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0*-
UnitedStates Recycling and Long-Range
Departmentof
Agriculture
limber Outlook
ForestService
Rocky Mountain
Forestand Range Peter J. Ince
ExperimentStation
Fort Collins
Colorado 80526
73
y
General Technical
Report RM-242 -<
Acknowledgments
Iamindebted toco-authorsoftheNAPAPModel, Adams,UniversityofMontana,andRichardHaynesof
including Dr. Dali Zhang, Research Associate at theUSDAForestServicePacificNorthwestExperiment
University of Wisconsin-Madison (UW), Romain Station,Portland,Oregon,workedonestimatesofU.S.
Jacques, Economist at the Policy and Economics Di- roundwoodpulpwoodsupplyfunctions,andprovided
rectorate (PED) of Forestry Canada, and Professor projectedpulpwoodsupplygrowthrelationshipsfrom
Joseph Buongiorno of UW-Madison. I am further theTAMM/ATLAS model.
indebtedtoDr. ZhangandProfessorBuongiornofor I am indebted also to the following for their sup-
their primary roles in development and co-author- porting roles and contributions at various stages of
shipofPELPSIII (version3ofthePrice-Endogenous this study or in development of the NAPAP Model:
Linear Programming System for economic model- DavidDarroftheUSDAForestServiceFIERRstaffin
ing, which we used in development of the NAPAP WashingtonDC,coordinatedandmanagedthework
Model). of RPA Issue Analysts for the 1993 RPA Update;
I am indebted also to the following codevelopers Lloyd Davidson of FPL, helped produce the charts
oftheNAPAPModel fortheirsubstantive contribu- showninthisreport;JoanneT. AligofFPLcompiled
tions: DonG. Roberts, PED, helped planand initiate extensivebackgroundinformationonlegislativede-
research which led to development of the NAPAP velopmentsinrecycling;H.FredKaiseroftheUSDA
Model;IreneDurbak,ResearchForester,FPL,worked Forest Service FIERR staff in Washington DC, Will-
onestimation ofU.S. trade relationships, along with iam Lange, FPL, and Doug Ketcheson and Dave
J.
graduate student Togu Manurung of UW; Susan Boulter, PED,ForestryCanada, Ottawa,helped pro-
Phelps, PED, developed a system for tabulating vide some of the arrangements and funding which
NAPAP Model input data and output information; facilitatedtheinternationalresearchstudyleadingto
Dr. Hsien-Chi Lu (formerly UW graduate student) developmentoftheNAPAPModel;formergraduate
worked on estimation of U.S. demand functions, students at the University ofWisconsin-Madison,
J.
along with Professor Joseph Buongiorno; Ken Skog Keith Gilless (now Professor at the University of
and James Howard, FPL, worked on estimation of California-Berkeley), and Patrice Calmels who
,
U.S. recovered paper supply functions; Robert G. helped develop previous versions of the price-en-
Prins and HarryJaaskelainen, PED, along with Don dogenous linear programming system (PELPS and
G. Robertsworked onestimationofrecovered paper PELPS II). Others who helped in compiling data or
supply functions for Canada; Don G. Roberts and developing estimates for the NAPAP Model at FPL
Robert G. Prins also worked on estimation ofCana- includedDeniseIngram,DenaLuze,JillBickelhaupt,
dian roundwood pulpwood supply functions; Bar- DietrichEarnhardt,MikeMolter,SujataGhosh,Mary
bara Baker, PED, worked on demand elasticities for Reuter, Ted King, Catherine Ausloos, and John
pulpandpaperproductsinCanada;ProfessorDarius Hagerty.
This publication was printed on recycled paper.
USDA Forest Service February 1994
General Technical Report RM-242
Recycling and Long-Range
Timber Outlook
Peter J. Ince, Research Forester
Forest Products Laboratory1
Contents
Page
Summary 1
Emergence ofthe Issue 2
Landfill Crisis and Waste Management Dilemma 2
Relevance to RPA Assessment 3
Selection and Definition ofthe Issue 4
Approach and Methods 5
Basic Assumptions 5
Methods 6
Other Studies 7
NAPAP Model 8
Methodology ofNAPAPModel 9
Results 10
Paper & Board Consumption 11
Per Capita Paper & Board Consumption 11
Gross WastepaperDisposal Burden 12
Exports of Paper and Board 13
Imports ofPaperand Board 13
Exports ofWoodpulp 14
Imports ofWoodpulp 14
Production of Paperand Board 14
Production ofWoodpulp 15
Total Pulpwood Supply 15
Softwood Pulpwood Supply 15
Hardwood Pulpwood Supply 16
Pulpwood Residues 16
Southern Softwood Pulpwood Price Index 16
Southern Hardwood Pulpwood Price Index 17
Softwood LumberProduction 17
National ForestTimberHarvest 18
U.S. Private ForestTimber Harvest 18
U.S. Timber Harvest (All Owners) 18
Southern Softwood Sawtimber Stumpage Index 18
Conclusions 19
Implications 20
References 22
Recycling and Long-Range Timber Outlook
Peter J. Inee
Summary andpaperboardwillcontinuetoincrease,withgrowth
in fiber demands matched by growth in domestic
This report updates the Forest Service analysis of fiber supplies.
long-rangetrendsinpaperrecyclingandimpactson Although increased recycling will extend fiber
thetimberoutlookintheUnitedStates.Twoupdated supply, results indicate that the United States still
scenarios are presented, a "base" scenario and a faces seriousfuturesupplyproblemsforsawtimber.
"high recycling/waste reduction" scenario. Projec- Inthisupdated analysis, future National Foresttim-
tionsextendfivedecadesintothefuture.2Inthebase ber harvest levels are assumed to decline (to levels
scenario, rapid increases are projected in U.S. paper much lower than assumed in the 1989 Assessment).
recyclingratesinthe1990s,followedbymoregradual Other assumptions updated since the 1989 Assess-
increases in subsequent decades. Results are com- mentincludehigherprojecteddemandforsoftwood
pared to the earlier 1989 RPA Assessment, which lumber and plywood in the United States, lower
assumed much slower growth in recycling rates. Canadian lumber production, lower private indus-
Increased paper recycling affects timber markets by trial sawtimber harvests in the U.S. West, and vari-
extendingtimberresourcesandexpandingfibersup- ousrevisionstotimbergrowthassumptions,particu-
ply. Roundwood pulpwood demand is projected to larly in the U.S. South. Consequently, growth in
increase at a more modest rate than projected in the domesticsawtimbersupplyisnotexpectedtomatch
1989Assessment,whilepulpwoodsuppliesincrease growth in sawtimber demand. Softwood sawtimber
(particularlyforsoftwoods).Consequently,realprices prices in the United States are projected to increase
for delivered Southern pulpwood are projected to substantiallyinthedecadesahead,despiteincreased
remain relatively stable for softwoods, and to in- paper recycling. Real stumpage prices for softwood
creasegraduallyforhardwoods.Thebalanceoftrade sawtimber in the South for example are projected to
isprojectedtoswingstronglyinfavorofU.S. exports nearly doublebetween 1990 and 2020; and southern
for pulp, paper and paperboard. In general, projec- sawtimber prices are projected to be higher by the
tions indicate that U.S. production of pulp, paper, year 2000 than projected in the 1989 Assessment.
However, increased recycling will help ameliorate
2Projections shown in this report are the result of long-range timber price increases somewhat. In the longer term
economic modeling based on economic supply and demand
(2010andbeyond),sawtimberpricesareprojectedto
theory. Theprojectionsareintendedonlytoprovideprofessional
opinion about directional trends of the future. The projections be lower than projected in the 1989 Assessment,
should not be viewed as official or scientific endorsement of partly because of increased recycling.
specific outcomes or events. They do not represent outcomes
which are certain to occur in the future. Ongoing changes in In the alternative "high recycling/waste reduc-
markets and technology will certainly render these projections tion" scenario, much more rapid increases in recy-
obsolete,andreasonablevariationindataandassumptionscan cling and lower future per capita paper and paper-
lead to a wide range ofprojected future outcomes apart from
projections shown in this report. Projections shown in this report boardconsumptionlevelsareprojected.Roundwood
were derivedfrom the draftNAPAPModelBasescenario results pulpwood consumption and pulpwood prices are
ddreavfetlNoApPeAdPinMMoadreclh,re1su9l9t3s(fionrc"lhuidgihngreTcAycMlMinrgu/nwLaRst1e26r)e,duacntdiotnh,e" projected to be substantially lower than in the base
whichweredevelopedinJune, 1993(includingTAMMrunLR 130). case. However, softwood sawtimber prices still are
Draftprojections shown in this report will vary slightly from final projectedtoincreaseinthedecadesahead,atasome-
rUepsudlatst,ewhreipcohrtw.illbepublishedinthe 1993RPA TimberAssessment whatslowerrateofincreasethaninthebasescenario.
1
Emergence of the Issue
Peopleunderstand thatpaperrecyclingcan "save
trees;" but, the precise impactontimber supply and
demandiscomplicatedbyeconomicbehaviorandby
other ongoing adjustments to timber supply and
demand. Inasimplisticsense,useofrecycledfiberin
papermaking directly avoids harvesting of trees for
pulpwood,tosomeextent.However,othereconomic
and behavioral adjustments complicate the issue.
Reducedpulpwooddemandwillextendtimbersup- Total Weight = 195.7 Million Tons
plies, making timber harvesting more economically
Figure 2.—Estimatesproportionsofmaterialsgenerated in MSW,
attractive than it would be otherwise. Trees which 1990 (U.S. EPA).
are"saved"byrecyclingarelikelytobeharvestedfor
end uses other than papermaking. Therefore, in-
creased recycling will tend to favor greater overall Landfill Crisis and Waste Management
consumption of forest products in domestic and Dilemma
overseas markets. Otheradjustments to timber sup-
ply and demand, such as increased forest preserva- In industrialized countries ofNorthAmerica, Eu-
tion, also will affect the long-range timber outlook. rope,andEastAsia,thelatterhalfofthe20thcentury
Fundamentally, the issue concerns the short-run has been characterized by sustained economic
market allocation of wood and fiber resources and growth, rapid expansion of consumer goods mar-
thelong-runallocationofland,technology,andcapi- kets,andincreasedurbanization.IntheUnitedStates,
tal resources to the forest products sector. The issue forexample,agrowingandmoreurbanizedeconomy
has emerged because of a landfill crisis and waste consumedpaperandpaperboardproductsinsteadily
management dilemma in the United States, which increasingvolumes,risingfrom24millionshorttons
hasprecipitateda substantialincreaseinpaperrecy- annually in 1949, to nearly 87 million tons in 1990
cling. (API 1992). Although organized means of trash col-
lectionand disposalwereprovided inindustrialized
countries throughout this period, the approach to
wastemanagementevolved.Insomeinstances,waste
disposalcreated environmentaland economicprob-
lems. Groundwater contamination and air quality
are among the more significant environmental and
humanhealthconcernsassociatedwithlandfillsand
waste incineration in the United States (EPA 1989,
OTA
1988; 1989). Increasing regulation, negative
impactson propertyvalues,and decliningavailabil-
ity of waste disposal sites have contributed to in-
creasing costs for waste disposal.
The volumes of municipal solid waste (MSW)
generated in the United States have increased and
are projected to increase substantially in the years
ahead.Figure 1 showshistoricalandprojectedtrends
MSW
inwastematerialsgeneratedannuallyin (EPA
1960 1970 1980 1988 2000 2010 1990).Itwasestimatedthatin1990,37.5%(byweight)
Year ofallMSWgenerated intheUnitedStateswaspaper
0Paper Glass/Metal SFood/Yard Mother Plastics and paperboard. Figure 2 shows estimated propor-
MSW
tions of materials generated in (EPA 1992).
Figureg1e.n—eHriasttoerdicaalnnaunadllpyrionjeMcStWe,dt1r9e6n0d-s20in10wa(sU.tSe.mEaPeA)r.ials EPA has projected that the amount of MSW gener-
2
ated in theUnited Stateswillexceed 220 milliontons 30
by the year 2010, without additional source reduc-
tion(EPA 1992). Withoutsignificantchangesinrecy-
cling or consumption patterns, paper and paper-
board would remainthelargestsinglecomponentof
MSW
in the United States.
Since the mid-1980s, there has been a significant
and continuous growth in paper recycling rates in
the United States. In economic terms, the increasein
paperrecyclingratessincethemid-1980swasprima-
rily an economic response by the paper industry to
increased supplies ofpaper collected and recovered
for recycling. Recovery of paper for recycling in- 1952 1962 1970 1976 1986 1990 2000 2010 2020 2030 2040
creased in recent years because of widespread ex- Year
pansion of paper collection and sorting programs E2!sawlogs GVeneer logs ESPulpwood IMisc. products ^Fuelwood
(e.g. community-based curbside collection, sorting,
and office wastepaper collection). Such programs Figure 3.—Roundwood consumption in the United States, speci-
fied years 1952-1986, with 1989 RPA base projections of de-
were directly or indirectly a response to long-term mandto2040.
environmental, economic, and human health prob-
lems associated with landfills and waste incinera- follows a much longer tradition of federal timber
tion, and increasingwaste disposalcosts. Increasing outlook studies, datingback to the late 19th century
disposalcostshaveledtoexpansionofcollectionand (forbibliographyofsuchstudies,seePrefacetoUSDA
sortingprograms,which,inturn,haveledtocheaper Forest Service 1982). The most recent RPA Assess-
and more abundant supplies of recovered paper, ment report was completed in 1989 (USDA Forest
providing the economic incentive for industrial ex- Service1989a),accompaniedbypublicationofamore
pansion of paper recycling. Thus, the landfill crisis detailed long-range analysis of the timber situation
and solid wastemanagementdilemma haveprecipi- in the United States (Haynes 1990). This report was
tated the recent departure from historical trends in developed in support of the 1993 RPA Assessment
paper recycling. Update (1993 Update). The RPA Assessment and
interim updates provide a factual and analytical
Relevance to RPA Assessment basis for the RPA Program of the USDA Forest Ser-
vice, a program of recommended agency activities
The Forest and Rangeland Renewable Resources which is revised and submitted to Congress every 5
Planning Act of 1974 (RPA), the National Forest years under the provisions of RPA.
Management Act of 1976 (NFMA), and the Forest Lookingatdataandprojectionsfromthe1989RPA
and Rangeland Renewable Resources Research Act Assessment (Haynes 1990), it was apparent that de-
of 1978 require the USDA Forest Service to develop mand for timber had grown substantially in recent
comprehensive long-range assessments of supply decades, and was expected to grow substantially in
and demand fortimberand otherforestresources in the future. Figure 3 shows historical data on timber
theUnited States. Thedecennial Assessmentreports consumptionintheUnitedStates,bytimberproduct
and their interim updates include detailed analyses category, since 1952, along with 1989 RPA Base pro-
ofthe prospective timber supplyand demand situa- jectionstotheyear2040. Itcould be noted, however,
tion in the United States. The reports include long- that the 1989 RPA Base projections assumed a very
range projections of timber market trends (regional conservative trend in paper recycling rates. Figure 4
supply,demandandprices),forestproductdemand, shows historical data on timber demand from U.S.
domestic production, and technological changes in forest lands, with imports and exports, along with
major forest product sectors of the U.S. economy 1989 RPA Base projections to the year 2040. Of ap-
(including the pulp and paper sector). RPA Assess- proximately 500 million cubic meters ofannual tim-
mentreportshavebeenpreparedsincethe1970s.The ber harvest from timberland in the United States, in
timber analysis component of the RPA Assessment the late 1980s, approximately one-fourth was pulp-
3
wood supplieddirectlytopulpmills. Inaddition,by
thelate1980s,timberharvestrepresentedonlyabout
60% of total pulpwood input to pulp mills in the
UnitedStates;about40% ofpulpwoodwasobtained
indirectlyas wood residues (wood chips) from saw-
mills and veneer mills. Therefore, total pulpwood
consumption in the United States, including timber
harvest and mill residues, amounted to more than
200 million cubic meters annually, by the late 1980s,
or more than 40% of the timber supplied from U.S.
timberlands. Inthe 1989RPABasecase,thispercent-
age was projected to grow to more than 50% in the
decades ahead. Thus, in the 1989 RPA Assessment
report, projected growth in pulpwood consumption 1970 1972 1974 1976 1978 1980 1982 1984 1986 1988 1990 1992
was a major element in projections of substantially Year
increased timber consumption in the United States.
Although net annual growth and inventory oftim- Figure5.—U.S. recyclable paperutilization rate historicaltrend
ber growing stock have been increasing steadily in (API).
recentdecades,andalthoughtimbersupplyisexpected
toincreaseinthefuture,the1989RPAAssessmentBase Selection and Definition of the Issue
projections showed that overall growth in timber de-
mand would generally exceed growth in timber sup- The 1993 Update was intended to reflect analysis
ply.Thisresultedinprojectedincreasesintimberprices, of important issues currently related to long-range
particularly increases in softwood timber stumpage forestresourcetrends,and particularlyissueswhich
prices in the U.S. West and U.S. South (Haynes 1990). haveremainedimportantsincethe1989Assessment.
Thisgeneralassessmentofthefuture,thattimberprices Certainly, trends in paper recycling have remained
would increase substantially over the long term, was an important issue, given the significant upward
not dissimilar to conclusions of other recent timber trend in paper recycling that is now apparent. Fig-
analysis studies (USDA Forest Service 1988, USDA ure 5showsthehistoricaltrendintheU.S.recyclable
ForestService 1982). paper utilization rate since 1970 (API 1992). The
recyclable paper utilization rate is the ratio of the
tonnage of recyclable paper used as fiber input in
domestic paper and paperboard mills to total ton-
nage of paper and paperboard produced. Figure 6
shows the historical trend in U.S. recyclable paper
recovery rate for the same period (API 1992). The
recyclable paper recovery rate is the ratio of the
tonnage of recyclable paper recovered for both do-
mesticuseandforexporttothetotaltonnageofpaper
and paperboard consumed in the U.S. economy. A
substantial historical increase in recycling rates be-
gan in the mid-1980s (figs. 5 and 6). Also, by 1992,
U.S. paper recycling rates actually reached levels
which were not forecast to occur in the 1989 RPA
1952 1962 1970 1976 1986 1990 2000 2010 2020 2030 2040
Base projections until the next century. Thus, the
Year
Forest Service recognized that scenarios such as the
IExports DImports ESIDemand on Forest Land 1989 RPA Base should not be viewed in isolation
fromalternativescenarioswhichshowmorerealistic
Figure 4.—Timber demand showing exports, imports, and de- trends in paper recycling.
mandonforestlandintheUnitedStates,specifiedyears 1952-
1986, with 1989 RPA base projectionsofdemandto 2040.
4
