geared to the use of pallets were constructed. During 

 this period pallet output and manufacturing produc- 

 tion were closely correlated. Projections based on this 

 relationship, and assumed growth in the value of 

 manufacturing shipments as the gross national prod- 

 uct rises, indicate continuing large demand for 

 pallets. The medium projection increases to 600 mil- 

 lion pallets by 2030, about triple 1976 production. 



Although the increase in terms of numbers of 

 pallets is large, the rates of growth drop rapidly from 

 an average of 7.3 percent in the 1960's to 2.0 percent 

 in the 1990's and 1.1 percent in the decade before 

 2030. Pallet output per dollar of manufacturing ship- 

 ments rises slowly to about the year 2000 and subse- 

 quently declines. Such a falloff means that growth in 

 pallet demand for use in new materials handling sys- 

 tems gradually ends, and that expansion thereafter 

 depends to a large degree on growth in industrial and 

 agricultural production. 



Markets for wood containers showed modest 

 growth in the 1960's. However, they declined in the 

 1970's in response to displacement by fiber and plas- 

 tic containers, metal and fiber barrels and pails, and 

 multiwall bags. Based on past relations and antici- 

 pated trends in manufacturing and agricultural 

 production, continued modest declines have been 

 projected. 



In the past three decades, use of lumber for dun- 

 nage, blocking, and bracing in railroad cars, trucks, 

 and ships has increased about 0.5 percent per year to 

 an estimated 860 million board feet. This relatively 

 modest growth, in a period of rapid increases in 

 shipment of goods of all kinds, apparently reflects 

 rising use of palletized, containerized, and bulk ship- 

 ment systems. Growth in such systems is expected to 

 continue. Consequently, demand for lumber for dun- 

 nage, blocking, and bracing has been projected to 

 continue to rise during the projection period, but only 

 at a rate of about 0.2 percent per year. 



Trends in Unit Use 



The projected level of activity in the major markets 

 discussed above is only one of the determinants of 

 future demands for lumber, plywood, and other panel 

 products. Also important are changes in unit use, i.e., 

 the volume of product used per dwelling unit, per 

 pallet, per dollar of expenditure, or other measure of 

 market activity. 



Changes in timber product prices relative to the 

 general price level and to competing materials have 

 had important impacts on unit use. In projecting 

 future trends, changes in the prices of timber prod- 

 ucts relative to the general price level from the 1950's 

 through the early 1970's — the period during which 



the basic data on unit use were collected'* — were 

 assumed to continue through the projection period: 



Assumed annual rate of change 

 in relative prices — base level projections 



Product 



Lumber 

 Softwood 

 Hardwood 



Plywood 

 Softwood 

 Hardwood 



Paper and board 



0.7 

 0.7 



0.0 

 0.0 



0.0 



Only lumber prices increased in the base period. 

 There were no clearly defined upward or downward 

 trends for most other products and it was assumed 

 that the relative prices would remain constant until 

 2030. 



These expectations on future prices will be realized 

 only if the supplies of timber (stumpage) are adequate 

 to meet the projected demands for timber products. 

 The base level projections of timber supplies pre- 

 sented in a following section indicate that if timber 

 owners continue to respond to stumpage price and 

 inventory changes and manage their timberlands 

 much as they have in the recent past, timber supplies 

 will not be large enough to meet the projected 

 demands and especially for softwood sawtimber prod- 

 ucts. Thus, unless action is taken to raise timber 

 growth and improve timber utilization, the increase 

 in timber product prices will be higher than assumed 

 and the associated projections of demands lower. 



In response to the varying rates of price change and 

 other forces, there have been widely divergent trends 

 in unit use of the major timber products in the last 

 two decades. The unit use of lumber has declined in 

 most end uses, especially in those, such as housing, 

 where there has been extensive displacement by panel 

 products. In contrast, plywood, hardboard, and par- 

 ticleboard consumption per unit has been rising in 

 most end uses. 



■•The trends shown by these data reflect the effects of price 

 changes in the period in which they were collected. A projection of 

 these "base level" trends assumes a continuation of similar price 

 changes in the future. Prices are measured in constant 1967 dollars 

 and are net of inflation or deflation. 



201 



