LPRCMPnODOUGLQS-FIR 



*^I8.93 



PER 



1,000 



BOARD 



FEET 



■f\6 04 

 PER 

 1,000 

 BOARD 

 FEET 



■-"-■ I"! 



SJ 



3wm. 



MILL PRICE-1939 



FREIGHT TO PITTSBURGH, PA 



Figure 41. — Comparison oj mill price and freight cost shows that the main 

 problem of the secondary species is that, economically speaking, it is too 

 far to market. 



costs, and higher proportion of top-quality lumber in 

 some species. 



In marketing western white pine, the handicap ot 

 economic isolation is balanced by the tact that it is a 

 quality product that usually commands higher prices 

 than most ot the competing species from other regions. 

 This and its virtual monopoly ot the match field have 

 enabled producers to expand their production despite this 

 handicap. The demand for ponderosa pine is likewise 

 sufficiently great to enable it to compete in outside markets, 

 but on the whole it is in a less favorable position. Except 

 in isolated instances, the other northern Idaho species, 

 such as larch, Douglas-fir, and white fir, are excluded from 

 the rich eastern market, and even nearer markets. In 

 1938, northern Idaho supplied only 5 percent of the lumber 

 consumed in Montana, Wyoming, North Dakota, and 

 South Dakota, whereas Washington and Oregon, although 

 farther away, supplied 34 percent. The rate advantage 

 possessed by northern Idaho mills was not sufficient to 

 offset the other advantages which the Pacific Coast plants 

 possess. 



The Future Situation 



For many years following the expansion of the lumber 

 industry in northern Idaho, the day when the secondary 

 species would improve sufficiently in value to leave a 

 substantial profit margin in their production was a matter 

 of common expectation. This expectation was based on 

 the course ot utilization in the older forest regions, but as 

 time went on it faded into a hope which appears today to 



have less substance than it did 20 years ago. With the 

 natural decline from the boom days, when vast quantities 

 of material were needed to establish new communities, it 

 now appears that the Nation can produce, with reasonably 

 good forest practice, more wood than it is likely to use. 

 As long as this is true, there is every reason to expect 

 that the unutilized surpluses will be concentrated in the 

 economically more remote regions, except where the prod- 

 ucts of ^:hese regions have premium values. 



Indeed, it is to be expected that even western white 

 pine will in the future experience greater rather than less 

 competition in the eastern markets with lumber from other 

 forest regions. At present about 10 percent of the western 

 white pine lumber cut in the Spokane territory is of the 

 select grades, ot higher value and better able to hold its 

 markets, but the bulk of the timber being logged at present 

 is older an.d larger than can be raised in a 120-year growing 

 period. Thus the percentage of selects will decline, re- 

 ducing the average value ot the lumber and therefore its 

 ability to compete. That this prospect is not particularly 

 disturbing is due to the fact that the growth capacity of 

 northern Idaho is not sufficient to supply continuously the 

 western white pine market available at present. 



The wholesale price of forest products at the point of 

 consumption has two component parts, the cost of pro- 

 duction and the cost of transportation. Reducing either 

 or both of these for any one region increases the com- 

 petitive advantage of that producing center and brings it 

 economically closer to the markets. -Although most of the 

 lumber production in northern Idaho is from large saw- 

 mills which are for the most part gradually increasing their 

 efficiency, it is questionable how much further costs can be 

 reduced. Cheap lumber is produced by small mills. But 

 since a large part of the savings in small-mill operation is 

 made at the expense of the workingman, a shift to a small 

 mill set-up, unless this condition is changed, would hardly 

 be desirable as a means of producing lumber at a lower cost. 



The railroad freight-rate structure has developed in a 

 haphazard fashion, and it has been pointed out repeatedly 

 that scientific justification is lacking for many rate situa- 

 tions. By setting a higher rate from point B to point A 

 than from point C to point A, the economic development 

 of C can be speeded and that of B retarded. Yet it may be 

 desirable from the standpoint of wise use of natural re- 

 sources that both localities be developed to the same degree. 

 In many instances the freight rate is the key to utilization 

 of the forest resource; yet it is safe to say that the national 

 interest in such proper utilization has not been adequately 

 represented at the freight-rate hearings. -At present, there 

 is insufficient basis for determining whether it is to the 

 national interest to expand the utilization of northern 

 Idaho's secondary species at the expense of some other 

 region by reduction of freight rates. 



As this is written, the emergency ot this country's war 



48 



