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<br />.' <br /> <br />, <br /> <br />1 <br /> <br />In this case they are thought to include considerations on the western US. timber supply situation as <br />c:baDges in available stumpage from the west awt have declined, increases in the demand for housing and <br />other constrUction activities that are related to the recent lowering of mortgage rates, and potentially to <br />international trade agreements - especially Canadian expons and tariffs. <br /> <br />This lumber index also directly impacts purchasers in their operation and bidding on Forest Service timber <br />sale cootacts. It impacts bidding because with sharp increases in the index, come sharp increases in the <br />rate the Forest Service uses to appraise stumpage. Sharp increases in the appraisal rates mean that <br />purchasers will have to pay more for stumpage (see Appendix B). Stumpage prices and their relation to <br />appraised rates are addressed in the next section on the overall oconomy4. <br /> <br />CIIT lEVELS <br /> <br />VIeWing historical cut levels often provides insight into the demand level. Cut levels are typically more <br />stable than sold levels because purchasers can manage the sawtimber volwnes they have under contract. <br />Their management tends 40 smooth out lIWly of the irregularities of the sales progtam and to suggest the <br />overall volwnes that they have been processing. The following shows the sawtimber cut chart for the <br />timbershed and for the Rio Grande forest. <br /> <br /> SaWlImbtr C~ Volume <br />10, I'M <br /> .... an <br />10 <br />.. <br />(: .... <br /> .... <br /> ~ <br />I: 0_ <br />. <br />to <br />a <br />.. .. . . B1 . . 10 .. <br /> ......v_ <br /> <br /> <br />Tbc above chart shows timbershed cut levels generally increasing through the decade. but Rio Grande <br />forest cut levels recently declining. A closer look at cut levels by forest, in the chart below, shows that the <br />illcrease ill cut ill the last three years bas ~ from the Qwmison. <br /> <br />~ other dfect that sharp iDcreases in the lumber price index can have on purchasm Is to increase the amount <br />they have to pay tobarvest volUl1le under conUllCl MoSl conUllCU now include an "acaJation clause" which can <br />increase (dCl:R&5C) the amount the conUllClor bas to pay the Forest Service as lumber prices rise (decline). Many <br />specific stipulations apply in the opmtion of the contract clause. <br /> <br />C' r; 2 ~ r: 0 <br />'. .J;) <br /> <br />17 <br />