. Effects of new export rules, a spotted owl plan, and recession on timber prices and shipments from the Douglas-fir region. Spotted owl; Lumber trade Northwest, Pacific; Douglas fir Prices. Before policy change After policy change Figure 3—Shortrun and longrun market developments. The export premium for logs—the difference between export and domestic prices—is expected to increase, as the tabulated results show. This result is attributable to the export-embargo trade barrier. Any policy impeding trade for a part of the resource can be expected to enhance prices of the exportable portion relat
. Effects of new export rules, a spotted owl plan, and recession on timber prices and shipments from the Douglas-fir region. Spotted owl; Lumber trade Northwest, Pacific; Douglas fir Prices. Before policy change After policy change Figure 3—Shortrun and longrun market developments. The export premium for logs—the difference between export and domestic prices—is expected to increase, as the tabulated results show. This result is attributable to the export-embargo trade barrier. Any policy impeding trade for a part of the resource can be expected to enhance prices of the exportable portion relative to the constrained part. Acting alone, the export embargo will depress domestic log prices (Flora and McGinnis 1989), but that effect is overridden (in our results) by log scarcity deriving from replanning and owl strategies. The disproportionate changes in volumes and prices generate increased revenues for sellers. For instance, the combination of replanning and the log-export embargo is projected to increase payments to log sellers in the domestic market by 24 percent and by 30 percent for those who export logs. Shippers of lumber to the domestic market receive about 7 percent more, and the export lumber market generates about 20 percent more, all despite lower production. Buyers, conversely can expect to pay more for less wood; other things equal, mill managers will see raw material costs rising both in absolute terms and as a share of total production costs. A cost-price squeeze on lumber producers is apparent. With all the policies in place, shortrun domestic log prices are estimated to more than double while domestic lumber prices rise by less than a third. Assuming that our export prices are akin to those experienced in other countries, with prices equalizing around the Pacific Rim, a similar squeeze confronts foreign lumber manufacturers; certainly those using North American timber. Whether individual firms can endure the squeeze depends on many factors,
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