212 



THE OUTLOOK FOR TIMBER IN THE UNITED STATES 



prices, the impact of higher prices is primarily on 

 demands for sawtimber products. For example, 

 under the rising price assumption (1.5 percent 

 per year for lumber; 1.0 percent for plywood, mis- 

 cellaneous products, and fuelwood; and 0.5 percent 

 for paper and board) demands for domestic saw- 

 timber in 2000 would be 65.7 billion board feet — 

 about 15 percent above production in 1970. In 

 contrast, projected demands for softwood round- 

 wood rise by about 40 percent, largely because of 

 increases in demand for pulpwood. 



Although there are differences in the magnitudes 

 of the increases, all projections indicate substan- 

 tially larger demands on U.S. forests. There are 

 fundamental questions as to the ability of U.S. 

 forests to supply projected demands and the size 

 of price increases necessary to bring demands into 

 equilibrium with supplies. These questions are 

 considered in the following chapter. 



DEMAND FOR INDUSTRIAL TIMBER PRODUCTS 

 IN RELATION TO OTHER INDUSTRIAL RAW 

 MATERIALS 



Timber is one of the basic industrial raw ma- 

 terials used in the U.S. economy. An analysis of 

 prospective demands for other materials is of 

 interest in judging the validity of timber demand 

 projections and of likely changes in the relative 

 importance of the major industrial raw materials. 

 Mineral products, including metals, sand, gravel, 

 and cement, are of special importance in this 

 connection. Some competition also exists between 

 timber products and other agricultural and 

 related products such as fibers and rubber. 



Between 1900 and 1969 consumption of all 

 industrial raw materials increased from $4.5 

 billion (1967 dollars) to $17.1 billion (Append. 

 V, table 36). Per capita use of materials in 1967 

 dollars rose from around $50 to about $85. 



Annual rates of growth in use of industrial raw 

 materials in these seven decades averaged about 

 2 percent per year — substantially below the rate 

 of increase in the gross national product. This 

 differential resulted from such factors as refine- 

 ments in manufacturing that added more value 

 to given amounts of raw materials; more complete 

 utilization of raw materials; increased recycling 

 of scrap and used materials ; and relative increases 

 in the transportation, trade, and service compo- 

 nents of the gross national product. 



During the first 5 decades of this century, 

 there were some substantial shifts in the relative 

 importance of various industrial raw materials 

 (fig. 80). Industrial timber products declined in 

 relative importance, falling from about 45 percent 

 of all industrial raw materials consumed in 1900 

 to around 20 percent in 1950 while minerals 

 showed an offsetting increase. Since the mid- 



Relative importance of industrial raw materials 



rising relative 

 prices 



1900 1910 1920 1930 1940 1950 1960 1970 1980 1990 2000 



Figure 80 



1950's, there has been little change in the com- 

 position of the raw materials used. 



The decline in relative importance of industrial 

 timber products before 1950 was presumably 

 related to the fact that prices of most timber 

 products showed substantial increases relative to 

 the general price level and relative to prices of 

 minerals and farm products. 53 On the other hand, 

 there was little change in timber product prices 

 relative to the general price level and to most 

 competing materials between 1950 and 1967. 



There has been a close statistical relationship 

 between changes in the consumption of industrial 

 raw materials and changes in the gross national 

 product in the past two decades. Projections 

 based on this relationship indicate that demand 

 (medium level) for industrial raw materials may 

 reach $30.8 billion (1967 dollars) by 2000 (table 

 154). Rates of increase in this projection are 

 about the same as projected rates of increase in 

 demand for industrial roundwood at 1970 relative 

 prices, as shown by the following tabulation of 

 annual rates of increase. 





All 



industrial - 



raw 

 materials 





Timber products 





Period 



1970 

 relative 



Rising 

 relative 



Higher 

 relative 







prices 



prices ' 



prices 2 



1940-69 



3 2. 4 



3 1. 6 







1969-2000__ 





1. 9 



1.3 



1. 6 



i With relative prices rising at 1.5 percent per year for lumber, 1.0 percent 

 for plywood and miscellaneous products, and 0.5 percent for paper and 

 board. 



2 With relative prices of lumber and plywood 30 percent, miscellaneous 

 products 15 percent, and paper and board 10 percent above the 1970 

 averages. 



3 Increase with actual prices. 



A rise in relative prices of timber products, how- 

 ever, could be expected to reduce growth rates 

 for timber products and shift demands to other 

 industrial raw materials. 



53 See Fisher, Joseph F., and Neal Potter. World pros- 

 pects for national resources. The Johns Hopkins Press, 

 Baltimore, Maryland. 1964. 



