If America Had Canadas Stumpage System

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If America Had Canadas Stumpage System

• Henry Spelter
• USFS, FPL, Madison, WI

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Then We Wouldnt be Needing This Symposium

• Canada has a competitive advantage in the way it
  prices timber, but its not a subsidy
• --Russell Taylor, A. E. Taylor and Associates,
  Vancouver, BC as quoted in article by Paul Marck,
  the Edmonton Journal, 1/09/2003.

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Gross Revenue of typical millGeorgia
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Gross Revenue of typical millless variable
costs
- 66-78/MBF
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Gross Revenue of typical millless fixed costs
- 28-32/MBF
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Gross Revenue of typical millless profit and
risk
- 15-22/MBF
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Residual Value of Wood(Log scale)
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Less Harvest Delivery costs Residual
Stumpage Value
- 87-95/MBF
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Residual Stumpage Value Lagged One Quarter
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Residual Stumpage Value versus Market Stumpage
Price
Market Stumpage Price Source Timber Mart South
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Average and Quarterly DifferencesResidual Value
v. Market
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Average and Quarterly DifferencesResidual Value
v. Market (Alabama)
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Average and Quarterly DifferencesResidual Value
v. Market (Texas)
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Elasticity of Price Transmission

• S. Pine 0.64
• S. Pine 0.60
• S. Pine 0.36
• Georgia 0.36
• Alabama 0.35
• Texas 0.30

• Haynes (1977)
• Holley cited by Haynes
• Adams cited by Hayne
• Spelter
• Spelter
• Spelter

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Elasticity of Price Transmission

• West 0.45
• West Coast 0.48
• Rocky Mtn. 0.35
• West Coast 0.46
• W. Oregon 0.27
• Montana 0.42

• Haynes (1977)
• Haynes (1977)
• Adams cited by Hayne
• Vaux cited by Haynes
• Spelter
• Spelter

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Ontario Stumpage Price v. Spruce Price
199904-200409
EPT 1.2
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Spruce Prices in 2000
Source Crows
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and Supply Response in US West
Source Western Wood Products Association
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Compared with Canada EOR
Source WWPA
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Overall US Canadian Responses
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US Supply Canadian Imports
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Summary

• The N. American Lumber Market is Integrated and
  Operates Uniformly at the Product Level
• N. American Log Markets Operate on Different
  Principles at the Raw Material Level
• At Critical Times the Supply Responses in the US
  and Canada are Asymmetric