A Historical Look at National Forest Timber Production

Throughout the United States, the USFS manages 192 million acres forest and grasslands. Of this, roughly 97 million acres are considered productive timberland, or forest that is capable of producing more than 20 cubic feet of commercial wood per acre annually. These lands produce seven major categories of raw wood products that are processed into a wide variety of end use products. (For more information on national forest wood products, see sidebar.) Although timber production from national forests has at times been substantial, historically, national forests have played a minor role in U.S. wood product markets.

Between its inception and World War II, the USFS largely promoted a conservation ethic and was known for its exceptional stewardship of the national forest reserves. After 1945, a postwar housing boom increased U.S. demand for wood products beyond what private forestlands could provide and the timber industry began to lobby Congress for more access to public forests. During this period, a new model of industrial forestry took hold and the USFS shifted its management emphasis away from resource stewardship (managing forests for wildlife, water, and public recreation) toward industrial-scale wood production.

Throughout the following decades, timber removal from national forests steadily increased. Despite the passage of the Multiple Use and Sustained Yield Act of 1960, which attempted to codify that other forest resources, such as wildlife, recreation, and water, were as important as timber, the timber industry continued to clearcut and build more roads. In the early 1970s, President Nixon’s pro-timber policies heightened the problem, calling for timber production to increase by 50% and for the number of permanent miles of road on the national forests to double. During this period, the USFS permitted the logging of the last sizeable areas of old-growth forest left in the U.S. By the late 1980s, timber removal from the national forests reached an all time high of 12.6 billion board feet (BBF). Yet even at its peak in 1986, the volume of wood products removed from national forest lands accounted for just 14% of the U.S. total. Ten years later, that share had dropped to 6% and today this figure hovers around 2%.

Hovering At Two Percent: The Market Share of National Forest Wood Products

A number of factors make it likely that the market share will remain near its present level. First, national forests represent just 19% of the timberland area in the United States, creating a natural limit on the size of the market share for national forest wood products. Second, it is expensive to bring national forest wood products to market because national forest timberland is steeper and less accessible than timberlands managed by industry, private landowners, or other public agencies. National forests are also less productive than private forests. When these forests were established back in the 1890s, almost all of the highly productive and commercially valuable timberland was already in the private domain.

Not only is it costly to bring these products to market, but less expensive alternatives – in the form of cheap imports – are more readily available. As in any industry, the high-cost supplier is in a precarious position. Declining prices or the entry of lower cost producers can significantly reduce demand for a high cost supplier’s product. In the case of U.S. timber markets, one of the most important changes over the past two decades has been the enormous influx of inexpensive wood products from abroad, first from Canada and now increasingly from Europe and South America. The influx is a direct result of trade liberalization policies.

In 2004, the U.S. imported nearly 21 BBF from Canada, 2 BBF from Europe, and 1 BBF from South America. In contrast, the 2004 yield from national forests was just 2 BBF. The illustration in Figure 1 points to the insignificance of the national forest logging program from a consumption standpoint. In the future, the share of domestic wood products consumption met by international suppliers is expected to rise from 20% to 26%. If globalization continues to lower trade barriers to inexpensive, imported wood products and if the U.S. dollar remains strong (imports are relatively cheaper with a strong dollar), it is likely that international competition will help keep the national forest logging program in check – at least for wood products that the U.S. does not hold an export advantage.

Another factor that makes it likely that the market share will remain low concerns the quality of wood products, which has declined markedly in recent years. In the late 1980s, the composition of wood products offered for sale from national forest lands was dominated by fine-grained, old-growth timber, largely from western states. Since 1990, national forest timber sales increasingly have been dominated by small diameter trees and dead trees removed by salvage operations. With less demand for such products, the value of national forest timber sales has plummeted. It is now common practice for the timber industry to not bid on national forest timber sale offerings. This forces the USFS to either lower the price even further below current market value or drop the sales altogether.

And last – and perhaps most importantly – it is increasingly apparent that national forests are far more valuable from an economic standpoint standing than they are cut down...