The Economic, Social, and Environmental 

 Implications of the Changing Timber Resource 

 Situation 



projected increases in investments in timber programs are not 

 large enough to fully meet the growing demands for 

 timber. This is true despite the fact that the assumed 

 investments in timber management programs that underlie 

 the projected trends in growth and inventories are much 

 above those of today. By 2030, the area in pine plantations 

 is more than doubled; large areas of mixed pine-hardwoods 

 and upland hardwoods are converted to pine. The necessary 

 planting and conversion would require investments on 

 private lands of $2.7 billion, with most of the investment 

 occurring within the next 15 years. Substantial increases in 

 timber yields and in the intensity of management are also 

 assumed for large areas of pine plantations. Thus, the 

 projections of net annual growth and inventories described 

 above reflect what would happen if there continues to be 

 major progress in forestry in the South and continued 

 expansion in the technical and financial assistance, 

 protection, research, education, and management programs 

 that have brought about the improved forestry situation in 

 the past. 



The intensifying competition for timber which will result 

 from the projected changes in net annual growth, timber 

 removals, and inventories in the South have important 

 economic, social, and environmental implications. Among 

 the economic consequences are rising real prices of 

 stumpage, that is, prices net of inflation or deflation. 



The increases in softwood stumpage prices are largest in the 

 early part of the projection period, the time in which 

 softwood timber inventories are declining. Between 1984 and 

 2000, for example, softwood sawtimber prices are projected 

 to rise at an annual rate of 3.2 percent in the South Central 

 region. After 2000, as inventories begin to rise, the rates 

 of price increase slow down. Between 2020 and 2030, 

 increases in the South Central region average only 0.5 

 percent per year. Softwood pulpwood stumpage prices rise 

 at about the same rate as sawtimber prices in the early part 

 of the projection period and more rapidly (3.5 percent per 

 year in the South Central region between 2020 and 2030) 

 in the latter part. 



The above projections simply show the direction things are 

 heading — what is likely if current expectations about 

 economic growth, changes in timberland area, the 

 establishment of pine plantations, management 

 investments, and all the other factors that affect timber 

 demand and supply are realized. The projected changes are 

 not inevitable. The present outlook can be changed, and as 

 indicated in the following discussion, there are important 

 reasons to do so. 



Hardwood stumpage prices show much different trends from 

 those for softwoods. They decline in both the southern 

 regions for sawtimber and pulpwood until around 2000. This 

 reflects the availability of large and increasing inventories 

 of hardwood timber. After 2000, as timber removals rise 



The South is facing a future of intensifying 

 competition for softwood and hardwood 

 timber and rising real prices (prices net of 

 inflation) for stumpage and most timber 

 products. This will mean higher costs to the 

 consumers of wood products — and everyone 

 uses wood products. It will also constrain 

 growth in the forest industries, and 

 employment in these industries is projected 

 to drop. 



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