1. What Does the Future Hold? Richard Porterfield Dean, Warnell School of Forestry and Natural Resources June 27, 2006 Georgia Society of American Foresters Annual Meeting Chattanooga, TN

2. All organizations conduct some type of forecasting Why aren’t forecasts more accurate?

3. First – all aspects of the natural, physical, cultural and political environment we either explicitly or implicitly hold constant as to magnitude or trend, and... Second – all those factors or parameters we are trying to predict Forecasting Involves:

4. It is not our predictions that are wrong it is the assumptions we make while making our predictions

5. 1980’s: Economy is good Timber demand is shifting South Ronald Reagan is President; inflation which topped 15% under President Carter is under control; supply side economic policies prevail Soviet Union is failing Berlin wall is falling

6. 1980’s (cont.) : Housing starts are high Paper demand is growing lock step with GNP The Conservation Reserve Program is putting millions of trees in the ground Quantity of imported forest products is low

7. Changing Factors since 1980’s: Free trade policies Computer technologies Major investment in forest products manufacturing in developing countries Corporate tax policy that favors research and development over reinvestment in plant and equipment

8. Changing Factors since 1980’s (cont.): Creation of REIT corporate structures Changing views regarding investments returns Creation of all news channels

9. Personal Biases: 1)Public policy, especially tax policy, directs both business and individual actions 2) With free trade policies world-wide, the world will move toward a common standard of living

10. Predictions: 1)Non-public forest land will continue to be fractionated (Finally) 2) Property tax relief will come 3) The population will become even more urban/suburban

11. Predictions (cont.): 4) Recreational/non-consumptive use of forest land will accelerate opportunities for fee-based recreation on private lands will grow 5) Use of wood for energy production will come of age 6) No new pulp and paper facilities Existing pulp and paper facilities are at risk

12. Predictions (cont.): 7) OSB has replaced plywood in construction applications and will dictate the price of panels 8) Engineered wood products will grow and take over wide dimension lumber markets 9) Lumber imports will continue to grow

13. Predictions (cont.): 10) Logging operations will become specialized 11) A new composite solid wood product will be created 12) Forest landowners will become a more important political force

14. Predictions (cont.): 13) Opportunities for consulting foresters will grow 14) Conservation plans and easements will grow but will have to be more landowner oriented to reach their potential 15) Invasive species issues will continue to grow with resultant harm to forest land

15. Predictions (cont.): 16) Hunting and hunting lease rates will decline 17) Markets and prices for large sawtimber and veneer sized timber will fall 18) Prices for super pulpwood and small diameter sawtimber will increase 19) Prices and demand for pulpwood will be flat in real terms unless influenced by use for energy

16. Predictions (cont.): 20) Fee-based, non-hunting recreational uses of private forest land will grow – including eco-tourism 21) Property taxes on forest land will be reduced 22) The death tax will be repealed 23) Escalation of the price of forest land will slow but the price of forest land will not fall significantly

17. It’s been fun!