Modeling Timber Supplyfrom Planted Forests in South America

andEuropean Forestry: A Snapshot

SOFAC Speech, 7 August 2013

Drawn from a Speech Presented at:

3rd International Congress on Planted Forests

Porto, Portugal

17 May 2013

Contributors, Co-Authorsand Countries

Fred Cubbage, USA Lawson Creekmore, USA

Robert Abt, USA Jesse Henderson, USA

James Jeuck, USA Omar Carrero, Venezuela

Alvaro Perez de Castillo, Uruguay Adriana Bussoni, Uruguay

Luiz Carlos Rodriguez, Brasil Bruno Kanieski, Brasil

Carlos Bohaman, Chile Marjorie Martin, Chile

Sergio Alonso Orrego, Colombia Victor Nieto, Colombia

Hugo Fassola, Argentina Patricia Egolf, Argentina

Louis Colcombet, Argentina Fernanda Pietratuono, Argentina

Economics

Area of Planted Forests by Function, 2005

10798

44422

3833

21615

17133

11326

2370

20474

32

6028

986 31519204

0

10000

20000

30000

40000

50000

Africa Asia Oceania Europe North

America

Central

America

South

America

Millio

n H

a

Productive Forest Protective Forest

FAO 2005; 109.6 million ha productive (78%); 30.1 million ha protective (22%); 140.1 million ha total

Planted forests could comprise 2/3 of industrial wood production (Carle and Holmgren 2008)

Total Productive Plantation Area For Major Countries in the World, 2005

17061

11888

53843399 2661 1997 1968 1832 1792 1766 1573

28530

0

8000

16000

24000

32000

Chin

a

U.S

.A.

Russ

ian F

ed

Bra

zil

Indones

ia

Chile

Thaila

nd

France

New

Zea

land

Vie

t Nam

Aust

ralia

Mal

aysi

a

Th

ou

sa

nd

Ha

FAO 2006 Working Paper FP38E

EU planted: Finland 5904; Germany 5283; Sweden 3613

Total Productive Plantation Area For Major Countries in the World, 2005

1426

122910671053

806 751 754667

312164

72 43

1471

0

500

1000

1500

2000

Spai

n

S A

fric

a

Arg

entin

a

Port

ugal

India

Ven

ezuel

a

Uru

guayPer

u

Swed

en

Colo

mbia

Ecu

ador

Mex

ico

Par

aguay

Th

ou

sa

nd

Ha

FAO 2006 Working Paper FP38E

Annual Increase in Production by Region (%)

Source: Gonzalez et al. 2008, NCSU, from FAO 2007

-1.25% -0.25% 0.75% 1.75% 2.75% 3.75%

Asia

Africa

N. & C. America

World

Oceania

Europe

South America

IAGA

Asia -15%

-5%

5%

15%

25%

35%

45%

55%

65%

75%

Bra

zil

Ch

ile

Arg

en

tin

a

Uru

gu

ay

Ecu

ad

or

Countries accountable for changes in

production of indutrial roundwood in

South America

Ecu

ad

or

FAO 2007, Gonzalez et al. 2008

Production and Consumption of Industrial

Roundwood in South America, 2003

Source: Gonzalez et al. 2008, NCSU, from FAO 2007

0 20 40 60 80 100 120

Brazil

Chile

Argentina

Paraguay

Uruguay

Peru

Colombia

Ecuador

Venezuela

Bolivia

Guyana

Suriname

Million m3

Production Consumption

ArgentinaBrazil

Chile

FAO 2007, Gonzalez et al. 2008

Global Leader in Market Pulp

Source: Hawkins Wright; Fibria 2010 15

Production capacity of the world’s leading pulp producers in 2009 (‘000 tons)

Why worry about global supply?

Supply from the rest of the world continues to grow, while

traditional suppliers (US, Europe, Canada) have difficulty

expanding supply

0

100

200

300

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600

700

800

900

1961 1970 1980 1990 2000 2010 2020 2030 2040 2050Year

Millio

n C

ub

ic M

ete

rs

Rest of World

United States

Europe

South America

Canada

Daigneault et al. 2008

SubRegional Timber Supply (SRTS) Model Description

Inventory, Growth, Removals and Acres are Tracked By:

Region – e.g. survey units

Owner – Corp or NIPF

Species Group – Pine, Soft Hwd, Hard Hardwood

Mgt. Type – Planted Pine, Natural Pine, Mix Pine, Upland Hwd, Lowland Hwd

Age Class – 5 year

Stand growth projection into future

SRTS Inventory Projection

Stand table projection by forest management type though age classes

V1 = Vo + G – R + ∆Area

V1 = Volume in Year 1

Vo = Initial volume per age class

G = Net annual growth (net current annual increment)

R = Removals (harvests + clearing)

∆Area = Change in area by management type

Typical SRTS Resource Analysis

Project Demand or Harvest Assumption based on trends

Harvest uses FIA historical

Demand uses macroeconomic drivers

Project Acres (timberland/planted) assumption

price responsive

Project Growth FIA for natural forests

Can increase growth for planted pine

Model Outputs by Product

Inventory Trends

Harvest Shifts Between

Owners/Regions/Types

Price Trends

Southern USA Pine SawtimberProjections, 2007-2036

0

20

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60

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120

140

20

06

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08

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06

=1

00

Pine Sawtimber

Price

Inventory

Removals

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140

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07

=1

00Pine Sawtimber

Price

Inventory

Removals

Southern U.S. Projected Shifts in Inventory, 2007-2022

Pine

Product

Inventory

Shifts

Shifting from the U.S. Southto SRTS (Far) South America

Same principles apply for plantations

Advance inventory through age classes

Stand table projection – 5 year classes

Pines grow at similar rotations

But eucalyptus have most of rotation in 6-7 years

Moderate model adaptation underway

Demand, elasticities, land change also more dynamic & exogenous

Research Hypotheses

H1: The joint SRTS southern U.S. and South America partial equilibrium models will provide better projections of timber supply in both regions than the global general equilibrium models.

H2: The collection and use of detailed, fine scale data on timber area, inventory, growth, and removals in the SRTS framework will lead to better projections of timber supply in both regions of the Americas than the global general equilibrium models.

H3: The fine scale SRTS South America model can provide a useful new management decision making tool for investors and companies there.

Research Hypotheses

H4: The fine scale SRTS South America model can provide a useful tool for national timber supply, carbon accounting and REDD projects, and policy analyses.

H5: South America will continue to increase its timber supply and global shares of industrial wood production and

related forest products industries.

Calculating Timberland Area, Timber Inventory, and Annual Growth

(1)Area by Age Class = Ha of Planted Area per Year “Aged” to Number of Years since Planting

(2) Total Inventory Volume by Age Class = MAI*Age of Stand*Planted Area in Ha

(3) Total Growth Volume by Age Class = MAI*Planted Area in Ha

Growth and Harvest Inputsfor Uruguay as an Example

Year (Amount Removed)

Euc. Globulus

Euc. Grandis

Pinustaeda

Growth Rate as MAI (m3/ha/yr)

22 25 18

Year of Harvest (m3/ha removed)

First Thinning (1/4) 10 (60) 9 (40)

Second Thinning (1/4) 12 (44)

Final Harvest (100%) 9 (200) 16 (340) 22 (312)

Uruguay Plantation Areaby Age Class (ha), 2011

Uruguay Plantation Area

Species Group: Area (ha)

Year of Planting Age Class Euc globulus, pulp species Euc grandis, dunii Pinus taeda, Otros pinos

2011 1 17,964 25,319 6,402

2010 2 17,918 36,791 9,630

2009 3 21,653 51,599 10,677

2008 4 29,395 61,916 12,770

2007 5 28,687 57,578 6,394

2006 6 28,064 32,367 12,172

2005 7 21,204 17,106 4,865

2004 8 16,521 9,876 6,847

2003 9 12,763 6,941 5,622

2002 10 13,974 7,196 8,705

2001 11 11,946 8,376 14,134

2000 12 10,299 9,359 22,954

1999 13 7,860 9,764 23,860

1998 14 6,606 14,730 18,347

1997 15 3,885 9,403 11,108

1996 16 2,801 7,106 5,605

1995 17 480 7,230 3,289

1994 18 489 6,971 1,861

1993 19 138 5,321 1,490

1992 20 591 3,926 320

1991 21 44 615 579

1990 22 165 854 977

1989 23 425 4

1988 24 463 129

1987 25 49 92

1986 26 1 75 63

1985 27 35 6

1984 28 249

1983 29 26 202

1982 30+ 152 877

Total 257,871 397,855 191,297

Uruguay Plantation Volume by Age Class (000m3 ob), 2011

Uruguay Plantation Area

Species Group: Area (ha)

Year of Planting Age Class Euc globulus, pulp species Euc grandis, dunii Pinus taeda, Otros pinos

2011 1 309,702 662,695 114,556

2010 2 637,737 2,022,272 344,977

2009 3 1,145,527 4,201,197 578,115

2008 4 2,007,442 6,878,163 922,042

2007 5 2,460,776 7,837,587 588,672

2006 6 2,782,117 5,266,213 1,363,619

2005 7 2,439,219 3,233,750 637,957

2004 8 2,210,158 2,157,475 1,031,960

2003 9 1,943,661 1,803,043 946,211

2002 10 2,313,328 2,045,889 1,601,715

2001 11 2,223,919 2,711,720 2,907,191

2000 12 1,545,496 2,996,295 5,155,600

1999 13 1,277,308 3,483,248 5,789,028

1998 14 1,315,198 5,953,420 4,820,438

1997 15 726,732 4,191,418 3,121,670

1996 16 461,893 3,425,907 1,678,390

1995 17 119,838 3,664,429 1,030,607

1994 18 148,665 3,638,317 613,634

1993 19 40,387 3,025,840 514,683

1992 20 160,574 2,371,023 117,502

1991 21 14,377 370,133 226,158

1990 22 69,728 424,074 403,389

1989 23 0 285,510 1,510

1988 24 0 312,812 57,937

1987 25 0 34,510 43,023

1986 26 279 64,697 30,333

1985 27 0 27,595 2,617

1984 28 0 0 130,524

1983 29 0 25,281 108,821

1982 30+ 0 127,296 525,999

Total 26,354,059 73,241,805 35,408,878

Uruguay E. globulus Timber Inventory Available Vs. Projected Demand (000 m3)

9138

3206 325429583430

4130

0

2000

4000

6000

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2011 2016 2021

Inventory

Demand

Uruguay E. grandis Timber Inventory Available Vs. Projected Demand (000 m3)

9560

4623 4988

2590

7550 7810

0

2000

4000

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12000

2011 2016 2021

Inventory

Demand

Uruguay P. taeda Timber Inventory Available Vs. Projected Demand (000 m3)

762 592

7938

430

1820 2030

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2011 2016 2021

Inventory

Demand

SOFAC March 2007

SOFAC March 2007

Brazil Plantation Areaby Age Class (ha), 2011

BRAZIL: Plantation Area

Species Group: Area (ha)

Year of Planting Age Class Eucs (expanded) Eucs (members) Pinus (expanded) Pinus (members)

2011 0 437952 268377 34615 18000

2010 1 605850 371265 16415 8700

2009 2 529143 324259 12273 5400

2008 3 745516 456852 38095 16000

2007 4 510467 312814 36279 15600

2006 5 484800 297086 69015 25743

2005 6 324637 198938 69845 26052

2004 7 273315 167487 59932 22355

2003 8 242753 148759 54413 20296

2002 9 216483 132661 48697 18164

2001 10 218602 133959 39185 14616

2000 11 165034 101133 48448 18071

1999 12 145067 88897 49003 18278

1998 13 150495 92224 49261 18374

1997 14 140532 86118 40825 15228

1996 15 143610 88004 64658 24118

1995 16 116341 71294 60845 22695

1994 17 104536 64060 52446 19562

1993 18 114303 70045 50455 18820

1992 19 113505 69556 34647 12924

1991 20 98486 60352 36895 13762

1990 21 174047 106656 42643 15906

1989 22 107831 66079 56577 21103

1988 23 55557 34046 55705 20778

1987 24 48614 29791 44442 16577

1986 25 44633 27351 41865 15616

1985 26 42622 26119 38832 14484

1984 27 31334 19202 39216 14628

1983 28 38098 23347 46876 17485

1982 29 27756 17009 45333 16909

Total 3953736 1343120

SOFAC March 2007

SOFAC March 2007

Timber Plantation Trends per Year, Brazil, 1982-2011

0

100000

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800000

Hecta

res

Eucalyptus

Pine

Timber Plantationsby Age Class, Brazil, 1982-2011

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60000

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0 5 10 15 20 25 30

Hecta

res

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Pinus

ABRAF DATA

BRACELPA DATA

Timber Plantationsby Age Class, Brazil, 1982-2011

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ABRAF DATA

BRACELPA DATA

Argentina Plantation Areaby Age Class (ha), 2011

BRAZIL: Plantation Area

Species Group: Area (ha)

Year of Planting Age Class Eucs (members) Pinus (expanded) Pinus (members)

2011 0 219 17,117 40,178

2010 1 219 17,117 40,178

2009 2 219 17,117 40,178

2008 3 219 17,117 40,178

2007 4 219 17,117 40,178

2006 5 621 12,414 52,537

2005 6 621 12,414 52,537

2004 7 621 12,414 52,537

2003 8 9 8,194 20,611

2002 9 9 8,194 20,611

2001 10 9 8,194 20,611

2000 11 9 8,194 20,611

1999 12 11 6,304 12,781

1998 13 11 6,304 12,781

1997 14 11 6,304 12,781

1996 15 11 6,304 12,781

1995 16 11 6,304 12,781

1994 17 0 10,985 13,974

1993 18 10,985 13,974

1992 19 13,974

1991 20 13,974

Total 17009 45333 16909

SOFAC March 2007

SOFAC March 2007

Chile Plantation Areaby Age Class (ha), 2011

BRAZIL: Plantation Area

Species Group: Area (ha)

Year of Planting Age Class Eucalyptus Pino

2010 3 51023 63637

2009 4 38118 49304

2008 5 34505 63192

2007 6 43607 64316

2006 7 59010 51930

2005 8 56222 60318

2004 9 52031 61560

2003 10 49652 58214

2002 11 36474 39073

2001 12 38545 48432

2000 13 36780 59411

1999 14 35548 69925

1998 15 22798 58752

1997 16 17042 55869

1996 17 18138 53444

1995 18 29555 62723

1994 19 37791 63061

1993 20 45994 71411

1992 21 40605 81868

1991 22 34418 75416

1990 23 29085 61310

1989 24 17595 65587

1988 25 8762 61841

1987 26 4412 55386

1986 27 5996 55058

1985 28 5345 80630

1984 29 5299 76982

Total 854350 1668650

Chile Planted Forest Area by Species Group, 2011

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Age…

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SOFAC March 2007

SOFAC March 2007

SOFAC March 2007

Conclusions – Timber Modeling

SRTS Model extended to South America

Data collection off to good start

Planted area by age class for

Uruguay, Brasil, Chile in process

Argentina, Colombia, Venezuela soon

SRTS model adaptations in progress

Should provide much more detail than previous efforts, for whole region

Stay tuned

SOFAC March 2007

SOFAC March 2007

SOFAC March 2007

European Forest Trends

178 million ha in 27 EU countries

vs. 82 million ha in US South

~500 million m3 (tons)/yr EU harvests

vs ~375 million tons in US South

EU forests older and more decadent

EU Harvests only 64% of growth, and declining

20-50 million m3/yr EU damaged or killed

EU forestry becoming more nature oriented

Could cause a 160 million m3 cut loss by 2060

16 million tons EU pellet demand 2010

No major EU forest / plantation investments occurring now

Nabuurs et al. 2013

European forest management is

nature oriented

Which may cause a shortfall of wood

supply of ~190 million m3/y by 2060

(Nabuurs et al. 2006, 2013)

1 ton ~ 1 m3

SOFAC March 2007

SOFAC March 2007

SOFAC March 2007

SOFAC March 2007

SOFAC March 2007

SOFAC March 2007

SOFAC March 2007

SOFAC March 2007

SOFAC March 2007

SOFAC March 2007

SOFAC March 2007

SOFAC March 2007

Modeling Timber Supplyfrom Planted Forests in South America

andEuropean Forestry: A Snapshot

SOFAC Speech, 7 August 2013

Drawn from a Speech Presented at:

3rd International Congress on Planted Forests

Porto, Portugal

17 May 2013