Where will the trees come from? How tariffs and new policies mean big changes on federal forests.

by Brent Sohngen (sohngen.1@osu.edu)

In this post:

• An assessment of the President’s recent executive order promoting timber harvests from federal lands to replace the 1.5 to 2 billion ft3 we import from Canada if tariffs reduce those flows.
• Federal harvests provided 2 billion ft3 per year, 15-20% of U.S. timber, until the early 1990s, but were reduced for environmental reasons. Now they provide 0.3 billion ft3 per year.
• Stocks have since grown significantly on these left-alone lands, and about 100 billion ft3 is reasonably available for harvest in the next few decades.
• Harvesting levels of 0.9 to 1.3 billion ft3 per year would equal current growth and fire losses on these hectares and would promote thinned and younger stands that would be more resilient in the future.
• There are environmental risks to building such a program that should be carefully weighed.

Now we know how the Trump administration plans to combat the effect of higher tariffs on wood prices: Harvesting more timber from federal forestlands, predominately in the western U.S. This approach would reverse thirty years of modest harvests from these forests, which began in the 1990s when the Endangered Species Act was invoked to slow down timber production in old growth forests that housed the Northern Spotted Owl (Strix occidentalis caurina).

Throughout their history, federal forests have been a punching bag, swinging back and forth between periods of protection and intensive logging as environmentalists and loggers duked it out in the court of public opinion and in front of judges. In the early 1900s, it was President Roosevelt who worried that lumberman and fires would destroy the great western forests and deprive future generations of habitat and boards. He set-aside millions of acres from the sawyer’s blade and hired forest rangers who tirelessly stood watch over their nation’s investment.

It turns out, back then, that logging was not much of a problem for federal forests. Sure, logging happened, but federal forests were remote and demand for industrial wood was modest in an era when population and income were far lower. Nature was a bigger “problem,” as 41 million acres per year burned before 1945.

Government set about slowing these conflagrations, hiring hearty soles, including servicemen returning from World War II, to put up a fight. Despite serious setbacks, like the Mann Gulch fire in 1949 that took 13 honorable lives, brave hand crews, hotshots, smokejumpers, and the like cut fires to 3 million acres per year by the 1970s.

What happened to all that wood saved from fires? Much of it made its way into houses and other products when the federal government built up a massive timber harvesting operation in western forests to meet growing demand during the post-World War II economic boom. By the 1970s federal harvests constituted 22% of softwood timber production in the U.S. In communities across the western landscape, forestry became a way of life, with booms and busts regulated by the number of housing starts.

But in 1991, all this came to a stop when Judge Dwyer ruled against the Forest Service, requiring changes in logging practices to save endangered species. Practically overnight, logging ceased on federal lands throughout California, Oregon, and Washington. They have remained low ever since as the Forest Service shifted its perspective.

These changes could not have come at a worse time for the American economy, which grew apace in the 1990s. Timber prices soared to new highs but mill towns in Oregon and Washington saw little benefit as log piles diminished. In 1993, President Bill Clinton chaired a timber summit in Portland, Oregon to make good on an election promise, but his words could not mend the obvious: a deep structural adjustment was underway, driven by a new calculation that favored owl habitat over tree cutting on federal lands.

Fortunately, for aspiring homeowners in the US, lumber poured in from Canada. The Canadians had plenty of trees and were keen to sell them. Lumber prices came back down as imports ramped up to 30% of lumber consumption by the early 2000s. The proportion has fluctuated a bit but remained close to this level ever since.

The question now is, what happens if tariffs reduce wood imports from Canada? Will prices stay high or can the US increase wood harvesting enough to counteract the market effects?
Consider federal timber lands, which have more or less been left alone since the early 1990s. These forests come under direct control of the President, who signed an executive order directing agency heads to increase logging on lands they control.

Can the US go back to the industrial-scale logging in federal forests like the 1950s through 1980s when federal harvests routinely hit 2 billion ft3 per year? Let’s look at the numbers.

The US consumes 12-13 billion ft3 of wood per year. Lumber accounts for about 55% of that, or 6.9 billion ft3. In recent years, we have imported around 1.7 billion ft3 per year. This level is down from the early 2000s when a housing boom drove imports to 2.5 billion ft3. Today, federal harvests stand at about 0.3 billion ft3 per year.

In principle, the US is capable of significantly ramping-up wood production on federal lands. With data downloaded from the US Forest Service Forest Inventory and Analysis database, I estimate that federal lands contain over 300 billion ft3 of softwoods, the key wood type imported from Canada.

We cannot access all that wood, though. About 23% is set-aside in wilderness areas and other protected places. An additional 43% is older than 120 years or in locations with slopes greater than 50 degrees. In both these cases, there are good environmental reasons not to cut. An additional 2.5% of the wood is too young to cut, so perhaps only 102 billion ft3 on 33 million acres is actually available for harvesting in a way that may not cause significant environmental damage.

That is a lot of wood. Can we cut it?

One answer is “yes” because we are already losing lots it each year to fires, which have now expanded to 7.5 million acres burned per year. Between fires and pests, 1.4 billion ft3 (1.4%) are killed annually, due in part to simple neglect. More harvesting would reduce fire and pest losses with thinned and younger forests.

How much can we safely cut? Simply cutting what grows every year would amount to 0.9 billion ft3 of wood for markets. Considering that these forests have not been managed for over 30 years, I hypothesize that we can harvest more than 0.9 billion ft3 per year and the effect on long-term volume growth will be positive. Currently, I’m assessing this with the Global Timber Model, so will have some actual analysis on that in the future.

But the current reality is that a significant amount of wood can, and probably should, be cut on public land. Based on the current inventory, growth, and dieback, I estimate that we can access 0.9 to 1.3 billion ft3 per year sustainably in the next two decades. Harvesting would also reduce forest fires.

That said, there are risks. The Forest Service has laid off lots of workers recently, and it is not clear the organization now has the capacity to manage a large and growing timber sale program. Lots of public and private infrastructure, including roads, machinery, and mill capacity, must be developed. Labor in western woodsheds has been scarce for years, so higher output will increase wages and drive-up costs.

There are also environmental risks. Road building and logging will denigrate habitat and water quality. In the haste to log, I worry that these risks will not be weighed carefully.

The carbon effects are not clear. Moving federal forests to shorter rotation ages with more harvesting could have short-term negative consequence for carbon emissions, but if management reduces fire damage and promotes increased growth rates through thinning and reforestation, the effects could be positive.

There is a way to have positive effects on the atmosphere, but it is not obvious that the Forest Service still has the personnel to ensure this outcome. And it is unlikely that the private sector, which will do the logging, has right incentives to do it well. The idea of using federal lands for more timber carries big risks.

One question folks might ask is why not harvest more on private land? Most forests and timber in the U.S. are on private land. Higher prices from tariffs could induce more harvesting there, but the tariffs must remain in place to have an effect. Landowners have inelastic supply, meaning that private wood supply will change modestly in today’s on-again, off-again policy environment.

The wildcard here is the potential federal timber harvesting program proposed through executive action. If private landowners come to believe the administration can actually pull off sustained increases in federal timber supply, logging on private lands in the east will edge up in anticipation. There is a modest overhang of mature logs in eastern forests that could enter the market in the next few years before the federal program gets up and running.

In conclusion, tariffs on wood imports from Canada would raise prices for lumber in the U.S. in the short term. We have plenty of wood available on federal forestlands, especially in the west, to expand our supplies and make up for any losses from Canada. However, it has been decades since most of these public forests have seen large-scale timber harvesting operations. Increases in harvesting can provide environmental benefits in terms of fire control and even long-term carbon storage, but there are also environmental risks to species, habitat, and the atmosphere.