The U.S. forest products sector is very dynamic, and contributes a substantial amount of employment, income, manufacturing sales, and value added to rural forest economies throughout the country. Overall, forest products comprise about 1.5% of the total U.S. economy, and contribute about 5% of total manufacturing output in the country. Furthermore, the forest products sector is one of the top three contributors to most southern state economies.
The forest products industry creates incentives for property owners to manage their forests rather than convert them to other uses with a higher financial return, such as development. These working forests deliver many ecosystem services that society values—fresh water, carbon sequestration and storage, erosion control, natural disaster mitigation, biodiversity, recreation, foods, and medicinal plants.
The industry also provides markets for the by-products of forest management and restoration, such as small timber from hazardous fuels reduction and after-fire salvage harvests. In some areas of the West and interior Alaska, the lack of a forest products industry means that owners have no financial incentive to improve forest health. These owners must then decide whether to restore their forests at their own expense, for the benefit of all.
The United States is both the biggest consumer and the biggest producer of forest products, making almost 30 percent of the world’s forest products in all major categories.
The size and organization of the forest products sector have changed over recent decades because it is a cyclical industry, sensitive to fluctuations in the domestic economy and to long-term changes in output markets, consumer preferences, technology, and global economic growth.
The overall trend in the U.S. share of global production, mostly made up by solidwood products and pulp and paper, has been decreased production in most categories. For some products, the decline has been evident since the 1960s; others have slipped since the late 1990s. Trends point toward further declines, even while domestic production of particular products, such as wood pellets, increases.
By Sarah Plummer
School officials in some of West Virginia’s most rural counties are slated to see major losses in financial support they receive from the U.S. Forest Service.
The Secure Rural Schools Act provides financial support for 775 counties across the nation located near national forests. These counties once relied on a portion of timber revenue, but increased logging regulations on federal land in the 1990s caused these revenues to dip drastically. The act was developed to shore up these forested counties.
Babete Anderson, national press officer for the Forest Service, said, without congressional reauthorization of the Secure Rural Schools Act, payments to these rural schools must revert to 1908 guidelines regarding timber revenues.
by Alice Cuddy
A “fire economy” has emerged in Indonesia in which the blazes tearing through the country’s land and forests, driven largely by the global demand for palm oil, are lining the pockets of local elites and their patronage networks, according to a new study.
“Fire economy and actor network of forest and land fires in Indonesia,” published in the journal Forest Policy and Economics, details the ways in which a variety of people “benefit directly and indirectly from the business of fire, enjoying profits and economic rents at the expense of environmental quality.”
The study — carried out by scientists from the Center for International Forestry Research (CIFOR), the University of Riau and Bogor Agricultural University — focuses on four districts in Riau province, on Indonesia’s main western island of Sumatra.
The province reportedly experiences the most frequent fires in Indonesia, due largely to the massive conversion of forests and peatlands to oil palm estates, where slash-and-burn methods are employed to clear land for planting. The practice is illegal in almost all cases.
The fires do not only impact the local environment, with blazes in Indonesia regularly resulting in haze that affects the whole region, particularly Malaysia and Singapore, and that has been linked to a slew of premature deaths.
At the heart of the issue are the “enormous benefits” reaped by those involved in the fires, said one of the study’s authors, Herry Purnomo.
By Tim Gray
Trees don’t watch the stock market. Forests keep growing — and potentially increasing their value — even when inflation surges or the market swoons.
Big investors, like university endowments and insurance companies, have long allocated money to timberland in places like Oregon’s fir-and-spruce forests, Georgia’s pine plantations and Appalachia’s hardwood groves.
Until a few years ago, retail investors were mostly shut out of this market. The deals were too big, involving thousands of acres and tens of millions of dollars.
That changed over the last 15 years with the introduction of two timber-focused E.T.F.s — the iShares Global Timber & Forestry E.T.F. and the Guggenheim MSCI Global Timber E.T.F. — and the evolution of big forest-products companies like Weyerhaeuser and Rayonier. Today, the big timber companies are organized as real estate investment trusts (R.E.I.T.s) focused on managing forestlands, having sold off many other operations.
Ordinary investors can now put money into timber without venturing into the woods. Buying shares of an E.T.F. or a R.E.I.T. won’t replicate the benefits of directly owning vast timberlands, but it does enable one to bet on timber.
And there’s an old-fashioned option: buying a little woodlot of one’s own. That’s more akin to a part-time job than a passive investment, but it can yield financial gains.
The use of residual forest biomass for rural development faces significant economic hurdles that make it unlikely to be a source of jobs in the near future, according to new research by economists from Oregon State University.
In a model of the forest industry, researchers in the College of Forestry combined an evaluation of costs for collecting, transporting and processing biomass with the potential locations of regional processing facilities in western Oregon.
Each location was chosen because it is adjacent to an existing or recently-closed wood product operation such as a sawmill or plywood manufacturing plant.The study, published in Forest Policy and Economics, focused on biomass generated during timber harvesting operations. Biomass consists of branches and treetops that are generally left in the woods or burned. In some highly accessible locations, these residues are ground up or chipped and used to make a product known as “hog fuel.”
“There’s a lot of interest in focusing on the use of biomass to meet multiple objectives, one of which is support for rural communities,” said Mindy Crandall, who led the research as a doctoral student at Oregon State and is an assistant professor at the University of Maine. “We thought this might provide some support for that idea,” she said. “But from a strictly market feasibility perspective, it isn’t all that likely that these facilities will be located in remote, struggling rural communities without targeted subsidies or support.”
By A.J. Higgins
The death of Maine’s pulp and paper industry is highly exaggerated. That’s the conclusion of a new preliminary report by Mindy Crandall, an assistant professor of Forest Management and Economics at the University of Maine.
Though eight major biomass power generators and paper companies have disappeared from the map in Maine since the last time the industry conducted an economic analysis of the forest products market six years ago, Crandall told those attending a meeting Thursday evening of the Forest Resources Association in Brewer that forest products are still a vital component of Maine’s overall economy.
CHINA will bring its forestry output to 9 trillion yuan (US$1.3 trillion) by 2020, an official has said. Nearly 60 million people are expected to be employed in forestry, Zhang Jianlong, director of the State Forestry Administration, said at a conference.
Nearly 60 million people are expected to be employed in forestry, Zhang Jianlong, director of the State Forestry Administration, said at a conference.
Development of forestry can raise the income of a large workforce, he said.
Around 60 percent of the country’s poor population live in mountains, forests and desert regions, which are key areas for tree planting.
China has become the world’s biggest producer, trader and consumer of forest products. Output grew from 409 billion yuan in 2001 to 5.9 trillion yuan in 2015, a 13.5-fold increase in 15 years.
The Forest Sector Innovation Fund (FSIF), administered by Forestry South Africa, has developed an innovative decision-making support tool for small scale forestry entrepreneurs and larger, existing timber growers.
The Forestry Enterprise Simulator (ForEntSim) was designed to assist small growers in evaluating the feasibility and profitability of forestry enterprises and activities throughout the rotation length. It is a joint initiative by the Department of Forest and Wood Science at Stellenbosch University, the Institute for Commercial Forestry Research and the Forest Economic Service.
The simulator is an open source web-based application for small growers and entrepreneurs interested in entering the industry and helps them to calculate the net present value, equivalent annual income, land expectation value and internal rate of return of one hectare of plantation based on income and costs. It provides an ex-ante simulation of enterprise ventures to test viability and capital requirements to identify potential improvements that will increase profitability.
BY ALEX SHASHKEVICH
To this day the U.S. government owns almost half of the land in the American West.
That level of control has been debated ever since the government began acquiring the areas in the 19th century, with some Westerners resenting the vastness of the federal authority, which amounts to 47 percent of land in 11 states. Some states, like Nevada, where the government owns 84.5 percent of the land, see more control than others.
But few know about the existence and history of revenue-sharing programs, with some dating to 1906, through which the federal government has been compensating states and counties for lost tax revenue on the lands it controls.
Now, thanks to historian Joseph “Jay” Taylor’s research and a team at Stanford’s Center for Spatial and Textual Analysis (CESTA), the history and geography of those programs are presented in Follow the Money: A Spatial History of In-Lieu Programs for Western Federal Lands, an interactive website that maps federal payments made to counties and states in the American West over the past 100 years.
If Wyoming officials want more say in how their federal lands are managed, they ought to craft influential state- or local-level plans rather than trying to altogether wrest away control.
That’s the upshot of a $75,000 study on how realistic it would be for Wyoming to manage the bulk of its federally owned public lands. The document was released to the public Tuesday.
“In essence, our recommendation is to work to phase more management to the state gradually,” the study says, “with the ultimate goal of providing the state and local communities with more influence over federal land management activities while avoiding inheriting the crippling bureaucracy, costs, and litigation…”