above net annual growth and inventories begin to decline, 

 prices begin to increase. In the last two decades of the 

 projection period, prices for hardwood sawtimber stumpage 

 are going up at a rate of 1 .4 percent per year in the South 

 Central region and 1.2 percent in the Southeast. 



The projected increases in hardwood sawtimber prices are 

 for the smaller, lower quality hardwood timber that 

 comprises the bulk of hardwood timber inventories. The 

 stumpage price outlook for larger hardwood timber of 

 preferred species, such as select white and red oak, ash, and 

 black cherry, is quite different. Removals of higher quality 

 sawtimber of most preferred species have been close to or 

 above net annual growth in recent decades, and large 

 increases in stumpage prices have apparently reflected this 

 situation. These trends seem likely to continue. 



Increasing stumpage prices are reflected in the prices of 

 saw logs, pulpwood. and the other round products used by 

 the forest industries. These increases, which are increased 



costs to the processing industries, are also passed on and 

 reflected in the prices of products. This is especially true 

 in the case of lumber and softwood plywood, where 

 stumpage represents a large part of the product cost. 



In the highly competitive markets in which nearly all timber 

 products are sold, rising prices act to constrain demand. As 

 a result, softwood timber supplies (harvests) rise slowly over 

 the projection period, much below the increases since the 

 early 1960's. Hardwood harvests rise in the first three 

 decades; then they level off and begin to decline. 



The increases in harvests are too small to sustain 

 employment in the forest industries (fig. 9). Rising 

 productivity per employee overrides the increase in harvests. 

 After 1990, employment drops; by 2030. total employment 

 in the lumber and wood products and pulp and paper 

 products industries will be 21 percent, some 85.000 people, 

 below the employment level of 1984. Total wages and 

 salaries also start to decline after 2000. 



Thousand employees 



300 



250 



200 



150 



100 



50 



Lumber and wood products 



S. 



x 



Pulp and paper products 



1950 



1960 



1970 



1980 



1990 



2000 



2010 



2020 



2030 



Figure 9 — Employment in lumber and wood products and pulp and paper products industries in the South, selected years 

 1954-85 with projections to 2030 



23 



