ter 2000, as timber removals rise above net annual growth 
and inventories begin to decrease, prices begin to rise. In 
the last two decades of the projection period, prices are 
going up at a rate of 1.4 percent per year in the South Cen- 
tral region and 1.2 percent in the Southeast. 
These projected prices increases for hardwood sawtimber 
stumpage are for the smaller, lower quality hardwood tim- 
ber that composes the bulk of the 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 different. Removals of higher 
quality sawtimber of most preferred species have been 
close to or above net annual growth in recent decades, and 
there have been large increases in stumpage prices in the 
past. This situation seems likely to continue. 
Increasing stumpage prices are reflected in the prices of 
sawlogs, pulpwood, and the other round products used by 
the forest industries. These roundwood price increases, which 
represent increased costs to the processing industries, are 
passed on in the prices of products, especially lumber and 
softwood plywood, where stumpage represents a large part 
of the product cost. 
Rising real prices of stumpage and roundwood products have 
important economic, social, and environmental implica- 
tions. In the highly competitive markets in which nearly all 
timber products are sold, rising prices act to constrain 
demands. As a result, softwood timber supplies (harvests) 
rise slowly over the projection period, much below the in- 
creases 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 employ- 
ment in the forest industries in the South. Rising productivity 
per employee overrides the increases in harvests. After 
1990, employment drops; by 2030 total employment in the 
lumber and wood products and pulp and paper products in- 
dustries will be 21 percent, some 85,000 people, below the 
employment level of 1984. Total wages and salaries also 
start to decline after 2000. 
The drop in employment and wages and salaries in the for- 
est industries is of great economic significance in the 
South. The effects of reduced employment will be multi- 
plied as they spread through the trade, service, transpor- 
tation, and other parts of the southern economy that 
provide goods and services to the forestry sector. It is cur- 
rently estimated, for example, that a loss of one job in the 
lumber and wood products industry would result in a de- 
crease of 2.3 jobs throughout the economy in Southern 
States; a one-job loss in the pulp and paper products indus- 
try would be multiplied 2.6 times as other parts of the econ- 
omy were affected. 
Rising real prices have other important implications. Ex- 
ports of most timber products are determined largely by the 
capability of domestic producers to compete on a price ba- 
sis with producers in other countries. Consequently, rising 
real prices will constrain timber export potential. 
As stumpage and timber product prices rise relative to other 
materials, use of substitute products such as concrete, steel, 
aluminum, and plastic will increase above the levels that 
would have otherwise prevailed. The mining, industrial 
processing, and power generation associated with increased 
use of timber substitutes will result in more air and water 
pollution. Thus, as timber prices go up, environmental 
costs will also rise. 
Consumers—and this includes everyone in our society—will 
be adversely affected by rising real prices. Home buyers 
will bear most of the increased costs both in terms of higher 
prices and in adverse impacts on the number, size, and qual- 
ity of dwelling units built. 
Rising prices and the associated economic and environmen- 
tal impacts are not inevitable. They simply show what 1s 
likely to happen if current expectations about the future tim- 
ber situation materialize. The development of the South’s 
fourth forest can be managed, and the forest can take al- 
most any form desired. 
11. There are very large opportunities to increase for- 
est productivity in the South and to sustain the forest 
industries and employment and wages and salaries. 
There are now economic opportunities (those that would 
yield 4 percent or more net of inflation or deflation) to in- 
crease net annual timber growth on 70 million acres of tim- 
berland in the South. If utilized, these opportunities would, 
in time, increase net annual timber growth by 3.2 billion 
cubic feet a year, a volume equal to 57 percent of current 
net annual softwood growth. Most of the opportunities to 
increase timber growth on timberland in the South—2.3 bil- 
lion out of 3.2 billion cubic feet—are on the other private 
ownerships. There are, however, opportunities on all 
ownerships, including 0.6 billion cubic feet on forest indus- 
try ownerships. The relatively small potential on the pub- 
lic ownerships—O.3 billion cubic feet—largely reflects the 
fact that little timberland is publicly owned in the South. 
