Saturating timber market will not help forests, DNR or private landowners

For the third time in 20 years, a comprehensive assessment of the sustainable timber harvest levels on state-administered lands has been completed. The latest study mirrors those of previous decades.

The results, however, have been greeted with great disappointment by Minnesota's forest industries, which had convinced Gov. Mark Dayton that the state could offer for sale at least 100,000 more cords of wood per year than current levels.

The motivation for the industry is simple and understandable. Directing the Department of Natural Resources to put more wood on the market — more wood than the market currently needs — will, based on simple supply and demand theory, keep stumpage prices (the value of standing trees) lower.

Some background. Since 2007, the demand for standing timber in Minnesota has declined by over 1 million cords per year (imagine a pile of wood 8 feet high and 8 feet wide that stretches from International Falls to Rochester). This decline was brought on primarily by mill closings in Sartell, Brainerd, Bemidji, Grand Rapids and Cook.

A well-timed, well-designed timber harvest is the most cost-effective management tool available to forest managers. Such harvests rejuvenate declining forests, capitalize mortality, and address insect and disease problems before they become endemic, while providing a product that supports jobs and industry.

However, lost in the current debate is the negative impact that saturating the market with state wood will continue to have on the health of state forests, and on the opportunity of private forest landowners to manage their lands.

Putting up for sale more state wood than is needed provides loggers the opportunity to "cherry pick" the sales. Again their motivation is simple and understandable. Loggers seek out stands of timber with higher density (20-plus cords per acre) and high quality that are close to all-season roads and as close to the mill as possible.

The other detrimental impact of the strategy is its effect on private woodland owners. Part of the argument that the forest industries have been making for increasing sales on state land is that private woodland landowners (who own 40 percent of the state's woodlands) have been offering less and less wood for sale.

And why is that? Well, it's because stumpage prices have been so low. A personal case in point:

Back in 2009, I determined that it was time to thin out my overcrowded pine plantation. But for nine years, I waited, hoping that logger disinterest would wane, and rock-bottom timber prices would moderate. As a private landowner I have a lot invested in my woodland, financially and personally. And after 40 years of ownership, I was not about to give the wood away. Finally this year, prices have crept up to a level where I could persuaded myself to sell.

This is a common story among private woodland owners, and one that will continue as long as prices are kept artificially low.

The best, if most challenging, solution to this problem is for the state to attempt to rebuild its industrial base. This will not be easy. Minnesota's aging paper mills are finding it ever more difficult to compete in an incredibly competitive global market. Minnesota's northern neighbor has a forest land base that dwarfs Minnesota's and provides competition for finished products.

What is needed now, as back then, is a concerted effort by the state to engage and market the forest product opportunities that Minnesota possesses, making it a win-win situation for the forests and citizens of Minnesota.