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Forest Economics

February 2015

Within the discipline of forest economics, scientists study the tradeoffs and choices people make related to forests. This includes what species of trees are harvested and how many,  whether the lumber is used domestically or exported, what the lumber is made into, how timber harvest impacts forests and local economies, and what measures are taken to stop the spread of non-native invasive species that damage and kill trees. This month we feature a scientist, research, a product and partnership related to forest economics.

Environmental Education Links

Forest For Every Classroom partners LEAF (Wisconsin’s K-12 Forestry Education Program) has a great lesson plan on forest product markets (pdf - You may obtain a free PDF reader from Adobe.) This plan is for Wisconsin, but you can learn about forest resources in your state at https://www.nrs.fs.fed.us/fia/data-tools/state-reports.

Featured Scientist

William Luppold

Bill Luppold

Bill Luppold, an economist at the Northern Research Station’s lab in Princeton, W. Va., recently marked his 34th year with the USDA Forest Service. His path to the Forest Service was inadvertent; he did not begin his college career as a forest economics major. Originally a business/accounting major, he decided to switch majors to agricultural economics so he could pursue his interests in science and take classes in chemistry, botany, zoology, soils, and even animal husbandry. At Virginia Tech, where he earned a doctorate, he had his first chance to study hardwood lumber markets and develop econometric models describing these markets. The rest is history.   

A conversation with Luppold is a journey through not only hardwood markets but geopolitical trends, manufacturing processes, and investments in alternative energy. Luppold’s research assesses the impact of markets on the structure and composition of eastern hardwood forests through the examination of Forest Inventory and Analysis (FIA) and national databases as well as international databases.   In the last 3 years, much of Luppold’s research has focused on international trade of hardwoods. Today, 60 percent of the higher quality hardwood lumber produced in the U.S. is exported, with more than half of these exports going to China and Vietnam. Much of that hardwood lumber comes back as furniture imports. Prior to the housing crash that began in 2006, the kitchen cabinet industry was the largest consumer of higher quality hardwood lumber.   Today, the biggest markets for hardwood lumber domestically are lower value industrial users including pallet and railroad ties manufacturers. A growing hardwood market is mill and logging residuals (sawdust, cull wood, and chips), which are used in producing paper, biofuels, and mulch.

Luppold’s favorite part of the job is meeting a wide variety of people—from loggers to people selling the finished wood products. Luppold believes that it is important to understand people because human decision-making ultimately determines what happens to a forest. The author of more than 200 articles, Luppold’s passion for the forest products is both professional and personal; he owns three wooden dining room tables.

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Featured Product

WoodCite

A new tool, WoodCite, helps hardwood manufacturers better compete in the marketplace.

An acorn germinates in a small, privately owned forest in Ohio, and over many years grows into an oak of harvestable size. The oak is felled by loggers and milled at a small local sawmill. Companies that make furniture, flooring, kitchen cabinets, etc. buy the oak lumber and play a key role in ensuring that all of the products made from that oak tree meet customer expectations and optimize company resources.

That isn’t always easy. The North American hardwood dimension and components industry is continuously adapting its business model to domestic and foreign competition and changing market and customer requirements in respect to quality, styling, performance, and costs.

A new tool developed by Forest Service and university scientists aims to help these hardwood manufacturers determine product costs and create competitive bids based on their information. The software, called WoodCite, was specifically designed for use by small and medium sized hardwood manufacturers.    The application is available free of charge at https://www.nrs.fs.fed.us/tools/WoodCite/ 

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Featured Research

Timber Product Output Research

Foresters take measurements at an active logging site for use in timber product output (TPO) reports.We know that when a tree is felled in the forest it makes a sound, but then what happens to it?  The Timber Products Output (TPO) group, part of the Northern Research Station’s Forest Inventory and Analysis (FIA) group, conducts research to track timber removals and estimate their impacts on the forest and on local economies. This information in turn helps policy makers, forest managers and the forest industry to make more informed decisions about the forest resource.

Forest researchers in the Timber Products Output group use a three step approach to gathering information. First they survey industrial and non-industrial primary timber products users to determine what tree species were cut, where they were cut, what products were produced, the amount of mills residues (i.e. bark, chips, sawdust) that were generated, and how mills disposed of residues. Second, they conduct logging utilization studies during harvesting to gather information on tree size, products and species harvested, tree volume used and not used, and biomass measurements for tree biomass models. Next they link the data collected to FIA field plot data. The results of each Timber Products Output assessment are published for each state on a 3-5 year cycle for industrial timber products.  

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Featured Partnership

Bio-economic Analysis of an Emerald Ash Borer Invasion

Scientists developed a model to help communities partner to battle emerald ash borer.

The emerald ash borer (EAB), a non-native invasive insect that has killed tens of millions of trees across the U.S. and continues to spread, has no qualms about crossing jurisdictional boundaries. So when the EAB shows up in a state, the most effective strategy for control involves working across communities and ownerships. There are a myriad of obstacles to this approach however.

In a recent study in Minnesota, Forest Service and university scientists examined two key obstacles to implementing a regional approach – lack of funds at the local level for protecting public ash trees and lack of access to ash trees on private property. The scientists developed a model that takes into account variation in ownership, management costs, and budgets of municipalities across 17 jurisdictions in the Twin Cities metropolitan region. The   model provides a big-picture response to EAB that cities and private property owners can implement. Results suggest that a regional management and funding strategy would control the infestation more effectively than an inconsistent, city-by-city response, or no response. In addition, better control can be achieved by increasing the number of trees accessible to public management. 

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