It may be small—measuring about the size of a grain of rice—but the mountain pine beetle is a huge problem in the forests of British Columbia and for that area's economic well-being.
Attracted to mature, large-diameter lodgepole pine trees and provided the opportunity to flourish in successive mild winters, the little critter has now infested an estimated 7 million hectares of timberlands (roughly the size of West Virginia) and may kill off 80 percent of the province's pine forests by 2013, according to estimates by the Ministry of Forests in Prince George, British Columbia.
For everyone associated with the lumber business, the impact of the pine beetle infestation could have a significant impact on lumber supply in both the near future and the long term. “It will increase supply, but it could be balanced by other factors,” says Michael Carliner, an economist at the NAHB, citing domestic timber buyers who have diversified their portfolios into European markets, thus reducing demand for Canadian timber ... even if there is more to buy.
Last fall, the British Columbia Ministry of Forests authorized increased cut levels of up to 27 percent beyond annual allocations in the affected forests. That action allows landowners to clear out trees killed by the beetle while the timber is still viable for use as structural lumber and other wood products. Simply, harvesters must cut the affected timber to mitigate forest fires (and thus protect what's left of its pine stands) and reap what they can economically from a devastating situation.
Despite being killed off by the pine beetle, which leaves a blue fungus stain on the wood, the timber (and resulting lumber) meets current domestic (U.S.) grading standards for structural uses, enabling it to compete directly with SPF and other timber species in the market, according to the U.S. Department of Agriculture.
Obviously, this huge pile of wood—estimated to be 43 billion board meters or nearly 400,000 railcars—will impact global supply; how much it will affect U.S. markets depends mostly on the willingness of Canadian timber owners to suffer the existing border tariffs that effectively limit the amount they can export to the U.S. “The tariffs are still there, so there may be no increase in exports to the States,” says Don McDonald, communications director with the Ministry. Instead, the extra timber may be sold and shipped to overseas markets, including China.
Also, the fact that the affected, uncut lodgepole pine logs can maintain their structural integrity and meet grading standards for five to seven years (and much longer, perhaps decades, for engineered wood products and pulp and paper manufacturing) should help to keep their export into the U.S. in check somewhat.
In addition to directly competing with traditional pine markets in the U.S., the potential glut of Canadian timber will likely shift supply-and-demand for hem fir, Douglas fir, and Southern yellow pine timber and cut lumber, as well. Meanwhile, there are plans to add OSB manufacturing in the infected area, tipping the scales for that market, too.
The lumber industry will have to adjust to this new dynamic, but not forever. If estimates of the beetle's prowess are correct, eventually the supply of pine from British Columbia's interior forests will dry up while the area recovers and is reforested, as the increase in cut levels is beyond sustainable harvesting practices. That situation may create the opposite effect on available timber, as well as consequences for agriculture, tourism, conservation, and habitat in the province. And since there is no effective human intervention, the beetle may make its way south across the border.
For an insect with a one-year life span, the mountain pine beetle's legacy could be felt for generations. —Rich Binsacca is a contributing editor for PROSALES.
