The Bipartisan Effort to Exempt Logging from Supply and Demand

by William Skink

There is this quaint notion we get from Economics 101 that supply and demand drive the markets. If you want to pass some standardized test, stick with 101. If you want to grapple with what actually happens in the real world, toss the text book out of the first available window.

It’s not that supply and demand don’t matter. They do. Take, for example, the demand for houses. Most people want to live in one, so there’s demand. For supply, there are plenty of laborers and resources to make use of. But we’re talking some big numbers if you want to play the home buying game. So you need financing.

Well, a few years ago we saw what happens when supply and demand takes a back seat to greed. Perverse incentives fueled an orgy of sub-prime lending, and the contagion went global.

For Montana, the collapse of the inflated housing boom hit labor hard. Mills closed and construction slowed. But despite the pesky constraints of reality, a bipartisan effort from Jon Tester and Steve Daines aims at using big government to shelter an industry from the impacts of Economics 101. And always happy to oblige, the Missoulian is more than willing to stack the story for panhandling loggers:

The U.S. Forest Service needs to quadruple forest restoration acres, while logging could reasonably triple over current levels in Montana, Chief Tom Tidwell said under questioning from Montana’s senators.

Tidwell was before the Senate Appropriations Interior Subcommittee on Wednesday lobbying for a nearly $5 billion budget in fiscal year 2016. Democratic Sen. Jon Tester and Republican Sen. Steve Daines questioned the chief on goals for Montana, pushing for increases in timber production to saw mills and other wood products.

“I don’t need to tell you how important saw mills are as a partner to the Forest Service. We don’t need to drive these folks out of business, and it becomes a taxpayer-funded problem as far as forest management,” Tester said.

Forest restoration, including logging, produced 113 million board feet (see info box) of saw logs, posts and poles and firewood on 9,000 acres in Montana during FY2014. Tester asked if current work was adequate to properly manage 17 million acres of forests.

“It’s not near enough of what we need to be doing to change the conditions on the landscape, to restore the resiliency of those forests and reduce the wildland fire threat to our communities,” Tidwell said, citing workforce reductions and shifting funds to fire budgets. “I’ve tried to be really clear about the challenge we have in front of us, and the need for us to increase the pace and scale of restoration of our nation’s forests.”

Tidwell went on to say that the number of restored acres needed to increase at least four times. He added that individual project size, with authorities granted under the 2014 Farm Bill, needed to significantly expand.

“Especially in your state, we need to be able to move forward with some larger landscape projects similar to what we’ve done in some neighboring states where we can look at not thousands but tens of thousands to hundreds of thousands of acres with one environmental assessment,” Tidwell told Tester.

Daines echoed the frustrations of Montana timber mill owners, many running at two-thirds capacity. Many mills are facing layoffs due to lack of logs while surrounded by millions of acres of available timber, he said.

“They’re healthier forests; environmentally the best thing we can do are responsible timber practices,” he said.

Sustainable timber harvest figures are much higher than the 113 million board feet cut in Montana, Daines said. He then asked Tidwell if 300 million board feet was a reasonable goal.

“Three hundred million board feet is very reasonable,” Tidwell replied.

Reasonable? Based on what? Certainly not market fundamentals.

Here are some numbers worth considering, reported on five years ago:

About 3.5 million US residents (about 1% of the population), including 1.35 million children, have been homeless for a significant period of time. Over 37,000 homeless individuals (including 16,000 children) stay in shelters in New York every night. This information was gathered by the Urban Institute, but actual numbers might be higher.

Fox Business estimates, there are 18.9 million vacant homes across the country.

3.5 million people without homes; 18.9 million homes without residents.

And don’t you know, it ain’t all about subprime:

While subprime loans have justly captured much of the ink as the culprit, overdevelopment is a major factor in the dramatic number of vacancies there are today. These are not just the homes of people who took on a mortgage they couldn’t afford; these are newly constructed houses without a buyer on the horizon. It’s not about taking a residence from someone who can’t pay his or her bills and giving it to another person who can’t make payments either, it’s about using resources we have in excess.

If environmentalists weren’t so easily scapegoated, one wonders how the tag-team effort from a Democrat and a Republican to push through big government logging subsidies, while absconding from the principals for free market Capitalism, would be accepted.

The article quoted at length above is fascinating because it tries to acknowledge reality, via quotes from Mike Garrity, but still drifts toward industry propaganda:

The dip in timber for mills came with the downturn in housing demand of the Great Recession, said Garrity, an economist. The downturn was coupled with cheaper logs from Canada via NAFTA, he added.

Whether a 300 million board feet target was attainable would simply depend on where the logs came from and challenges were likely if it harmed fish and wildlife, Garrity said.

Timber-dependent industries in Montana spoke favorably of the potential for increased harvest.

“The exchange between the senators and chief is encouraging,” said Keith Olson, executive director of the Montana Logging Association. “The ability of industry to ramp up will be dependent upon certainty of access to increasing harvest levels.”

“The mills can handle it,” said Julia Altemus, executive vice president of the Montana Wood Products Association. “The mills are running at 60 percent capacity. All the mills would love an opportunity to run at 100 percent.”

Altemus cautioned that the Forest Service in the short term may not have enough current projects in the pipeline to meet a 300 million board feet goal as the cut is typically closer to 100 million board feet.

Public sentiment had largely turned to support for increasing timber harvest and other forest restoration, Daines said. Collaborative based forest projects have the greatest chance of success, and the number of diverse groups agreeing that responsible forest management would have positive economic and environmental impacts was encouraging, he added.

“The level of agreement we have is greater today than it’s ever been in my career,” Tidwell said of collaborative pushes for increased forest restoration.

Restoration? What a joke. The push to “restore” Montana forests is happening despite a lack of demand for home construction, and that’s problematic from several different political angles. For Steve Daines, he’s aiding and abetting Big Government’s intrusion on the Free Market. For Jon Tester, he’s continuing to alienate the people he expects to help reelect him in a few years.

Both politicians will blab about jobs, as if cutting trees is the only kind of work possible in our forests. Instead of government subsidized logging, why not invest in trail maintenance? Well-kept trails would be good for our tourism industry, right?

But that would make too much sense, so don’t expect it to happen. Instead we will be treated to more shill-reporting and deceitful rhetoric from our elected officials.


  1. larry kurtz

    you’re in over your head, liz. lodgepole is generally logged for post and pole; douglas fir and ponderosa pine for lumber, larch for house logs.

    http://ravallirepublic.com/missoula/business/local/article_f3fcae76-5924-5001-ac2b-07f6b1f0dedf.html

    montana hasn’t been as forested since before statehood when aspen dominated the highest elevations and doghair existed only in isolated stands where fire hadn’t found it.

    • lizard19

      this from your beloved Cowgirl:

      The cold fact is that the timber industry–in fact the entire wood products industry–in Montana has been devastated in recent years by one thing, and one thing only: the bursting of the housing bubble. The market for the product crashed, and has not returned nearly to where it was.

      kinda weird you sticking up for earth-haters.

      • larry kurtz

        I left Missoula in 1981 because of the crash in construction and the closing of local mills even though i was in the bicycle business. People were laid off all over Montana: the locals around Butte say that’s when the deer population collapsed as hunting was nearly the only way to survive.

        Mechanical harvest doesn’t work everywhere but logging helps preserve water supplies just like bark beetles do.

        http://www.motherjones.com/environment/2015/03/bark-pine-beetles-climate-change-diana-six

    • JC

      You can’t use mechanical harvesting to replicate pre-colonial stand conditions. No matter how much clear cutting or “restoration” you do (and what they are proposing is clear cutting by a dozen different names), unless natural fire regimens are allowed to reassert themselves, we’ll eventually see conditions and fire catastrophe that will make 1910 look like tidily-winks.

      So why are you so afraid of fire, Kurtz? And why do you think logging will help it? The Jocko fire should put to rest any notion that extensive landscape “treatments” will slow down a fire. If anything, the fire accelerated as it moved downhill through predominantly clear cut region.

      I was right in the middle of the whole thing when it exploded, and watched it create its own weather and consume clear cuts like they were nothing more than kiln dried firewood and weeds… which is what was left after the over story was removed.

      When it’s hot and dry enough, pyrocumulus fire behavior will consume everything in its path, no matter what has been done to the landscape. And that is what the future brings in our forests: hotter, drier, more extreme and erratic fire behavior.

      Let it burn.

    • steve kelly

      Kurtz,
      Think chips. Think chips shipped to China and Japan. Your taxdollars pay for every tree cut, chipped, shipped to Asia, processed there, shipped back to you to purchase at Home Depot or Lowes. Every step is subsidized with tax breaks, or outright handouts — usually “road credits” reducing the bid price for standing trees. Who do you think paid for all those roads?

      Bad investment. Short growing season in semi-arid, shallow soils is a big loser right off the bat. At yields of between 20 and 50 cubic feet per acre per year, Montana will never be competetive in growing wood for commercial use. Never! It’s strip mining. And like all mining, it’s unsustainable.

  2. steve kelly

    Liz, you can’t wish back supply and demand or “capitalism.” The “bipartisan” Tester-Daines dream of quadruple or triple logging quotas and more jobs is literally beating a dead horse. So is tar sands and fracking. Welcome to the early stages of post-capitalist America.

    “But overall, in a situation where financial institutions have failed, where factories and other enterprises are no longer functioning, and where real estate holdings have been overrun by marauding mobs and/or invaded by squatters, one’s net worth becomes rather difficult to compute. And so we should expect the org chart of the post-capitalist society, in spreadsheet terms, to look like this. (“#REF!” is what Excel displays when it encounters an invalid cell reference in a formula.)”

    GRAPHIC DIDN’T COPY

    “A good, precise term for this state of affairs is “anarchy.” Once a new, low level of steady-state subsistence is reached, the process of aristocratic formation can begin anew. But unless a new source of cheap fossil fuels is somehow magically discovered, this process would have to proceed along the traditional, feudal lines. ” http://cluborlov.blogspot.com/2015/03/financial-feudalism.html#more

    • Or we could stand in line for toilet paper.

      • JC

        go use some prickly pear.

        • JC, see this?

          http://www.zerohedge.com/news/2015-03-24/zombie-apocalypse-heres-where-not-hide

          Missoula is a zombie outbreak refuge site.

          • JC

            No, it says that Missoula is a lesser, though still affected area. Fortunately, I live far enough outside of Missoula, and can escape to the wilds quite easily.

            Fortunately, Zombie Tools is located in Missoula, so the local populace militia can engage in some meaningful self-defense.

  3. mick

    NAFTA & Tester still sucking. Hard!




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