Coast Range Association
Sustainable Forestry
No other issue is arguably more important to our regional well being then achieving a sustainable forestry that provides for people and the natural world. The CRA's current work to achieve sustainable forestry involves supporting the Oregon Coast Community Forest Association (OCCFA).
Visit the OCCF web page and learn more about the project.
Learn more: OCCFA Page
View maps of the Newport landscape the CRA built for the OCCFA
Photo by Reed Wilson
Coast Range Association Foresry Reports
Forests That Work: The Problem of Investor Driven Forestry
Investor driven forestry businesses--operating under the pressure of financial return --do a poor job of growing high-quality wood, and sacrifice much productive capacity. We believe that strict financial return forestry poorly serves the interests of timber workers and rural communities for three reasons:
(a) Trees are cut too early, thereby losing up to 50% of the land's productive capacity for saw timber. This loss of productive capacity has barely been mentioned in the press and is never advertised by timberland owners. This loss of production is the simple result of cutting before what foresters call the Cumulation of Mean Annual Increment, or CMI.
(b) Logging costs increase per thousand board foot (mbf) with smaller tree harvest, while revenues declines due to the historically lower sale price of small logs per board foot. Add in the lost productivity of early cutting and it is understandable why timber companies seek to reduce costs. For example, when adjusted for inflation, the wages of timber worker fell by 38% between 1978 and 1994.
(c) Coast Range industrial forests have been biologically simplified in structure and composition compared to the historic range of variability (HRV) of the historic coast range forest.
Learn more: Forests That Work
The Economics of Forestry
Quality and quantity of ecosystem services, the production of quality timber outputs, and job opportunities are not priorities for today's industrial forest owners. It is important to remind ourselves of what actually determines the forestry practiced in Oregon. The normal business goal of profit maximization drives private Coast Range forest management. This translates into short harvest rotations and silvicultural practices designed to minimize costs. Private forestry's singular emphasis on financial efficiency occurs with far-reaching consequences for the silviculture practiced and the range of potential goods and services available from the forested landscape. It is important to understand that profit maximization is not about profits per se, but rather about achieving the greatest amount of profit relative to the amount of capital invested. Therefore, return on equity is the actual goal of forest-growing firms.
Competition for investment dollars within financial markets requires that industrial forest companies continually demonstrate that their profit from investments is equal to or greater than that of other alternative uses of capital. To compare the relative value of various investment projects in consistent terms, managers "discount" projected profits by a rate of interest (profit) expected to apply to their alternative opportunities. This ordinary business practice of discounting is a huge burden to the on-the-ground foresters who must justify their decisions to senior managers.
We assume that the primary driver of industrial forestry is the rate of return on capital and the subsequent use of a discount rate by firms when considering forest investments and silvicultural strategies.
Learn more: The Economics of Forestry
Photo by Reed Wilson
