Greg Latta and Darius Adams Department of Forest Resources Oregon State University
description
Transcript of Greg Latta and Darius Adams Department of Forest Resources Oregon State University
PNWPrivate: A Nested System of PNWPrivate: A Nested System of Regional Private Timber Supply Models Regional Private Timber Supply Models
for Oregon and Washington with for Oregon and Washington with Extensive Mill and Resource DetailExtensive Mill and Resource Detail
Greg Latta and Darius AdamsGreg Latta and Darius AdamsDepartment of Forest ResourcesDepartment of Forest Resources
Oregon State UniversityOregon State University
Outline
• Overview of OSU Forest Sector Models
• Regional Models
• Model Components
• Applying the Models
• Lessons Learned
• Work in Progress
Forest Sector Modeling System at OSU:Linking Subregional to International Markets
½ STATE MODELS WITH EXOGENOUS PNW LOG FLOWS
PNW REGIONAL MODEL WITH ENDOGENOUS LOG FLOWS
NATIONAL MODELS STUMP TO MILL LEVEL INCLUDE CANADA
DYNAMIC INTERTEMPORAL & EVEN-FLOW MODELS
DYNAMIC INTERTEMPORAL, MYOPIC
MARKET & EVEN-FLOW MODELS
Price and capacity (feedbacks)Harvest, inventory, capacity, management investment
Linking Regional Timber Supply Developments to National and International Markets
WESTERN WASHINGTON
MODEL
EASTERN OREGON MODEL
NORTH AMERICA AND
OFF-SHORE MARKET MODEL
PRODUCT OUTPUTPRODUCT OUTPUT
HARVESTHARVEST
LOG PRICESLOG PRICES
MANAGEMENT MANAGEMENT INVESTMENTINVESTMENT
INVENTORY & GROWTHINVENTORY & GROWTH
PRODUCT CONSUMPTIONPRODUCT CONSUMPTION
TRADETRADE
PRODUCT PRICESPRODUCT PRICES
INTER-REGIONAL INTER-REGIONAL SUBSTITUTIONSUBSTITUTION
MANAGEMENT INVESTMENT MANAGEMENT INVESTMENT TIMBER INVENTORIESTIMBER INVENTORIES
LOG FLOWSLOG FLOWS
PRODUCT PRICESPRODUCT PRICES
WESTERN OREGON MODEL
EASTERN WASHINGTON
MODEL
Regional Models
Elements of Harvest Projection Process
INVENTORYINVENTORY YIELDSYIELDS
MANAGEMENT MANAGEMENT REGIMESREGIMES
LAND BASE LAND BASE TRENDSTRENDS
HARVEST HARVEST SIMULATORSIMULATOR
Elements Of Harvest
Projection Process
Use USFS FIA inventoriesUse USFS FIA inventories
1997 WOR / 1999 EOR 1997 WOR / 1999 EOR Updated 1990 WWA/EWAUpdated 1990 WWA/EWA
Build model at Condition Build model at Condition Class levelClass level
INVENTORYINVENTORY YIELDSYIELDS
MANAGEMENT MANAGEMENT REGIMESREGIMES
LAND BASE LAND BASE TRENDSTRENDS
HARVEST HARVEST SIMULATORSIMULATOR
Elements Of Harvest Projection Process
INVENTORYINVENTORY YIELDSYIELDS
Identify 7-8 regimes Identify 7-8 regimes for WOR and WWAfor WOR and WWA
6 regimes for EOR 6 regimes for EOR and EWAand EWA
MANAGEMENT MANAGEMENT REGIMESREGIMES
LAND BASE LAND BASE TRENDSTRENDS
HARVEST HARVEST SIMULATORSIMULATOR
Elements Of
Harvest Projection
Process
INVENTORYINVENTORY
Project tree lists of each existing condition class under regimes
Develop projected tree lists for regenerated stands under regimes
FVSFVS / / ORGANONORGANON
YIELDSYIELDS
MANAGEMENT MANAGEMENT REGIMESREGIMES
LAND BASE LAND BASE TRENDSTRENDS
HARVEST HARVEST SIMULATORSIMULATOR
Elements Of Harvest Projection Process
INVENTORYINVENTORY YIELDSYIELDS
MANAGEMENT MANAGEMENT REGIMESREGIMES
LAND BASE TRENDSLAND BASE TRENDS
Project loss of timberland acres to non-forest uses
HARVEST HARVEST SIMULATORSIMULATOR
Elements Of Harvest Projection Process
HARVEST SIMULATORHARVEST SIMULATOR
1) Even-flow1) Even-flow
2) Market model:2) Market model:
> demand for logs at milling > demand for logs at milling centers > centers > supply of logs from supply of logs from timberland locationstimberland locations
INVENTORYINVENTORY YIELDSYIELDS
MANAGEMENT MANAGEMENT REGIMESREGIMES
LAND BASE LAND BASE TRENDSTRENDS
Model of Log Market at Milling Center x
DEMAND FOR LOGS AT DEMAND FOR LOGS AT MILLING CENTER MILLING CENTER xx
SHIFTS WITH PRODUCT PRICE, SHIFTS WITH PRODUCT PRICE, CAPACITY, TECHNOLOGY AND NON-CAPACITY, TECHNOLOGY AND NON-WOOD COSTSWOOD COSTS
SUPPLY OF LOGS FROM SUPPLY OF LOGS FROM TIMBERLAND LOCATIONSTIMBERLAND LOCATIONS
SHIFTS WITH COSTS OF SHIFTS WITH COSTS OF MANAGEMENT, LOGGING, HAULING, MANAGEMENT, LOGGING, HAULING, INTEREST RATEINTEREST RATE
PRICEPRICE
HARVESTHARVEST
Model of Regional Log Market
MARKET BALANCE MUST BE FOUND ACROSS ALL MILLING CENTERS AND MARKET BALANCE MUST BE FOUND ACROSS ALL MILLING CENTERS AND LOG SOURCESLOG SOURCES
LOG BUYERS TRADE-OFF SOURCES TO MINIMIZE COSTS LOG BUYERS TRADE-OFF SOURCES TO MINIMIZE COSTS
LOG SELLERS TRADE-OFF DESTINATIONS TO MAXIMIZE NET RETURNSLOG SELLERS TRADE-OFF DESTINATIONS TO MAXIMIZE NET RETURNS
TIMBERLAND TIMBERLAND AA
TIMBERLAND TIMBERLAND BB MILLING MILLING CENTER CENTER XX
MILLING MILLING CENTER CENTER YY
Original Regional ModelsFixed Model Structure With Preset OptionsFixed Model Structure With Preset Options
Applying the Models
• New Riparian Rules• Eastside Mill Closures• USFS Restoration Thinning• Older Forest Structure• Carbon Markets• Public Forestlands and Carbon• Future Harvest and Inventory by Log
Quality
New Riparian RulesOregon Department of Forestry wanted to analyze the market
impacts of two potential riparian policy changes– Increasing the leave tree basal area requirements– Changing some stream designations from non-fish to fish
bearing
INVENTORY More detail on riparian plots
YIELDS Rerun the yield tables with more detail in riparian
What:What:
How:How:
Original Plots More Detailed Riparian Plots
New Riparian Rules
0
500
1000
1500
2000
2500
3000
Lan
d a
nd
Tim
ber
Val
ue
($19
92)
Large Fish Medium Fish Small Fish No ControlledStream
Stream Class
Current Riparian Policy
Increased Basal Area Retention
Eastside Mill Closures
Initial eastern Oregon log market runs showed up to 50% reduction in harvest volumes which caused log prices to rise too high
HARVEST SIMULATOR Endogenous mill capacity via a binary capacity utilization scheme with shutdown point
WhatWhat
HowHow
LOG QUANTITY
LOG PRICE
CAPACITY
SHUT DOWN
LOG QUANTITY
LOG PRICE
Original Linear Demand Curve
New Demand Curve
USFS Restoration Thinning
Eastern Oregon public forests contain over a million acres of forestland in need of fuel reduction / forest health thinning
INVENTORY Public forestlands added to model
YIELDS Volumes calculated for potential thinning
HARVEST SIMULATOR Harvest, haul, disposal and subsidy
WhatWhat
HowHow
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LoggingdLumberêPlywoodð
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private, for indÝprivate, not for indÝ
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Eastern Oregon Timber Market
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0 20 40 60 Miles
N
Demand Centers
LoggingdLumberêPlywoodð
FIA Pots
private, for indÝprivate, not for indÝ
USFS Overstocked Plots
1 - 2000Ý2000 - 4000Ý4000 - 6000Ý6000 - 10000Ý10000 - 40000Ý
Public Forest Lands
BLM
State Lands
Revised Market
Eastside Mill Closures with USFS Restoration Thinning
Num
ber
of M
ills
in O
pera
tion
Year
Creating Older Forest Structure
Incentives and opportunity cost of producing older forest structure (OFS) on private forestland
MANAGEMENT REGIMES Heuristic optimization of NPV and OFS silvicultural regimes
HARVEST SIMULATOR Management incentives added as well as targets for OFS creation
WhatWhat
HowHow
Net Present Value (NPV) maximization
Reserve Older Forest Structure (NPV) generation
Creating Older Forest Structure
4050607080901001101200
1
2
3
4
5
6
7
billi
on d
olla
rs (1
992)
Time limit, to meet OFS target
<=60%
<=40%
<=20%
Net
Su
rplu
s R
ed
uct
ion
(C
ost
)
<= 20%, <=40%, and <=60% requires more than 20%, 40% and 60%, respectively, of the private timberland base to have older forest characteristics by the time limit
Carbon Markets
Estimate impacts of carbon tax/subsidy system on private timber harvest and management in western Oregon
Add forest carbon accounting to market model
WhatWhat
HowHow
$50
$100
$50
$100
0
10
20
30
40
50
60
70
80
-90 -80 -70 -60 -50 -40 -30 -20 -10 0
Average timber production (ft3/ha)
Avera
ge c
arb
on
pro
du
ctio
n (to
nn
es/h
a)
Industrial lands
Nonindustrial lands
Carbon Price/Subsidy
Effects of Carbon Price / Subsidy on Carbon and Harvest Levels
Changes in Federal Timber HarvestOptions for offsetting forest carbon flux reductions due to increments in timber harvest from federal lands
INVENTORY Add Federal forest land plots to model
YIELDS Generate yields under alternative silvicultural regimes HARVEST SCHEDULER Find market solutions with alternative federal harvest levels subject to regional carbon flux constraints
WhatWhat
HowHow
INDEPENDENT INDEPENDENT MANAGEMENTMANAGEMENT
10.25
10.75
11.25
11.75
12.25
12.75
13.25
3.4 3.6 3.8 4.0 4.2 4.4
Average annual total harvest (BILLION BOARD FEET)
An
nu
aliz
ed
to
tal c
arb
on
se
qu
es
tra
tio
n(M
ILL
ION
TO
NN
ES
)
MAX SUSTAINABLEFEDERAL CUT
Rising Carbon Targets
Coordinated Management To Limit Carbon Flux ImpactsCoordinated Management To Limit Carbon Flux Impacts
Federal Land Only
All Owners
Future Harvest and Inventory by Log Quality
Project future private timber harvest by log size and species
YIELDS Store and retrieve individual tree projection detail for post-solution processing
WhatWhatHowHow
0%
5%
10%
15%
20%
25%
30%
35%
40%
5-8.9 9-12.9 13-16.9 20-23.9 24-27.9 28-31.9 32-35.9 36+
LOG SMALL END DIAMETER (INCHES)
PE
RC
EN
T O
F T
OT
AL
HA
RV
ES
T 2007
2022
Future Harvest and Inventory by Log Quality
Individual Milling Center DetailMill
Period Center Lumber (mbf lumber/year) Plywood (msf 3/8"/year)
2004 Riddle 147,849 409,1292009 Riddle 143,234 324,3592014 Riddle 143,234 270,4592019 Riddle 143,234 244,474
Mill Capacity
Riddle Milling Center Sawlog Price
0
100
200
300
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500
600
700
1970
1980
1990
2000
2010
2020
2030
2040
2050
1982
$/m
bf
scri
bn
er
History
Projection
Riddle Milling Center2004-2009 Distribution of Logs by log Small-end Diameter
0
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0.04
0.06
0.08
0.1
0.12
0.14
0.16
0.18
0 5 10 15 20 25 30 35 40
Diameter in Inches
Lessons Learned• Fixed structure models with preset options always lag
current “hot” policy topics—policy analysts seldom revisit a topic, or if they do it’s with a different focus
• Develop a set of market and harvest scheduling model components that can be readily modified and grouped to meet changing analytical needs
• Maintain inventory database at most disaggregated level to allow maximum flexibility in aggregation
• Develop modules to automate aggregation of plots and generation of yields under alternative silviculture regimes
Future Work
• Satellite imagery to reduce effective plot size through “nearest neighbor” methods—analysis below the county level
• Explicit links to land-use models with sensitivity to returns to forestry (log prices) so land base is endogenous
• Expansion to regions beyond the PNW
LONG-RANGE POTENTIAL TIMBER SUPPLY
IN OREGON BY REGION
EASTERN OREGONEASTERN OREGON
SOUTH WESTSOUTH WEST
WEST CENTRALWEST CENTRAL
NORTH WESTNORTH WEST
WESTERN OREGON PRIVATE HARVEST BY OWNERWESTERN OREGON PRIVATE HARVEST BY OWNER
0
0.5
1
1.5
2
2.5
3
3.5
1940 1960 1980 2000 2020 2040 2060 2080
MIL
LIO
N B
OA
RD
FE
ET FOREST INDUSTRYFOREST INDUSTRY
OTHER PRIVATEOTHER PRIVATE
WESTERN OREGON TOTAL PRIVATE WESTERN OREGON TOTAL PRIVATE HARVEST AND INVENTORYHARVEST AND INVENTORY
INVENTORY
HARVEST
0
20
40
60
80
100
120
140
1940 1960 1980 2000 2020 2040 2060 2080
MIL
LO
N B
OA
RD
FE
ET
0
0.5
1
1.5
2
2.5
3
3.5
4
MIL
LIO
N B
OA
RD
FE
ET
INVENTORY
HARVEST
NORTH WEST NORTH WEST OREGON OREGON PRIVATE PRIVATE HARVEST HARVEST
AND AND INVENTORYINVENTORY0.0
0.2
0.4
0.6
0.8
1.0
1.2
1.4
1.6
1940 1960 1980 2000 2020 2040 2060 2080
MIL
LIO
N B
OA
RD
FE
ET
-
5
10
15
20
25
1940 1960 1980 2000 2020 2040 2060 2080
MIL
LIO
N B
OA
RD
FE
ET
HARVESTHARVEST
INVENTORYINVENTORY
ADJUSTMENT TO DECLINING INVENTORY, RISING COSTS AND SHIFTING CAPACITY
0.0
0.2
0.4
0.6
0.8
1.0
1.2
1.4
1.6
1940 1960 1980 2000 2020 2040 2060 2080
MIL
LIO
N B
OA
RD
FE
ET
-
5
10
15
20
25
1940 1960 1980 2000 2020 2040 2060 2080
MIL
LIO
N B
OA
RD
FE
ET
WEST WEST CENTRAL CENTRAL OREGON OREGON PRIVATE PRIVATE HARVEST HARVEST
AND AND INVENTORYINVENTORY
HARVESTHARVEST
INVENTORYINVENTORY
-
5
10
15
20
25
30
1940 1960 1980 2000 2020 2040 2060 2080
MIL
LIO
N B
OA
RD
FE
ET
0.0
0.2
0.4
0.6
0.8
1.0
1.2
1.4
1.6
1.8
1940 1960 1980 2000 2020 2040 2060 2080
MIL
LIO
N B
OA
RD
FE
ET SOUTH WEST SOUTH WEST
OREGON OREGON PRIVATE PRIVATE HARVEST HARVEST
AND AND INVENTORYINVENTORY
HARVESTHARVEST
INVENTORYINVENTORY
EASTERN EASTERN OREGON OREGON
HARVEST AND HARVEST AND INVENTORY BY INVENTORY BY
OWNEROWNER0
0.1
0.2
0.3
0.4
0.5
0.6
0.7
1940 1960 1980 2000 2020 2040 2060 2080
MIL
LIO
N B
OA
RD
FE
ET
0
2
4
6
8
10
12
14
1980 2000 2020 2040 2060 2080
MIL
LIO
N B
OA
RD
FE
ET
HARVESTHARVEST
INVENTORYINVENTORY
INDUSTRYINDUSTRY
INDUSTRYINDUSTRY
OTHER PRIVATEOTHER PRIVATE
OTHER PRIVATEOTHER PRIVATE
SUMMARY OF LONG-TERM TRENDSSUMMARY OF LONG-TERM TRENDS• Clear demographic basis for resurgence of
US housing activity
• PNW will continue to play a major role in US softwood lumber supply
• Aggregate private harvest in western Oregon may drop slightly over next 15 years but rise thereafter—much regional variation
• Aggregate WOR inventory roughly stable
• NW Oregon source of near-term harvest decline—inventory and capacity shifts
• Eastern Oregon faces declining inventory and declining harvest on private lands
For More Information
Adams, D.M. and G.S Latta. Future Prospects for Private Timber Harvest in Eastern Oregon. Western Journal of Applied Forestry 22(3): 197-203..
Im, E., D.M. Adams and G.S. Latta. 2007. Potential impacts of carbon taxes on carbon flux in western Oregon private forests. Forest Policy and Economics 9(8): 1006-1017.
Busby, G.M., C.A. Montgomery and G. Latta. 2007. The opportunity cost of forest certification on private land in western Oregon. Western Journal of Applied Forestry 22(1): 55-60.
Adams, D.M. and G.S Latta. 2007. Timber Trends on Private Lands in Western Oregon and Washington: a New Look. Western Journal of Applied Forestry 22(1): 8-14.
Montgomery, C.A., G.S. Latta and D.M. Adams. 2006. The cost of achieving old-growth forest structure. Land Economics 82(2):240-256.
Adams, D.M. and G.S Latta. 2005. Costs and regional impacts of restoration thinning programs on the national forests in eastern Oregon. Canadian Journal of Forest Research 35(6):1319-1430.
Adams, D.M. and G.S Latta. 2005. Timber harvest potential from private lands in the Pacific Northwest: biological, investment, and policy issues. P. 4-12 in Understanding key issues of sustainable wood production in the Pacific Northwest, Deal, Robert L.; White, Seth M (eds). USDA For. Serv. Gen. Tech. Rep. PNW-GTR-626.
Latta, G., and Adams, D. 2005. Analysis of an extensive thinning program on eastern Oregon national forests using a dynamic spatial equilibrium market model with endogenous industry capacity. In Systems Analysis in Forest Resources: Proceedings of the 2003 Symposium, 7–9 October 2003, Stevenson, Wash. Compiled by M. Bevers and T. Barrett. USDA For. Serv. Gen. Tech. Rep. PNW-GTR-656.
Adams, D.M. and G.S Latta. 2004. Effects of a Forest Health Thinning Program on Land and Timber Values in Eastern Oregon. Journal of Forestry 102(8):9-13.
Latta, G. and C.A. Montgomery. 2004. Minimizing the cost of stand level management for older forest structure in western Oregon. Western Journal of Applied Forestry 19(4): 221-231.
Adams, D.M. and G. Latta. 2003. Private Timber Harvest Potential in Eastern Oregon. Research Contribution 42, Forest Research Laboratory, Oregon State University. Corvallis. 42p.
Schillinger, R. R., D. M. Adams, G. S. Latta, and A. K. Van Nalts. 2003. An Analysis of Future Private Timber Supply Potential in Western Oregon. Western Journal of Applied Forestry 18(3):1-9.
Adams, D.M., R.R. Schillinger, G. Latta, and A. Van Nalts. 2002. Timber Harvest Projections for Private Land in Western Oregon. Research Contribution 37, Forest Research Laboratory, Oregon State University, Corvallis. 44p.
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