Industry changes expected from pine beetle

The mountain pine beetle epidemic has now infected and/or killed over 17.5 million ha (43.2 million acres) of B.C. lodgepole pine forest (an area roughly double the size of New Brunswick or Austria). B.C. government reports indicate that 51% of the merchantable lodgepole pine volume in the province had been killed by 2010, and the most recent estimates are that 58% will be killed by 2016 as the epidemic tapers off. As the rate of new infection finally winds down, the mid- and long-term impacts are coming into focus.

It has now been ten years since the B.C. government released its first mountain pine beetle action plan. Sawmills in the hardest-hit regions of the B.C. Interior are now facing the challenge of cutting logs that have been dead for eight to ten years (or more). Some timber supply management areas have begun to see MPB-related reductions in the allowable annual cut (AAC). From the current (2012) Interior AAC of 60 million m3 (both public and private land), the AAC is expected to decline to about 40 million m3, a reduction of 20 million m3 (33%).

While the impact of the MPB epidemic will be significant, the future may not be as dire as it would appear at first glance. Because 22 mills (not including Lakeland) have already closed, the drop in saw log availability will not be as high as the peak-to-trough decline in AAC. Over the next decade, there will be an increase in residual fibre and pulp logs, eventually followed by a decline. Prices will be the key determinant in how long sawmills can operate using drier timber, and also in what percentage of biomass will be economic to harvest.

The next few years will doubtless be challenging. Low lumber prices and increasing processing costs may cause more mills to close (even before the log supply is reduced). However, in 2014 and 2015, demand and prices are forecast to improve, boosting producers’ bottom lines and opening up timber options that would otherwise be uneconomic. (Extracted from B.C. Mountain Pine Beetle: Evolving Impacts and Opportunities).

Source: International Wood Markets Group, www.woodmarkets.com

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