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Econ Home > Products > Southern Markets > Timber Sector
• Timberland area within the South was relatively stable through the twentieth century.
• Ongoing urbanization is focused in the Piedmont and along the coasts. Forest loss will be highest in the southeast (from Virginia to Florida.)
• Agricultural prices are such that increased timber prices or a reduction in agricultural subsidies could lead to an expansion of pine plantations on agricultural lands.
• Future scenarios have a wide variance—they range from no net loss of acres to a net loss of 31 million acres by 2040 (16 percent of forests)—depending on the future price of timber.
• In spite of strong growth in hardwood pulpwood prices there has been little investment in hardwood production (i.e., hardwood plantations).
• After accounting for Soil Bank and Conservation Reserve programs, planting of pines increased at a steady rate between 1945 and 1998.
• With the exception of Soil Bank and Conservation Reserve periods, industry has had a disproportionately high share of planting (45-70 percent of planting with only about 20 percent of timberland).
• Planting has served as both replacement and expansionary investment. In the 1990’s, levels of expansionary and replacement investment were each about one million acres per year.
• Recent declines in planting indicate a reduction in expansionary investment since the late 1990’s.
• The supply effects of recent reductions in expansionary investment will not be felt for some time.
• Forest products firms, which hold a disproportionately high share of the forest capital, have been selling much of their lands, about 50 percent by 2005.
• Some industry land sales are explained by urbanization pressures but the largest share will remain in timber production in the near term.
• The shift toward TIMO management may entail more parcelization and fragmentation of timberland. It may also lead to a less stable supply of timber, more volatile timber prices, and a slower rate of increase in the area of pine plantations.
• Divestiture of industry lands could lead to lower overall investments into timber research and development, leaving the US South less able to compete against foreign producers in the long run.
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modified: 30-Nov-2005 created by: John M. Pye |
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