Page 9 - Georgia Forestry - Issue 2 - Spring 2021
P. 9
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that could help get us there sooner.
The housing market continues to strengthen. If these higher levels of demand persist, that will help. We also need to see a shift back to single family units. It looks like the pandemic may drive that shift, with people seeming to want to get out of the cities and multi-family living. Single-family units use more lumber than multi-family units. The big wild card is trade with China. They are big enough to close the gap between supply and demand. The wid- ening of the Panama Canal, completed in 2016, opened the door for us in terms of accessing that market, with big ships returning from the U.S. to China. Con- tainers are coming from China loaded, and a lot of empty containers are going back. That is an opportunity for forestry. Trade was building up prior to the trade wars, and it was building rapidly. If we can solve our trade woes with China, and get that going again, it will certainly accelerate a return to a supply-demand balance. It is a particular opportunity for Georgia because of the serendipity of our port proximate to trees. And southern pine is actually better suited than West Coast species for concrete forming, a
primary use in China.
Continued development of new prod-
ucts, replacing things like newsprint, should continue to exceed lost products made from small trees. Mass timber buildings have the potential to increase demand for lumber as these buildings become more popular as a replacement for steel buildings, helping fuel demand for large trees.
On the supply side, ecosystem ser- vices, in this case carbon sequestration, may be about to help. Up until now, carbon projects have required very large acreage ownerships, and even then, the prices paid for carbon sequestration (holding trees rather than harvesting them) weren’t enough to entice many southern pine tree growers to partici- pate. Viable programs targeted towards smaller landowners are emerging. And it looks like the demand for carbon is increasing to the point that prices could move up to levels that will entice even southern pine growers to consider lengthening rotation and carrying more volume on their forest, taking carbon payments in lieu of harvest payments.
Demand always impacts supply, but ecosystem services are a form of demand that immediately removes the trees from the market without building a house or a mass timber building. It can happen
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