Forest management and timber production in the U.S. South [Document prepared for Canada/United States lumber consultations]
This paper has described the evolution of the South's forest sector from several perspectives. Findings are summarized below: The South contains 24 percent of the U.S. land area, and 40 percent of U.S. timberland. Southern forests are among the most productive in the United States. Timberland ownership is dominated by private landowners. While ownership by forest industry has grown steadily, the majority of land is held by a varied group of nonindustrial private owners. The total area of forestland has declined since the 1950's but has grown slightly in the late 1980's and early 1990's. In contrast to forest area, forest inventories have expanded substantially over this historical period. Softwood inventories, however, have leveled off since the late 1970's. Output of timber products (especially softwood) grew in absolute terms. As with softwood inventories, output leveled off during the most recent period. Econometric analysis of timber supply and of forest management reject the notion of widespread market failure in southern timber markets. Timber owners have and should be expected to respond to market signals in their production plans. An analysis of the most recent growth:removal ratios for the South indicate that production may be operating at or near capacity. The spatial pattern of these ratios also indicates localized urban development pressures on timber lands. Patterns of timber investment indicate that, while gross investment in timber production is substantial (e.g. $3.6 billion for softwoods alone in 1983), net investment is near zero. That is, investment has played essentially a replacement rather than expansionary role within the region. Price trends for timber products seem to reject the notion of increasing economic scarcity of timber material. However, recent changes in U.S. timber markets have not played out completely. Government has played a role in reducing investment risk and providing assistance to some private landowners. However, government participation is relatively minor compared to the total resources dedicated to production within the region. Taken together, these findings indicate that the South?s forest sector is well-organized and highly productive. The sector has grown in an orderly manner and appears to have reached a stasis over the last few years. An equilibrium is rarely stable though, and shifts in demands for non-forest land uses and demands for wood products will likely lead to change. This paper has focused exclusively on timber production in the South and the ability of atomistic, diverse landowners to supply a timber market. All indicators discussed here suggest that the market has worked well in the production of timber. However, it is equally clear--though not necessarily as easy to measure--that many services that are provided by forests but do not trade in markets may become increasingly scarce in the South. For example, concerns over biodiversity, wetland protection, and habitat fragmentation are the subject of much policy debate and motivation for existing and potential future regulation of forest management in the South and other regions. In essence, these might be components of a broader definition of sustainability, that obviously extend the sustained-yield model discussed here. Increasing regulation is likely in pursuit of this broader vision, portending additional and possibly important changes in timber markets. The collection of existing local, state, and federal regulations, however, have not yet had discernable impacts on timber supplies at the market-level examined here.