to about 8 percent of the softwood sawtimber harvest. 



In part because of devaluation of the U.S. dollar 

 relative to Japanese and European currencies, the 

 total and average value of log exports have also 

 increased rapidly in recent years. For example, the 

 total value of log exports in 1978 was $1,180 million 

 with an average value of $346 per thousand board 

 feet, log scale. Shipments during the last half of 1978 

 and the first half of 1979 were averaging well over 

 $400 per thousand board feet. 



The rapid rise in the volume and value of softwood 

 log exports has caused a substantial amount of con- 

 troversy. This has been centered on the shipments 

 from the Pacific Northwest where about 85 percent 

 of the logs originate. About 70 percent of the soft- 

 wood log exports from this region come from private 

 land, nearly all from those in forest industry owner- 

 ship, and 30 percent from lands managed by the State 

 of Washington. Export of logs cut from timber on 

 Federal lands and State of Oregon lands is pro- 

 hibited, with minor exceptions, by Federal and State 

 laws.24 



Opponents of softwood log exports have generally 

 argued that if these logs were not Exported, they 

 would be processed domestically, contributing to 

 employment and helping to lower domestic stumpage 

 and softwood end product prices. Proponents have 

 generally argued that little of the volume exported 

 under current regulations would be processed domes- 

 tically and that the export market contributes to 

 employment and improved timber management. 



The effects, in Japan and the United States, of 

 further restrictions on softwood log exports cannot 

 be predicted with any certainty, they would depend in 

 large part on Japanese reactions. Logs from the 

 United States amount to about 25 percent of Japan's 

 consumption of softwoods and are used primarily for 

 housing construction. Logs from New Zealand, the 

 Soviet Union, and domestic sources and lumber from 

 the United States and Canada are Japan's alternative 

 sources of softwood construction materials. If United 

 States log exports were restricted, the Japanese 

 responses could range from relying to a greater 

 degree on other countries, to increasing lumber 

 imports from United States sources. 



Timber owners in the Pacific Northwest could also 

 respond to restrictions on log exports in various 

 ways — ranging from trying to sell more logs in the 

 domestic market, to building additional processing 

 facilities, to storing the timber on the stump in the 



hope that rising timber prices would make storage 

 worthwhile. Timber processors in the Pacific North- 

 west could expand capacity and attempt to sell the 

 additional lumber output in the domestic or Japanese 

 market. 



In general, the Japan-Canada-United States triangu- 

 lar trade in softwood logs and lumber would tend to 

 limit the effects of restrictions on softwood log 

 exports on domestic softwood lumber markets. If 

 Japan did purchase additional lumber from the 

 Pacific Northwest after restrictions on log exports, 

 lumber imports from Canada and production in 

 other United States regions would tend to increase in 

 response to an associated rise in prices. This, in turn, 

 would tend to alleviate the impact of expanded United 

 States lumber exports on domestic end product 

 prices. 



A recent study^^ simulated in a quantitative way 

 the effects of alternative Japanese, Canadian, and 

 United States' responses to a ban on softwood log 

 exports. This analysis showed that, in general, such a 

 ban would reduce softwood lumber prices in the 

 United States only if Japan turned to sources outside 

 North America for construction materials and only if 

 lumber processing capacity expanded significantly on 

 the West Coast of the United States. The softwood 

 lumber price decline associated with these types of 

 market responses would be on the order of 2 to 3 

 percent. Stumpage prices would tend to fall in all 

 United States supply regions, with the largest drop — 

 on the order of 10 percent — in the Pacific Northwest. 



The analysis further showed that softwood lumber 

 prices in the United States would rise on the order of 

 2 to 3 percent if the Japanese purchased lumber from 

 North America to replace the log imports and if pro- 

 cessing capacity did not expand significantly. With 

 these responses, stumpage prices in the Pacific North- 

 west would decline by roughly 10 percent and by a 

 larger amount in western Washington. 



There has also been some controversy over the 

 export of hardwood logs from the eastern United 

 States. Although the volumes involved are small, 1 10 

 million board feet in 1978, they are largely made up 

 of high value and relatively scarce species and thus 

 have had some effects on domestic markets. For 

 example, export of walnut logs, principally to west- 

 ern Europe, has been a contributing factor in the very 

 large increases in walnut log and stumpage prices that 

 have taken place in recent years. 



2^ Lindell, Gary R. Log export restrictions of the western States 

 and British Columbia. U.S. Dep. Agric. For. Serv. Gen. Tech. 

 Rep. PNW-63. Pacific Northwest For. and Range Exp. Sta., 

 Portland, Oregon. 14 p., illus. 1978. 



" Darr, David R., R. W. Haynes, and Darius M. Adams. The 

 impact of the export and import of raw logs on domestic timber 

 supplies and prices. (In process.) 



215 



