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Title: If the U.S. had Canada's stumpage system

Source: U.S.-Canada forest products trade : a bilateral technical symposium. [East Lansing, MI] : Michigan Agricultural Experiment Station, 2006. Special report (Michigan State University. Agricultural Experiment Station) ; 125. Research report from the Michig

Author(s)Spelter, Henry

Publication Year: 2006  View PDF »

Category: Journal Articles

Abstract: North American log markets function on different principles -- a profit allowance for the wood processor plays a role in timber pricing in Canada, while in the United States, it is a byproduct of the give and take of arm's-length market negotiations. The former is characterized by high elasticities of price transmission and, at times of market weakness, by low elasticities of product supply; the other, by the opposite of these benchmarks. This can result in asymmetric supply responses in weak markets to the detriment of U.S. producers. Whether this is a subsidy in the sense of conferring a direct financial contribution by the government or merely a different pricing mechanism is beclouded by the dearth of market-based transactions. The challenge in the lumber dispute, then, is to devise a system of pricing in Canada that is more transparent regarding the underlying valuation of timber.

Keywords: Timber pricing, subsidy, elasticity of price transmission, forest products industry, economic aspects, Canada, statistics, lumber trade, timber, valuation, prices, softwoods

File size: 215 kb(s)

This publication is also viewable on Treesearch:  view
RITS Product ID: 26388
Current FPL Scientist associated with this product
Spelter, Henry N.
Economist (Volunteer)
  

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