common 1 x 12 lumber rose sharply until 1951 compared to the other 

 grades. A leveling off period followed, but 1960 showed a definite sharp 

 upturn in the relative price. 



The relative change of the price of lumber, adjusted to the quality of 

 stumpage, can also be shown by wholesale price index comparisons. 

 Both 1x6 and 1 x 12 lumber followed similar trends. That is, the rel- 

 ative change in price falls slightly below number 3 common Jjut well 

 above number 4 common. Figure 11 shows the price index for 1x6 

 lumber in comparison to the national wholesale price index of lumber 

 and the price index for stumpage. It can be seen that the adjusted price 

 of eastern white pine lumber enjoys a slight advantage over all lumber 

 in price increases since 1946. The price index for stumpage has risen 

 very sharply and steadily. It compares closely with the steady rise of 

 the indexes for grades 1, 2 and 3 common (Figures 9 and 10). It is 

 far above the index for the adjusted price of all lumber. Figure 11. 

 This rise in price of the industry's raw materials at a mvich faster rate 

 than the price for lumber has reduced the industry's operating margin. 



VII. CONCLUSIONS 



Sawmill Movement and Size 



The sawmill industry has undergone a period of decline in terms of 

 both production units and volume of lumber cut from 1946 to 1961. A 

 decline in the number of sawmills was noted for total mills representing 

 the annual cut, for registered mills, and for active sawmills. The largest 

 decline in active sawmills occurred to portable mills, but stationary mills 

 also had a decline. Operating mills declined from 400 in 1946 to 238 in 

 1961. The major period of decline, however, was from 1953 to 1961 when 

 active sawmills decreased from 428 to 238 mills without even one yearly 

 increase or movement into production. This loss amounts to 44 percent 

 of the industry's production units. The annual cut of lumber in New 

 Hampshire, and more particularly the white pine cut, has shown a 

 significant decline. The cut of white pine lumber has decreased from 

 almost 283 million feet in 1946 to about 121 million feet in 1961, a 

 decline amounting to 57 percent. 



The annual cut is evidently decreasing at a rate greater than the rate 

 at which sawmill numbers are decreasing. This means that for the in- 

 dustry in general the mills are not becoming larger, and average mill 

 size is decreasing despite actual production increases by a few individual 

 mills. 



The Margin Between Stumpage and Lumber Prices 



The wholesale prices of eastern white pine lumber have been estab- 

 lished by market demand since the removal of the O.P.A. ceiling prices 

 in 1946. Sawmills in order to move into operation, or stay in operation, 

 must receive enough revenue from selling lumber to cover their cost of 

 operation, pay for their raw materials, and return them a profit. Sawmill 



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