The Forest and the Trees

Lumber prices have twice coursed over a roller-coaster in the past five years. In a few months in late 1968 and early 1969 they rose more than 50 percent, only to fall back equally quickly to a lower level than at the beginning of the rise. After a fairly steady period in late 1969 and throughout 1970, they rose again sharply, by about 40 per-cent, in early 1971. After an irregular but considerable further rise in 1972, they really took off in early 1973, with a more than 60 percent rise in about three months. Then once again, beginning in the spring of 1973, prices fell substantially as rapidly as they had risen, although this time they remained after the fall at levels nearly double the first pre-rise level of 1968. For the past two years these lumber price gyrations have been complicated by changing price controls, apparently only partly effective. And each time prices rose sharply, supplies of lumber available to builders tightened up. Plywood prices have exhibited their own peculiar gyrations, but rapid rise and rapid fall have characterized them also.

In each case, it was primarily quick changes in demand, especially changes in housing demand, plus anticipations of further demand changes, which touched off the violent swings. There were, to be sure, some supply factors—bad winter weather, labor difficulties, transportation shortages, etc. Each time that prices rose sharply there were special government task forces or committees established, demands in Congress and among conservationists for bans on log exports, fears expressed about the long-run adequacy of wood supplies, and similar manifestations. Each time prices dropped sharply, these manifestations disappeared or become muted. In the summer of 1973, for instance, the Senatorial sponsor of a ban on log exports quietly withdrew his bill from further consideration. Yet there is good reason to expect continuing violent swings in lumber and plywood prices, since price instability is too deeply rooted in the supply and demand characteristics of the industry to end easily.

The year 1973 also saw, for the first time in modern times, a shortage of newsprint. With U.S. mills operating at full capacity, and with prices in the recent past too low for more than a modest return on mill investment, the prospects for an increase in U.S. supply will continue to be poor for several years to come. Canadian mills have a little unused capacity that may help relieve the near-term shortages, but they too have been reluctant to expand capacity in the light of moderate returns on investment. Canadian supplies in 1973 were reduced because of strikes both in mills and, briefly, on railroads. Newsprint inventories were low throughout 1973, and there was a real pinch in supply for those publishers who had neither their own sources of supply nor long-term contracts. The prospect is for continuing tight newsprint supplies for at least two or three years (perhaps for longer if newsprint demand continues to rise), and the real price of newsprint will almost surely be higher in the future than it has been in the recent past.

This rising price of newsprint will make paper-mill expansion economically feasible, and new mill capacity may ultimately be expected, despite the further obstacles that will have to be overcome. High interest rates and possible tightness of money markets are among the prospective difficulties, as are the inevitable problems and delays of major construction. Additional paper-mill capacity will also almost surely encounter environmentalist resistance: as with housing for the poor, everyone is in favor of additional newsprint capacity, but somewhere else. Paper mills are often heavy contributors to water and air pollution.

While new methods can reduce both, costs are involved, and some environmentalists may not be content with assurances of less pollution when they believe the alternative is none at all.

During 1973, conservationists continued to fight clear-cutting as a method of harvesting timber in national forests. The guidelines which had been issued in 1972 by the Subcommittee on Public Lands of the Senate Interior and Insular Affairs Committee (reported in "Highlights" of 1972) helped to mute the controversy but did not satisfy the more dedicated opponents. A Senate bill introduced by Senator McGee in October would establish a prestigious commission to study the practice and would declare a moratorium on clear-cutting on all federal lands for two years (or until ninety days after the commission reported). At year's end, a lower court judge ruled against clear-cutting in the Monongahela National Forest, as being contrary to Organic Administration Act of 1897 providing for national forest administration.

As in previous years, the facts about the consequences of clear-cutting were in sharp dispute between opponents and supporters. Each "side" pointed to facts, and situations favorable to its while downplaying the facts and situations cited by the other. Bad examples of clear-cutting surely exist; opponents argue that these prove the practice is generally indefensible, while supporters argue that these are merely bad examples for which equally bad counterparts can be found for any other method of timber harvest. Some of the opposition to clear-cutting is clearly opposition to any timber harvest and in some of the worst examples it may well be true that no harvest of timber should have been allowed. In general, opponents depended heavily upon aesthetic objections.

Finally, 1973 was marked by the publication of four reports of unusual significance for forestry. First was the report of the National Commission on Materials Policy, which recommended various policies for both increasing timber output and decreasing waste in its utilization. In September, the Report of the President's Advisory Panel on Timber and the Environment was publicly released, describing how the rising demand for wilderness, recreation, wildlife, water, forest aesthetics, and wood could all be met from American forests, given higher levels of management and of investment. A report by the General Accounting Office took the Forest Service and the Bureau of Land Management to task for the very large loss of dead timber annually, because of the low level of salvage operations. (In the case of the national forests, the loss of dead timber is more than half as large as the total harvest of timber.) Lastly, the Forest Service released its report, The Outlook for Timber in the United States. A mine of invaluable statistical information, it presents the agency's analysis of the timber supply and demand situation in the United States for the next few decades and, at least inferentially, its program for forestry during those same years. All of these reports are available from the Government Printing Office.

With their immense area, their widespread public use for recreational purposes, and their potential output, well above present levels, the forests of the United States are likely to remain indefinitely as both major resource opportunities and major problems.