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<br />,\c, <br /> <br />. This chart shows that since 1988, after their capital investments, they have gradually increased the <br />pel'CCll1aiC ofvolwnc they acquire &om other forests in the timbershed. Most oflhis increase has eome <br />from the Gunnison National Forest and more recently some bas come from the San Juan National Forest. <br />. This is a trcIId that 1 cxped to eontinue, or at least to stabilize at DCal' the currcnt level. Hence, Stone will <br />ClOlItinue to purchase timber outside of the Rio Grande National Forest at a rate of30 to 40 percent. This <br />would traDSlatc into increased competition on the Gunnison and San Juan National Forests for the non-SBA <br />wllllllC5 . <br /> <br />i <br /> <br />'Ibm an at least two reasons for Stone to be looking at other forests for stumpage. First is their increase <br />in capacity since 1988. and second is that stumpage bas been Cbcapcr on other forests. To illustrate this, <br />M CIllIISlrUc:tcd voIl111lC Mightcd aw:rage prices for sawtimber purchased by Stone on the Rio Grande <br />National Forest and for sawtimber wlume purchased by Stone from the rest of the timbcrshcd. but not on <br />the Rio GBndc forest. The rcsuIts an in the table below. <br /> <br />Table 1. Average Bid Prices for Stone on the Rio Grande National Forest va. <br />Other National Forasts In the Tlmbershed. <br />(prices are volume weighted in $/MBF) <br /> <br />Filcal Year <br />1988 <br />19B9 <br />1990 <br />1991 <br /> <br />Rio Grande <br />$36.05 <br />$66.79 <br />$71.52 <br />$61.32 <br /> <br />Non Rio Grande <br />$34.52 <br />$34.25 <br />$33.27 <br />$57.56 <br /> <br />Note that prices rcfIed high bid on timber sale contracts and haw: not been adjusted for es,.olotion. The <br />table shows that Non-Rio Grande stumpage bas. as an annual average. always been lower priced. ,We Mre <br />not able to test for differences in stumpage quality or other Dctors which arc beyond the scope oflhis <br />study. Also IIOIC that non-Rio Grande stumpage will typicaUy involve higher haul costs for Stone. <br />Appcadix B identifies Dctors that Can be used to explain differences in bid prices in the timbcrshed. <br />National Forest loWion was not identified as being useful in explaining differences in bid prices. Rather, <br />appraised price and the number of actiw: bidders Mre among the key variables identified and the <br />differences in Stone's bid prices in the table above arc likely a result of one ofthesc two variables. <br /> <br />StoDC'S demand for stumpage is clearly at 29-30 MMBF annually. Recently they haw: purchased about 7 <br />MMBF per year from non-National Forest lands (mostly private). With private sources dimiIIj.hi"g and <br />being somewhat unreliable. I estimate their availability at about one half of the 7 MMBF, or about 3 <br />MMBF per year. This leaves Stone with a demand for National Forest limbershed volume at about (29 <br />MMBF minus 3 MMBF) or 26 MMBF annually. <br /> <br />'lut Mesa <br />The ncxl1argest purchaser in the timbershed is Blue Mesa Forest Products. Blue Mesa purchased 22.78 <br />MMBF from the timbershcd ow:rthe five year period from '91- '87. This is an average of just ".S MMBF <br />per year. Blue Mesa is owned by Allied Forest Products in Portland Oregon. Allied currently operates <br />three mills, Blue Mesa in MontroSe, Sheridan Forest Products in Sheridan WY, and a miU in Alamagordo. <br />mP. They I'CCClItly sold their miU in Escalanto to Kaibab. Although Blue Mesa is an important mill in <br /> <br />2 A lengthy analysis and discussion of Allied's mill in Sheridan can be found in "Timber Demand and Supply on <br />the Bigbom National Forest. by Rideout, 1991. <br /> <br />[0 8.2 5 4 7 <br /> <br />14 <br />