Predictions (cont.) - Southeastern Society of American Foresters

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Transcript Predictions (cont.) - Southeastern Society of American Foresters

What Does the Future Hold?
Richard Porterfield
Dean, Warnell School of Forestry and Natural Resources
June 27, 2006
Georgia Society of American Foresters
Annual Meeting
Chattanooga, TN
• All organizations conduct
some type of forecasting
• Why aren’t forecasts more
accurate?
Forecasting Involves:
First – all aspects of the natural, physical,
cultural and political environment
we either explicitly or implicitly hold
constant as to magnitude or trend,
and. . .
Second – all those factors or parameters
we are trying to predict
It is not our predictions that are
wrong it is the assumptions we
make while making our
predictions
1980’s:
• Economy is good
• Timber demand is shifting South
• Ronald Reagan is President; inflation
which topped 15% under President Carter
is under control; supply side economic
policies prevail
• Soviet Union is failing
• Berlin wall is falling
1980’s (cont.):
• Housing starts are high
• Paper demand is growing lock step with GNP
• The Conservation Reserve Program is
putting millions of trees in the ground
• Quantity of imported forest products is low
Changing Factors since 1980’s:
• Free trade policies
• Computer technologies
• Major investment in forest products
manufacturing in developing countries
• Corporate tax policy that favors research and
development over reinvestment in plant and
equipment
Changing Factors since 1980’s (cont.):
• Creation of REIT corporate structures
• Changing views regarding investments returns
• Creation of all news channels
Personal Biases:
1) Public policy, especially tax policy, directs
both business and individual actions
2) With free trade policies world-wide, the
world will move toward a common standard
of living
Predictions:
(Finally)
1) Non-public forest land will continue to be
fractionated
2) Property tax relief will come
3) The population will become even more
urban/suburban
Predictions (cont.):
4) Recreational/non-consumptive use of forest
land will accelerate
• opportunities for fee-based recreation on
private lands will grow
5) Use of wood for energy production will come
of age
6) No new pulp and paper facilities
• Existing pulp and paper facilities are at risk
Predictions (cont.):
7) OSB has replaced plywood in construction
applications and will dictate the price of
panels
8) Engineered wood products will grow and
take over wide dimension lumber markets
9) Lumber imports will continue to grow
Predictions (cont.):
10) Logging operations will become specialized
11) A new composite solid wood product will be
created
12) Forest landowners will become a more
important political force
Predictions (cont.):
13) Opportunities for consulting foresters will
grow
14) Conservation plans and easements will
grow but will have to be more landowner
oriented to reach their potential
15) Invasive species issues will continue to
grow with resultant harm to forest land
Predictions (cont.):
16) Hunting and hunting lease rates will decline
17) Markets and prices for large sawtimber and
veneer sized timber will fall
18) Prices for super pulpwood and small
diameter sawtimber will increase
19) Prices and demand for pulpwood will be flat
in real terms unless influenced by use for
energy
Predictions (cont.):
20) Fee-based, non-hunting recreational uses
of private forest land will grow – including
eco-tourism
21) Property taxes on forest land will be
reduced
22) The death tax will be repealed
23) Escalation of the price of forest land will
slow but the price of forest land will not fall
significantly
It’s been fun!