1. Softwood Timber Supply Outlook and Influences Richard A. Harper, CF, RF Forest Resource Analyst USDA Forest Service, SRS, FIA Knoxville, TN 37919 RAHarper@fs.fed.us Southern Forest Products Association 2004 Annual Meeting Asheville, North Carolina September 26 - 28

2. Pulp & Paper Mills in the South 1953  51 Mills1995  105 Mills 470 tons/day1,325 tons/day R. Harper USDA Forest Service, FIA TPO data 2004  94 Mills 1,310 tons/day 1950s – 20,000 +/- Mills? 1960 – ???? Mills 12.6 Bill. BF 1970 – 4,528 Mills 16.0 Bill. BF 1980 – 3,674 Mills 19.4 Bill. BF 1990 – 2,838 Mills 24.0 Bill. BF 1999 – 2,289 Mills 26.5 Bill. BF 2001 – 2,189 Mills 25.8 Bill. BF Historical look at Pulp & Paper and Sawmills All Primary Saw and Veneer Mills in the South

3. U.S. Annual Lumber and Wood Pulp Production, 1900-2003 0 10 20 30 40 50 60 70 19001910192019301940195019601970198019902000 Billions of board feet - lumber. 0 10 20 30 40 50 60 70 Millions of tons - wood pulp. Softwood Lumber Hardwood Lumber Wood Pulp U.S. wood pulp output peaked in the mid-90s, and since 1995 an unprecedented drop in wood pulp output has occurred. Wood pulp production includes estimates of dissolving pulp and wood pulp for construction paper and board Sources: Howard, J. L. Research Paper FPL-RP-595 (and earlier reports); AF&PA Monthly Statistical Summary; Peter J. Ince, U.S. Forest,Products Laboratory, Madison, WI U.S. Annual Lumber and Wood Pulp Production, 1900-2003

4. Forested Regions of the World 14% 23% 27% 14% 17% 5% R. Haynes, PNW-GTR-560, Feb. 2003 R. Harper, USDA Forest Service, FIA U.S. ≈ 6% South 1.7%

5. Industrial Wood Output is projected to increase  50% between 1995 and 2040 J. Prestemon and R. Abt Journal of Forestry, Oct/Nov 2002 R. Harper, USDA Forest Service, FIA 1952 41% of U.S. 6.3% of World 1997 58% of U.S. 15.8% of World Today 18% of World While U.S. ≈ 25% of World U.S. softwood timber production grew 22% (1952 – 2001) South softwood timber production grew 125% (1952 – 2001) South’s Percent of Industrial Wood Products (All Roundwood Production)

6. Forestland in the United States USDA Forest Service, North Central Research Station Forest Inventory and Analysis Legend Forest Nonforest Forestland Ownership U.S. Forestland and Ownerships

7. U.S. Mill Capacity Mill Capacity (MMBF/Year) Less than 10 (221mills) 10 – 50 (214 mills) 50 – 100 (135 mills) 100 – 200 (113 mills) Greater than 200 (30 mills) Softwood Mill Capacity in the United States Data - H. Spelter, M. Alderman FPL-RP-608 Forest Products Lab, Madison, WI Map - Dale Gormanson North Central Research Station St. Paul, MN Forest Type Map Forest Type Hardwood Softwood Non Forest

8. Million Cubic Meters H. Spelter, USDA FS, Forest Products Lab, Madison, WI R. Harper, USDA Forest Service, FIA 0 10 20 30 40 50 60 NorthSouthWest 1995 Capacity 2002 Capacity Capacity Loss 14% 9% 21% 7.1% 13.5% 0.5% Net Capacity Change U.S. Softwood Lumber Capacity Change by Region 1996-2002

9. U.S. Softwood Sawtimber Volume/Acre of Timberland Less than 500 501 - 2,000 2,001 - 5,000 5,001 - 8,000 8,001 - 10,000 10,001 - 20,000 Greater than 20,000 None Board Feet/Acre of Timberland Data source: 2002 Timberland Area, RPA dB ESRI 2002 data & maps USDA Forest Service North Central Research Station D. Gormanson, J. Vissage, R. Harper Softwood Sawtimber Volume/Acre of Timberland

10. Intensity of Softwood Sawlog Harvest – 2001 Less than 50 None 50 - 125 125 - 250 250 - 500 Greater than 500 Board Feet/Acre of Timberland Data source: 2002 Timberland Area, RPA dB ESRI 2002 data & maps USDA Forest Service North Central Research Station D. Gormanson, J. Vissage, R. Harper U.S. Intensity of Softwood Sawtimber Harvest - 2001

11. Less than 25 -24 to 25 (no change) Greater than 25 Board Feet/Acre of Timberland Change in Softwood Sawtimber Production Intensity – 1996 to 2001 Data source: 2002 Timberland Area, RPA dB ESRI 2002 data & maps USDA Forest Service North Central Research Station D. Gormanson, J. Vissage, R. Harper U.S. Change in Softwood Sawtimber Intensity – 1996 to 2001

12. None Less than 1000 Board Feet/Acre of Timberland 1001 - 2000 2001 - 3000 3001 - 5000 Greater than 5000 Softwood Sawtimber Volume per Acre of Timberland Data source: 2002 Timberland Area, RPA dB ESRI 2002 data & maps USDA Forest Service North Central Research Station D. Gormanson, J. Vissage, R. Harper South Softwood Sawtimber Volume/Acre of Timberland

13. None Less than 50 50 - 100 100 - 200 Greater than 200 Board Feet/Acre of Timberland Intensity of Softwood Sawlog Harvest – 2001 Data source: 2002 Timberland Area, RPA dB ESRI 2002 data & maps USDA Forest Service North Central Research Station D. Gormanson, J. Vissage, R. Harper South Intensity of Softwood Sawtimber Harvest - 2001

14. Change in Softwood Sawtimber Production Intensity – 1996 to 2001 Less than -24 -24 to 25 Greater than 25 Board Feet/Acre of Timberland Data source: 2002 Timberland Area, RPA dB ESRI 2002 data & maps USDA Forest Service North Central Research Station D. Gormanson, J. Vissage, R. Harper South Change in Softwood Sawtimber Intensity – 1996 to 2001

15. Trends in Softwood Volume by D.B.H. Class - South R. Harper USDA Forest Service, FIA data 0 100 200 300 400 500 600 700 68101214161820 22-28 D.B.H. (inches) Tons (million) 2002 1997 1987 1977 1953 Trends in Softwood Volume by D.B.H. Class - South

16. Global Tree Plantations Globally, industrial forest plantations have expanded to over 200 million acres by the year 2000 (according to FAO*), with most expansion in Asia and Oceania. (?) *The plantation acreage in Asia is questionable, but in any case there are now tens of millions of acres of industrial plantations worldwide. 0 50 100 150 200 250 Millions of Acres South America North America Europe Asia & Oceania Africa (?) Peter J. Ince, U.S. Forest,Products Laboratory, Madison, WI 14% 23% 27% 14% 17% 5%

17. South Tree Plantation and D.B.H Classes Also, the shifts in pulpwood demand and timber harvest were accompanied by big increases in the area of managed timber plantations and intensity of management for Southern pine... Since 1985, an estimated 32 million acres of pines were planted in the South (Marshall Thomas, F&W Forestry) Peter J. Ince, U.S. Forest Products Laboratory, Madison, WI R. Harper, USDA Forest Service, FIA, Knoxville, TN R. Harper, USDA Forest Service, FIADB

18. Historical Planted Acres in the South SFRA, Sept. 2002 R. Harper, USDA Forest Service, FIA Industry NIPF

19. Historical Planted Acres by U.S Regions Historical Planted Acres in the South R. Haynes, PNW-GTR-560, Feb. 2003 Figure 12-1. Tree planting in the United States by year and region, 1952–1996. NorthSouthWest 195219621972 1982 19922002 0.5 1.0 1.5 2.0 2.5 3.0 Million acres 0.0

20. Projected Softwood Volumes by Stand Types - South 27% 55% 67% 43% 25% 18% J. Prestemon and R. Abt, SFRA, Sept. 2002 0 500 1,000 1,500 2,000 2,500 3,000 PlantedNaturalOak-pineUpland hardwood Bottomland hardwood Tons (thousand) 27% 55% 67% 43% 25% 18% 1995 2020 2040

21. Projected Softwood Volumes by Age Classes - South J. Prestemon and R. Abt, SFRA, Sept. 2002 0 200 400 600 800 1,000 1,200 1,400 1,600 0-1010-2020-3030-4040-5050+ Age Class (years) Tons (thousand) 1995 2020 2040 Projected Softwood Volumes by Age Classes - South

22. 0 40 80 120 160 Billion cubic feet Softwood 89101111121 1995201020252040 SRTS Southern Softwood Private Timber Inventory, 1995–2040 Professor Bob Abt, NCSU; Fall 2001 See http://courses.ncsu.edu/classes/for319001/sofac/sfs_fwc_timsupply.ppt The Southern Regional Timber Supply model (SRTS) that was used in the recent Southern Forest Resource Assessment projected an increase in softwood timber inventory on private forestland in the South out to 2040. Peter J. Ince U.S. Forest, Products Laboratory, Madison, WI ≈36% increase

23. Shifts in Annual Volumes, So. Pine Plantation Growth and Total U.S. Pulpwood Receipts (all species) Shifts in Annual Volumes, So. Pine Plantation Growth and Total U.S. Pulpwood Receipts (all species) -10 0 10 20 30 40 50 60 70 80 Shift in Pine Plantation GrowthShift in U.S. Pulpwood Receipts Million green tons In an article published in the January 2003 Forest Products Journal, Professor Siry (Univ. of GA) estimated that the average annual growth increment of Southern pine plantations will have increased by 69.2 million green tons per year, between 1987 and 2004 (at left). Meanwhile, actual data on pulpwood receipts from the Forest Resources Association show that annual U.S. pulpwood receipts (all species, roundwood and residues) have declined by -6.74 million green tons between 1987 and 2001... Peter J. Ince U.S. Forest, Products Laboratory, Madison, WI

24. Other Roundwood Consumption (besides pulpwood), Historical and Comparison of RPA Projections 0 2 4 6 8 10 12 14 16 18 20 195219621970198619962010202020302040 Billion cubic feet Fuelwood & Misc. OSB Veneer logs Sawlogs Other Roundwood Consumption (besides pulpwood), Historical and Comparison of RPA Projections 1989 RPA Peter J. Ince U.S. Forest, Products Laboratory, Madison, WI 0 2 4 6 8 10 12 14 16 18 20 20102020203020402050 2001 RPA

25. Population Density Impact on Forestry 0 -99 100 - 199 200 - 399 400 - 799 > 800 # of People Per Square Mile 2000 Census Population Density Map At approximately 45 people/square mile, there is a 50:50 chance of practicing forestry. At 150 people/square mile, forestry approaches zero Virginia Study (D. Wear, et al., USDA Forest Service,1998). Compiled by R. Harper, J. McCollum USDA Forest Service, FIA 0 -99 100 - 199 200 - 399 400 - 799 > 800 # of People Per Square Mile 2000 Census Population Density Map R. Harper, USDA Forest Service, FIA

26. Forecast Change in Forestland 1992 - 2010 Forest change > 14% loss 8 – 14% loss 0 – 8% loss Stable > 1% gain Forecast Change in Forestland 1992 – 2010 D. Wear, et.al, SFRA, Sept. 2002

27. South-wide Pine Sawtimber Stumpage Price 1991(3 rd Qtr.) to 2003(2 nd Qtr.) $/ton Source: Timber Mart-South Annual Increase 12.1% Annual Decrease 2.7% $/Ton

28. Historical National Forest Annual Timber Harvest Levels and Lumber Production Shift NFS Harvest The downward shifts in pulpwood demand and U.S. timber harvest were accompanied by a huge decline in National Forest harvest levels since the 1980s... Also, NFS timber inventory data were revised upward since the last timber assessment. Source: Forest Service ‘Sold and Harvest’ Reports, through FY ‘02 Historical National Forest Annual Timber Harvest Levels Peter J. Ince, U.S. Forest, Products Laboratory, Madison, WI Lumber Production Shift 1986 to 1997 West ` 27% South & 34% R. Haynes, USDA Forest Service, PNW-GTR-560

29. Lumber vs. Stumpage Prices Source: Random Lengths and Timber Mart-South 0 50 100 150 200 250 300 350 400 450 500 1Q861Q881Q901Q921Q941Q961Q981Q001Q021Q04 US$ per MBF (lumber or timber) RL Composite LumberSE Avg PST stumpage Poly. (RL Composite Lumber)Poly. (SE Avg PST stumpage)

30. Lumber vs. Stumpage Prices 0 50 100 150 200 250 300 350 400 450 500 1Q861Q881Q901Q921Q941Q961Q981Q001Q02 US$ per MBF (lumber or timber) RL Composite LumberSC Avg PST stumpage Poly. (RL Composite Lumber)Poly. (SC Avg PST stumpage) Source: Random Lengths and Timber Mart-South

31. Healthy Forest Restoration Act of 2003 - Impact??? R. Haynes, PNW-GTR-560, Feb. 2003 J. Mills, X. Zhou, PNW-GTR-568, Jan. 2003 Figure 73–National forest softwood harvest in base, zero harvest, and doubled interior West harvest scenarios. Softwood harvest (billion cubic feet) 2.5 2.0 1.5 1.0 0.5 0.0 19751985199520052015202520352045 Year Zero national forest harvest Base case Doubled NF cut interior West 1989 RPA Projection (≈10.8 BBF*) SW Stump $ ` ≈ 2% SW Lumber $ ` ≈ 2% SW Removal ` ≈ 1% ≈700 Million CF/YR (≈4 BBF*) Adds ≈445 Million CF/YR (≈2.5 BBF*) Healthy Forest Restoration Act of 2003 - Impact??? (Healthy Forest Initiative) * BBF = Billion Board Feet

32. Southern Forests The World’s Preeminent Producer The U.S. South is the single largest producer of industrial roundwood. The U.S. South produces approximately 25% of the world’s wood pulp, 18% of solid wood products. The South currently produces 58% of the total U.S. harvest. 60% of the total U.S. forest industry capital spending is dedicated to the South.

33. Summary The forest resource situation is constantly changing, and change is one rationale for FIA/RPA assessments… Big shifts recently: - Pulpwood Demand ` down - National Forest Harvest ` down - Pine Plantations (South) & up Result: Big build up in standing timber inventories (especially for NFS, Other Public, & NIPF) Issues for future timber assessments (2010 RPA?): - Globalization, consolidation, & fiber demand - Future development of plantations - Other big changes? Peter J. Ince U.S. Forest Products Laboratory, Madison, WI Softwood resource looks abundant Since 1985, an estimated 32 million acres of pines were planted in the South (Marshall Thomas, F&W Forestry) 14% 23% 27% 14% 17% 5% Plantations of the World ≈ 220 million acres