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,\'11 I ':mest Younl! Ernest Young shows as a top purchaser on both the timbershed and on the Rio Grande forest. He purchased timber throughout the 10 year study period through FY '91. He bad been purchasiDs (adjusted for defaults) an average 0(3.2 to 3.6 MMBF (FY '17 to FY '90) for his last four years. He is DO lODger actively purchasiDs, and there is DO expedation that he will in the future. Hence, his demand level is estimated here at zero. ) 'Iusant Lol!l!inl! and Millinl! Pleasant, in Monte Vista, is a small hoard mill. Their product mix includes Ix4 through Ixl2's with small amounts of dimension lumber. Of the top purchasers, this is the only board mill 011 the Rio Grande forest and they intend to COJl1inue producins one-by products. They have purclwed a1most all of their volume from the Rio Grande forest and have Iiule interest in non-Rio Grande sources. They COII5ider themselves dependent on the SBA program 10 that they do DOt have to compete with Stone at timber sales. They have .Iowly been upgnding the mill incluclins a vertical resaw. Although the build.in&s appear to have lied .ignificantly, our impression is that the mill is financially and operationally IOIIIId and tbat it will continue to focus aD board products at about the same rate. Although most board mills can -vary the amount of ltumpage they use in a given year, Pleasant is arranged to process 2.5 to 3.0 MMBF ofmatcrWlIIDua11y (our sale records confirm this level). ! ~ , I LUMBER PRICES The demand for sawtimber comes from the demand from lumber and both the demand for lumber and the demand for sawlogs are closely related to lumber prices. Higher lumber pri~ sisnaJ increased demand for lumber and sawtimber. The following chart illustrates lumber prices as reported in the Western Wood Products Association Inland White Woods Index with a I 916 basis. WNPA __" Lutnblr _. (1_ bOlI.1 SlO.DO ...... -... ,...... -_.00 J "D.GO J IICl.ao ....... -... .. " ~.._.................. 01 .. .. .. -y- .. Each point reflects an annual average except for 1992 in which the lIIDual average is estimated from the first three quarters of data. ,This index is used in Forest Service Region 2 for sawtimber appraisal purposes and to adjust stumpage rates on current sale contracts. It dots IIot refltct tht produCt price $fructur, Df tiny particular milL Note that the price index bas climbed slowly then increased sharply in 1992. Such prices generally capture broader economic effects than just those of the timbershed or region. (1::2549 ~ 16 :&'-' ;;~~ ~ $ ~ t 3,: 1 "., J .<:; ;0. ~ ~ ..... ~, .:f. ~ '!':. ~.- - ...!/'" "'~ .--.". ~~ - :;.' / 'i.~ 'w ~. ~ cr- _. i' ,;-- -~. "!' .. ".. ~' ..- .:s. ... s ","' "'- -'Y:. ~' ... 5 ... ;<. ;t:. ~ i>- LL ~ w. " ~' -~ .- ~' -~ ... _:i ~ -, ,~ ~ jt ......;.. J;.. ,:;;. ~..: ..".. .::.~ -~ ~ ;. ~ ~ .k.:.- ... ~; ~. .* ... ..~ -,;. ~_...... :!:' ~. ~ . :~_. - -":;~ ~' ";:"'- .~.~ 3' ";' .;Z:' ~, \! c >.:- ...~