National forest timber harvest variability
Forrester, Albert Ayers
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It has long been the goal of the United States Forest Service to stabilize timber dependent communities via a sustained yield, even-flow of timber from the National Forests. This policy has been based upon the assumption that timber markets have a destabilizing impact on these communities since private timber operators harvest at varying rates. This paper examines the question of whether or not private harvests are more variable than Forest Service harvests. Statistically, it is shown that Forest Service harvests are not stable and that private harvests are much less variable than national forest harvests. The focus of the paper then turns to an explanation of the variability in Forest Service harvests. Timber sales policies and the Forest Service contract are given as two possible sources of this variability. Regression analysis shows that, for the most part, timber harvests are not significantly related to sales and that apparently there is enough slack in the timber contracts to allow operators time to alter harvest rates according to changes in the economy. Econometric analysis shows that harvests do respond to changes in the economy. Thus harvest variability is not solely due to variability in Forest Service timber sales. Because of the apparent lack of rigidity in timber contracts, evidenced by contract extension, termination, alteration, and slack in the contract period, it is proposed that firms harvesting national forest timber will behave differently than firms harvesting under private contracts. Specifically, it is proposed that firms reduce harvest rates dramatically when prices fall, perhaps ceasing operations altogether, and increasing harvest rates when prices rise. Econometric analysis shows that such behavior in national forest timber supply is present. The evidence provides a partial explanation of national forest harvest variability.