Deja Vu on the Tongass: How Overestimating Timber Demand Prevents Responsible Stewardship
America’s largest national forest, the Tongass National Forest in Alaska, is indispensable to salmon fishermen, native cultures, and local economies. The Tongass has a wealth of resources from scenic views to old growth forests to habitat for hundreds of species including wild salmon, brown bears, and whales. Unfortunately, not all resources are given equal weight by the agency charged with managing the Tongass. Over the last decade and more, the Forest Service has consistently overestimated market demand for timber resulting in a Tongass timber program that has been significantly, and unnecessarily, subsidized at the expense of other forest resources and uses.
In this report we explain how the most recent U.S. Forest Service projections once again overestimate demand for Tongass timber. The Forest Service estimates that demand is increasing, despite ample evidence to the contrary. The agency bases its timber demand projections on outdated assumptions about markets for Alaska timber, Alaska’s forest product mix, future opportunities for an integrated forest products industry, and Alaska’s ability to compete in the global market.
Key findings and conclusions include the following:
The timber industry in Southeast Alaska will always be affected by inherent competitive disadvantages. Because of its geographic location and distance from markets, logging, manufacturing, and transportation costs have always been high in Southeast Alaska. Southeast Alaska’s forests are also dominated by tree species with lower value as timber. A history of over-harvesting the highest value trees further exacerbates this disadvantage for the Alaska timber industry. (The remaining trees most accessible for logging are of lower quality.) Southeast Alaska is a high cost producer competing regionally against more efficient mills in the Pacific Northwest and Interior British Columbia.
Global market conditions are changing and recent trends indicate that demand for Tongass timber will continue to decline. The lumber export market to Japan has collapsed and is no longer a major export destination for Southeast Alaska wood products. The current market for softwood produced in Southeast Alaska is the U.S. domestic market, which is dominated by modern efficient mills in the Southern U.S., Canada, and the Pacific Northwest. The domestic lumber market is also currently in decline as a result of the downward trend in the housing market. Prices paid for Alaska’s highest value tree species have been falling over the last ten years. Timber jobs are also declining. All of these trends combine to suggest that market demand for Tongass timber is not increasing and will not increase anytime soon, as the Forest Service suggests.
The latest Forest Service projections are flawed as a result of the following faulty assumptions. The agency assumed that the Pacific Rim, especially Japan, continues to drive demand for Southeast Alaska timber when that is no longer the case. The agency further assumed that U.S. domestic demand can be calculated as a simple multiple of the demand estimated for the Pacific Rim – without providing any data supporting such a relationship. The Forest Service ignored Alaska’s competitive disadvantage and historic downward trends when predicting new trends. And the PAGE v agency’s demand estimate assumed new mills will be built in Southeast Alaska, when history and the current low market demand suggest otherwise.
A new management paradigm is needed on the Tongass in order to appropriately meet the agency’s multiple use mandate, and ensure proper long-term stewardship of the national forest as a public resource.
Specifically, this report calls for:
• Increased Forest Service funding directed at fish and wildlife habitat restoration and improvement, and shifting priorities away from the harvest of old growth trees
• Protecting old growth reserves and subsistence uses of the forest
• Investment in recreational uses of the forest • Increasing the recognition given to the non-timber economic benefits of the forest
• Establishing an appropriately sized timber program that reflects economic realities, and is able to sustain and support local jobs and local needs
The Wilderness Society hopes that this report will bring attention to the need for a new market demand analysis, and ultimately a shift in Forest Service policy that reflects the economic realities of Southeast Alaska and supports the true economic drivers of this region, and the best interests of all Americans.
