DEMAND FOR TIMBER PRODUCTS 



147 



Price Assumptions 



Past increases in timber product prices have 

 undoubtedly played an important role in deter- 

 mining levels of comsumption of timber products, 

 both in actual terms and relative to competing 

 materials. A number of closely related factors such 

 as installation and maintenance costs, perform- 

 ance, useful life, and market promotion efforts 

 have likewise affected actual and relative use. 



To determine potential effects of alternative 

 price levels, the medium projections of demand for 

 major timber products were developed using three 

 price assumptions, as follows: 



(1) One set of projections was developed on the 

 assumption that 1970 prices of timber products 

 relative to average wholesale prices of all com- 

 modities and to most competing materials would 

 not change significantly during the projection 

 period. These were the price relationships prevail- 

 ing during most of the 1950's and 1960's when 

 most of the basic data on timber products use 

 were compiled for this study. The 1970 prices were 

 also intended as a base level for judging the size of 

 price changes resulting from potential imbalances 

 between timber demand and supply. 



The 1970 price relationships could be expected 

 to prevail only if supplies of stumpage meet de- 

 mands at 1970 prices through the projection 

 period — which later analyses indicate is not 

 likely — and if productivity in the timber process- 

 ing industries keeps pace with that in other 

 industries. 



In the past these conditions have not held for 

 periods longer than a decade or two, and prices of 

 most timber products have shown persistent long- 

 run upward trends relative to the general price 

 level (figs. 55, 56, and 57; Append. V, tables 2, 3, 

 and 4). Timber product prices have also shown 

 longrun upward trends relative to important corn- 

 Relative wholesale price index of lumber 

 1800 - 1972, with projections to 2000 



Relative wholesale price indexes 

 of selected timber products 1940-72, 

 and price assumptions 1970-2000 



1800 1820 1840 1860 1880 1900 1920 1940 1960 1980 2001 



Figure 55 



Figure 56 



peting raw materials such as iron, aluminum, and 

 nonmetallic minerals. 12 



12 Potter, Neal, and Francis T. Christy, Jr. Trends in 

 natural resource commodities — statistics of prices, output, 

 consumption, foreign trade, and employment in the United 

 States, 1870-1957. The Johns Hopkins Press, Baltimore. 

 1962. 



Fisher, Joseph L., and Neal Potter. World prospects 

 for national resources. The Johns Hopkins Press, 

 Baltimore. 1964. 



