Markets for forest products following a large disturbance

The mountain pine beetle outbreak in the Interior forests of British Columbia that began in the late 1990s continues to kill lodgepole and other pine trees across the region and into western Alberta. Beginning in 2001 the provincial government increased available timber supply on Crown-owned lands and encouraged the forest industry to focus harvesting efforts on lodgepole pine. The timber supply uplift and pine-focused harvest strategies raise several questions with regard to the response by the BC industry to the increased supply of pine timber and the impact on timber and product market prices. Following the slowdown in many of BC's major markets, further opportunities to utilize MPB-killed wood inventories need to be examined. This paper describes recent wood market trends and highlights market opportunities and limitations for MPB-killed lodgepole pine. We also highlight key information gaps and uncertainties with regard to fully understanding the possible market and industry impacts of increasing pine harvests to address the mountain pine beetle outbreak, and the subsequent decrease in future timber supply. The appendices include a comprehensive listing of elasticity estimates important to any economic analysis of wood product markets.