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Econ Home > Products > Southern Markets > Timber Sector
Forest land use can be split into two distinct subcategories based on origin and management type. Naturally regenerated forests, consisting of natural pine, mixed pine-hardwood, and various hardwood forest management types, can be viewed as largely a residual land use—most were not established with the intent of producing timber, and are located where both development and agricultural uses could not be justified. Forest plantations represent the other major subcategory of timberland. Establishing these forests requires a direct application of financial capital which generally implies intent to harvest timber at some time. Plantation forestry, which has been limited to pine species in the South, is an agricultural style of forest management which is displacing harvests from naturally regenerated stands.
Figure 39. Acres by forest management type (Source: FIA data summarized by Conner and Hartsell 2002).
Pine plantations have expanded steadily from practically none in 1950 to more than 30 million acres in the late 1990’s (Figure 39). They now account for about 16 percent of all timberland. These forests can produce up to three times the amount of timber products as naturally regenerated forest types. Perhaps the strongest signal of the market’s perspective on future timber supplies is current efforts to establish and intensively manage pine plantations.
In contrast to investment in pine production, steady gains in the price of hardwood pulpwood over the past twenty five years (Figure 40) have not triggered investment in hardwood plantations. This indicates that current and anticipated prices are not yet high enough to justify the capital costs of establishing these types of investments. This can be explained either by strong supplies of hardwood timber from naturally regenerated forests, slower growth rates for hardwood plantations, the unavailability of a profitable technology for intensive management of hardwoods, or by the ready availability of low cost hardwood chips from South America. That is, if prices rise more in the future, we might expect more eucalyptus chips to flow, for example, from Brazil to southern ports, thereby capping the price effects of domestic scarcity.
Figure 39. Real prices of hardwood and softwood pulpwood in the US South (Source: Timber Mart South).
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modified: 07-Feb-2017 created by: John M. Pye |
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