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In The News
US Forest Service Announces Rural Schools Funding Details
In January, Agriculture Secretary Tom Vilsack announced that over $323 million will be paid to 41 states and Puerto Rico in two distributions to support local schools and roads as part of the Congressional one-year reauthorization of the Secure Rural Schools and Community Self-Determination Act.
These payments are part of the Department of Agriculture’s long-standing commitment to rural communities, schools and American youth,” said Vilsack. “Our century-long support of America’s public schools and roads is one of many ways in which the Forest Service, as a good neighbor and partner, contributes to rural communities becoming self-sustaining and prosperous.”
Below are the fiscal year 2012 amounts being distributed in January for greater Northwest states:
OSB Producers Return to Profitability
According to a recent study completed by The Beck Group, higher OSB panel prices enabled a return to profitably for a number of North American Oriented Strand Board operations during 2012. Financial performance in 2012 was markedly better than 2007 – 2010, when much of the industry incurred substantial losses due to depressed markets.
While many firms were profitable in the first half of 2012 (the study period), their profitability was still lower than it had been in 2006, when a similar study was completed by the consulting firm. While sales values achieved in early 2012 were very close to those from 2006, rising per-unit manufacturing costs cut profits by over 30 percent. The rise in manufacturing costs is in spite of continued gains in productivity per man-hour made at most operations. Increased prices for resin and other chemicals, as well as reduced production levels and reduced operating schedules, were the main reasons for higher manufacturing costs.
As in previous years, U.S. producers outperformed their Canadian counterparts in terms of per-unit profitability, with the main U.S. advantage being sales values more than 10 percent higher than those of the Canadians due in part to differences in transportation costs and distances to major U.S. markets. Canadian plants were also negatively impacted by the strong Canadian dollar relative to U.S. currency.
This year, the Beck Group plans similar benchmarking studies covering the full year 2012 for other segments of the North American forest products industry, including Western plywood and Western softwood lumber. www.forest2market.com
Forest2Market Forecasts Good News in 2013
Forest2Market reported that log prices in the Pacific Northwest are climbing back to pre-recession levels. It projects that prices will gain additional ground in 1Q2013, the result of the ongoing recovery taking place in both domestic and export markets.
Forest2Market stated: The U.S. housing market turned the corner in the last half of 2012, and demand for forest products quickly followed. In November, lumber prices were $100 per thousand board feet (MBF) above their November 2011 level. Forest2Market projects the housing recovery will continue to pick up steam in 2013, with annualized housing starts hitting the one million mark by the end of the year.
Gordon Culbertson, manager of Forest2Market’s Pacific Northwest business says, “Inventories of imported logs and lumber products in China have declined by nearly 50 percent from a year ago, while the Chinese Government has renewed efforts to stimulate affordable housing construction. Russia’s market share, traditionally the largest supplier of Chinese logs and lumber, has continued to erode, leaving Chinese buyers to fill the shortage with deliveries from North America and New Zealand.”
According to Forest2Market’s Deli-vered Price Database, prices for logs delivered to northwest seaports for export loading to Asia revived as 2012 progressed, with Douglas fir prices gaining back $72 per MBF of the $78 per MBF they lost in the first half of the year and Hem-fir hitting a 2012 peak in November at $558 per MBF.
A combination of supply constraints and stronger demand from both U.S. and export markets will lead log prices higher in 2013. Douglas fir prices, for instance, will reach into the mid-$600s by the end of the first quarter, with the largest increases occurring in western Oregon, where the supply shortage is more acute.
U.S. Forest Service Report Forecasts Natural Resource Management Trends and Challenges for Next 50 Years
If you are looking for a long range forecast, a comprehensive USFS report released recently examines the ways expanding populations, increased urbanization, and changing land-use patterns could profoundly impact natural resources, including water supplies, nationwide during the next 50 years.
USFS scientists and partners at universities, non-profits and other agencies found urban and developed land areas in the U.S. will increase 41 percent by 2060. Forested areas will be most impacted by this growth, with losses ranging from 16 to 34 million acres in the lower 48 states. The study also examines the effect of climate change on forests and the services forests provide.
Most importantly, over the long-term, climate change could have significant effects on water availability, making the US potentially more vulnerable to water shortages, especially in the Southwest and Great Plains. Population growth in more arid regions will require more drinking water. Recent trends in agricultural irrigation and landscaping techniques also will boost water demands.
“Our nation’s forests and grasslands are facing significant challenges. This assessment strengthens our commitment to accelerate restoration efforts that will improve forest resiliency and conservation of vitally important natural resources,” said U.S. Forest Service Chief Tom Tidwell. www.fs.fed.us/news/2012/releases/12/report.shtml
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