Improving The Economic Value Of Coastal Public Forest Lands

Restoring economic and ecological health to Oregon public forestry practices

by Tom Bender

IN CONTEXT #44, Summer 1996
© December 1994 by Tom Bender, © 1996 by Context Institute

SUMMARY

• TIMBER sustainable yields possible with long rotations can DOUBLE current yields, while providing an amazing NINE-FOLD increase in net economic returns from timber production. (Wigg, M. Ibid.; Burkhardt, Hans J., 1993, "Maximizing Forest Productivity".)
  
  
• FISHERIES restoration possible with long rotation harvesting can produce annual revenues in the order of seven to twenty times current timber revenues. (Williams, Ted, 1990, "The Spotted Fish Under the Spotted Owls", Fly Rod & Reel.)
  
  
• RECREATION development possible with long rotation harvesting can produce annual revenues in the order of five to ten times current timber revenues. (Ibid.)
  
  
• SPECIAL FOREST PRODUCTS such as mushrooms and medicinals, possible with long rotation harvesting, can produce significant annual revenues.
  
  
• TOTAL net economic value of long rotation forest management thus appears to be roughly TWENTY to THIRTY TIMES that of present management practices!

• Timber production per acre of Oregon coastal forests, particularly with commercial thinning, does not drop off significantly beyond the traditional CMAI point for many, many years. (Curtis, Robert O., 1994, "Some Simulation Estimates of Mean Annual Increment of Douglas-Fir" USFS Research Paper PNW-RP-471.) Harvest cycles can be extended several times the conventional 60 year rotations while still staying quite near the maximum productivity. Such practices, in fact, often produce increase rather than decrease in net timber yield. They also typically produce a higher percentage of high value wood in larger logs. (Haynes, Richard W., and Fight, Roger D., 1992, "Price Projections for Selected Grades of Douglas Fir...." USFS Research Paper PNW-RP-447. Newton, M. and Cole, E. C., 1987, "A Sustained-Yield Scheme for Old-Growth Douglas Fir", WJAF. Fight, Roger D., Cahill, James M., Fahey, Thomas D., and Snellgrove, Thomas A., 1987, "Financial Analysis of Pruning Coast Douglas-Fir", USFS Research Paper PNW-RP-390.)
  
  
  
• Long-rotation timber harvest can sustain timber yields that would otherwise be lost from the disease, nutrient loss, soil losses, and fungal destruction of current timber management practices. (Ingham, Elaine, 1994, "Soil Organisms and Forest Health", Headwaters Journal.)
  
  
• Extreme health impacts to humans, fish and wildlife have recently been shown to result from the use of organo-chloride compounds such as employed in present management practices. (Colborn, Theo and Clement, Coralie, Chemically-Induced Alterations in Sexual and Functional Development: The Wildlife / Human Connection, Princeton Scientific Publiching Co., 1992.)
  
  
• Management costs have a major impact on net economic yield. They occur largely during the cut/replant/early growth part of the cycle. Longer rotations which eliminate these cycles of management costs produce far greater net economic returns. (Wigg, M. Op. Cit.)
  
  
• Northwest Oregon coastal forests have exceedingly high risk of erosion causing soils loss impacting both timber and fisheries. Long rotations dramatically lessen soils disturbance and loss affecting fisheries and timber production and their revenues. ("Tillamook Bay Drainage Basis Erosion and Sedimentation Study", Soil Conservation Service, 1978. R.K. Nawa, C.A. Frissell, J.L. Ebersole, N.J. Liss, "Life History and Persistence of Anadromous Fish Stocks in Relation to Stream Habitats and Water Classification", Annual Progress Report, Fiscal 1991, Oak Creek Lab. of Biology Dept. of Fish and Wildlife, Oregon State University. Ziemer, Robert R., "Management of Steep Land Erosion, An Overview", J. of Hydrology V20#1, 1981.)
  
  
• Soil microorganism health issues play a much more vital role than previous suspected in the reforestation success, productivity, and disease-resistance of forest stands. (Ingham, Elaine, Op. Cit.)
  
  
• Long rotation forestry creates a forest with more varied age classes needed for forest and wildlife health, without the need for "no-cut reserves".
  
  
• The non-timber product value of forest lands, which far exceeds that of timber production, has been ignored and damaged by past practices.
  • Forest Service studies in 1989 and 1990 showed tourism, hunting, and recreation producing $122 billion vs logging revenues of $13 billion - TEN TIMES AS GREAT! (New York Times, "The Great Tree Robbery", Sept 17, 1991.)
  • A 1990 Forest Service study showed that recreation fees could be three times as great as revenues from timber. ("Millions Lost to US Economy Logging Old Forests", Forest Resources, 1993.)
  • Salmon from the Smith River in California, even heavily damaged by logging, produced $7.8 million/year - more than the entire logging revenues from the basin. (Williams, T. Op. Cit.)
  • A Forest Service study on the Salmon River in Idaho showed that a $14 million logging operation resulted in a $100 million salmon revenue loss. (Williams, T. Op. Cit.)

• Higher stumpage prices paid for larger logs, reflecting more high value wood.
• Larger harvest volumes - 60 yr. rotations cut stands before CMAI. Long rotation harvests almost twice as many board feet and 25% more cubic feet than short rotation.
• The largest reason for greater profits is that costs are reduced. Sixty year rotations require three times the site preparation, planting, release, thinning, and sales management as does a 180 year rotation.

Trends and forestry practices here and abroad indicate substantial competitive benefit in an Oregon focus on higher quality product and sustainable long-rotation practices with lower costs, higher sustainable harvest rates, and far greater profits. At minimum, they suggest not discounting future benefits in favor of immediate gain.

• The management cost agreement on other similar Oregon public forests is less (31% for Common School Fund Lands). This indicates that at least a 12% reduction could be argued even under current practices.
  
  
• This management cost ratio has covered management costs on all state-managed lands without the Tillamook Forest, representing about 70% of state-managed lands, producing significant revenue for the last 50 years due to the Tillamook Burn. With all forest lands producing revenue, reducing the management fee from 35% to 10.5% (a 70% reduction) would produce the same revenues.
  
  
• Increases in timber values in recent years is providing substantially more revenue without commensurate increase in management costs. A lower management ratio, even with no change in practices or costs, would provide equivalent revenues.
  
  
• Long-term rotation represents major savings (up to 75%) in management costs. This savings, if accruing to the counties and taxing districts, would represent a 40% increase in their revenues. It can well be argued, particularly with the magnitude of change in net economic yield that long-rotation harvest represents, that such savings should be passed on to the counties and other beneficiaries rather than being retained in ODF coffers. A nine-fold increase in net economic return represents a several-fold increase in ODF revenues, and major increase in ODF revenue excess over costs.