Economic and Ecological Realites for Timber Industry

Economic and Economic Realities

Today in Washington DC, the Senate is holding hearings on John Tester’s Forest Jobs and Wilderness bill. One of the goals of the bill is to prop up a flagging timber industry by mandating timber targets on several national forests, including the Beaverhead Deerlodge National as well as the Kootenai National Forest in northwest Montana. But will timber targets help a dying industry?

The recent closure of the Smurfit-Stone Mill in Missoula signals yet another nail in the coffin for Montana’s timber industry. Yet far too many people in Montana want to live in denial, including Senator Tester, who asserts this closure is just a momentary result of the current economic recession—and that once the economy recovers (which is another questionable assumption)--housing demand will kick start the timber industry.

What people in Montana do not accept is that the Montana timber industry is terminally ill, as are other marginal timber-producing regions from the Rockies to Maine, and it’s not coming back. The industry only existed because it could exploit the virgin forests with its large trees, as well as government tax breaks and subsidies that gave them just enough financial edge that could justify continued operations in the state. Now that the easily accessible and most valuable trees are gone, even the biggest subsidies and tax breaks do not justify continued operations.
What Tester and other proponents of the present bill appear unwilling to accept is that the timber industry in Montana has been in a significant decline for a long time for geographic/economic reasons that go well beyond the current recession. Even during the heydays of the housing boom, mills were closing in the state.

The enduring reality is that all things considered, Montana is not a good place to grow trees for wood production. Compared to other timber producing regions, Montana’s forests are not very productive.

The industry has largely “mined” the big older trees that once were found near mills. What are left are the smaller, slower-growing trees at higher elevations at longer distances from mills or the small regrowth on previously cut lands found at lower elevations. You can grow a 10 inch tree in Georgia in ten years, while on Montana’s dry, cold Beaverhead Deerlodge NF even on the most productive sites, it might take 50-60 years to grow a similar-size tree. You might have slightly better growing sites on the moister Kootenai National Forest, but most sites, particularly the ones that are being logged today can’t compare in productivity to the coastal forests of the Pacific Northwest or the Southern/Eastern states.

Timber companies are realists. They have to produce a profit for their stock holders. If you are a timber company waiting decades to cut your chief resource—namely trees—this long time between cuttings leaves the trees exposed to beetles, disease, fire, and any number of other natural factors that can reduce or eliminate your chief source material. With global warming likely to stress forests further, these factors are even more likely to impinge upon your profits. It’s a gamble that industry increasingly does not want to take.

But the long term decline of Montana’s timber industry goes beyond just the slow growth rates of the state’s trees. Montana forest products industry is at a competitive disadvantage in other ways as well. Because much of the lower elevation forests close to mills were logged off long ago, timber companies are increasingly obtaining their trees from higher elevations at greater distance from mills. Long transport of logs, particularly with rising fuels costs, adds to the overall costs of production. Furthermore, other wood-producing regions of the country are closer to the ultimate market where tree products will be sold, adding yet another layer to the cost, namely the transport of the final product—whether paper and/or wood to the consumer.

On top of that Montana’s rugged terrain and climate is yet another additive disincentive to the industry. It costs a lot more to build and maintain roads in the mountains than on flat terrain such as the coastal plain of the Southeast or even in the coastal hills of Washington and Oregon where logging is possible year round. And there are other resources that are jeopardized by timber harvest in Montana, including endangered fish and wildlife that don’t exist and/or are less vulnerable to logging effects in other timber producing regions like the eastern United States.

In addition to these factors, technology has stolen a lot of jobs. Where once it required a dozen workers to cut and pile logs in the woods, a few workers can now do the same work. If you are a stock holder and/or a company executive and are thinking of reinvesting or purchasing new equipment for your mill are you going to reinvest in a marginal timber producing area or would you build that new mill someplace where trees grow rapidly and can be cut with fewer costs?

Unlike most Montanans and many politicians, timber company executives and their stock holders are more rational. They tend to move where operating costs are lower—and that isn’t Montana. Even with tax breaks, government subsidies, and a host of other goodies, Montana forests simply can’t produce wood at the same rate as trees growing in moister, warmer climates.

Counting on the sale of trees to fund restoration projects as Senator Tester and his bills supporters hope is optimistic at best. The trees will be cut, but the funds likely will not materialize to repair the damage wrought by present and past logging.

All of these reasons suggest that Montana’s timber industry is unlikely to see a resurrection once, and if, the economy recovers. Sure there will always be some local need for wood, but even meeting local demand might be accomplished at less economic and environmental costs if trees are cut in a place where the terrain is flatter, the growing season longer and other factors more favorable to wood production. Shipping the limited amount of wood used by Montanans on a rail car might be less damaging to the environment and less costly to a timber company than building logging roads on steep hillsides and cutting slow-growing trees in grizzly or bull trout habitat.

What Montana National Forests do best is grow bull trout, westslope cutthroat trout, grizzly bears, elk, bighorn sheep, and other wildlife that are increasingly jeopardized and degraded by logging operations. Furthermore, these forests possess some of the best scenery and remaining wildlands left in the United States. Why are we compromising those nationally significant resources to produce something—namely trees—that can be grown elsewhere at less environmental and economic cost? You grow a ten inch tree and cut it on flat terrain operating year round in Georgia or Texas, but you can’t grow bull trout there. You can’t grow grizzlies there. You won’t find outstanding mountain scenery and internationally significant wildlands there.

It’s time for Senator Tester and the Montanans supporting more timber cutting to acknowledge what the stockholders and the timber industry itself recognizes—that Montana is not the Nation’s woodbox and the single best thing the Senator can do to ensure Montana’s economic and environmental future is to protect more wildlands as wilderness.