends

differ, higher levels of timber harvesting are

biologically sustainable on U.S. forestlands.

Trees that are already growing will be the

predominant source of industrial wood for the

next 30 to 50 years. This is because of the long

length of time required for tree crops to mature.

However, if intensive timber management systems (applications of planned treatments to forestland aimed at increased production of industrial roundwood) are widely adopted, more

timber could be available for harvest in the long

term. In theory, “economic opportunities” for

management intensification are promising. In

particular, studies by the Forest Service and

the Forest Industries Council have identified

substantial opportunities for management investment in 25 States. i These investments

would be expensive to make ($10 billion to

$15 billion over 30 to 50 years, the course of

a single rotation) but would boost growth tremendously.

Extent of Domestic Forests

Before the colonization of America, forests

covered about half of the 2.3 billion acres

that span the United States. Until 1800, removals of the original forest cover were relatively

minor, but the westward expansion of the 19th

century brought the clearing of nearly 300 million acres for farming, settlements, and other

uses. z Timber generally was considered a nuiI Forest Industries Council, Forest Productivity Report

(Washington, D. C,: National Forest Products Association, 1980);

and U.S. Department of Agriculture, Forest Service, An Analysis

of 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 American

History,” Science, June 15, 1979, pp. 1168-1174.

sance and cleared land was often worth more

than land supporting large timber stands. Regional cycles or waves in the amount of forest

acreage have been significant; in some areas,

in the past 200 years, forestlands more than

once have been cut, used for agriculture, and

again allowed to revert to woods.

The rate of decline of U.S. forestland leveled

off around 1920, although slight declines continued through 1940. From 1940 to the early

1960’s, acreage then increased slightly, because

of farm abandonment and reversions of fields

to forests in the Southeast, Northeast, and the

upper Great Lakes States. During the late

1950’s and early 1960’s, the Federal soil bank

program (now suspended) stimulated forestland expansion by encouraging farmers to

plant trees on cropland. Since 1962, forestland

area again has declined somewhat—chiefly because of expanded agricultural and developmental uses.

Today, only about one-third of the United

States is forested (fig. 22), with the acreage

divided about equally between the East and the

West. This area—736 million acres in 1977—includes some land that is sparsely stocked with

trees or otherwise unsuited for industrial

timber production.

About two-thirds or 482 million acres of the

total forestland area is classified by the Forest

Service as “commercial.” The commercial classification includes all forestland that is capable

of growing 20 cubic feet (ft3

) of industrial wood

per acre annually in natural stands and which

has not been withdrawn from timber harvesting by statute or administrative action. Noncommercial forestland may produce fuelwood

and some timber, but is generally not important for industrial forestry.

The commercial forest designation does not

imply that all or even most of this land currently is used to supply timber markets. Only about

14 percent of the commercial base is owned

by the forest products industry, the single

group for which timber production is unequivocally the primary ownership objective (table

23). Twenty-eight percent is publicly owned

and generally is managed for multiple uses including recreation, wildlife habitat enhance-
Ch. V/—The Forest Resource Base ● 149

Special us

7

G

O

2

Figure 22.— Major Uses of Land in the United

—

(Excludes areas used

for parks and other

special uses)

States, 1978a

Forest land

31 “/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 the

United States, by Owner Class and Region, 1977

Million Percent

Owner class and region acre s

a of total

National Forest . . . . . . . . . . . . . . . . . . . . . . . 86.7 18.4

Other public . . . . . . . . . . . . . . . . . . . . . . . . . 47.0 9.7

Forest industry . . . . . . . . . . . . . . . . . . . . . . . 68.7 14.3

Farm and miscellaneous private . . . . . . . . 278.0 — 57.6—

Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 482.4 100

North . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 166.1 34.4

South . . . . . . . . . . . . . . . . . . . . ., . . . . . . . . . 188.0 39.0

Rocky Mountains . . . . . . . . . . . . . . . . . . . . . 57.8 12.0

Pacific coastb . . . . . . . . . . . . . . . . . . . . . . . . 70.5 14.6

Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 482.4 100

aTO convert acres to hectares, multiply by O 4047

blncludes Alaska

SOURCE Adapted from Brian R. Wall, Trends in Cornrrrerica/ Timber/and Area

In 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 to

timber production. Fifty-eight percent of the

commercial base is PNIF held by over 7 million

owners with diverse objectives and management capabilities, Although most PNIF land is

not owned primarily for timber production,

nearly half of the industry’s wood supplies

come from this acreage.

Regionally, the South has the most commercial forestland and makes the greatest contribution to nationwide timber supplies (table 23).

The Pacific coast supplies the most softwood,

Although the North has about one-third of the

commercial acreage, the forest products industry is less developed there than in the South

or on the Pacific coast.
150 Ž Wood Use: U.S. Competitiveness and Technology

Variation in Productivity of Forestland

Nearly all forestland in the Eastern United

States (93 percent) meets the commercial standard for productivity. In other words, it is capable of producing the Forest Service’s designated minimum of 20 ft3

/acre/year in natural

stands. In the Rocky Mountain and Pacific

coast regions respectively, only 42 and 33 percent of the forestland area is considered commercial. The lower proportion of Western commercial acreage arises mostly from the pervasiveness of low productivity forests, such as

pinyon-juniper in the Southwest and mixed

conifers in interior Alaska. Administrative

restrictions on timber management on Federal

land also play a role.

Natural productivity also varies greatly within the commercial timberland classification

(fig. 23). About 28 percent of the commercial

forestland is capable of growing 20 to 50 ft3

/

acre annually. This low-quality acreage may

provide timber and fuelwood, but ordinarily it

is not well suited for intensive timber production. Another 40 percent is in an intermediate

range of productivity at 50 to 85 ft3

/acre/year.

The remaining 30 percent of commercial forest is “prime timberland” capable of producing 85 ft3 or more of industrial wood per acre

per year in natural stands. All else being equal,

management investments on such lands will

be more cost effective than investments on less

productive lands. In 1970, nearly 48 percent

of the productive capacity of all commercial

forests was on the 34 percent of the commercial forest base that was considered prime

timberlands

Even within the prime category, there is a

wide range in productivity. Some forestland in

3U .S. Department of Agriculture, Forest Service, USDA Prime

Forestlands Program, Mimeograph, May 23, 1977, p, 3.

Figure 23.–Commercial Timberland Area by Productivity Class and Region, 1977

20-50 50-85 85-120

Productivity class (cubic feet/per acre/per year)

120 or more

Pacific Rocky

coast 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 of

producing 225 ft3 of wood per acre per year.

Thus, the productive capacity of such lands

without intensive management is 10 times

greater than the productivity of marginal commercial forestland, and nearly three times

greater than land on the threshold of qualification as “prime timberland. ”

The distribution of prime forestland also varies among ownership classes (table 24), As a

general rule, forest industry lands include proportionately more land in the better site classes

than public or private nonindustrial forestland,

This is especially true in the West, where twothirds of the forest industry’s holdings are

prime lands and nearly half of them are capable

of producing over 120 ft3

/acre/year.

Table 24.— Area of Commercial Forestland in

Site Classes Capable of Producing 85 Cubic Feet of

Wood per Acre or More, by Ownership, in 1977

As a proportion

of acres i n

Million ownership category

acresa

(percent

National Forests . . . . . . . . . . 27.0 30.4

Other public . . . . . . . . . . . 11,5 24.5

Forest industry . . . . . . . . . . 30,3 44.0

Farm, miscellaneous . . . . . . 77.4 27,8

All 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 (Washington, D C 1982), pp 350-359

Decline in Commercial Acreage

The Forest Service estimates that commercial forestland declined by about 5 percent between 1962 and 1977—from 509 million acres

to 482 million acres. Most of this decline resulted from diversion to other uses, such as

agriculture, urbanization, and wilderness;

some is attributed to reclassification of land.

The decline in acreage represents a reversal of

an earlier trend toward a slight increase in forestland that occurred between 1920 and 1952.

Although pressures on forests are expected to

continue, less rapid declines in forest acreage

for the coming decades are projected by the

Forest Service and other resource analysts

(table 25).4

Most of the 1962-77 nationwide decline was

in private forests owned by farmers or other

nonindustrial parties. Some of this private land

was purchased by the forest products industry,

whose holdings increased by about 7 million

acres during the period, making the net decline

in private holdings about 19 million acres. Na4B ria n R. Wall, Trends in Commercia 1 Tim berlan d Areas in

the United States b~, State and Chvnership, 19,52-1977, With Projections to 2030, Genera] Technical Report WO-31 (Washington,

D. C.: U.S. Government Printing Office, April 1981), p. 7, For

discussion of agricultural competition for forestland, see Thomas

N. Schenartz, “I)ynamics of Agricultural Land Use Change, ”

Agricultural Land A\ailabilitj: Papers on the Suppl~ and llemand 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 78.8

Other public. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49.0 46.8 46.9 47.0 46.6 46.5 46.4 46.4 46.4

Forest industry . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 59.5 61.6 67.0 68.7 70.9 72.2 72.7 73.0 73.1

Farm and miscellaneous private . . . . . . . . . . . . . . 296.1 304.1 287.8 278.0 268.8 261.8 256.1 251.5 247.9

Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. 499.3 509.4 496,4 482.4 467.6 460.9 455.0 450.1 446.2

North . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 168.8 170.9 168.6 166.1 164.2 162.5 160.9 159.1 158.5

South . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 192.1 199.9 192.5 188.0 182.5 179.7 177.2 175.2 172.9

Rocky Mountains . . . . . . . . . . . . . . . . . . . . . . . . . . . 63.9 64.4 62.1 57.8 56.2 55.2 54,1 53.6 53.0

Pacific 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 1

blncludes 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
152 ● Wood Use: U.S. Competitiveness and Technology

—

tional forest acreage also declined by 8.2 million acres as a consequence of wilderness designations and other administrative actions that

preclude timber harvesting. Most of the Forest

Service land that shifted to noncommercial

purposes was in the low productivity range (between 20 and 50 ft3

/acre) and was thus of marginal value for timber production.

The greatest regional decline in commercial

forestland was in the South, the Nation’s fastest

growing region between 1970 and 1980,5 Here,

about 12 million acres were diverted to other

uses between 1962 and 1977 according to the

Forest Service. In particular, the South’s

“prime timberland” declined very rapidly—a

matter of special concern because of the

region’s importance to national timber supplies. Between 1970 and 1977, the decline was

about 6 million acres—a 10-percent reduction

in the region’s prime acreage in 7 years, Loss

of prime timberland apparently exceeded the

region’s total timberland loss for the period,

which was 4.7 million acres, because some

poorer quality land reverted to forest during

the same timeframe.

Shifts between agriculture and forestry probably will continue to be the major factor influencing forestland acreage, although the extent

is unclear. Rapid changes in agricultural land

requirements have made it extraordinarily difficult to project long-term interactions between

forestland and cropland. Projections made in

the 1960’s and early 1970’s, when grain surpluses were common, assumed that cropland

needs would decline due to improved yields

per acre. During the 1970’s, however, expanded world demand for U.S. food, together

with the lifting of farmland set-aside programs

by the Federal Government, led to a very rapid

expansion of cropland. Projections by the U.S.

National Agricultural Land Study (NALS)

made in 1979-80 assumed that cropland requirements would expand rapidly and would

accelerate conversion of forestland to agricul5

For discussion of southern land use conflicts and their relationship to the forest products industry, see Robert G. Healy,

“Land in the South: Is There Enough to Satisfy Demands, ” Conservation Foundation Letter, September 1982; and Schenartz,

“Dynamics of Land Use Change, ” op. cit.

tural use. Specifically, NALS concluded that

most of the 31 million acres of forestland that

have a high or medium potential for crop production could be cleared and converted to crop

use by 2000, G Most of this converted land

presumably would be commercial forestland,

and two-thirds of it would be located in the

South, Some agricultural land reverts to forest

each year, but generally is not stocked with

commercially important species.

Since the NALS study was published in early 1981, the agricultural situation has again

changed dramatically. In the 1980-82 period,

enormous grain supplies similar to those of the

1960’s developed once more, and the Reagan

administration instituted a payment-in-kind

(PIK) cropland set-aside program for eligible

farmers. In 1983, under the PIK program, agriculture activities on 82 million acres of cropland will be restricted to eligible conservation

uses during the growing season.

Urban and other developmental uses such as

water reservoirs also will affect the forestland

base. For the first time in memory, populations

in rural areas grew at a faster rate than in metropolitan areas between 1970 and 1980, chiefly as a result of in-migration of people to nonmetropolitan counties. This shift occurred in

all regions of the country, including high wood

production areas.

Out-of-Date Forest Surveys

Forest Service acreage estimates are based

on periodic State forest surveys, which, at the

time they are taken, are the most reliable and

consistent sources of information available,

However, because they are conducted in individual States only on an average of every 12

years, many surveys are out-of-date by the time

they are used to assess nationwide trends; this

was the case in 1952, 1962, 1970, and 1977.

The 1977 national estimate of commercial

forestland, used for the 1980 assessment required under RPA and for subsequent analyses

“U.S. National Agricultural 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, exemplified this timing problem. In 1977, the most recent forest survey had been conducted prior

to 1970 in 22 States. The Forest Service reported some of these estimates without change

in compiling its 1977 data; in other instances,

revisions were made, but these were riot based

on field data and consequently carry a higher

likelihood of error, Forest surveys completed

after 1977 show important differences with the

acreage figures issued in 1977.

Budgetary and political constraints underlie

the Forest Service’s difficulty in increasing the

frequency of forest surveys. Congress, through

the Forest and Rangeland Renewable Resources Research Act of 1978 (Public Law

95-307), recognized that adequate information

was a key component of RPA planning. While

Congress initially provided expanded funding

for surveys, current budget cuts may slow the

survey schedule again. To overcome some of

the scheduling problems, in some States, the

Forest Service and State agencies have cooperated in producing “midcycle updates. ” Another option would be to give greater survey

priority to the most important timber producing States and to those where rapid changes

in inventories and acreage are expected.

Soil Conservation Service Estimates

of Non-Federal Forestland

In addition to the Forest Service, SCS also

compiles data on non-Federal forest area. SCS

does not distinguish between commercial and

noncommercial forestland, in contrast to the

Forest Service. SCS’s estimate of non-Federal

forest area in 1977 was 74 million acres

less than the Forest Service’s estimate for the

same year. Both figures were reported to Congress by USDA in 1980. The higher Forest Service estimate was part of the 1980 assessment

required by RPA, while the lower SCS figure

was reported in the 1980 assessment for the

parallel Soil and Water Conservation Act.

The two USDA agencies are working to resolve this discrepancy and have agreed to use

common forestland acreage figures in future

assessments. Nevertheless, the situation

Ch. VI— The Forest Resource Base ● 153

demonstrates some of the difficulties in providing decisionmakers with accurate national

level data on natural resources,

According to the Forest Service, non-Federal

forestland amounted to 451 million acres, including noncommercial forestland, in 1977.

According to SCS, which does not distinguish

between commercial and noncommercial forestland, only 377 million acres were nonFederal forestland in 1977. 7

Nearly half the difference is attributable to

the fact that SCS classifies some transitional

forest-range ecosystems as rangeland, while the

same land is called forest by the Forest Service.

As much as 35 million acres of transitional land

may be involved, according to a report prepared for the U.S. National Agricultural Lands

Study in 1980. 8 Most of this land would not be

considered commercial forestland by the Forest Service’s definition.

Additional differences are attributable to the

fact that SCS includes more forestland in its

“urban or built up” classification than does the

Forest Service, and some land may be classified

as native pasture by SCS but forestland by the

Forest Service. The timing problems associated

with uniform reporting of Forest Service data

at a given date may partially explain some of

the difference. The 1967-77 period witnessed

major land use changes in agriculture and

development that could be expected to affect

forestland, and Forest Service estimates may

not fully reflect these. The 1977 SCS inventory

data, on the other hand, was compiled in a

2-year period and estimates were based solely

on field data, Several technical difficulties have

been identified with the SCS field data, how7U

. S. flepa rt ment o f Ag ric u] tu re, E’o rest Ser\ ic e, ,411 Assessment 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 and

Water 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, “Federal

Data on Agricultural Land Use, ” Agricultural bind A\ail;ibility: Papers in the SupplJ and Demand for Agricultural Lands in

the United States, prepared for the L1. S, National Agricultural

I,ands Study and printed for use of [J, S. Senate Committee on

Agriculture, Nutrition, and Forestry, [Washington, D. C.: U.S.

Government Printing Office, July 1981), table 1, p. 246.
154 • Wood Use: U.S. Competitiveness and Technology

ever, which may have resulted in overstatement of the magnitude of shifts in land use during the 1970’s.

As this report was going to press, the two

agencies appeared close to reconciling key differences associated with their 1977 estimates. *

Anticipated Further Declines in Forest Acreage

To estimate long-term timber supplies, assumptions must be made about the amount of

forestland that will be available in the future.

Predicting future land use trends is still little

more than guesswork. The magnitude of recent

trends affecting forestland, such as increased

diversion of forestland to agriculture and developmental uses, was not anticipated by analysts in the 1960’s. Current analysis is equally

subject to uncertainty.

There is little surety that the dramatic land

use changes that occurred in the 1970’s will be

repeated. The 1981-82 recession, which

brought slumps in housing demand and slackened growth in world markets for U.S. food,

presumably has reduced conversion pressures

on forestland. If agricultural surpluses keep

mounting, forestland acreage could begin to increase as agricultural land is retired from production. Such land, if allowed to naturally revert to forest, probably would be poorly stocked

with commercial tree species. However, if government programs such as the soil bank of the

late 1950’s and early 1960’s were reinstituted,

planting of commercial species on land that is

now cropped could result.

Based on trends through 1977, it is reasonable to assume that forestland will continue to

be diverted to other uses. The Forest Service

projections used in modeling long-term timber

supplies show commercial forestland declining at a net average rate of about 700,000 acres

annually over the next 50 years. This projected

36 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 moved

rapidly to resolve their differences. Agreed upon statistics for

State by State and national non-Federal forestland acreage were

expected to be released shortly as the report went to press.

commercial forestland base by about 7.5 percent from what it was estimated to be in 1977.9

The Forest Service anticipates that most of

the decline would result from conversion of

private nonindustrial lands to other uses. Commercial land on national forests would decline

slightly due to wilderness designations, while

commercial industry lands would increase

somewhat. All regions of the country would experience a decline in commercial forest, but

the most significant decline would be in the

South (table 25).

The projected decline is less than half the rate

of decline measured by the Forest Service in

the 1962-77 period, but it is consistent with the

longer term trend seen in Forest Service statistics between 1952 and 1977. There are some

technical difficulties with this projection due

to the out-of-date information used in the 1977

baseline data. Recently completed State surveys in Arkansas and Michigan, for example,

show that 1977 RPA forestland acreage projections in those States were overstated. The 1978

survey in Arkansas showed that commercial

forest acreage in the State had already declined

to the level that had been projected for 2010.10

Arkansas’ 1977 projection was based on the

State’s 1969 survey, but Arkansas forestland

was greatly affected by expanded soybean production in the mid-1970’s, a change apparently not incorporated into 1977 projections. The

preliminary 1980 Michigan forest survey data

shows present commercial acreage to be about

what was projected for the period from 2010

to 2020. 11

Close monitoring of forestland acreage is

needed in the coming years. A revived economy coupled with potential renewed growth in

agricultural exports could produce a more

rapid decline in commercial forest acreage

9Wall, Trends in Commercial Timberland Areas in the United

States, 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, Arkansas

Forests: Trends and Prospects, Forest Service Resource Bulletin

SO-77 (Washington, D, C.: Government Printing Office, 1980).

Arkansas forests declined 9 percent between 1969 and 1978.

llclted in W, Brad Smith , “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 trend

extended through the year 2000, commercial

acreage would decline by 41.4 million acres

rather than by the projected 21.5 million acres.

Availability of Commercial Forestland

for Intensive Management

Merchantable trees eventually may be harvested from most commercial forestland. As

a practical matter, however, only part of the

forestland base is worth special management

treatment. Since some lands are better suited

for such investment than others, the issue has

arisen on how to direct limited public incentives and private investment capital to acreage

offering the most cost-effective intensive management opportunities.

Factors affecting a tract’s suitability for intensive management include:

●

●

●

●

●

●

management profitability;

parcel or stand size;

market proximity;

landownership objectives;

accessibility; and

site specific variables such as natural productivity and slope.

To demonstrate the information systems

needed to portray the interaction among these

factors, OTA asked the Forest Service’s Southeast Forest and Range Experiment Station to

screen its data on private nonindustrial commercial forestland. The Southeastern Station

operates the Forest Information Retrieval System (FIR)—a sophisticated system that is able

to cross-reference inventory data for the five

Southeastern States on local, county, State, and

regional levels without double-counting acreage. Low productivity, lack of accessibility, and

other factors were assumed to limit the feasibility of tree planting and silvicultural activities. Although these factors are likely to impede intensive management activities, the specific criteria chosen (such as exclusion of tracts

of 10 acres or less) are somewhat arbitrary and

may not necessarily preclude economical management in all circumstances.

Of the 64 million acres of private nonindustrial lands in the region, only 34 million acres

were not affected by the selected managementconstraining factors. The 30 million acres of

affected lands currently contain 40 percent of

the region’s PNIF softwood growing stock and

50 percent of the hardwood growing stock.

This land can be expected to provide timber,

but silvicultural activities on the affected lands

would presumably be less cost effective than

investments on nonaffected lands (table 26].

The FIR analysis does not include ownership

objectives or financial 1 imitations on management and therefore is not a complete picture

Table 26.—Screening of Land-Related Management Constraints on

Private Nonindustrial Forestland in the Southeast

Maximum PNIF discount Residual

Commercial Growing-stock volume Commercial Growing-stock volume

forest (thousand cubic feet) forest (thousand cubic feet)

Step Description (acres) Softwood Hardwoo d (acres) Softwood Hardwood

1 Total area and volume — — — 87,999,537

2 Minus public and forest industry holdings — — — 64,089,209

3 Minus remaining stands on poor sites

(site 5) 10,523,496 3,289,981 3,666,237 53,565,713

4 Minus remaining stands 10 acres or less 14,673,950 8,557,411 7,429,750 40,936,396

5 Minus remaining stands that are

inaccessible 668,975 298,788 804,547 40,512,090

6 Minus remaining stands with difficult

operabiIity 6,857,375 2,383,606 7,663,517 36,434,599

7 Minus remaining stands in strips,

stringers, and strands 4,017,883 1,582,757 5,259,451 33,787,967

8 Minus remaining stands that are poorly

stocked 12,696,671 1,998,743 3,142,848 28,890,905

SOURCE Data and table provided by the U S Department; of Agriculture, Forest Service, Southeastern Forest Experiment Station

49,040,888

34,670,624

31,380,643

23,516,864

23,330,665

22,036,160

21,099,625

20,188,588

53,279,042

40,649,933

36,983,696

30,072,922

29,384,892

23,959,028

20,184,492

18,826,225
156 . Wood Use: U.S. Competitiveness and Technology

of the factors needed for a comprehensive assessment.

The screening described illustrates the capabilities of advanced information systems to) provide refined data about forestland management

opportunities. Broader application of such

systems could provide decisionmakers with a

more realistic picture of feasible goals both

regionally and nationally.

A better national assessment of the management potential of U.S. forestland ultimately

may require a modified conceptual framework

as well as additional data. One possibility, proposed by resource economist Marion Clawson,

would be to incorporate economic and environmental considerations into site class designations. 12 Three classes of commercial forestland could be established:

1.

2.

3.

Class A—lands capable of producing at

least 85 ft3

/acre per year in natural stands,

able to yield a lo-percent return on man-’

agement investments in real terms, and

posing no serious environmental problems;

Class B—50 to 85 ft3

/acre/year, less than

lo-percent return on investment, and no

serious environmental problems; and

Class C—less than 50 ft3

/acre/year, and/or

serious environmental or other constraints

that would preclude commercial operations. Other analysts have proposed similar classification systems, although the

specifics differ.

The growing importance of fuelwood also

points to a need to redefine commercial forestland. In some areas, rising fuelwood use has

increased demand for wood growing on lands

that are marginal for producing industrial

roundwood. In the Southwest, for example,

large areas of pinyon-juniper classified as noncommercial are being utilized for energy production.

13 Hence, it may be necessary in the

1’Marion (~liilvs{)n, “An Economic: Classification of U.S. ‘Commt>r[ ial’ Forests” /(Jurna/ (Jf’ Forestr~, Noirember 1981 ,

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[jcI

W()(dlands,” Er]~rir(~r]n](!r]till hfiinagement, ~ol. 6, pp. 505-575,

for (Iis(:ussion.

future to take into account both industrial and

nonindustrial commercial uses for wood when

assessing commercial forestland.

Growing Stock Volumes

The Forest Service estimated that commercial growing stock* in 1976 amounted to over

710 billion ft3

.

l4 Softwood species, currently

preferred for most high-volume wood uses,

comprise about two-thirds of the stock; hardwoods comprise one-third.

About half the softwood volume is in the

Pacific coast region; the South and the Rocky

Mountain areas each have about one-fifth of

the softwood growing stock, while the North

has about 10 percent (fig. 24), Over 90 percent

of the hardwood stock is in the Eastern United

States—half in the North, 40 percent in the

South. The South, therefore, has a high proportion of both hardwood and softwood volumes.

Even though only one-fifth of the Nation’s

standing softwood volume is in the South, the

region accounts for more than half the annual

growth of softwoods.

ownership of inventories varies significantly

by region. About 56 percent of the softwood

inventory is in public ownership, primarily in

the old-growth stands of the western national

forests. The forest products industry currently owns relatively small volumes of sawtimber

in the Pacific Northwest, because most oldgrowth has been cut; many of these harvested

areas now support rapidly growing secondgrowth stands, Most growing stock in the

South is located on private nonindustrial lands

and a lesser amount on forest industry lands.

Current efforts to manage forestland are

aimed primarily at increasing the area in softwood species or in reducing the hardwoods

among existing softwood stands. Emphasis on

softwood management is largely a function of

the higher demand for softwood timber, the

resulting higher value of such wood and projections of its increasing economic scarcity.

* Net volume of live sawtim~er and ~c)letimber trees from the

stump to a minimum A inch top c)f the central stem or to the

first 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 hardwood management because hardwood growth

in general greatly exceeds removals. Desirable

and undesirable hardwood species may be intermixed in a stand, thus complicating harvesting and processing, In many hardwood forests,

“high grading’’—removal of high-value trees—

has left mature stands of hardwood species that

are currently undesirable from an industrial

perspective.

Growing stock volumes comprise only part

of the potentially usable woody biomass in

forests. Nongrowing stock sources–limbs,

tops, and rotten and small trees—currently account for 7 percent of softwood and 14 percent

of hardwood industrial wood supplies and also

are important for fuelwood. Technological advances in harvesting such as whole tree chippers that convert the entire above-ground portion of trees into chips, may expand the importance of nongrowing stock sources of wood,

as may fuelwood demands and manufacturing

processes able to use wood chips,

In 1980, the Forest Service established a National Tree Biomass Compilation Committee

to gather more precise information about

potentially usable above-ground woody biomass [growing stock plus nongrowing stock

wood). Preliminary national estimates of tree

biomass were issued in late 198115 (fig. 25).

1‘[ 1.S. Department of Agriculture, Forest Ser\rice, ‘1’ree

ll;omas.s--,~ State of the ,4rt Compilation. General Technical

Report \lrO-33 (M’ashington, II, C.: U.S. Government Printing Office, No\cmber 1981),
158 Ž Wood Use: U.S. Competitiveness and Technology

Figure 25.— Biomass on Commercial Forestland

A

Softwoods Hardwoods

merchantable tops and branches merchantable tops and branches

Growing 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 as

possible harm to soil, wildlife, and future tree

growth, however, only a portion of the nongrowing stock biomass actually could be utilized.

Resource Implications of Increased

Wood Fuel Demand

The effects of the recent growth in demand

for wood fuel (discussed in detail in ch. IV) on

the Nation’s forest resources are difficult to

predict, Continued growth in wood fuel consumption presents both opportunities and

problems for timber management,

It is clear that supplies of woody biomass in

domestic forests could sustain higher levels of

fuelwood use than at present without affecting

industrial wood supplies, The Office of Technology Assessment’s 1980 report, Energy From

Biological Processes, concludes that the biolog1981), p 5

ical capacity exists to produce between 4 and

10 quadrillion Btu (Quads) of energy per year—

two to four times current levels—mostly

through utilization of wood wastes, logging residues, dead wood, management thinning, etc,16

The Forest Service’s 1981 biomass inventory

also showed large quantities of potentially

available biomass that could be utilized without

affecting merchantable portions of trees.

Fuelwood for residential use already has reemerged as an important timber crop in some

areas. A sustained market for residential

fuelwood could have positive effects on industrial wood supplies if properly managed. It

could stimulate timber stand improvement activities on private nonindustrial forests, for example, because trees of little current commercial 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 trees

by reducing crowding, an important problem

on some forestland. Harvesting residues,

which are normally left behind in the forest

where they can increase the cost of regeneration as well as create fire hazards, are now

sometimes removed for fuel.

However, there are no guarantees that fuelwood harvesters will confine their removals to

trees that are of little value to the forest products industry. In some areas, markets for fuelwood already are stronger than for industrial

roundwood. Many fuelwood harvesters may be

unconcerned about restricting removals to

nonindustrial timber and may harvest trees

that are more valuable as nonfuelwood. This

is less likely to be a problem with high-value

mature trees than for young trees that could

provide high-value forest products if left to

mature.

In addition, a large number of inexperienced

fuelwood harvesters could exacerbate environmental damage to forestlands, Improper harvesting can result in increased water pollution,

soil erosion, and damage to fish and wildlife

habitat. Only about 12 percent of homeowners

who cut fuelwood from their own land in 1981

consulted a professional forester, according to

the Forest Service.l7

Clearly there is a need for more information

about fuelwood use and its ramifications for

forest management, Current levels of residential fuelwood use (40 million to 43 million cords

annually) are several times higher than estimated by the Forest Service for 1976 (6 million

cords per year) and greatly surpass levels initially projected for 2030 (26 million cords). Although a Forest Service Forest Products Laboratory study, to be published soon, has improved the understanding of key aspects of residential fuelwood harvesting (see box F), it is

not yet clear what proportion of residential

fuelwood is coming from commercially important forestland or what kinds of trees (industrial

quality, nongrowing stock, or rough and rotten

trees) predominate in fuelwood harvests.

Nontimber Values of Forestland

Domestic forestland serves a wide variety of

uses in addition to timber production (table 27).

These uses include watershed and soil protection, fish and wildlife habitat, grazing, landscape esthetics, and recreation. Also, significant energy and mineral resources are found

on domestic forestland, both public and private.

Conflicts between timber production and

other land uses, such as wilderness preservation, are unavoidable to some extent. Commercial timber management and harvest necessarily disturb natural forest ecosystems, although

the degree of disturbance varies greatly depending on the practice used, site conditions,

and the care that is taken to minimize harm.

For example, silvicultural application of herbicides, pesticides, and fertilizers, if not properly done, can adversely affect water quality,

fish, and wildlife. Timber harvest and associated logging roads and skidding activities disturb the soil and often lead to increased soil

loss and sedimentation of streams, at least temporarily, Erosion problems may continue if

stand regeneration is not accomplished

promptly. Stand conversion to different species

also radically alters the previous natural ecosystem.

Interactions among the various objectives of

forest management are often complex. Some

land uses such as grazing can interfere with

timber growth if improperly handled, but are

compatible with timber production if precautions are taken. Timber production can improve some kinds of wildlife habitat by producing increased forage after harvest, but other

kinds of wildlife, such as those that are dependent on mature forests for habitat, may be adversely affected. I n general, however, forestlands can be managed to produce a mixture of

economic and noneconomic values important

to society even though some tradeoffs cannot

be avoided.

Multiple use management has long been a

key tenet of national forest policy and also is
160 ● Wood Use: U.S. Competitiveness and Technology —

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 fuelwood

consumption were not available until surveys were conducted in 1980-81 by the Forest Service

and the Department of Energy. The unexpectedly high levels of fuelwood use in the last few years

raise significant forest management issues and are intensifying competition between homeowners

and 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 to

86 million cords.

Thirty million cords of the residential fuelwood was self-cut by the user; the rest was obtained from mill residues or purchased. About 27 percent of the self-cut wood came from

industrially merchantable trees. It is not known what proportion of the mill residues or purchased cordwood came from industrially merchantable trees.

Millions of Americans are now harvesting wood for residential fuel. Some 3.9 million

households cut fuelwood from their own land. In addition, 3.4 million other households cut

fuelwood from private land they do not own.

An estimated 12 percent of those who cut from their own land stated that they cut their

wood based on the advice of a professional forester.

About 11 million cords of residential fuelwood were acquired, averaging 1.5 cords per purchase, at $85 per cord. Variations in both volume and price paid were great, with those buying larger quantities paying less per cord, and those buying smaller quantities (less than a

third 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 legal

removals have increased from 400,000 to 4 million cords. National forest administrators are

trying 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 thefts

are 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 that

are not part of the forest products industry. A recent nationwide study which compared

wood-fired systems to energy production based on other fuels has found that wood energy

systems are in many cases economically attractive. Wood fuels are particularly competitive

in the South, the Northeast, and the North Central region, especially for residential and small

industrial applications.

A recently released American Paper Institute study concluded that the burning of waste paper

in municipal powerplants will present major competition for recyclable fiber (now accounting for 25 percent of the fiber requirements of the paper industry) in coming decades. Waste

paper exports, which constitute a major share of U.S. wood fiber exports, also maybe affected if municipal burning accelerates.

International trade in wood fuels, long thought impractical, is now being contemplated

seriously in some areas. Shell International reportedly expects trade in densified wood fuels

to develop in the Far East. And Minnesota and the Seaway Port Authority of Duluth are

examining 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 with

annual growth

Fish and wildlife Varies with species that are desired. Habitat

must be protected, created, or enhanced

for the species desired

Endangered species (alive) Critical habitat must be protected,

enhanced. or created

Water Control sources of pollution, some

modification of quantity possible by

manipulating vegetative cover

Timber Replanting unforested areas, silvicultural

practices to increase growth rates

Landscape esthetics Varies with values and objectives, in relation

to timber harvest generally involves

restriction of harvest in areas of high

recreation use, reduction in size of clear

cuts

Wilderness Withdrawal from other consumptive uses,

restriction of use intensity to preserve

wilderness condition

Soils and watersheds Protection and preservation

Minerals Control rate and efficiency of use

Endangered species Generally none, unless possible to

(extinct) reestablish species through genetic

breeding

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 to

hundreds of years

Generally less than 10 years unless the

hydrologic balance has been drastically

disturbed

Thirty to over a hundred years

Tens to hundreds of years (higher end to

establish wildernesslike esthetics

Usually hundreds of years to reestablish

once wilderness environment has been

disturbed

Thousands to tens of thousands of years to

reestablish equilibrium after drastic

disturbance

Millions to hundreds of millions of years

New species may evolve to replace niche

left by extinct species, but the loss of the

gene pool is usually irreversible

Photo credit: U.S. Forest Service

Tree plantation can help prevent erosion while also providing landowners with income This farm was badly gullied

by 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
162 ● Wood Use: U.S. Competitiveness and Technology

applied in some other Federal, State, and local

forest systems. The Forest Service’s RPA assessments call for increased production of both

timber and nontimber resources from national

forest lands.

Lands owned by the forest products industry

and by some States are managed primarily to

produce timber, but other objectives such as

wildlife and recreation also may be included.

Multiple use resource management is less often

a goal of private nonindustrial landowners, but

they too have numerous opportunities for it,

For example, less than 15 percent of eastern

forestland with grazing potential is now being

grazed, according to the SCS. The recreational

potential of private acreage also is far greater

than is currently realized. In a limited number

of cases, forests can serve pollution control objectives, such as in the application of treated

sewage sludge to forestland. When properly

conducted, sludge applications enhance

growth by providing important plant nutrients

without appreciable environmental damage or

health hazards.

Some forestland functions are difficult to

quantify in economic terms, The importance

of the forest in hydrologic regimes and in

minimizing soil erosion has been understood

for over a century. Many of America’s most

scenic areas are forested, Designated wilderness areas, most of which are on Federal lands,

are critical for recreation and scientific
Ch. VI—The Forest Resource Base ● 163 —

research and increasingly are being recognized

both as a national and global heritage of immeasurable long-term value.

Because of wide variation in site conditions,

it is hard to generalize about the nationwide

or regionwide effects that increased timber

production would have on other forestland values. In the 1980 RPA assessment, the Forest

Service introduced a model to show some of

these interactions (table 28). An important

characteristic of the model is that it permits different assumptions to be used about resource

management while quantifying potential effects on other resources. A more refined model

is expected to be used in the 1985 assessment.

Such efforts, by developing realistic portrayals

of future effects on domestic forests of increased timber production, can help decisionmakers understand resource tradeoffs.

Table 28.—Multiresource Interactions in the Southeast Resulting From

Meeting 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 feet

Billion cubic feet

Million animal unit months

Percent change from 1977

Percent change from 1977

Percent change from 1977

Percent change from 1977

Percent change from 1977

Percent change from 1977

Percent of area

Percent of area

Percent of area

Percent of area

Percent of area

Percent of area

—

—

—

—

—

—

—

—

—

89

11

98

2

78

22

2.42

1.01

18.10

10.1

6.0

-0.3

0.4

89.0

0.3

77

23

91

9

70

30

3.06

1.35

21.50

-4.0

16.0

2.0

1.0

116.0

0.1

72

28

89

11

65

35

aprojected demands as shown In the review draft of the 1 ~ RPA assessment

bln this mult!resource interaction analys!s the areas recommended for wilderness or further planning by the RARE II process were considered wilderness

cThe 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 undertaken

to 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 prospective uses of “miscellaneous” individuals, and corporations

forestland. The Forest Service separates forest that are not part of the forest industry). PNIF

landowners into three basic categories: public land comprises 58 percent of all commercial

(Federal, State, local, and Indian), forest in- forests; industry lands 14 percent; and public

dustry (corporations or individuals who own lands the remaining 28 percent (fig. 26).

or operate a wood-processing facility), and
164 Ž Wood Use: U.S. Competitiveness and Technology

Figure 26.—Ownership of U.S. Commercial Forestland, 1977

23 million acres 69 million a

Farmers

116 million acres

Other private

162 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 significantly

by region. In the Western United States,

Federal and State Governments and the forest

industry, which collectively own over 75 percent of the region’s forests, dominate. In the

Eastern United States, private nonindustrial

owners hold most of the forestland, although

forest industry holdings are large in Maine and

in the South. Federal holdings in the East may

be locally important, but constitute only 5 percent of forested areas.

Timber harvest levels among ownership

classes are not a function of acres held (table

29). Forest industry lands—14 percent of commercial forests— accounted for an estimated

31 percent of timber harvested in 1976, while

other ownerships provided less timber per

acre.

Nearly half (47 percent) of all U.S. timber

supplies in 1976 came from private nonindustrial lands. In the East, however, PNIFs’

contributions to regional timber supplies are

far higher. Forest Service projections suggest

that the forest products industry will rely increasingly upon these PNIF lands for wood. By

2000, according to the Forest Service, 54 percent of the harvest will come from private nonindustrial sources (fig. 27). This represents

more than a 50-percent increase in roundwood

supplied from PNIF lands in 24 years.

Publicly Owned Forestland

About 28 percent of commercial forestland

is owned or held by Federal, State, or local

governments 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 Volume

Million commercial harvested Proportion

acresa

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 14.9

Other public . . . . . . . . . . . . . . . . . . 47.0 46.5 10 10 982 1,219 7.7 7.1

Forest industry . . . . . . . . . . . . . . . . 68.8 72.2 14 16 3,890 4,141 30.7 24.3

Private nonindustrial forests . . . . 278.0 261.9 58 57 5,946 9,169 46.7 53.7

U.S. totals . .................482.5 461.0 100 100 12,805 17,084 100.0 100.0

NOTE 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 1976

and 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 Ownership

Class; With Base Level Projections to 2030a

10000

9000

8000

7000

6000

5000

4000

3000

2000

1000

0

1952 1962 1970 1976 1990 2000 2010 2020 2030

aSupply ad ta for 1952 1962, 1970 and 1976 are estimates of trend levels of

harvests and differ somewhat from Forest Service estimates or actual con

sumpl [on Project on year supply data shows volume that would be harvested

given the assumptions made by the Forest Service

SOURCE Derived from the U S Department of Agriculture, Forest Serwce, An

Ana/ys/s of the Timber S/tuafion in the Unifed States 1952-203 0

(Washington, D C U S Government Printing Off Ice, 1982), p 160

State and local governments hold about 30 million acres forestland nationwide. In the Great

Lakes States, State and county forests are especially prominent, comprising one-fourth of

the region’s timberlands. Pennsylvania, Alaska,

and Washington also own sizable forests. Elsewhere, State and county holdings may be important locally, but comprise a minor fraction

of regional timber acreage. Indian lands, about

6 million acres in total, are concentrated in

Oregon, Washington, and Arizona.

The Federal Government is by far the most

important public owner of forestland. It manages more commercial forestland than any

other single entity, Its holdings—nearly 100

million acres in l977—amount to about onefifth of the commercial acreage in the country.

Ninety-five percent of the Federal holdings are

administered by the Forest Service, which

manages the National Forest System, and by

the Department of the interior’s Bureau of

Land Management. Other Federal agencies,

such as the Department of Defense, also have

commercial forest holdings, mostly located in

the East and generally small, In the Western

United States, where three-fourths of the Federal commercial timberland is located, Federal holdings comprise 57 percent of the region’s

commercial acreage.

National Forests

Most of the National Forest System, administered by the Forest Service, is composed of

lands reserved by Congress from the original

public domain. Other portions, primarily in the

East, were acquired by purchase, exchange or

donation. Only about half of the land in national forests is commercial forestland. The rest

is 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 timber

production by Congress through wilderness

designation, and other land has been deferred

pending such designation. Some land also is

administratively closed for endangered species

habitat or recreation or because it is deemed

“unsuitable” (see box G).

In March 1983, the Reagan administration

stated that about 6 million acres of national

forest land were being considered for possible

sale 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 contained about 89 million acres of commercial

forestland or 18 percent of total U.S. commercial timberland. Most of the commercial timberland in national forests is located in the

West—41 percent in the Rocky Mountain region and 36 percent in the Pacific coast region.

The 23 percent in the East is divided about

equally 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 n

post, Mar. 16, 1983, P ‘8

Box G.—Basic

VVd311111~l UIl

national forests. The Multiple Use and SusForest Service Management Principles

Multiple Use-The Multiple Use and Sustained Yield Act of 1960 directs that all resource values

be weighed and tradeoffs made in making management decisions. It requires that economic factors be considered but not necessarily control management decisions. Also, management objectives must preserve land productivity. The multiple use concept has proven difficult to implement

because Congress did not provide criteria for deciding between conflicting land uses. Lands that

are managed primarily for recreation, wilderness, wildlife habitat, or watershed may receive little

or no timber management treatment.

Sustained Yield–The principle of sustained yield is closely linked to the principle of multiple

use. The Multiple Use and Sustained Yield Act defines it as “the achievement and maintenance

in perpetuity of a high-level annual or regular periodic output. . . “ This relatively straightforward

concept is complicated in practice, because many different levels of sustained yield can be defined 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) but

also authorized the Forest Service to depart from even flow in order to meet “overall multiple use

objectives.” The act failed, however, to provide clear guidance as to what specific situations justify

such departures. Under a 1979 Presidential directive, departures are being assessed on some national forests through acceleration of planning.

Harvesting at the High Point of Forest Growth-NFMA affirmed the Forest Service’s existing

policy 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 timber

that 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 and

the forest industry as being economically inefficient, but by law it remains a strong influence on

the formation of national forest management objectives.

Exclusion of “Unsuitable” Land From Timber Production-NFMA restricts timber harvest

on 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 after

harvest and sets specific criteria for the choice of cutting method. NFMA further requires that

the reforestation backlog-which as of October 1, 1982, had been reduced from 6.1 million acres

in 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 national

forests should be managed for “outdoor recreation, range, timber, watershed, and wildlife and

fish purposes, ”

The setting of land management objectives

for national forests is controlled by RPA and

its amendment, the National Forest Management Act (NFMA) of 1976 (Public Law 94-585),

under the overall framework of multiple use

and sustained yield principles set forth in the

1960 act, RPA requires the assessment of all

forest and rangeland renewable resources in

the United States on a continuing basis and the

preparation of a 50-year renewable resources

program. These mandates were intended to

help Congress set a forest resource budget.

NFMA requires the preparation of management plans under regulations consistent with

congressional guidelines, a lengthy and complicated process. At the regional level, forest

plans are developed to establish general management objectives, standards, and guidelines.

At the local level, forestland and resource

management plans are drawn up for each national forest, using the regional standards and

guidelines to develop specific objectives and

prescriptions for planning units within the

forest. The first round of this new planning

process is still underway. As of March 1983,

individual plans for 18 out of 121 national

forests had been released in draft form; the remainder are scheduled for completion in

1983-84. 10

Basic management principles set by Congress provide a framework for planning and

managing the use of timber and nontimber national forest resources (see box G), Their implementation limits timber management and

harvest levels in the interests of meeting other

resource management objectives. Harvests on

individual national forests generally cannot exceed a level which could be removed “annually

in perpetuity on a sustained yield basis. ”

However, temporary exceptions to this policy

19U.S. Department of Agriculture, Forest Service Lan d

Management Planning Staff, personal communication,

Washington, D. C,, Oct. 14 1982.

through “planned departures” are authorized

in some cases to achieve sustained yield objectives, In 1979, the Carter administration called

for accelerated updating of plans on some national forests to increase sales of mature

timber. This process continues today.

The potential for producing more wood per

acre of allocated timber production land under

Federal laws is substantial, An important limitation to more intensive management, however, is budgetary constraints.

Bureau of Land Management Land

The Bureau of Land Management (BLM) was

created in 1946 to administer Federal Government properties that were never disposed into

private ownerships or set aside for special uses.

Nearly all of these are in the West,

BLM manages 5.8 million acres of commercial timberland, About half of this is original

public domain lands. The other half is the socalled “O&C” lands, located in western Oregon, This acreage is the remains of a land grant

that was revested by Congress in 1866 when

a railroad failed to comply with the terms of

its grant. The O&C lands are BLM’s most productive and are among the most productive forestlands in the country.

Permanent objectives for BLM-administered

lands were not clarified until enactment of the

Federal Land Policy and Management Act

(FLPMA) of 1976 (public Law 94-579), FLPMA

directs that public lands, only 1 percent of

which are forested, be managed on a multiple

use, sustained yield basis, but the act does not

provide specific objectives for timber resources. O&C lands are administered under

FLPMA and the O&C Act of 1937 (50 Stat. 875),

which name timber production as the major

ownership objective. In the event of conflicting

purposes, the O&C Act prevails.

In response to FLPMA’s mandate, BLM is

preparing Resource Management Plans for

each of its management units. These documents will combine in one environmental impact statement, as required by the National Environmental Policy Act of 1969 (public Law

91-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. Six

factors must be considered in reaching

decisions:

1.

2.

3.

4.

5.

6.

legislative and Department of the Interior

goals,

resource demand forecasts,

estimated sustained levels of the multiple

uses that may be obtained under existing

biological and physical conditions and differing management practices,

degrees of management intensity which

are economically viable,

opportunities to resolve public issues, and

degree of local dependence on public land

resources.

Thus, planning objectives for BLM-administered forestlands, like those for the National

Forests, balance many different legislative

mandates.

Other Legislative Mandates for Federal Lands

Many other statutes related to environmental protection and the management and use of

public lands affect Federal forest management.

The National Environmental Policy Ac t

(NEPA), for example, requires preparation of

environmental impact statements for Federal

actions that may significantly affect the environment, including some forest management

activities on Federal lands.

Another example is the Endangered Species

Act of 1973 (Public Law 93-205). The act protects endangered species on Federal lands by

prohibiting activities that damage their habitats, and some view it as a potential major conflict with timber production on Federal forests.

Although about 200 threatened and endangered species are listed by the Federal Government, most have specialized habitats that cover

relatively small areas. Only a few species appear to have potential for serious conflict with

timber production. The grizzly bear and gray

wolf are two of them. The national forests are

considered to be of major significance in the

recovery of these species, because large portions of their habitat—82 percent or 4,432,920

acres of the gray wolf’s, for instance—are on

national forest lands. In the Pacific Northwest,

efforts to protect the spotted owl may conflict

with timber production because this species requires old-growth conifer stands for habitat. In

other national forest regions, there may be

cases where endangered species protection reduces Federal lands available for timber production, but these areas are likely to be small

in relation to total national forest acreage

available for harvest.20

Another law, the Wilderness Act of 1964

(Public Law 88-577), also has been perceived

by timber interests as a threat to future wood

supplies. Although the act clearly has resulted

in substantial acreage being removed from production, wilderness lands are generally below

average in productive potential. There are

presently 25.1 million acres in the National

Wilderness Preservation System, but only 40

percent of this land (10.2 million acres) is “productive reserved land”- i.e., land that would

be called commercial forestland if it had not

been withdrawn from timber production. Table

30 shows the average productive potential by

Forest Service region of “productive reserved

land” included in existing wilderness areas.

Only Alaska and the Pacific Southwest have

wilderness with high productive potential, and

the acreages are relatively small. In four

regions, the average productive potential of

wilderness areas is less than 50 ft3

/acre/year,

which often is considered the minimally acceptable cutoff point for economical timber

management.

In recent years, Congress has prohibited the

sale of Federal timber to companies who intend to export it prior to processing. It also has

prohibited the sale of timber to purchasers who

use Federal timber to substitute for exported

unprocessed logs from private lands. The rationale for this restriction has been jobs. Congress intended to encourage domestic processing of the raw material to provide employment

for U.S. workers, implying that this benefit is

yet another objective of Federal forest management.

ZO& discussed in J, Russell Boulding, Federal Forests: An

Assessment of Their Management, Use, Potential Productivity, 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 Lands

in Wilderness and Their Average Productive Potentiai, 1981

Productive reserved Average potential Regional productive

forest 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 63.7

Southwestern . . . . . . . . . . . . . 0.8 41 —

Intermountain. . . . . . . . . . . . . 1.8 40 —

Pacific Southwest . . . . . . . . . 0.4 78 90.8

Pacific Northwest . . . . . . . . . 1.2 42 —

Southern . . . . . . . . . . . . . . . . . 0.1 59 71.1

Eastern . . . . . . . . . . . . . . . . . . 0.8 56 62.3

Alaska . . . . . . . . . . . . . . . . . . . 1.4 109 —

Total . . . . . . . . . . . . . . . . . . 10.2

aTo convert acres to hectares, multiply by 0.4047

b 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 million

acres were owned by the forest industry i n

1977. These lands on the average are naturally more productive than lands in other ownerships, they generally are in larger tracts, and

they often are located near mills.

Forest industry landownerhip is highly concentrated, In 1978, the 90 largest firms owned

62 million acres of forestland—9l percent of

all industry-held acres. 21 Nearly half (48 percent) of the total was owned by just 17 companies, with the half-dozen largest firms each

having holdings the size of Connecticut, Most

of the remaining 30,000-plus companies in the

lumber or pulp and paper sector either have

minor landholdings or none.

In addition to land they actually own, forest

products firms lease a substantial amount of

private property. Management activities on

leased land vary from minimal maintenance to

intensive timber management practices. Shortterm leases generally involve timber harvesting

but not management. Long-term leases, which

often do involve management, are an impor-

—. illa}, O’ I,au~h]ln ancl Pad V, Ellefson, New Diversified Entrants Among U.S. Wood Based Companies: A Study of

Economic Structure and Corporate Strateg~, Bulletin 541-1982

(St. Paul, Minn.: University of Minnesota Agriculture Experiment Station, 1982), p, 18,

tant trend in the South, where nearly 6.7 million acres are leased for 25 years or more.22

Leasing activities by the forest industry may

increase in the future, especially in those areas

where large mills require large timbersheds for

supplies.

The South contains more than half of the industry’s holdings. All but one of the southern

States have at least 1 million acres, and in each

of six of these States, the industry owns more

than 3 million acres.

In the West, where Federal forestlands dominate, the major forest industry holdings are in

Oregon, Washington, and California, with

much smaller (1 million acres) but still significant holdings in Idaho and Montana. In the

North, Maine alone contains nearly half of the

region’s industrial forestland. Most of the remaining northern industrial holdings are in the

Great Lakes States and in Pennsylvania and

New York.

The era of large-scale assembly of new forest

industry lands may be over. There are many

reasons for this, but possibly the most important is the tremendous increase in land prices

in the 25 years following World War II.

Although price increases have moderated or

zzu, S, Department of Agriculture, The Federal Rol~ iJI the COnserl’a tion and .4 fanagemen t of Prj\fa te A’on-jn du $ tria 1

Forest]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 seems

unlikely that the forest industry as a whole will

embark on major new land acquisition programs in the coming years. In fact, during the

1980-82 recession, forest industry firms have

tried to sell several million acres of commercial timberland; this may have been a shortterm response to acute cash flow problems

brought on by high interest rates and by the

economically depressed state of the industry.

The Forest Service projects that only about 4.4

million acres of additional industry holdings

will be purchased in the next 50 years (table

31). About three-fourths of this increase is projected for the South, much of the remainder is

in the North, and a modest increase is expected

to occur in the West. The Forest Service projects that most of these purchases will take

place before 2000; thereafter, forest industry

holdings will begin to decline—chiefly as a

result of the disposal of some industry lands

in the Pacific Northwest.

Ownership Objectives

The forest industry’s major landowning objective is the production of timber for its mills.23

For strategic corporate reasons, partial self-sufficiency in timber supply is considered important to those forest products companies that

own land. Relatively few firms, however, can

rely on their own lands for more than a portion of their timber needs (fig. 28). Most firms

are highly dependent on PNIF or public lands

to provide much of their wood.

In the past, when old-growth timber was

abundant and land prices low, companies acZso’Laughlin and El]efSOn, New Diversified Entrants, table 5,

P, 16.

Figure 28.—Timber Self-Sufficiency of Major Timber

Processing Firms

SOURCE: Forbes, Dec. 24, 1979, as reproduced In U.S. General Accounting Office, New Means of Analysis is Required for Policy Oecisions Affecting Private Forestry Sector (Washington, D. C.: U.S. General Accounting Off Ice, 1961), p. 18.

quired land with the simple objective of cutting the trees. Today, however, old-growth supplies have dwindled and land prices have risen

sharply, so objectives now center on managing existing holdings for improved production.

Potential acquisitions are evaluated for their

productive capacity as well as for their existing

timber 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 18.7

South . . . . . . . . . . . . . . . . . . . . . . 32 33.4 35.0 36.2 39.7

West . . . . . . . . . . . . . . . . . . . . . . 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? With

Pro@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 demand for outdoor recreation have made some

industry land more valuable for uses other than

timber production. Firms with large holdings

usually have realty divisions or subsidiaries,

Forest industry real estate activities were

highly publicized in the early 1970’s whe n

several firms began to promote recreational

home sales and development on their lands,

Since the 1974-75 recession, however, the industry’s real estate ventures have been relatively conservative. Rural population growth also

is increasing the potential for conflict between

industry and residential goals. A case study in

one Texas county found that local timber companies opened their lands to the public for

hunting, in part because of a good neighbor

policy but also because of threatened arson or

vandalism. 24

Management of Industrial Lands

Since timber production is the major objective of the forest industry, the prospects for

higher output in response to increased demand

look very good, Response would be limited, of

course, by how profitable it would be to invest

in more intensive management. The productive capacity of most industry lands is high,

however, and they are generally well-located

near processing facilities and contain large

tracts capable of capturing “economies of

scale” in management,

Management intensity on industrial forestlands apparently is increasing, although significant differences exist among firms and data

is limited. According to a review by Jay

O’Laughlin and Paul V. Ellefson, those few

studies that have been conducted suggest a

mixture of management intensity among different industrial size classes. One study of 2 0

major firms, which together owned almost 4 0

million acres of timberland in 1969, found that

16 of the firms practiced varying degrees of

management. All of them had planting programs, 11 used timber stand improvement, and

13 practiced site preparation. Four of the comZaRob~rt c, Hea] ~, and James 1,. Short, The ,$ farket for Rorai

Land: Trends, Iss;es and Policies (Washington, D. C,: (conservation Foundation, 1981 ), pp. 51-58.

panics apparently did not practice management even though they each owned more than

1 million acres. Another study of 166 firms in

the mid-1970’s found that those with holdings

of 250,000 acres or more used certain management practices (precommercial and commercial thinning, timber stand improvement, fertilization, site preparation, and genetic improvement) to a greater extent than did firms

with smaller holdings, but it found no significant differences between other forest management techniques. This study also found that industrial lands were managed most intensively in the South and Pacific Northwest, and that

large tracts were more intensively managed

than small ones.25 Industry planting and direct

seeding of harvested land have increased from

an average annual rate of about 150,000 acres

in 1950 to over 1 million acres per year in the

mid- to late-1970’s,

Since 1949, about 19 of the 90 largest forest

industry firms have merged or been acquired

by conglomerates. These 19 companies presently own about 14 percent of the total forest

industry land base and account for about 8 percent of wood-based sales in the United States.26

It has been speculated that these conglomerates

may be less inclined toward long-term forest

management than traditional forest industry

firms, but a recent University of Minnesota report found little ground for such speculation.

Based on questionnaires and interviews with

several diversified and traditional forest product firms, the study concluded that, “ . . . the

large diversified firm with a wood-based subsidiary manages its lands no differently than

does the traditional wood-based company,” 27

In fact, the study found that the diversified

firms that were surveyed invested slightly more

in forest management on a per-acre basis than

did traditional companies, It should be noted,

however, that the study was based only on a

partial response by firms and that some traditional forest products companies may have

been 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 - - -
172 ● Wood Use: U.S. Competitiveness and Technology

about management than the new diversified

firms.

Private Nonindustrial Forest Lands

Private nonindustrial forestland, sometimes

termed underproductive, actually makes a major contribution to U.S. wood supplies. About

half (46 percent) of all roundwood and 38 percent of sawtimber were harvested from these

lands in 1976. While their contribution to national wood production is proportionately

smaller compared to the total acres their

owners hold—about 58 percent of the commercial forestland or about 278 million acres—this

difference is less pronounced when regional

markets are considered.

About nine-tenths of PNIF lands are in the

East (table 32), where they account for over

two-thirds of regional timber supplies. PNIF

lands are especially important in the South,

which contains more than half of all private

nonindustrial land. Because the forest products

industry is concentrated more heavily in the

South 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 in

Private Nonindustrial Forest (PNIF) Ownership by

Region (thousands of acres)a

Commercial timberland

in PNIF ownership

North . . . . . . . . . . . . . . . . . . . . . . . . 117,715

South . . . . . . . . . . . . . . . . . . . . . . . . 134,070

Rocky Mountains . . . . . . . . . . . . . . 12,502

Pacific coast. . . . . . . . . . . . . . . . . . 13,695

Total United States . . . . . . . . . . 277,982

a~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 national

timber supply.

In the Pacific coast region, PNIF owners account for less than 20 percent of commercial

forestland. The proportion of large timber on

these lands is small relative to other ownerships since the old-growth has been cut and

most stands are still immature; thus PNIF lands

in this region are relatively insignificant in

terms of near-term timber resources. About

one-fourth of the Rocky Mountain commercial

forestland base is in the private nonindustrial

category.

Changing Ownership Composition

Information about PNIF owners comes from

three major sources—State forest surveys, a nationwide rural landownership survey conducted in 1978 by USDA, and statewide surveys conducted in 11 Northern States by the

Forest Service. The Forest Service traditionally

divides PNIF landowners into two categories—farmers and “miscellaneous other” (or all

those who are not farmers). “Miscellaneous

other” represents a cross-section of society, including professionals, retired people, blue collar workers, and nonwood-based corporations.

State forest surveys over the last three decades have shown a very rapid transfer of land

from farm to miscellaneous ownership, In

1952, about 58 percent of all PNIF acreage was

in farm ownership and 42 percent was in miscellaneous other (table 33). In 1977, the situation was exactly the reverse—42 percent was

in farm ownership and 58 percent were in miscellaneous other. More than 60 percent of the

decline in farm forestland occurred in the

South and most of the rest occurred in the

North.

Table 33.—Change in Farm and “Miscellaneous Other” Ownership: 1952-77 (millions of acres)a

1952 1962 1970 1977

Number of Percent of Number of Percent of Number of Percent of Number of Percent of

acres total acres total acres total acres total

Farm-. . . . . . . . . . . . . . 172 58 145 48 125 - 44 116 42

Miscellaneous other 124 42 159 52 163 56 162 58

Total . . . . . . . . . . . . 296 100 304 100 287 100 288 100

aTO 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 capital

ship for timber harvesting and management are for timber management if it is profitable, Some

unclear. Nonfarm owners sometimes are con- of the PNIF land is owned by nonwood-based

sidered to be less interested in harvesting tim- corporations, which also may be in favorable

ber than are farmers and more interested in positions to undertake management activities

amenity 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 processing

facilities.

Forest Service landownership surveys in 11 Northeastern and Middle Atlantic States provide

the best data about these corporate holdings. In the surveyed States, about 6.7 million acres are

owned by nonwood-based companies—nearly twice as much land as is owned by the forest industry. (This excludes the major forest industry holdings of Maine, where a survey is not yet complete.) In other surveys, five Southeastern States show a total of 7.4 million acres owned by such

firms—about half as much as forest industry holdings in those States.29 In California, just nine

nonwood-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 in

parcels 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 Service

study, The Private Forest Land Owners of the United States, identified 89.5 million acres of

forestland as being in all categories of corporate ownership—21.8 million acres above estimated

forest industry holdings for 1977. This figure is an inexact estimate of nonwood-based corporate

holdings, because the landownership survey and forest industry data were derived from different

data series and some of the forest industry data is out-of-date.

National information about the kinds of companies involved also is imprecise. Mining and

energy corporations may own large quantities of forestland, but information is fragmentary. While

it is known, for example, that 21 such firms own at least 3 million acres of land and lease far more

private 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 maybe

substantial, 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 that

State. In Pennsylvania, 13 percent of all corporate forestland is owned by real estate firms. Sports

and recreation clubs, churches, and other nonprofit organizations hold a significant amount of

private forests. About 5 percent of Pennsylvania’s private forestland, for example, is owned by

hunting and fishing clubs.

Recently banks, investment firms, and other financial institutions have become involved in

private 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 channeling

capital 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 information 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.
174 ● Wood Use: U.S. Competitiveness and Technology

More detailed national and regional information about private forest owners is available

through a U.S. rural landownership survey that

USDA conducted in 1978. Although the survey did not specifically ask questions about

forestland, Forest Service analysts were able

to construct from the survey data the first nationwide statistical profile of private forest

owners in 25 years. The profile is entitled The

Private Forest Landowners of the United

States. 34 In addition, Forest Service analysts

have conducted in-depth forest land ownership

surveys in the Northeastern and Middle Atlantic States.

The national survey provides data about

owners, including their numbers, acres held,

sqThO~~~ wI. Birch, Douglas c. Lewis, and Fred H. Kaiser,

The Private Forestland Owners of the United States, Forest Service Resource Bulletin W(3-1 (Washington, D. C.: U.S. Government

Printing Office, 1982).

occupation, educational level, and other factors relevent to assessment of timber management. It was based on 11,000 respondents. The

survey does not distinguish between forest industry owners and PNIF owners—an important qualification, since forest industry holdings account for 69 million acres of forestland,

The national survey provides general information about the size of individual holdings.

The overwhelming majority of the 7 million

owners of private forestland held less than 10

acres apiece, but these holdings collectively

comprised only a small proportion of the land

base (fig. 29). Four-fifths of the private

forestland is held by people or corporations

who own 100 acres or more. Although some

individuals own enormous tracts of forestland,

most of it that is in the l0,000-acre-plus

category shown in figure 29 presumably belongs to the forest products industry or other

large corporations.

Figure 29.—Acres of Private Forest Land Ownership Units by Size Class

and Region, 1978

70

v

1-9 10-49 50-99 100-499 500-999 1000-9999

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 ForestlafJdOwnerS of the United States, USDA Forest

Service 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 most

U.S. forestland is in large enough holdings for

efficient commercial harvesting and management. However, some observers are concerned

that parcellation (division of land without

development) may be effectively reducing the

acreage available for timber production, Adequate historical data is not available to determine whether the proportion of forestland in

small tracts has increased nationwide. Most

case studies in specific rural areas suggest that

parcellation has been most intense on tracts

that were small to begin with.35 Hence, forestland in holdings of 100 acres or less (about 20

percent of the private acreage according to the

1978 survey) are probably most likely to be subject to parcellation. Still, in some areas, consolidation of land into larger parcels may have

occurred. Closer monitoring of parcellation

will be needed to identify national trends clearly.

Ownership Objectives

Many local surveys have been conducted

which reveal landowner objectives, but the

results of such surveys cannot be combined or

compared with statistical accuracy because of

different methodologies. Nevertheless, some

generalizations can be made about their findings:

• PNIF ownership objectives vary widely

both within and among regions. Owners

in the Southeast appear to be more interested in timber production than those

in the North, who are more interested in

recreational and other nontimber uses.

Lack of markets in the North may explain

part of this difference.

Ž PNIF owners who harvest timber tend to

have larger parcels of forestland than those

who do not; hence, the proportion of land

held by owners with timber production objectives tends to be high relative to their

numbers, and the proportion with recrea-

‘~Hea]j, and Short, Market for Rural Land, Op. Cit., p. 22.

tional objectives tends to be low relative

to their numbers. se

Limited regional data on ownership objectives is available for both the Northeast and

Southeast. In a survey of PNIF owners in the

Southeast, 62 percent reported that timber

management is very important on the land they

own, but fewer owners (54 percent) actually

named timber growing as an important ownership objective, Much of the land was not

specifically acquired for timber management,

however, and is held for reasons in addition

to timber production. For example, over half

of the owners indicated that they had inherited

their land and that a highly important reason

for owning it was to pass it on to their heirs.37

In the Northeast, nearly half of the owners

have forestland simply because it is part of

their farm or residence or because they derive

esthetic enjoyment from it. These owners, however, hold only about one-third of the region’s

PNIF acreage. About 10 percent of the PNIF

lands in the Northeast are held for recreational

purposes and 14.5 percent for investment

reasons. Less than 2 percent of the owners report that they hold land for timber production,

but they own approximately 15 percent of the

acreage .38

Forest Service landownership surveys in the

Northeastern and Middle Atlantic States found

that less than 1 percent of the harvests on PNIF

lands were conducted for timber stand imie]ack p, Royer, A Report to the Forest productit’it~r cO~ln~~-

tee of the Forest Industries Councel Highlighting the Findings

of a Ret’ien’ of Non-Industrial Pri~rate Forest Owner Sur~’e~’s,

and Assessing the Usefulness of Data from Past Sur\’eys in

Evahiating Alternative Proposals for Impro\ing Forest Productivity, unpublished manuscript, Center for Resource and Environmental Policy Research (Durham, N. C.: Duke University,

School of Forestry and Environmental Studies, 1979), p. 16.

iTUnpublished results of the 1981 Reforestation Surve}’ conducted by U.S. Department of Agriculture, Statistical Reporting

Service, Crop Reporting Board.

q8Neal P. Kingsley, “The Northeastern Forest Landownership

Study,” in Jack P. Royer and Frank J. Convery, eds., IVonlndustriaf Private Forests.’ Data and information Needs Conference Proceedings (Durham, N. C,: Duke University School of

Forestry and Environmental Studies, April 1981], p. 90.
176 ● Wood Use: U.S. Competitiveness and Technology

— — - — —

provement purposes. Only 9 percent of the

owners have ever received any kind of forestry

assistance, 39

Similar but more explicit findings come from

the Southeast. For instance, on lands from

which pine has been cut, the most common

harvest method was partial cutting, a practice

resulting in site conditions that are suboptimal

for pine regeneration. On 80 percent of the harvested lands, no site preparation practices

(readying the land for reforestation) were carried out, and 65 percent of the lands were not

planted or seeded with pine but left to reforest

themselves naturally. As a result, these lands

probably will be restocked eventually with

hardwood or mixed pine/hardwood stands of

relatively low timber value. Eighty percent of

the lands in the sample were not covered by

forest management plans. 40

These statistics would be more illustrative if

they could be compared with similar data for

other ownerships, but such information is not

available. They do suggest, however, that PNIF

owners as a whole in the Southeast are not taking active steps to perpetuate their supplies of

pine.

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 (97

be increased dramatically through intensified ft

3

/year), although actual growth in 1976

management. Net annual growth on all com- reached only about half that, The South has the

mercial forestland in the United States in 1976 next highest potential (77.3 ft3

/year), with acwas about 60 percent of the estimated produc- tual growth the highest for any region (74 pertive 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 Acre

in the United States, by Ownership and Section, 1976 (cubic feet)

All National Other Forest Farmer and

Item ownerships Forest public industry other private

North

Current . . . . . . . . . . . . . . 35 43 36 44 33

Potential. . . . . . . . . . . . . 66 63 59 74 66

South

Current . . . . . . . . . . . . . . 57 57 54 60 56

Potential. . . . . . . . . . . . . 77 71 71 83 77

Rocky Mountain

Current . . . . . . . . . . . . . . 29 30 25 50 25

Potential. . . . . . . . . . . . . 60 64 55 74 51

Pacific coast

Current . . . . . . . . . . . . . . 49 30 53 80 62

Potential. . . . . . . . . . . . . 97 91 88 119 99

United States

Current . . . . . . . . . . . . . . 45 35 42 59 45

Potential. . . . . . . . . . . . . 74 74 68 87 72

apOtenti~ ~ro~rh is defln~ ss the average net growth attainable in fully stocked natural stands. Much hi9her 9rowth can

be 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 Annual

Growth per Acre by Sectiona

North

South

Rocky Mountain

Pacific coast

Current 1976

Potential

I I I

o 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 managed

stands

SOURCE U S Department of Agriculture. Forest Service, An Analysfs of fhe

Tmber Sifuat/on In the United States 1952-2030 (Washington, D C

U S Government Printing Office, 1982), p 137

Historical evidence suggests that dramatic

gains in productivity could be made with

modest improvements in the intensity of timber

management practices .41 The rate of improvement would depend on two factors—the time

required for wood output to be increased as a

result of management investments and the rate

at which landowners are willing and economically able to intensify forest management.

Because of the lag time between management

investments and resulting yields, the full impact of intensification measures begun immediately would not be attained nationwide until after 2000 and probably would not peak until

after 2030.

Through cooperative Federal, State, and

private programs, most U.S. forestland is now

managed extensively to control wildfire and

limit damage from insects and disease. About

1.4 billion acres of forest, rangeland, and other

rural land are now under organized fire protection. The total area of commercial forestland

“R. Fisher, “Productivity in Florida’s Third Forest, ” }ournaf

of Forestry. VO]. 79, 1981, pp. 613-615.

Ch. VI— The Forest Resource Base ● 177

————.

burned by wildfire has decreased significantly since the early 1950’s, in part because more

land is now protected. Successful control and

suppression of wildfire almost certainly has

contributed much to improved growth trends

on private nonindustrial lands.

Intensive timber management is applied currently on only a small portion of U.S. forestland, but apparently its use is spreading, Most

of the practices now applied involve planting

trees or seeding harvested areas with commercially desirable species, primarily softwoods,

and intermediate stand treatments, primarily

precommercial thinnings and release/weeding

(see ch. V for a discussion of management

practices).

Artificial regeneration of stands has increased steadily on forest industry lands since

the early 1950’s as well as on public lands,

although to a lesser extent. Planting of PNIF

lands reached an all time high in the late 1950’s

and the 1960’s as a direct result of the Federal

soil bank program, now defunct, which paid

farmers to plant trees on cropland to conserve

soil and reduce grain surpluses. Intermediate

stand treatments on all ownerships reached a

high point in 1968, having fallen off subsequently. Figure 31 and table 35 show estimated

annual acreage treated by ownership and region. Current levels of tree planting and

seeding on all PNIF lands are less than half the

levels of the soil bank era.

The first systematic evaluation of the possible effects of cost-effective management was

completed in 1980 by the Forest Productivity

Project of the Forest Industries Council. This

project developed detailed estimates of the

economic potential for increasing timber

growth, by ownership, in 25 States that contain about 80 percent of the commercial forests

in the United States,

The Forest Industries Council study estimated that profitable management opportunities could be undertaken on 139 million acres

of commercial forestland in these 25 States if

the minimum rate of return was 10 percent,

The Forest Service, using a 4 percent returnon-investment criteria, estimated that 168
178 . Wood Use: U.S. Competitiveness and Technology

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 Printing 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

137

164

191

212

236

242

235

258

285

283

308

302

270

270

269

268

265

245

281

250

225

271

211

195

168

249

184

160

233

United Rocky

Year States North South Mountain

1950 . . . . . . .

—

488 -

1951 . . . . . . . . . . . 453

1952 . . . . . . . . . 520

1953 . . . . . . . . . 710

1954 . . . . . . . 808

1955 . . . . . . . 779

1956 . . . . . . . . . 886

1957 . . . . . . . . . . 1,138

1958 . . . . . . . . 1,533

1959 . . . . . . . . . . . 2,117

1960 . . . . . . . . 2,100

1961 . . . . . . . . . 1,761

1962 . . . . . . . . . . . 1,366

1963 . . . . . . . . . . . 1,325

1964 . . . . . . . . . 1,313

1965 . . . . . . . . . . 1,285

1966 . . . . . . . . . . 1,281

1967 . . . . . . . . . . . 1,373

1968 . . . . . . . . . . . 1,439

1969 . . . . . . . . . 1,431

1970 . . . . . . . . . . . 1,577

1971 . . . . . . . . . . . 1,667

1972 . . . . . . . . . . . 1,647

1973 . . . . . . . . . . . 1,721

1974 . . . . . . . . . . . 1,576

1975 . . . . . . . . 1,900

1976 . . . . . . . . . . . 1,858

1977 . . . . . . . . . . 1,942

1978 . . . . . . . . . . 2,072

285

245

250

420

506

482

574

782

1,080

1,642

1,567

1,205

816

798

756

708

696

769

795

808

925

1,002

1,014

1,051

1,037

1,269

1,172

1,301

1,245

15

15

15

17

17

5

7

7

7

13

14

18

27

37

42

64

69

65

69

73

70

84

68

81

65

73

76

57

74

Pacific

coast

52

29

63

60

49

51

70

91

161

179

212

235

253

221

246

245

251

294

294

300

357

310

354

394

306

309

426

424

520

National

Forest

45

46

50

53

54

56

61

85

89

112

134

163

198

221

208

233

237

257

269

257

261

267

268

299

272

293

292

257

296

ownership

Other Forest

public industry

54 153

49 106

67 143

89 217

70 265

72 239

84 257

86 311

119 370

123 417

130 521

140 588

151 443

151 467

161 485

136 455

144 475

132 527

128 604

127 681

131 763

124 895

114 828

123 879

116 836

138 1,059

135 1,040

120 1,138

124 1,145

Farmer

and other

private

237

253

260

352

419

413

484

657

955

1,465

1,315

870

573

486

460

461

425

457

437

367

422

381

436

420

352

410

391

427

507

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 (national forest land was excluded). Capital requirements for taking advantage of all of the

management opportunities identified in the

two studies would be high, both in aggregate

($10 billion to $15 billion nationwide) and on

a per-acre basis.42

Most of the opportunities identified involved

establishing and maintaining softwood species

in the East, primarily on private nonindustrial

forestlands and often at a cost of more than

$l00 per acre (table 36). Less costly management opportunities (such as management of existing hardwood stands to optimize growth)

42 A11ajJ,5;,S of the Tjmber Situation, op. cit., p. 248: alld

F1ore\t ries Industry Council, F’orest Productivity’ Report, p. 46.

received less attention. Planting softwoods on

idle fields also is less expensive than stand

regeneration on harvested sites, but this too

was not emphasized in the two studies, which

were conducted prior to 1983 cropland setasides.

Many factors are believed to influence private landowners’ management decisions, and

the most important ones seem to be closely

related to potential return on the management

dollar.

43 Other factors such as tract size and

ownership tenure also are believed to be influential, especially on PNIF ownerships. In addition, there is evidence that timber manage4S 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 by

the 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 $111.30

Stocking control . . . . . . . . . . . . . . . . . . . 46.7 1,569 33,60

Forest Industry Council:

Harvest and regeneration . . . . . . . . . . . 48.2 4,072 84.50

Stand regeneration. . . . . . . . . . . . . . . . . 16.4 1,872 114.15

Intermediate stand treatment . . . . . . . . 38.3 756 19.74

Stand conversion . . . . . . . . . . . . . . . . . . 33.3 3,353 100.69

Plant 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 of

Agriculture, F~rest Service, 1982)

ment costs have been rising faster than inflation since the late 1960’s.44

Markets

Uncertainty about future timber markets is

perhaps the single greatest deterrent to intensified timber management, since investments

need to be made decades in advance of harvest.

Limited markets are an especially important

constraint on private nonindustrial forests of

the North, where the majority of stands support low-grade hardwood stands that historically have been in low demand. New manufacturing processes (such as waferboard plants)

have improved markets for such materials in

some areas. Expanded hardwood markets, particularly opportunities to sell lower grade,

small-size hardwood timber, could stimulate investment in the conversion of less profitable

hardwood stands to more valuable softwoods

or could lead to improved hardwood management. Increased fuelwood consumption also

could encourage such stand improvements if

properly undertaken. Since only a small percentage of fuelwood harvesters seek professional advice, fuelwood removals probably are

not improving existing stands appreciably.

Stumpage Prices and Market Structure

PNIF owners respond to increases in stumpage prices by making more of their timber

“J. Moak, W. Watson, and P. Van Deusen, “[;osts and Cost

Trends for Forestry Practices in the South, ” Forest Farmer

hfanua], 1981, pp. 58-63.

available for harvest. 45 46 47 Seventy-three percent of PNIF owners surveyed in the Southeast

said that they harvested their timber because

they were offered a good price, while the second most important reason was that the timber had reached maturity. 48

Stumpage prices also influence the propensity of landowners to manage their timber,

although the effect is less clear. Among PNIF

owners in general, a poor market usually is not

considered a serious land management problem.

49 However, landowners who see timber

production as an important priority respond

differently, For example, nonindustrial members of the American Tree Farm System (an

industry-sponsored program providing recognition and information to landowners) said low

stumpage prices more often than any other variable discouraged them from managing their

tree farms more intensively. 50 51

%lark S. Birddey, Timber Supply From Private Non-Industrial

Forests, 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 tives

for Non-Industrial Private Forests, report of the Workshop on

Policy Alternatives for Non-Industrial Private Forests [Washington, D. C.: Society of American Foresters and Resources for the

Future, 1978], p. 22.

iTClawson) The Economics of U.S. Nonindustrial private

Forests, op. cit., p. 187.

48U11pub]ished results of the 1981 Reforestation Survey.

iest(lneland Research, ‘‘A Study of Private Woodland OWnership 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, Tree

Farm News, February 1973, p. 4.

‘lAmerican Forest Institute, “Tree Farm Survey Yields Interesting Data, ” Tree Farm News, summer 1979, p. 3.
———

Ch. VI—The Forest Resource Base • 181

PNIF owners in many areas are at a disadvantage in the marketplace because there are

relatively few timber buyers. Because of the

high ratio of transportation cost to wood value,

markets for many tree species and grades of

logs are highly localized and may be monopolistic in some respects, often with only one or

two purchasers.

Information

PNIF owners often know little about current

wood prices, volume estimation techniques,

and other aspects of stumpage sales. Thus,

many owners have little chance or ability to

influence the price they receive for their wood

other than electing not to sell. PNIF owners in

some areas are seeking more professional assistance and getting better prices as a result,52

but they are exceptions to the rule.

In addition, owners also may not know

enough about potential yields, market characteristics, and timber prices to make good decisions about investing in intensive forest management. Computerized information programs

may be an important solution to this problem.

The Tennessee Valley Authority [TVA), for example, has developed a software program usable in personal computers that can facilitate

timber management decisions (see box I), TVA

also is training consulting foresters as part of

an outreach effort to expand the use of this tool.

Plans by USDA to place computers in county

extension offices could broaden the use of such

systems.

Length of Ownership

The private nonindustrial forest owner typically owns a parcel of land for a relatively

short time. According to the Forest Service

report, The Private Forest Land Owners of the

United States, more than one-fifth of all private

forests were acquired by the present owner between 1970 and 1978, while another 20 percent

were acquired between 1960 and 1969, In contrast, only 27 percent of the commercial forest

szPersona] communication with J, E. Carothers, I,ouisiana Tech

University, Aug. 2, 1982.

area was owned by the present owner for at

least 30 years,53 These estimates include forest

industry land, which tends to be held for long

periods of time. Transfer of ownership on

PNIF lands, therefore, may be more rapid.

Tenure may be slightly longer for lands

whose owners name timber production as a

major objective, but the difference does not appear to be significant. PNIF owners as a whole

acquired their land somewhat more recently

than did members of the American Tree Farm

System, according to one survey, but 24 percent of American tree farmers still have owned

their property less than 10 years .54

Short tenures may have a beneficial effect on

timber harvest, since owners who are reluctant

to harvest soon may be replaced by new

owners with new objectives. However, the

rapid transfer of forest real estate from one

owner to another may complicate efforts to increase the intensity of PNIF management.

Most private forestland is held in a single

ownership for less than 30 years—the minimum amount of time required even in the

South for a stand to reach maturity. It is uncertain whether new owners in general continue

management efforts begun by the prior owner.

Tract Size

various studies show that owner inclination

to harvest timber correlates with parcel size.

The larger the holding, the more likely it is that

the owner will harvest timber from it, According to one researcher, “A shift in the distribution of parcel size to small holdings will, all else

equal, lead to less timber supplied,” 55 Eve n

when owners of small parcels want to harvest,

small-scale logging may be unattractive to large

buyers because of the high cost of moving

equipment from one logging site to the next,

Cooperative management approaches and

small-scale machinery can alleviate this problem.

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,
182 ● Wood Use: U.S. Competitiveness and Technology

Box I.—Information Technology and Forest Management

Computer technology can assist forest managers in several ways through easy storage and rapid

retrieval 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 individual forest plans (FORPLAN) as well as in modeling long-range forest needs. The Forest Information Retrieval System (FIR) administered by the Southeastern Forest Experiment Station has

for many years provided landowners, industry, and government with easily retrieved, low-cost

data at the local, State, and regional levels. The system is commercial and users pay for information retrieved.

With the advent of the microcomputer, personal computers, and associated software programs,

computers may now facilitate PNIF management operations. Several forest management software

programs now are commercially available. One of the leaders in the development and application

of computer technology to forest management is TVA, a public corporation established by the

Federal Government in 1936. TVA has developed a software program (WOODPLAN) that combines forest management and business administration that can be used in personal computers.

WOODPLAN programs now available permit users to process timber inventory data into standard stock tables, to forecast yields according to alternative management strategies, and to predict

potential lumber yields and corresponding value based on current prices. Financial analysis programs, as well as a “caretaker program” which will store, retrieve, and process information for

clients 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 consulting

foresters in the region. About 10 consulting foresters have been setup in business since the program was established. TVA presently guarantees work to these foresters during their first 3 years

of business to help them get started.

Distribution of the WOODPLAN program has been facilitated through the establishment of

Forest 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 commercial

firm.

National and regional data comparing management intensities by tract size is not

available. However, a similar relationship probably exists. Owners of smaller tracts probably

are less likely to manage their land than owners

of larger tracts, although there is no data to support this hypothesis. Management of small

tracts often is relatively more expensive than

large tracts, because it lacks economies of

scale. The Forest Service estimates that the peracre cost of site preparation and planting, precommercial thinning, and removal of trees can

be two to five times higher on a lo-acre parcel

than on a 160-acre parcel.56

Financial Considerations

The peculiar economics of PNIF management often have been singled out as a major

roadblock to improved productivity. Specifically, investment requirements or costs of man-

‘U, S, Department of Agriculture, 7%e Fe~eral Role in the Conservation and Management of Private Nonindustrial Forestlands,

op. cit., p. 20.
Ch. VI—The Forest Resource Base • 183

agement often are high—as much as $100 to

$200 per acre for stand establishment–and

cash returns cannot be expected for at least

15 years. This lack of immediate or regular income may discourage PNIF owners, especially those who may not be able to realize a return

within their lifetimes. In addition, investments

in timber management are illiquid and risky

due to potential damage from fire, insects, and

disease.

Also, capital sometimes has not been readily available for PNIF management, but this

dearth may be improving as forestland becomes more valuable. Although data on forestland prices is fragmentary, anecdotal evidence

suggests that in many areas forest prices increased even more rapidly than farm prices,

which rose 900 percent between 1950 and 1977

before tapering off recently .57

Increased land values, coupled with financial incentives (such as low-rate long-term

loans with no payback penalty offered to PNIF

landowners by Federal Land Banks) permit

landowners to use their timberlands for collateral. Federal, and in many cases State, tax

codes also give preferential treatment to timber

acreage. In addition, limited assistance has

been offered to PNIF owners through Federal

programs such as the Agricultural Conservation Program and the Forestry Incentives Program, although funding for these programs currently is uncertain.

Insurance companies, banks, and other commercial investors are showing interest in owning and managing PNIF lands, especially in the

South. 58 The E. F. Hutton Group, which has acquired, managed, and sold timber in the Southeast since 1979, bought 40,000 acres of southern forestland for commercial management in

1981. The First National Bank of Atlanta’s

“Collective Timberland Fund” is an intermediary for pension funds and for other investors

in managed commercial forestlands. Since

~pH~a]y and short, Market for Rural Land, op. cit., p. 9.

SeSee, for exa mp]e, E, F. Hutton & Co., Inc. HU tton STouthern

Timber Partner 1: Prospectus, Oct. 30, 1981; and The First National Hank of Atlanta, Timberland, A Growing Investment From

the Ground Up, May 1, 1981.

these companies do not operate mills, they are

not classified as part of the forest products

industry.

Federal and State Programs for

Private Forestland Management

Federal and State tax policies offer preferential treatment to timberland owners. Federal

tax incentives that make timber management

more attractive to private investors include the

capital gains treatment of timber income, the

deductibility of some reforestation costs, the

preferential valuation of forestland for estate

tax purposes, and the deductibility of timber

losses (see box J). Many State governments also

provide preferential estate tax treatment and

have established preferential assessment of forestland for property tax purposes.

The Federal provision allowing capital gains

treatment of timber income entails a greater

subsidy to timberland owners than all other

Federal programs combined, but does not require that tax savings be used for management

activities. Although the favorable tax treatment

of timber income probably has encouraged

management intensification, its direct effect on

investments is difficult to establish, due to their

long-term nature and many other factors. Another Federal tax provision, adopted in 1980,

allows a deduction for reforestation expenses,

up to a maximum of $10,000 annually under

certain circumstances.

Several Federal programs to provide information, technical help, and direct cost-sharing

assistance to private landowners have been

established over the last 50 years. These programs are administered by several USDA agencies besides the Forest Service, including the

Soil Conservation Service, the Agricultural

Stabilization and Conservation Service, and the

Cooperative Extension Service. Most funds go

through the Forest Service to State forestry

agencies for subsequent dispersal, although

some USDA agencies administer forestland assistance through general agriculture programs.

The most important cost-sharing program is

the Forestry Incentives Program (FIP), which
184 ● Wood Use: U.S. Competitiveness and Technology

Box J.-Federal Tax Incentives to Timberland Owners

Capital Gains Treatment of Timber Income-Under the current IRS Code, gains on the sale

of timber maybe treated as capital gains rather than as ordinary income—a provision favored by

the forest products industry and timberland owners since capital gains are taxed at a lower rate

than ordinary income. Capital gains treatment makes timber growing more lucrative, although

there 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 and

plants and equipment would have been 5 to 7 percent less between 1971 and 1978 if the capital

gains provision did not exist.59 If timber-growing alone were the sole purpose of the capital gains

provision, however, other tax options (such as investment tax credits) would be a more direct route

to assure that Federal tax expenditures were contributing to management. Current Federal revenues

foregone because of the provision are about $500 million per year, two-thirds of which goes to corporations, 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 annually under certain circumstances-with associated limited income tax credits. Under the amortization schedule established by the 1980 law, a landowner needs to incur reforestation expenses

of $10,000 per year for 7 years before the maximum deduction can be taken. Although directly

linked to reforestation expenditures, this tax provision is not likely to affect significant acreage

since it currently covers reforestation costs of about 100 acres per landowner (assuming $100 per

acre in costs). Current Federal tax expenditures accruing from the program are $20 million to $30

million per year-about 200,000 to 300,000 acres, assuming $100 per acre reforestation costs. Most

of these benefits now go to corporations, but the individual share is expected to increase in the

next 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 inherit

forestland. Heirs are exempt from Federal estate taxes on gains in property values realized prior

to 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. Estate

tax payments may be spread over a l0-year period if forest property comprises 35 percent of the

estate’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 for

its 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 preclude

its widespread use.

Casualties, Thefts, and Condemnations-Deductions are permissible for timber losses due

to fire, storm or other casualty, theft or condemnation by a public agency if the timber is not

salvageable and not covered by insurance. Although not a tax provision, the Federal Crop Insurance

Act of 1980 (Public Law 98-365) authorized a pilot program related to insurance against risks and

losses associated with forest industry needs (including appreciation). The initial pilot program is

not 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 imand the Agricultural Stabilization and Conser- provement and reforestation on about 2.2 milvation Service. Between its 1973 inception and lion acres of private forestland. FIP assistance

1981, 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 annually in natural stands.

A recent evaluation of the FIP program by

the Forest Service and the University of Minnesota concluded that the program has gained

in efficiency over time.60 The average size of

tracts has increased and 70 percent of the

treated acres in 1979 were on timberlands capable of producing 85 ft3

/acre/year in natural

stands. Nonetheless, most of the treated sites

in 1979 were small (41 acres for reforestation

and 31 acres for timber stand improvement),

and about 6 percent of the acres treated in 1974

had not been retained by the owner through

1981, Several States have established their own

forestry incentives programs since FIP was

enacted. The Reagan administration, in its

fiscal year 1984 budget proposal, has requested

that Congress consolidate FIP with the Agricultural Conservation Program and has sought

no funds for FIP.

Three 1978 enactments—the Cooperative

Forestry Assistance Act (Public Law 95-313),

the Renewable Resources Extension Act (Public Law 95-306), and the Forest and Rangeland

Renewable Resources Research Act—placed

additional emphasis on technical assistance,

research, education, and information programs

for private forestry. These programs have the

potential to reach more landowners than direct

cost sharing, but funding has been limited, especially for education and information. In addition, several Federal environmental laws

have direct and indirect effects on timber

management on private lands (see box K).

For many years, State governments have provided forestry-related technical and information services to forest land owners, as well as

fire suppression and other extensive management assistance. Currently, these programs are

supported by the Forest Service’s Rural Forestry 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 (St. I)aulj

hlinrl [ Trlii(’rslty of h! i[l ncsota, A~ri(.lllt(lrtil [ixljt’rim(?nt St,]-

tlorl 55(1, 19831

Recently, State legislatures have expanded

forestry-related activities. A 1981 survey by the

National Conference of State Legislatures

found significant modifications in State programs during the 1970’s61 (table 37). State programs at the end of 1981 included:

●

●

●

●

●

preferential forestland tax treatment in at

least 22 States;

six cost-sharing programs, either independent of or supplemental to the Federal

Forestry Incentives Program;

15 State forest practices acts that regulate

harvesting activities, environmental practices or reforestation;

other initiatives designed to retain forestland in productive use; and

forestland retention Provisions of various

kinds.

Most of the State programs are intended to

encourage timber production and management. Some State forest practices acts, however, have more complex objectives, including

environmental protection which in some instances may have negative effects on intensified forest management. California’s law

(California Public Resources Code Division 4,

ch. 8), which is the most stringent, is believed

by some to actually discourage timber management, even though one of its goals is to improve

it, because of high compliance costs. One analyst makes informal estimates of $10 to $40 per

thousand board-feet for additional costs

resulting from implementation of practices required by law and concludes, “ . . . it seems

quite unlikely that the costs associated with

rule requirements are likely to have much effect on the magnitude of operations, except in

a limited number of marginal cases. Quite

clearly, however, the net returns from timber

harvesting to some stumpage owners have

been significantly reduced. ”62
186 • Wood Use: U.S. Competitiveness and Technology

Box K.—Environmental Regulations and Timber Management

Environmental damage is to some extent unavoidable in timber harvesting and management

activities, but many of these impacts can be ameliorated through environmentally sound management. Environmental protection is a key management objective of congressional policy articulated

for Federal lands. Several recent Federal and State laws related to water quality, air pollution control, and chemical use affect forest management activities on private lands, although often less

directly. 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.) affect

forestry activities, but to date implementation of these provisions has not substantially impeded

silvicultural activities. The act’s section 208-aimed at reducing nonpoint pollution (including that

which results from timber harvesting and other silvicultural practices)—has been implemented primarily through State level educational efforts and voluntary compliance with forest practice guidelines. It is not known whether these voluntary guidelines have been widely adopted by PNIF owners

or how widely the guidelines diverge from common practices, but it appears unlikely that timber

production would be significantly affected by compliance. Some foresters feared that section 404

of the act would restrict some practices for crossing streams and forest drainage areas, especially

in the South where wetlands abound. To date, however, forest managers apparently have been

successful in qualifying for exemption from 404 provisions or in obtaining the necessary permits

to conduct forestry operations. The extent to which 404 restrictions may diminish forest productivity or discourage landowners from intensifying management is speculative but appears to be

minimal.

Clean Air-Prescribed burning of forestlands is regulated under particulate emission provisions of the Clean Air Act (42 U.S.C. 7401 et seq.), and forest management interests have feared

that 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. Permit

and notification requirements do not appear to be burdensome, and smoke management regulations seem to restrict scheduled burning activity only rarely.

Chemical Use-Regulation of chemical uses under the Federal Insecticide, Fungicide, and

Rodenticide 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 on

forest productivity is uncertain. Some States’ legal requirements for applicator licensing and water

monitoring, coupled with rising insurance Premiums, may result in higher Costs of chemical application
Table 37.–Selected State Activities Related to Private Forest Management, 1981

State Cost sharing

Alabama a . . . . . Considered but not adopted

Alaskaa . . . . . . . ., Authorization exists but

appropriation to date

Arizona ... . . —

Arkansas a . . . . —

no

Callforni a

a

80- to 90-percent cost-sharing for

reforestation, Timber stand

improvement and land

conservation-1 978

Colorado . . . . . . . . . —

Connecticu t

a 

. . . . . —

Delaware . . . . . . . . . . —

Florida. . . . . . . . . . Considered but not adaptedc

Georgia . . . . . . . . . —

Hawaii . . . . . . . . . . . . —

Idaho . . . . . . . . . . . . . —

Illinois . . . . . . . . . . . . Considered and defeated in

legislature 1979 and 1980

Indiana . . . . . . —

Kansas ., . . . . . . . . —

Kentucky a . . . . —

Louisiana . . . . . . . . . Considered but not adopted

Maine . . . . . . . . —

Maryland . . . . . . . . . —

Tax provisions

Fixed assessment rate on land

Timber exempted from ad valorem

Severance on timber

No special tax treatment

Ad valorem with market-value

assessment on forestland and

timber on more than 40 acres

Use value assessment on productivity

of forest land. Severance tax on

timber products. Five cents per

acre fire protection tax

Use valuation on zoned land; yield tax

on severed timbers

Ad valorem tax on land; conditional

exemption of increased value as

result of planting

Use valuation on land; yield tax on

land and timber

30-year exemption for established

commercial plantation of 5 acres or

more

Forestland valuation based on

potential yield according to site

index as an annual ad valorem tax

on capitalization of net income

expected from yield

No special treatment for forest lands

Use valuation on land; yield on

severed timber. Private lands under

public management are exempted

Yield tax on severed timber 61 per

acre assessment on land

No special treatment for forestlands

Lands classified as forest are eligible

for $1 per acre assessment

Use valuation IS authorized but not

implemented

Use valuation on land; standing

timber is Included in land valuation

Use valuation on land; severance tax

on timber

Tree Growth Law provides

productivity valuation; standing

timber included with land

Assessment Iimits on classified

lands; income tax credit being

considered

Forest practice acts

Voluntary with recommended

guidelines for nonpolit source

pollution b

Requires reforestation of all

public and private harvested

lands; regulates harvesting

practices —

Retention of forestland

—

Authorization exists for retention

of forestland in State ownership

for multiple use, but no lands

designated

—

—

Comprehensive regulations to

maintain timberland productivity

water quality, and other values

—

—

—

—

—

—

Requires reforestation and

regulates harvesting practicesb

—

Classified forestlands must meet

minimum management

standards

—

—

—

Land Use Regulation Law

regulates harvesting in shore

lands and hazard areas

Forest Conservancy Law and Pine

Reforestation Law

Favorable tax treatment IS

conditioned on timberland

preserve zoning, permit IS

required to convert

Educational program to promote

multiuse

Open-space law provides favorable

tax treatment for classified

timberland

—

—

—

Statewide zoning by land-use

commission provides some

protection

—

—

Tax provision of the Forest

Classification Act encourages

retention

—

—

—

—

Forest Conservancy Law and its

tax provisions are intended to

encourage 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 tax

on severed timber

Classified forestland is taxed at a

fixed rate; yield tax on timber

Productivity valuation on land plus

yield tax at fixed rate on land.

Valuation on timber IS at fixed rate

Massachusetts .

. Slash reduction, wetlands

protection, and harvesting plans

are required

—

Forest Tax Law is intended as

Incentive for retention

Michigan . . . — —

Minnesota. ... 50-percent cost-share for 7-county

area administered by Soil and

Water Conservation District, 1979

— —

and according to management

agreement

Mississippi 75-percent cost-sharing Program ,. Ordinay Property tax on land; Mississippi forest harvesting law —

Missouri a . . . . . . . .

funded by severanc; t“ax ~ith $37

per acre limit, 1974

severance tax on timber

Fixed assessment on classified land

(voluntary tax law); yield tax on

timber harvested from classified

land only

Land is assessed by productivity and

accessibility for ad valorem taxes

Related to grassland value

— —

Montana . . . . . . . . . .

Nebraska. . . . . . . . . .

Nevada . . . . . . . . .

New Hampshir e

New Jerse y

a

. .

—

—

—

By executive order, owners must

have State approval for tree

cutting

Very extensive seed-tree

requirements and strict

harvesting standards

Several laws regulate timber

harvesting techniques

Use value assessment on classified

land; yield tax on severed timber

Use valuation on land if certified as

tree farm; yield tax on severed

timber d

Use value assessment base on

productivity

Voluntary with recommended

guidelines for nonpoint pollution

Pineland Protection Act Iimits

development and encourages

forestry or agricultural use on

1.1 million acres

New Mexicoa 

. . . . . . — Productivity valuation on land; Forest Conservation Act requires

severance and excise tax on timber reforestation, seed tree,

harvesting standards, and fire

prevention

Extensive technical assistance

Including management planning

and timber marking

—

New Yor k

a — Tax treatment IS intended to

encourage retention and

management of forestland

—

Forestland is assessed at a reduced

rate; yield tax

North Carolin a

a 60-percent cost-sharing on a

maximum 100 acres per year

funded by primary products

assessment and State

appropriations, 1978

North Dakot a —

Use valuation on land; exemption for

standing timber. Amortization of

timber receipts

Differential valuation in lieu of ad

valorem taxes on land and timber

Forestland is taxed at 50 percent of

normal rates, use valuation is

optional

Market valuation on land; ad valorem

on timber

Use valuation on land; income tax

credit for reforestation

capitalization of income over

rotation; yield tax on timber

— —

Ohio. . . . . . . . . . — — —

Oklahom a —

Oregon a ... . . . . . . Considered but not adoptedc

Voluntary guidelines developed by

forestry committees

Practice Act provides for

reforestation, reading,

harvesting, chemicals, and slash

burning

—

State land-use law requires local

use plans to conform with State

goals and guidelines
Ch. VI— The Forest Resource Base ● 189 ———

I I

i

I II I
APPENDIX
APPENDIX

Glossary of Terms

Baling—The process of compressing pieces of

wood into a dense package or bale,

Best opening face (BOF)—A computer program,

developed at the U.S. Forest Products

Laboratory, that determines the optimum sawing

pattern to use on a log to maximize its lumber

yields.

Biomass—The total mass, at a given time, of living

organisms of all species in a natural community. In this report, biomass is used to describe the

total mass of woody plants, unless otherwise

specified.

Bleaching—The chemical treatment of pulp to increase its brightness.

Bristol—cardboard with a smooth surface suitable

for writing or printing.

Bucked log—A log that has been cut into smaller

lengths.

Burst strength—A measure of the ability of a sheet

to resist rupture when pressure is applied by a

specified instrument under specific conditions.

Cellulose—The major chemical constituent of plant

cell walls; a long chain polymer formed from glucose units.

Chemical pulping—The process of obtaining pulp

by cooking wood chips in acids, alkaline, or neutral salt solutions under pressure and high temperatures. This process breaks down the wood

structure and dissolves some or most of the lignin

and hemicellulose contents.

Chips—Small pieces of wood used to make pulp.

The chips are made either from wood waste in

a sawmill or plywood plant, or from pulpwood

specifically cut for this purpose.

Coated paper—Printing paper that has been coated

with materials that improve its printability and

photo reproduction.

Cogeneration—The combined production of electricity and useful thermal energy in one process.

Commercial forestland–All forestland capable of

growing 20 ft3 of industrial roundwood per acre

annually in a natural stand that has not been

withdrawn from timber harvesting by statute or

administrative action. This designation does not

necessarily imply that the land is currently being used for commercial timber production.

Corn-ply-Flat plywood-like panels or lumber-like

pieces with particleboard cores and wood veneer

faces.

Composite lumber–Lumber made from small

wood pieces, usually chips or veneers glued together.

Converted paper products—Paper that has been

converted to product form, such as envelopes, tissues, boxes, cartons, and printing and writing

papers.

Coppice system–A silvicultural system in which

timber crops originate from cutover stumps from

which shoots develop into mature timber. Coppice harvesting and growth cycles can be repeated as long as the supporting root system remains sufficiently productive.

Cover crop—A subsidiary crop of low plants introduced in the earlier stages of planting to protect the land from erosion and to suppress weeds.

Cull trees—Individual trees which, because of certain defects, fail to meet standards for commercial exploitation.

Disking—Cultivating with an implement (such as

that used in farming] that turns and loosens the

soil with a series of disks.

Edge, glue, and rip (EGAR)—A sawing and gluing

technique that reduces wood loss during milling

and permits use of low quality raw materials to

make high-quality lumber-like products.

Feller-buncher tree processors—A self-propelled

machine used to cut trees by shearing them off

near the ground, then move bundles of logs

across the ground surface using a hydraulic apparatus.

Fiberboard—Panels composed of wood fibers, usually glued together. They have extremely flat and

smooth surfaces and edges.

Flakeboard—Particleboard with surfaces composed of flakes or composed entirely of flakes.

Forage—Edible vegetation available for livestock or

wildlife grazing,

Fuelwood—Wood removed directly from the forests primarily to burn as fuel (firewood) for residential heating. Fuelwood is one type of “wood

fuel”.

Groundwood pulp—Pulp produced by grinding

wood between stone surfaces or between sets of

metallic bars in a refiner.

Growing stock—The net volume of live sawtimber

and poletimber trees from the stump to a minimum four inch top of the central stem or to the

point where the central stem breaks into limbs.

193
194 . Wood Use: U.S. Competitiveness and Technology

—.—— —

This definition includes most wood used by the

forest products industry; however some timber

supplies are derived from nongrowing stock

sources such as salvageable dead trees.

Hardboard—Flat panels made of individual wood

fibers, usually glued together. They are graded

according to density.

Hardwood—One of two broad classes of timber,

usually characterized in the tree by broad leaves

that fall off each year. Examples include oak, elm,

and ash.

Harrowing—Cultivating with an implement set

with spikes, spring teeth or disks used primarily

for pulverizing and smoothing the soil.

Industrial roundwood—Wood harvested for use as

an industrial raw material rather than as fuel.

Note: Residues derived from industrial roundwood are often used as wood fuels.

Intensive forest management—A general term

used to distinguish active versus passive treatment of specific forest sites. As used in this report

it refers to application of planned treatments to

forestland to enhance the quality and/or quantity of industrial timber. Management intensity

varies from simple procedures such as thinning

of stands for improved growth to complex use

of genetic and chemical technologies. Costs of intensive management vary accordingly. The technologies used are further described in chapter V.

Kraft—A strong paper or board made from woodpulp derived from chips boiled in an alkaline

solution containing sodium sulfate,

Lathing—The process of peeling logs to yield

veneer for plywood.

Lignin—The noncarbohydrate, structural component of wood that encrusts the cell walls and cements the cells together. Its exact composition

is unknown.

Linerboard—Stiff, durable, thick paper made primarily from bleached sulfate kraft pulp and used

as a facing sheet on corrugated box material or

in material for solid fiber containers.

Log—Any section of the trunk or of the thicker

branches of a felled tree after trimming.

Lumber–Beams, planks or boards produced by

sawing logs and used primarily for construction.

Mechanical pulping—The process of producing

pulp by use of a machine known as a defibrator

in which wood chips from debarked logs are

physically ground or are passed through a mill.

Millwork and molding—Units of wood completely manufactured and assembled ready for putting

in place; doors, window frames, etc.

Multiple use—Any forest management policy

which seeks to simultaneously fulfill several distinct objectives. In the case of National Forest

System and Bureau of Land Management lands,

these objectives are mandated by law and include

recreation, timber, wildlife, and watershed management.

Multispan logging—A type of skyline logging

where the cable is stretched between several

posts or trees.

Naval stores—A wide variety of chemical products

extracted from wood, including pitch, rosin, turpentine, and pine oils. The term dates back to the

days when wooden vessels were caulked with

pine tar and pitch.

Newsprint—A coarse textured paper of low

strength and limited durability which is made

from mechanical or semimechanical pulp, which

uses either hardwoods or softwoods.

Nondeclining even flow-The harvest policy on

National Forest lands which seeks to ensure sustained yield in perpetuity without diminishing

harvest levels; however temporary departures

from this policy are permitted under certain circumstances.

Oriented strand board—Flat plywood-like panels

made with alined strand or ribbon shaped pieces

of wood, sometimes crossbanded (strands in different layers oriented perpendicular to adjacent

layers), sometimes veneered.

Pallet—A low wooden platform, sturdy and portable, on which material is stacked to facilitate

handling and shipping.

Panel product—Any composite wood sheet including plywood, particleboard, fiberboard, and

veneer.

Paper and paperboard—All primary and converted

paper products including newsprint, printing

and writing paper, and paperboard. This term

does not include waste paper and waste paperboard unless otherwise specified.

Paperboard—A pulp product which is typically stiffer and thicker than paper; it includes linerboard

and corrugated boxes,

Parallel laminated veneer (PLV)—A composite

product made of layers of veneer laid with the

grain going in the same direction and united with

an adhesive or mechanical fastener.

Particleboard-A general term for flat panels manufactured from wood particles which are bonded

together with synthetic resin or other suitable

binder under heat.

Planing mills—Mills which plane or smooth the

surface of sawn timber.

Platform frame—The traditional American 2 x 4

method of building a house.

Plenum system—An underfloor wood construction
.—

Appendix: Glossary of Terms ● 195

. . . -—

heating/cooling system in which air pressure is

built up under the house, pushing air into the

rooms of the house without using ducts.

Plywood—Flat panels, usually 4 ft by 8 ft and less

than 1.5-in. thick, consisting of laminated hardwood or softwood veneers. The grain direction

of each ply or layer is usually at right angles to

the ones adjacent to it. The veneer sheets are

joined, under pressure, by a bonding agent.

Press drying–A new papermaking technology

which both reduces the amount of energy required in the papermaking process and enables

the greater utilization of some hardwood species.

Primary paper products—All paper and paperboard except converted products; includes linerboard, newsprint, etc.

Productive deferred forestland—Land that has

been temporarily withdrawn from timber utilization pending government action,

Productive reserved forestland—Productive public

forestland withdrawn from timber utilization

through statute or administrative action.

Pulp—A processed wood fiber in which varying

amounts of lignin have been removed in preparation for making paper.

Pulping liquors—A general term which refers to

the different chemicals used in the pulping process. “White Liquor” is the original sodium sulfide

and sodium hydroxide solution. “Black Liquor”

is the liquid rich in lignin salts and other organics

removed from wood in the pulping process. The

salts remaining after the water is removed and

the remaining viscous solution is burned in a recovery furnace (mostly sulfides and carbonate of

soda) form a molten stream known as smelt and

are recombined with water to form “Green

Liquor. ”

Rayon—A synthetic fiber made primarily from

wood by the viscose process using pure cellulose

produced by the dissolving pulp process. Its

properties are similar to those of cotton.

Roadless area review and evaluation (RARE)–

An administrative review of national forests to

identify potential wilderness areas for congressional consideration. There have been two such

reviews, RARE I and RARE II.

Roundwood—Logs, bolts, or other round sections

cut from trees.

Saw, dry, rip (SDR)—A process which allows

greater use of hardwoods for lumber manufacture by reducing their tendency to warp and deform.

Sawlines—The lines or cuts that a saw follows

through the wood.

Sheathing—A wooden covering laid over the exterior framework of a structure for attachment

of roofing and external wall coverings; often consists of particleboard and plywood.

Silviculture—The science and art of cultivating forest trees by tending, harvesting, and replacing

them in a way which results in the planned production of tree crops.

Skidding–A loose term for hauling timber by

sliding it along the ground,

Skyline logging–A method of power cable logging

in which a heavy cable is stretched between upright supports, the whole functioning as an overhead track for a log carrying trolley.

Softwood—One of the two broad classes of timber,

usually characterized in the tree by needlelike or

scalelike leaves that persist year after year. Examples include Douglas fir, hemlock, pine, and

spruce.

Solid wood products–All wood products except

pulp, paper, paperboard, and derived products.

Stand regeneration—The establishment of a new

timber crop. The three major regeneration methods are planting, seeding, and natural regeneration.

Stocking—The extent to which forestland is occupied by trees of specified classes. Classification of forestland and forest types are based on

stocking of all live trees. Classification of condition classes are based on stocking of desirable

trees.

Stumpage—Uncut standing timber.

Sustained yield management—Silvicultural systems designed to achieve perpetually a continuing balance between forest growth and harvest.

Tariffs—An official schedule of taxes imposed on

imported and less commonly exported goods,

either in the form of a percentage of their value

or as an amount per unit of measure.

Tensile strength—The capacity of a body to sustain equal and opposite forces tending to lengthen it in that direction. In wood, tensile strength

is high along the grain and low across it,

Thermomechanical pulping—In this process wood

chips are continuously fed into a steam heated

chamber with mechanical separation of the fibers

taking place at high temperatures.

Traditional quotas—Formal quantitative limits

placed on imports.

Truss framing—A method of homebuilding based

on braced framing designed to transfer structural

loads to the supports.

Veneer—A thin sheet of wood of uniform thickness,

produced by rotary cutting, slicing, or sawing.
196 • Wood Use: U.S. Competitiveness and Technology

Waferboard-Flat panels made with wafers or large

chips of wood glued and pressed together;

generally used in structural sheathing.

Waste paper—Paper or paperboard collected for

reuse either as raw material for new paper and

paperboard or as a fuel,

Wilderness—Federal lands designated by Congress

under The Wilderness Act of 1964 and subsequent legislation for protection and management

to preserve natural conditions. wilderness areas

generally show little evidence of human activity, provide outstanding opportunities for primitive and unconfined recreation, are at least 5,000

acres or more, and have important scientific, educational, scenic, or historic values.

Wood fuel—Any wood or wood derived source of

fuel including fuelwood (firewood), byproducts

of wood processing and manufacturing subsequently used as fuel, and specially processed

wood products specifically made for use in

energy production.

Woodpulp—pulp manufactured from either softwood or hardwood trees either by mechanical

means, chemical means or both,
Index
—

Index

Africa, 54, 56, 57

agricultural land, diversion of forestland to, 11

Alabama, 127

Alaska, 51, 124, 150, 165, 168

American consumption, 73, 75, 82, 88-94

American Forestry Association, 32

American Paper Institute, 63, 160

American Tree Farm System, 180, 181

Argentina, 60

Arizona, 165

Arkansas, 127, 154

Association of Consulting Foresters, 182

Australia, 59

Austria, 125

balance-of-payments deficit, 15, 49, 66

base level forecast, 14

Brazil, 8, 9, 13, 50, 55, 62, 146, 147

California, 123, 169, 173, 185

California Public Resources Code, 185

Canada, 3, 8, 9, 13, 15, 36, 49, 51, 52, 54, 55, 56, 57,

58, 59, 61, 68, 124, 128, 132, 146, 147

Canadian advantage, 13

Canadian Department of External Affairs, 128

Carter administration, 167

cellulosic fiber industry, 74, 86

Chile, 56, 59, 60, 62

China, Peoples Republic of, 13, 56, 59

Clawson, Marion, 156

clearcutting, 109, 110

commercial forestland, 148, 149, 150, 151, 152, 154,

155, 156, 158, 164, 165, 166, 169, 172

commercial thinning, 114, 115, 171

commercial timber production, 4

Corn-Ply, 134

computer technology, 182

Congress:

House Subcommittee on Forests, Family Farms,

and Energy, 4

Senate Committee on Appropriations, 4

congressional interest and options, 4, 22, 29, 30, 31,

32, 35, 37, 39, 41, 45, 168

construction, design improvements in, 136, 137

contribution to the domestic economy, 95

currency exchange rates, 64

decline in forestland, 143, 148, 151, 153

demand projections for wood, 89, 90

Department 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, 185

Commodity Credit Corporation, 65

Cooperative Extension Service, 5, 12, 34, 35, 39, 43,

128, 183

Farmers Home Administration, 43

Federal Crop Insurance Corporation, 5, 22

Federal Land Bank, 183

Foreign Agricultural Service (FAS) 5, 18, 20, 36, 37,

65, 66

Renewable Resources Extension Program, 35

Science and Education Administration, 5

Secretary of, 31, 32, 35, 38, 39, 88

Soil Conservation Service, 5, 12, 39, 43, 129, 143,

144, 153, 162, 183

Department of Commerce, 6, 19, 65, 66, 84

Bureau of Economic Analysis (BEA), 90

Foreign Commercial Service, 18, 37, 65

Department of Defense, 65, 165

Department of Energy, 37, 79, 144, 160

Department of the Interior, 19, 168

Bureau of Land Management, 5, 164, 165, 167, 168

Department of Justice, 20, 21, 33

Department of State, 6, 65

Department of the Treasury, 6, 19, 44, 45, 65

Domestic International Sales Corporation (DISC), 66

Douglas-fir, 58, 63, 109, 111, 112, 113, 114, 116, 147

E. F. Hutton Group, 183

Egypt, 60

Ellefson, Paul V., 171

employment, 7, 31, 75, 95

Energy From Biological Processes, 158

energy savings, 135, 136

environmental damage, 121, 159, 186

Environmental Protection Agency, 19

equilibrium level forecast, 14

European Community (EC), 61

European Economic Community (EEC), 61, 63

European Free Trade Association (EFTA), 61

exploitable forests, 8, 9, 13, 57, 146, 147

exports, 3, 13, 20, 37, 49, 51, 53, 54, 55, 56, 57, 58,

59, 60, 61, 62, 63

by area of destination, 54

embargos, 62

factors affecting, 64

U.S. expansion of, 15, 18, 35, 49, 50, 52, 58, 59,

60, 61

trade barriers, 15, 18, 35, 36, 37, 49, 60, 61, 62

Export-Import Bank, 65

Federal estate tax, 184

Federal ownership, 12, 45, 163, 169

fertilization, 113, 114, 117, 159

Finland, 13, 55

fire and pest control, 113, 177

First National Bank of Atlanta, 183

Florida, 127

Food and Agricultural Organization (FAO), United

Nations, 36, 50

Forest 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, 49

forest products industry:

competition, 97

consumption of industrial commodities, 97

employment, 7, 31, 75, 95

foreign markets, 53, 55 (see exports)

forest land ownership, 98, 169, 170

future role of, 8, 13, 75

importing (see imports)

innovation, 99

ownership objectives, 170

private business attitudes, 64

product mix and diversification, 98

pulp and paper sector, 7, 13, 37, 50, 51, 55, 56, 57,

61, 68, 83, 94, 95, 97, 100, 106, 131, 137

demand for, 74

established markets, 52

product recovery, 135

regional distribution, 99

sensitivity to economic activity, 99

solid wood sector (lumber and panel), 7, 13, 35, 50,

51, 55, 57, 59, 61, 67, 87, 95, 97, 131

product recovery, 132

U. S. lumber production by region (fig. 16), 100

U.S. position, 13, 30, 35

wood fuel use by, 80

wastes, 106

forest resources, assessment and reporting system

for, 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, 32

Forest Information Retrieval System (FIR), 155, 182

Forestry Incentives Program, 183, 184, 185

Private Forest Land Owners of the United States,

study, 173, 174, 181

research budgets, 33, 34, 128

Rural Forestry Assistance Program, 185

Southeast Forest and Range Experiment Station,

155, 182

U.S. Forest Products Laboratory, 86, 135, 136, 159,

160

France, 61

furniture, 85

General Agreement on Trade and Tariffs (GATT), 36,

60, 61, 62, 63, 65, 66

general questions, 4

genetically improved seedlings, 10, 114, 115, 116, 117

Georgia, 127

global economic conditions, 64

government assistance to exporters, 65

government participation in trade, 62

government policies that hinder exports, 65

Great Lakes States, 50, 51, 68, 98, 99, 132, 148,

165, 169

gross domestic product (GDP), 94, 95

gross national product (GNP), 75, 89, 90

Gulf 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, 125

harvesting equipment, 121, 122, 123, 124, 125, 126,

127, 128

harvesting systems, 34, 35, 120, 121, 122

herbicides, use of, 111, 112, 159

history of wood use, 76

Hong Kong, 59

housing demand, 89, 90

imports, 3, 13, 15, 18, 49, 51, 52, 60

American Market Syndrome, 65

Canadian softwood, 67

pulp and paper, 68

solid wood, 67

tonnage of U.S. wood, 66

value of U.S. wood, 66, 67

increasing timber supplies through manufacturing

and use, 130-139

Indonesia, 62

industrial roundwood, 13, 50, 139, 155

intensive timber management, 117, 118, 119, 145,

146, 155

factors affecting, 176-189

International Monetary Fund, 64

international trade, 3, 18, 20, 35

investment needed to achieve full economic potential,

3, 10, 41

IRS 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, 169

land use and ownership trends, 10, 11

Latin America, 49, 50, 54, 56, 57, 59, 60, 62

legislation:

Clean Air Act, 19, 185

Clean Water Act, 19

Cooperative Forestry Assistance Act (Public Law

95-313), 22, 34, 35, 43, 185

Endangered Species Act of 1973 (Public Law

93-205), 168

Export Trading Company Act (Public Law 97-290),

20, 37

Federal Crop Insurance Act [Public Law 96-365),

22, 184

Federal Insecticide, Fungicide, and Rodenticide

Act, 186
———— .— . .

Federal land Policy and Management Act

(FLPMA), 167

Federal Water Pollution Control Act, 186

Forestry and Rangeland Renewable Resources

Planning Act (R PA) of 1974 (Public Law

93-378), 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 Resources

Research 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, 6

Multiple Use and Sustained Yield Act of 1960,

166, 167

National Environmental Policy Act (NE PA) of 1969

[Public Law 91-190), 19, 167, 168

National Forest Management Act (NFMA) of 1976

(Public Law 94-585), 6, 19, 29, 31, 32, 88,

165, 167

National Renewable Resources Extension Plan, 129

Renewable Resources Extension Act (Public Law

95-306), 22, 34, 35, 43, 128, 129, 185

Smith Lever Act, 129

Soil and Water Resource Conservation Act (RCA)

of 1978 (Public Law 95-192), 39, 40, 143, 153

Wilderness Act of 1964 (Public Law 88-577), 19, 168

loblolly pine, 109, 111, 113, 116, 147

Louisiana, 127

Malaysia, 62

management of industrial lands, 171

Maryland, 173

Mexico, 51, 54, 56, 60, 62

Michigan, 154

Middle Atlantic States, 8, 38, 100, 173, 174, 175

Middle East, 54, 56, 57, 60

Minnesota, 160

Minnesota, University of, 171, 185

Mississippi, 127

Multilateral Trade Negotiations, 63

National Agricultural Land Study (NALS), 1 5 2

National Conference of State Legislatures, 185

National Forest System, 5, 6, 19, 29, 31, 32, 34, 62,

93, 160, 165, 166

National Forest Products Association (NFPA), 18, 36,

65, 118

national goals, 19, 30, 31

national research centers, establishment of, 35

National Security Council, 6 5

National Tree Biomass Compilation Committee, 157

National Wilderness Preservation System, 168

New England, 8, 100, 132

New York, 169

New Zealand, 59

non-Federal forestland data, 153

nontariff barriers (NTB), 60, 62, 63, 64, 65

nonwood-based corporation, forestland holdings, 173

North Carolina, 127

Index ● 2 0 1

.—. ——

North Central States, 8, 38, 51, 100

Northeastern States, 38, 68, 98, 173, 174, 175

Norway, 62

oak wilt, 58

ocean freight rates, 63

Office of Technology Assessment (OTA), 4, 5, 14, 16,

21, 22, 78, 79, 155, 158

Oklahoma, 127

O’Laughlin, Jay, 171

Oregon, 5, 165, 167, 169, 173

organosolv process, 136

out-of-date surveys, 152

overseas Private Investment Corporation, 65

ownership, 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), 134

payment-in-kind (PIK) program, 44, 153

Pennsylvania, 165, 169, 173

Philippines, 62

plywood recovery, 134

policy consideration, 4, 19, 23, 29, 31, 34, 35

precommercial thinning, 113, 171

primary processing, 96

private 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, 185

recycled paper, 107, 132, 137

regeneration, 112, 177

research and development (R&D), 3, 4, 19, 20, 21, 23,

33, 34, 35, 41, 106, 125, 128

RPA 1980 assessment, 9, 16, 17, 19, 20, 31, 33, 37,

38, 39, 80, 89, 93, 163

Sandwell International, 128

Saudi Arabia, 60

Saw-Dry-Rip process, 134

Scandinavian producers, 18, 34, 54

Seaway Port Authority, Duluth, Minn. 160

secondary processing, 96

selective cutting, 111

Shell International, 160

silvichemicals, 86, 87

silviculture, 10, 33, 34, 105, 106, 109, 115, 155

Singapore, 59

site preparation, 111

Small Business Administration, 65

small tract harvesting, 10

softwood, 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, 44

Solid Waste Council, 132

South Atlantic States, 51
202 ● Wood Use: U.S. Competitiveness and Technology

South Carolina, 127

South Central States, 51

Southeast Asia, 8, 18, 49, 56

Southern States, 7, 8, 38, 93, 146, 169

Spain, 58

specialty products, 18

State activities related to private forest management,

187-189

stumpage prices, 180

supply projections, 91

Sweden, 13, 55, 62, 106, 125, 127

systems approach to harvesting, 10

Taiwan, 59

tax incentives, 183, 184

taxonomy of major forest products (table 11), 77

technology transfer, 34, 35, 127

Tennessee, 127

Tennessee Valley Authority (TVA), 5, 19, 181, 182

Texas, 127, 171

timber growth and demand, domestic, 10, 16, 20,

40, 74

timber inventories, 9, 10, 17, 37, 41, 43, 45, 108, 109,

143, 156, 157

timber management needs, 40, 42, 45, 108, 145, 146

timber resource development, public and private

sector involvement in, 12

Tokyo Round of Multilateral Trade Negotiations, 61

transportation systems, 126, 146

truss framing, 137

usable residues, 34

uses for wood (table 1), 7, 76, 78-88

advanced materials, 86, 87, 88

cellulosic fibers, 86

construction, 81

furniture, 85

nutritional products, 86

shipping, 85

U. S. S. R., 8, 9, 13, 49, 50, 59, 62, 146, 147

U.S. timber supplies, 19, 40, 120, 144

U.S. Trade Representative, Office of, 6, 19, 36, 37,

65, 66

Venezuela, 60

Virginia, 127

Washington, 123, 165, 169

Western Europe, 3, 18, 34, 36, 49, 50, 51, 52, 53, 54,

55, 57, 58, 61, 62, 106, 121, 124, 125, 128, 146

wood fuel use, 7, 9, 33, 37, 39, 41, 79, 80, 81, 100,

102, 136, 144, 158, 159, 160

wood in construction, 81, 83

WOODPLAN, 182

wood products, major world producers of (table

3), 13

wood pulp, 83, 84

wood use, history of, 76

woodsworkers, training of, 127