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Pulpwood Supply and Demand Development in the South, Little Growth Elsewhere

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Pulpwood Supply and Demand Development in the South, Little Growth Elsewhere Pulpwood Supply and Demand Development in the South, Little Growth Elsewhere Peter J. Ince and Irene Durbak This long-range outlook derives from analysis of pulp and paper markets and pulpwood de- modities with respect to population mands for wood panels. The analysis projects modest increases in pulpwood demand beyond and GDP, with varying potential for 2010, with decelerating growth in paper and paperboard consumption; increased demand for product substitution by electronic pulpwood in wood panels; increased imports of pulp, paper, and paperboard; and little addi- media or plastics (Zhang 1995). tional growth in paper recovery for recycling. Results point to expanded pulpwood markets, In recent decades, paperboard con- particularly for softwoods in the US South, but to limited expansion of pulpwood markets else- sumption increased more rapidly than where in the United States. paper consumption, a trend projected ABSTRACT to continue beyond the current eco- Keywords: economics; industry; paper; pulp; timber nomic slowdown. Per capita paper- board consumption rose from 243 pounds in 1980 to 337 pounds in he US pulp and paper industry and recycling technologies—as eco- 1998, but consumption relative to consumes a large share of US nomic responses to projected market GDP in 1998 was nearly the same as in Ttimber output, more than 7 bil- conditions, and in turn capacity 1980, at 6.0 tons per million dollars of lion cubic feet per year of roundwood change influenced projected market real GDP (in 1992 dollars). Paper- pulpwood and wood residues, plus equilibria. The robust structure of our board demands weakened in the cur- large volumes of recycled fiber. In addi- model and overlap of projections with rent economic slowdown, but eco- tion, pulpwood demands are increasing historical data allowed for extensive nomic recovery is projected to propel in the expanding US wood panel in- testing and calibration of model per- paperboard consumption levels to 350 dustry. The current Resources Plan- formance; average annual errors be- pounds per capita by 2010 at 5.2 tons ning Act (RPA) Timber Assessment tween historical and projected equilib- per million dollars of real GDP and (Haynes, in press) includes this base- rium product demands, production 418 pounds per capita by 2050 at 4.0 line analysis of fiber markets in the levels, pulpwood supply, and recycling tons per million dollars of real GDP. pulp and paper sector along with pulp- rates were generally less than 1 percent. Per capita paper consumption (ex- wood demands for wood panels. cluding building paper) rose from 326 AF&PA pulp and paper data series Paper and Paperboard pounds in 1980 to 407 pounds in (1998) were the main source of histor- Markets were analyzed and pro- 1998, but consumption relative to real ical data used in this analysis and jected for all paper products (e.g., GDP declined during that period, shown in this article. Projections were newsprint, printing and writing paper, from 8.0 to 7.3 tons per million dollars derived independently using the tissue and sanitary paper, and packag- of real GDP. Per capita paper con- USDA Forest Service North American ing paper) and all paperboard products sumption has receded during the cur- Pulp and Paper Model (NAPAP) (e.g., containerboard, bleached board, rent economic slowdown but con- model, which is maintained at the For- and recycled paperboard). Basic growth sumption is projected to recover to 401 est Products Laboratory. Using assumptions for economic determi- pounds in 2010 and gradually rise to a NAPAP, we projected changes in re- nants of population and per capita peak at 414 pounds around 2030, at gional production capacities for pulp gross domestic product (GDP) are il- 4.9 tons per million dollars of real and paper manufacturing processes— lustrated in figure 1 (p. 22). Domestic GDP. Paper consumption is then pro- including shifts between virgin fiber demand relations vary among com- jected to decline slowly to 391 pounds 20 Journal of Forestry • March 2002 per capita in 2050, at 3.7 tons per mil- sumption is projected to increase mod- jection period. Other paperboard and lion dollars of real GDP. estly throughout the projection period, building paper consumption is pro- Demand trends vary greatly among reaching more than 60 pounds per jected to remain at around 100 pounds individual paper products. Per capita capita by 2050. per capita throughout the projection newsprint consumption peaked histor- Among paperboard commodities period. ically at 113 pounds in 1987 and de- growth trends are more consistently Overall US per capita consumption clined to 89 pounds in 1996. News- upward for containerboard grades. Per of paper and paperboard is projected to print consumption picked up recently capita consumption of containerboard increase at a decelerating rate, while (to around 96 pounds in 1999), but (linerboard and corrugating medium) consumption per unit of real GDP is consumption is projected to fall to 81 climbed from 166 pounds in 1980 to projected to gradually decline, consis- pounds by 2010 and to 43 pounds by 246 pounds in 1999 (48 percent). Per tent with historical trends of recent 2050, reflecting gradual long-run sub- capita consumption of all other grades decades. Figure 2 (p. 22) illustrates his- stitution by electronic media. Likewise, of paperboard (other recycled paper- torical and projected trends in per consumption of unbleached kraft board and bleached paperboard) plus capita US paper and paperboard con- packaging paper is projected to gradu- building paper was at 101 pounds in sumption (including building paper) ally recede, reflecting continued substi- 1999, slightly above consumption lev- and consumption per million dollars of tution of paper bags by plastic, al- though not declining so rapidly as in the past two decades. On the other The West will continue to see hand, per capita consumption of print- ing and writing paper has increased, little growth in pulpwood supply and rising from 142 pounds in 1980 to 232 demand, with serious implications for pounds in 1999, boosted by compli- mentary demands for computer print- management of forest health, fire ers, office copiers, and print media. hazards, and watershed quality. Printing and writing paper consump- tion is projected to increase but at a de- celerating rate of growth, climbing els of the 1980s but slightly below con- real GDP. Following the current eco- above 250 pounds per capita by 2020 sumption levels of the 1960s and nomic slowdown, per capita consump- and reaching a peak above 260 pounds 1970s. With projected economic ex- tion is projected to return to recent around 2030, with gradually declining pansion in the base scenario, per capita peak levels of around 750 pounds by consumption relative to real GDP. Tis- containerboard consumption is pro- 2010 and then rise to 809 pounds in sue, toweling, and sanitary paper prod- jected to reach 256 pounds by 2010 2050. The historical pattern of deceler- ucts increased in per capita consump- and 324 pounds by 2050, while con- ating growth in demand observed in tion from 38 pounds in 1980 to just sumption relative to real GDP is pro- the latter half of the 20th century is over 50 pounds in 1999, and con- jected to gradually recede over the pro- projected to continue, with average Photo credits, left to right: Pallets, Society of American Foresters Archives; paper roll, Society of American Foresters Archives; logging truck, Gerald W. Williams; aerial view, South Carolina Forestry Commission March 2002 • Journal of Forestry 21 compound growth in per capita con- Real GDP per capita Population (1987 dollars) (millions) sumption declining to just 0.2 percent 45,000 450 per year over the next 50 years. Con- sumption of paper and paperboard per 40,000 GDP per capita 400 Population million dollars of real GDP is projected 35,000 350 to gradually decline from 13.6 tons in 1998 to 11.2 tons in 2010 and 7.7 tons 30,000 300 in 2050. 25,000 250 With projected increases in US pop- 20,000 200 ulation and per capita GDP (fig. 1), US paper and paperboard consumption is 15,000 150 projected to increase in total tonnage 10,000 100 from 103 million tons in 1999 to 112 million tons by 2010 and 159 million 5,000 50 tons by 2050. Population, economic 0 0 growth, and end-use assumptions drive the demand projections. However, be- 1950 1960 1970 1980 1990 2000 2010 2020 2030 2040 2050 cause of decelerating demand growth, Figure 1. Historical and projected trend assumptions for US population and per capita gross the projected annual increase in ton- domestic product (GDP). nage over the next 50 years is just 0.8 percent, less than one-third the average growth rate of 2.8 percent from 1960 Pounds Tons per million 1992 per capita dollars GDP to 1999. 900 20 800 18 Production and Trade The baseline trade outlook projects 700 16 continued increases in paper and pa- 600 14 perboard imports particularly over the next decade, with little growth in US 500 12 paper and paperboard exports and only 400 10 modest weakening in the exchange 300 8 value of the US dollar. The trade out- look is consistent with trends of recent 200 Consumption per capita 6 years, during which the US dollar Consumption per million dollars real GDP 100 4 gained value appreciably and the gap between US imports and exports of 0 2 paper and paperboard widened. 1960 1970 1980 1990 2000 2010 2020 2030 2040 2050 US paper and paperboard imports surged in recent years, attracted by the Figure 2. Historical and projected trends in US per capita paper and paperboard consumption and strong US dollar. Exports declined as consumption per unit of real gross domestic product (GDP), in 1992 dollars.
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