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Forest Industry Unrest to Continue in 1998

PULLMAN, Wash. — Political, economic and technological factors will contribute to continued unrest in Pacific Northwest forest industries during 1998.

Writing for the 1998 Pacific Northwest Agricultural Situation and Outlook Report, Eric Hansen, Oregon State University forest products department, said the trend to new labor-saving technologies will continue as wood products companies respond to a changing resource base.

In recent years wood prices soared to record heights in response to huge reductions in federal timber harvests. “Private harvest levels have now stabilized at more sustainable levels, and the increased timber value has enabled owners to invest in intensive management and increase productivity,” Hansen said.

“The mills left after the shake up have largely retooled for second-growth, and most are actively attempting to expand timberland ownership.”

Hansen said shifts in federal land management policies and intensive management on private lands have resulted in an over-supply of small-diameter timber.

The industry could face further restrictions on timber harvests on both federal and private lands if concern about dwindling anadromous fish populations rises. This likely would drive log prices up in the short term, but Hansen says rising prices could force further industry migration to other regions of the nation and overseas.

Already, Austrian spruce and pine is competing with Oregon softwoods, Hansen said. Imports from Chile, New Zealand and Brazil are growing, especially in the molding and millwork industry.

On the other side of the economic scale, Japan’s cooling economy has slowed demand for Northwest wood products. Also, devaluation of Southeast Asian currencies is making it more expensive for those countries to buy U.S. goods and that region’s rapid growth rate has slowed.

“The biggest wildcard in the picture is whether concerns over dwindling fish runs will force restrictions on private timber harvesting,” Hansen said. “This could change the whole outlook for wood products production in the Northwest.”

The 1998 PNW Agricultural Situation and Outlook Report is the product of 44 agricultural economists and other authorities at Washington State University, Oregon State University, University of Idaho and private industry. It will be published Jan. 2 in the “Capital Press.”

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