Current issue: 58(4)
The existence and direction of causal relationships between the time series for the Finnish roundwood market for the period 1960–1994 is tested. Using simple bivariate analysis, we found evidence that for both logs and pulpwood, the lagged prices are helpful in forecasting quantity for the next year, but not vice versa. Saw log stumpage prices have significantly Granger-caused pulpwood prices over the business cycles, but the effect has diminished towards the present time. For quantities traded, the direction of causality was rather from pulpwood to saw logs. The consistency of bivariate test results was checked by the Granger-causality tests within trivariate VAR-models for both markets, and the results were found to be fairly similar to bivariate tests. The price fluctuations in the international markets for forest products have been found to be carried to domestic wood markets dominantly via the pulpwood part of the market.
This study investigates the relationship between Finnish sulphate pulp export prices and international pulp inventories using the Johansen cointegration method. Long-run equilibrium is found to exist between pulp price and NORSCAN inventory for the study period, 1980-94. Granger causality is found to exist from inventory to price but not vice versa. A simple short-run forecasting model for the Finnish pulp export price is formed. In preliminary analysis, the explanatory power of model is found to be acceptable but only under stable market conditions.
In 1979, the Federal Research in the United States instituted a so-called ”tight money” policy which led to a decrease in the demand for stumpage. The decrease in demand brought about lower stumpage prices and, consequently, a waning interest in policies to stimulate NIPF production. The authors report on five recent studies on NIPF behaviour and raise concerns that increases in demand for housing may bring new pressure upon NIPF as a source of wood.
This paper is a theoretical study of what is considered to constitute the proper perception of time in forest economics and management. A stumpage appraisal model that recognizes the influence of time is developed within the framework of a national aggregate economy. To demonstrate how a socially optimal land for timber production may be determined in a given nation, a stock-supply model is derived. The stumpage appraisal rule of development determines the market stumpage price that maintains a state of balance between timber production and other land use activities.
The PDF includes an abstract in Finnish.
In this paper the system of collective timber price agreement in Norway is described. The history of »collective behaviour» in the roundwood market can be tracked far back in history, with different degrees of importance, and it has totally dominated the price-formation of roundwood from the 1950’s until the present. In trying to answer the question »What has been the effect of the collective price agreements» a few theoretical market models are used and the empirical data are also employed. Both the theoretical discussion and the empirical data seem to indicate that the forest owners are better off with collective price agreements than with a situation where there are no organized price-negotiations.
The PDF includes a summary in English.
Silva Fennica Issue 92 includes presentations held in 1956 in the 8th professional development courses, arranged for forest officers working in the Forest Service. The presentations focus on practical issues in forest management and administration, especially in regional level. The education was arranged by Forest Service.
This presentation discusses different ways to determine the price of growing forest stock in settlement farms. The Settlement Act describes the main principles for the evaluation of forests. The growing stock of forest land has been devided into valueable and small timber. Construction timber and valuable trees are marked separately, and small timber is estimated by line survey. According to the act, the total price of a farm should be only what a sensible buyer would pay for it. Therefore, the value must be reduced to a reasonable price if the added value of the different parts is too high considering, for instance, the location of the farm and construction and clearing costs.
Silva Fennica Issue 64 includes presentations held in 1947 in the third professional development courses, arranged for foresters working in the public administration. The presentations focus on practical issues in forest management and administration, especially in regional level. The education was arranged by Forest Service. Two of the presentations were published in other publications than Silva Fennica.
This presentation describes budgeting of costs of delivery loggings, which have been at times underestimated in the practical forestry in the state forests.
Silva Fennica Issue 64 includes presentations held in 1947 in the third professional development courses, arranged for foresters working in the public administration. The presentations focus on practical issues in forest management and administration, especially in regional level. The education was arranged by Forest Service. Two of the presentations were published in other publications than Silva Fennica.
This presentation outlines the history of timber sales at delivered price made in state forests, and describes good practices to arrange timber harvesting locally.
Silva Fennica Issue 64 includes presentations held in 1947 in the third professional development courses, arranged for foresters working in the public administration. The presentations focus on practical issues in forest management and administration, especially in regional level. The education was arranged by Forest Service. Two of the presentations were published in other publications than Silva Fennica.
This presentation compares timber sales by delivered price and stumpage sale in the state forest. The buyers of wood have criticised sales bu delivered price from the state forests. The article discusses which of the type of sales is more profitable for the state.
The government of Finland appointed a committee to study which method of selling wood, sale at delivered price or stumpage sale, is more profitable method for wood sales from state forests.
According to the committee, in normal conditions, when supply and demand determine the price of timber and forest work wages are dependent on the supply and demand of labour, returns from the sale at delivered price has proved more favourable than stumpage sale. During the World War II the case was, however, the opposite. Sale at delivered price can have also other advantages. The state has by means of logging a hold in the labour market and can use loggings, for instance, to ward off unemployment. Also, loggings can be more easily used in rational silviculture. They keep the supervising staff of forest districts employed throughout the year and provide better professional training for the foresters. In addition, the number of buyers from state forests has increased. The stumpage sale may, however, be good method in certain conditions. The committee states that the State forestry officials are best able to decide on the most favourable method of selling.
The article includes an abstract in English.
Silva Fennica issue 42 includes presentations held in professional development courses, arranged for foresters working in public administration in 1936. The presentations focus on practical issues in forest management and administration, especially in regional level. The education was arranged by Forest Service
This presentation describes determination of stumpage prices in timber sales of the state forests in Finland.
Roundwood statistics are essential in a country such as Finland, where the roundwood market costitutes one of the most important internal markets. Determining the price level of roundwood can, however, be problematic due to the difficulty of the empirical determination. The main difficulties are the many timber assortments, quality differcences within a timber assortment, large variation of local prices due to variations in demand and harvesting conditions and in sales methods. The article discusses these problems from the perspective of composing a roundwood statistics for different timber assortments that would allow local and temporal comparison of the prices. It seems impossible to compose price statistics that could eliminate totally the variation in the material, transport conditions and demand fluctuations caused by technical development. However, one can suffice to a compromise that would eliminate the major disturbances and take into account other factors that are not related with market when studying the price series. In addition, the paper discusses methods for calculation of price indices.
The PDF includes a summary in Finnish.
The aim of the investigation was to estimate the changes in the price ratios of different tree species of sawn timber, timber sizes and qualities, the ratios of the prices obtained by different shippers and from different countries, and their changes, especially the trends and business cycles. The data can be utilized in the organization of sawing and the drawing up of the price scales. The price ratios were calculated by taking 100 as the basic quantity and calculating the values for the other quantities accordingly, the values are called price indices. The data is collected from the sales reports in the archives of the Finnish Sawmill Owners’ Association.
Comparing the ratios of the basic prices, the prices of unsorted pine goods by shipper B (the leading marks of Northern Finland), were considerably higher than the others. The North Finnish pine goods are of the best quality in Finland. The price differences between the other shippers were small. The prices of unsorted spruce goods differed very little with different shippers. In some years the basic prices obtained for pine from different countries showed considerable differences although, in the overall view, the differences were small.
In the leading marks of Northern Finland, the differences between pine and spruce prices was greater than the other price differences. The quality of pine logs in Northern Finland is extremely high. During the periods of prosperity, the price difference between pine and spruce was relatively smaller than during depression. With spruce goods, the relative price difference for the qualities is smaller than with pine goods. For the both species the relative price differences diminished with the increase in the basic price. In the broadest sizes of unsorted pine goods, the price difference of the inch class is much bigger than in the small sizes. This is true especially for boards. The relative price difference between boards and battens increased distinctly with the advance in the basic price. A similar, though not as clear change took place in the price ratio of board and 7” sizes. The price differences between battens and boards are much smaller for spruce than for pine. The trends of the price indices of the different sizes show from the middle of 1920s and as far as the 9” u/s pine sizes very gentle, and in regards of the corresponding spruce sizes, a fairly sharp rising tendency.
The PDF includes a summary in English.
Forests have been priced by assessing separately the value of the land, small timber and heavy timber, and adding them together. This method of summing up gives a small woodlot the same price per hectare as a large forest area. In real estate sales the actual prices paid per hectare, however, are higher for small woodlots. The summing-up method thus over-values big forest holdings.
The figures obtained by the summing-up method should be corrected by using a reduction percentage. This value should increase with the growth of the forest area and should be higher for fully-stocked areas than those with small growing stock. A table of reduction percentages is presented, where an effort is made to eliminate the effect upon the statistics of the potential value of the land as building site and field. The results clearly indicate that the effect of area upon the price of a woodlot is fairly marked, even with very small parcels.
On the other hand, determination of the reduction percentages has some theoretical weaknesses. The author recommends a method of price evaluation which takes the factor of area directly into account, excluding arbitrary correction percentages. In this method the marketable part of the growing stock is evaluated at its felling value and its relative role decreases with the growth of the area. The rest of the growing stock together with the ground is priced as rental value. This method of professor Eino Saari does justice both to the area and to the fact that forest land and the growing tied to it form an inseparable whole.
The Acta Forestalia Fennica issue 61 was published in honour of professor Eino Saari’s 60th birthday.
The PDF includes a summary in English.
The investigation studies the development of a logger’s daily earnings, a sawmill worker’s hourly earnings, saw timber stumpage prices and saw timber export prices, expressed in marks in Finland in 1913-1953, concentrating upon the trends of real value.
Although worker’s earnings in forestry and sawmilling have developed differently especially in the 1920s, the late 1930s and the early 1940s, their general long-time development has been very similar. On the other hand, the stumpage prices increased in real value much sharply than wages before the World War II. The real value of stumpage prices dropped because of economic regulation measures in the 1940s until regulation was abolished and the Korean War boom raised them in 1951, to fall after that. The development depends partly of the development of export prices for sawn timber.
Without changing the distribution of income from exports the real value of labour earnings, measured by export prices, may rise at most at a pace corresponding to the productivity of work. In logging there has been no actual increase in the productivity in the 20th century. As the increase in the productivity in timber transportation has probably been absorbed in increased wages and capital costs in the branch, a rise in forest labour’s real earnings and stumpage is possible only by means of a rise in the productivity of sawmilling or a change in the distribution of export income. It seems that from the end of World War I up to the middle of 1920s this increase of productivity and in export prices of sawn timber was shared only by capital and possibly mill labour. After that up to World War II stumpage prices rose so steeply that they swallowed the entire increase in productivity and reduced capital’s share of the export price. In the 40s the level of earnings followed the trend of productivity in industry, made possible by a sharp reduction in stumpage.
The Acta Forestalia Fennica issue 61 was published in honour of professor Eino Saari’s 60th birthday.
The PDF includes a summary in English.
The use of imported fuels has increased in Finland, which has resulted in a growing disregard of domestic fuels, primarily firewood, on fuel market. This has affected forest management and economy of forest owners as well as diminishing the working opportunities in the countryside by decreasing the demand of small-sized timber. This investigation studies the fuel problem in the industrial field by a survey sent to all industrial plants in the country.
The different fuels were converted to the calorific value of pine firewood measured in piled cubic meters (p-m3, cu.m.). In 1950 the industry utilized 14.1 million cu.m piled measure of imported and domestic fuels. Of this 47% was domestic fuels and 53% imported fuels. The share of coal was 40%, wood waste almost 30%, and firewood 18%. The relatively small proportion of firewood suggests that it could be possible to increase the industrial demand for firewood. However, it should be noted that industry uses fuel mainly for power production, where imported fuels are highly effective. Forest industry used 2/3 of all domestic fuel.
According to the report, waste wood was cheapest kind of fuel for industry. It was, however, often the plant’s own waste material. The cost of coal at the mill was 60% of the corresponding price of firewood. The location of the industry affects greatly the price relations between domestic and imported fuels. Coal is cheaper close to the harbours and the coastline of the country. The state has supported firewood transportation by lower freight rates for firewood.
The PDF includes a summary in English.
Due to shortage of large logs, sawmill industry has been forced to buy also smaller logs, which also pulp industry uses as a raw material. Sawmills must be careful in the pricing of the logs, because profitability of sawing of timber depends on the size of the logs. These industries use different measures when they buy timber: pulp industry uses piled measure in meters, while saw logs are measured individually in cubic feet. The aim of the study was to develop sets of figures on technical cubic measure of a saw log and its relation to a piled cubic meter from the same log used as pulp wood. In addition, the effect of form class on the measures was studied.
The relation was assessed for trunks that had good, mediocre or unfavourable form class, which distinction is easy to make for a forest worker buying timber. The relations can be used by a buyer of saw logs or pulpwood who need to compare the prices or when the seller of the wood compares the offers.
The PDF includes a summary in German.
The article is a review on the costs of raw materials in the Finnish sawmill industry in 1920s based on statistics collected from the members of the Central Association of the Finnish Woodworking Industries (now Finnish Forest Industries). The article includes statistics about the average size of if the saw timber bought in standing sales from private forests and harvested from the industry’s own forests, stumpage price of the timber, and labour costs of the harvesting of the wood. The average size of the logs was greater in the northern part of Finland, where the sawmills could limit the purchases of smaller timber. In the southern part of the country, the size of the timber decreased in 1922‒1926 due to growing demand of the timber. The long transport distances in the north influenced the costs. The number of logs per tree increased during the period. The level of stumpage price varied considerably in different parts of the country, falling from the south-west to the east and north. Competition of raw material increased the stumpage prices in 1922a and 1926‒27. The international economic downturn influenced the industry in 1929‒1931.
The PDF includes a summary in German.
The article is a review on the wood procurement and cost of pulpwood in the Finnish mechanical and chemical pulp industry in 1922‒1926, based on statistics collected from the members of the Central Association of the Finnish Woodworking Industries (now Finnish Forest Industries), and the series Statistics of Industry and Foreign Trade. Wood trade is carried out by three types of sale: standing sales where the buyer of the wood takes care of fellings and transport (55% of the volume), contracts for the delivery of pulpwood (45% of the volume), and fellings in the own forests of the industry. Norway spruce (Picea abies (L.) H. Karst.) was the most important tree species, and was used almost exclusively especially in the mechanical pulp mills. According to the study, the demand of pulpwood increased markedly during the period. The stumpage prices did, however, not increase accordingly until in 1926. It is assumed that also the supply of wood was high after the World War I.
The PDF includes a summary in English.
The survey focuses on the stumpage prices of standing sales, where the buyer of the wood takes care of felling and transport of the timber. The study concentrates further on conifer sawn timber. The prices of the sawn timber rose continuously from 1891 to 1910. After 1913 the stumpage price fluctuations reflected the changes in the market. The article includes a detailed description on the changes of the saw timber in 1913-1922 and the factors affecting the prices. The prices are shown for different parts of the Finland. The first world war affects the prices and demand on saw timber in 1917-1918. In Northern Finland the prices of sawn timber increased slower than in Southern Finland. In general, the unfavorable factors have had stronger impact on the stumpage prices than the favorable.
The PDF includes a summary in German.
The aim of this study was to explain both theoretically and empirically the formation of the unit price of a woodlot in the early 1980’s in Finland. The structure of the market in which woodlot transactions take place is described by analysing the volume of markets, the heterogeneity of the woodlots, institutional regulation of woodlot ownership and information concerning the market. The decision-making processes of both woodlot seller and buyer are examined using a theoretical model. Using a woodlot transaction sample for 1983 and 1984 woodlot unit price is explained empirically.
The PDF includes a summary in Finnish.
The aim of the present study was to explain how the Finnish paper industry increased its production and its exports, broadened its markets and managed to show a profit in its activities during the period between the two world wars, despite the restrictive international commercial policies then prevailing, and despite the economic depression of the thirties. Newsprint has been treated as a subject for detailed examination.
The study is based on a comparative investigation of the price received by the paper mills for their paper and the costs of production. Since the market price of paper fell during the twenty years in question, one must examine how the mills responded to the reduction in selling price. Technically the study ranges from the valuation of the standing timber to the handing over of the finished product to the buyer. Between 1929 and 1933 the cost of producing newsprint fell by 387 marks per ton.
The most significant factor in maintaining competitive power was the technical development and increased output brought about in the mills. That alone accounted for half the savings achieved. The reduction in the buying price of wood and in delivery costs accounted for about a third of the difference in production costs, and other factors for the remaining fifth. In addition, the devaluation of the Finnish mark was crucial. Measures taken to reduce costs were effective in so far as the paper mills, with only one or two exceptions, maintained their competitiveness in international markets and managed not only to retain but also to extend their markets.
The PDF includes a summary in English.
The aim of this paper was to study the nature of the relative areal differences in the Finnish forests in respect of timber yield, intensity of exploitation and stumpage prices. The yield index is the most inconsistent and the source of the greatest regional differences. The differences arise even in Southern Finland, as the yield in the South-West is only 80 % of that obtained in Eastern Häme. The areal variations in the wastage index are of the order of only 10 % at most, and the stumpage price index is relatively constant, remaining within the 10 % limit, as far north as the southern boundary of the province of Oulu.
Indices for the forest yield and final forest returns suggest that the further one goes in Finland the greater the discrepancy between the two, as a consequence of the increase in stumpage price differences. Thus, whereas the yield per hectare in North-Eastern Finland is about 20 % of that in Eastern Häme, the stumpage price is similarly only just over 50 % of that prevailing in the latter area. This, the resulting returns per hectare are only 10 % of those obtainable in the more southerly area. When the return per hectare for the Forestry Board District of Eastern Häme is represented by the index 100, one then obtains corresponding return indices of 21.0 for the Northern Ostrobothnia and Kainuu area, 13.0 for Lapland and 10.0 for North-Eastern Finland. Thus, it may be said that roughly 10 hectares of forest land in Lapland, 5 in Northern Ostrobothnia or Kainuu, or 2 in Northern Karelia or the coastal area of southern and central Ostrobothnia would be required to produce the same returns as 1 hectare in Eastern Häme. This represents an extremely wide range of variation within the borders of one country.
This work provides a clear and sufficiently accurate impression of the order of magnitude of the areal differences in returns from the Finnish forests, and may thus serve as an adequate basis for the taking of decisions in this field.
The PDF includes a summary in English.
In Finland The Central Forestry Board Tapio conducts forest drainage operations on swamps owned mainly by private individuals. This drainage is almost totally financed by the Government either as loans or subsidies. The local contractors have left bids about new forest drainage projects, and the best bid has won the contract. The trend of the average price for forest drains has been declining during the last 11 years although digging costs have increased. The aim of this study was (1) to explain the regional price variation of forest drains made by tractor-diggers and (2) to describe competition among tractor-digger contractors and to measure its effect on prices.
Correlation and regression analyses support the hypothesis that competition among tractor-digger contractors has decreased forest drain prices, especially in 1967. In the course of the last two years this competition effect has been lessening. The most significant other variables explaining price variations were the proportion of winter drainage, length of drainage work done for each participant in the project, and density of drains.
The PDF includes a summary in English.
Forestry and forest industries are important for regional income and employment in Norway as well as in most North European countries, but few studies exist about factors affecting the timber supply at regional level. The main objective of this study is to estimate aggregated regional timber supply elasticities for six regions in Norway. Thereby we also test for regional differences, focusing on wood prices, standing stock volume and interest rate as explanatory variables. We have used three different statistical models (fixed and random effects panel models and first difference models) on regional data from the Norwegian forest inventory on standing volume and official statistics on harvested volumes, interest rate and prices of sawlogs and pulpwood for the period 1996–2016. Statistically significant different price elasticities are found in 12 out of total 15 pairs of regions. The price elasticity was lower and the volume elasticity higher in the western region compared to the other regions. The first difference models are best with respect to specification tests. The use of region specific price elasticities gives slightly better fit for the panel data models than using a uniform price parameter. The results show that the econometric specification influence the parameter values, and it is thus complicated to directly compare results in different timber supply studies. Regional differences in timber supply are important to consider.
In northern Europe, largest part of non-wood forest products (NWFPs) are gathered for recreational purposes and household consumption, but considerable amount of forest berries and mushrooms are sold as well. Retail market, largely invisible for the official statistics, reveals the lifestyle-related aspects of NWFP trade and may help to understand the flows of this ecosystem service when information on wholesale trade is inaccessible. The prices and flows of most common NWFPs – edible berries, mushrooms and tree sap – in the retail market in Latvia in 2017 and 2018 were analysed based on direct interviews with the sellers in marketplaces and telephone interviews with online retailers. The mean retail prices of NWFPs were compared between statistical regions and years and correlated with socio-economic data and forest characteristics. The directions of the NWFP flows were analysed according to the place of origin and place of retail sales. The highest prices were recorded for stinkhorn (Phallus impudicus Pers.) and Boletes spp. among mushrooms, for wild strawberries (Fragaria vesca L.) among berries and for maple (Acer platanoides L.) sap in the product group of tree sap. The retail price of the same products differed between years, most likely due to the product availability, largely caused by meteorological conditions. In more than half of the cases of recorded sales, NWFPs were consumed in the same region as they were gathered. For other cases of sales, the capital, Rīga, was the main service benefitting area of NWFP retail trade, and the largest part of the products originated from the two closest statistical regions.
With progressing globalization of forest production, roundwood prices in different countries may follow similar trends. The Law of One Price (LOP) postulates that the price of a similar product should be the same in different markets when expressed in the same currency. The objectives of this research were (1) to test the LOP in selected coniferous sawlog markets, and (2) to analyze whether a common market – the European Union – leads to the existence of a single sawlog market. The analysis included Brazil, Chile, Finland, Germany, Norway, Poland, Russia Northwest, Sweden, the US South, the US Northwest, Canada East, and Canada West. The results suggest that some of the coniferous sawlog markets were cointegrated which means that they shared a long-term relationship even if in the short-term they do not necessarily adjust to each other. The LOP may hold between coniferous sawlog markets in Sweden and Norway from 1995 through 2012 when sawlog prices were expressed in USD, and in Norway and Finland for 2001–2012 for prices in EUR. Furthermore, the LOP may hold for North American markets in the West for 2004–2012.
Combining research into forest management stand conditions and wood supply chain processes has been missing from earlier forestry studies. There is a clear need to develop more cost-efficient small-diameter wood production, harvesting and transportation methods from first thinning, which could be used for either industrial or energy wood purposes. This study considers the total cost for small-diameter wood originating from young Scots pine (Pinus sylvestris L.) dominated stands. Pine pulpwood is the most harvested and most used roundwood assortment, use of which is expected to rise following new pulp-mill investments in Finland. In addition, utilisation of small-diameter trees directly for energy purposes has been increasing steadily in recent years. The aim of the study was to determine the cost-reduction potential of alternative forest management options and supply chains for small diameter-wood in the regional case of South Savo in eastern Finland. The total costs of three distinct scenarios were studied on the basis of forest management, first-thinning harvesting methods, and transportation: 1) industrial wood, 2) delimbed energy wood, and 3) whole trees for energy purposes. The cost-reduction potential for energy-wood supply chains from first thinning was compared to the industrial supply chain. Small-diameter delimbed wood delivered straight for energy purposes was found to be the most cost-efficient as far as the total cost of the supply chain is concerned. More cost-efficient small-diameter wood processes can be found by linking forest stand simulations with supply chain analysis.