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Criterion 6 Indicator 38
Value of investment in forest health and management, reforestation, wood processing, recreation, and tourism.
Public values are a combination of community opinion and behavior. However, in many instances public behavior does not accurately reflect expressed opinion regarding the value of a good or service. For example, public opinion surveys indicate that Americans highly value air quality, yet public behavior shows that Americans are increasing the amount of air pollution by commuting longer distances to work in sport utility vehicles that create more pollution. The value of investment provides a measure of public behavior.
Investment in the resources dedicated to future production of both economic and social values from forests reflects the relative value placed on different forest resources. Investment can also be a leading indicator, reflecting the amount of a specific resource that may be available in the future. Investment in forest health and management is important in order to maintain basic forest productivity. Other investments help to maintain the many other values of forests.

Can This Indicator Be Quantified
Due to the importance of Oregon’s forest products industry, a considerable amount of data is available regarding investments. The data comes from several different sources including state and federal agencies. However, information that completely quantifies all the investments in forestry is not available. Because data is incomplete or estimated from various sources, comparisons between different investment types are not completely valid. Table 38-1 shows investments in each of the categories.
Table 38-1. Investment in Forest Health and Management, Planted Forests, Wood Processing, Recreation and Tourism (Millions of Dollars)
YearUSFS Forest Health SpendingEstimated Private Land Management Spending (PCT & Fertilization)Estimated Annual Reforestation SpendingNew Capital Expenditures in Wood Processing (SIC 24)Recreation
19993.65   116.75
Note: Uninflated, dollars in millions.
In Oregon, the U.S. Forest Service makes the largest investments in forest health. Budgets for the past several years have been between $3 and $4 million. These budgets include funds for detection, monitoring, and evaluation of forest ecosystem health, including insect and disease infestation. Information on similar spending by other landowners was not available.
Pre-commercial thinning and fertilization are common investments used by private forest landowners to increase the volume and value of their timber investments. Spending on private land management is difficult to estimate because records on expenditures are not publicly available. We used a two-year rolling average of the acreage of operations reported under the Oregon Forest Practices Act notification requirements and cost estimates from a survey of landowners to calculate the value of management investments on private lands. Estimated spending has been between $8 and $16 million in recent years.
A similar method (to that explained above) was used to assess non-Forest Service reforestation spending. This approximation was added to the Forest Service budget allocations to estimate a total spending on reforestation of about $60 million.
New capital expenditures for lumber and wood products (SIC 24), collected by the Census Bureau in the Annual Survey of Manufactures, was used as indicator of investment in wood processing. Despite reductions in timber supply and a decline in the number of mills operating in Oregon, the wood products industry has continued to invest heavily in new equipment. The latest numbers available exceed $240 million annually.
The U.S. Forest Service, U.S. Bureau of Land Management, and the Army Corps of Engineers all allotted significant amounts for recreation in fiscal year 1999. For the federal agencies, in some cases, the budgeted amount is a regional total that covers two states. Although exact figures were not available on how those funds would be split, a substantial part of the total would be spent in Oregon. These agencies manage a large share of the forest lands in Oregon. Data was not available to show trends for investment in recreation.
Table 38-2. State and federal agency recreation budgets for fiscal year 1999
Agency Recreation Budgets: Fiscal Year 1999
U.S. Fish and Wildlife*$540,500
Army Corps of Engineers$3,870,000
State Parks**$84,000,000
National Park Services$540,500
*Estimated Data
**1997-1999 biennium

Forest Health and Management- Data for investment in forest health is available for the US Forest Service, but is not accessible for other sources. USFS Forest Health spending has increased steadily over the several years. Silvicultural investments in private lands have been more volatile and tended to reflect changes in log prices. Investments in pre-commercial thinning and fertilization have more than doubled in the past ten years.
Figure 38-1. Value of investment in forest health by USFS and Private Lands Management (Estimated investments in Fertilization and Pre-commercial thinning)
Reforestation- In 1982 dollars, expenditures on reforestation have declined from approximately $80 million to about $50 million during the last decade. The largest declines in reforestation investments have come on federal lands where timber harvesting has also decreased rapidly.
Figure 38-2. Estimated Annual Reforestation Spending, 1982 dollars
Wood Processing– During the 1980’s many wood product mills were upgrading their machinery in response to competitive market forces created by the recession. Investment in 1982 dollars increased from $132 million in 1982 to $238 million in 1989. Outlay levels dropped during the early 1990’s as lumber production fell in the region, then stabilized at about $190 million from 1994 through 1996.
Figure 38-3. New Capital Expenditures SIC 24, 1982 dollars

Data Source and Availability
Data Source and Availability
The following sources were used for this indicator.
Oregon Department of Forestry, Forest Practices annual records. These records provide acreage data for precommercial thinning, and use of fertilizer. Acreages were multiplied by average costs from Beuter, 1998. A two-year moving average was used to reduce any potential problems of time lags between notifications and accomplishments.
New Capitol Expenditures: Annual Survey of Manufactures. Geographic Area Statistics. Statistics for the Industry by Group. US Department of Commerce. Economics and Statistics Administration. Bureau of the Census.
Recreation budget data. The following sources were used for various agencies.
Army Corps of Engineers — Heidi, Public Affairs Office, Portland District, 503-808-4510.
National Park Service Units — Crater Lake, Carolyn Baker, 541-594-2211; Fort Clatsop, Betty, 503-861-2471, ext. 224; Oregon Caves, Kelly Donnelley, 541-592-2100.
Oregon State Parks — Craig Tutor, 503-378-8587.
U.S. Fish and Wildlife — Ken Tredenick, 503-231-6112.
U.S. Forest Service. Information on forest health and reforestation funding trends.

Reliability of Data
Not all expenditures on forest health are available. Other information had to be estimated. For data on investment in reforested stands, pre-commercial thinning, and fertilization in Oregon, we used standard per-acre cost figures, and then multiplied these prices by the acreage data available in the Oregon Department of Forestry’s Forest Practices annual records, to come up with a total estimated investment.
Forest health funding reported by the U.S. Forest Service is reliable, but the measure is incomplete since expenditures on forest health by other forest landowners are not available.
New Capitol Expenditures from the Annual Survey of Manufactures is reliable.
As for recreation budgets for the federal agencies, in some cases, the budgeted amount is a regional total that covers two states. Although exact figures were not available on how those funds would be split, a substantial part of the total would be spent in Oregon.

All reported data is statewide, except recreation data from the U.S. Forest Service.

Recommended Action for Data Collection
Data should be collected and compiled on investment in recreation and tourism on a yearly basis, including expenditures on items such as trail construction and maintenance, camping and visitor facilities, etc.

Forest Health
Federal lands forest health — In calculating forest health investments on federal forest lands, we included funds spent on detection, monitoring, and evaluation of forest ecosystem health, including insect and disease infestation. We also included funds spent on prevention and suppression of insect and disease outbreaks.
Appropriated reforestation — We included funds spent on seeding, planting, and preparing sites to encourage natural forest regeneration on sites outside timber sale areas, or for sites within sale areas for which no KV funds have been collected. These funds are federal money, appropriated for federal forest lands.
CWKV reforestation — This fund comes from money deposited by timber sale purchasers for site preparation and reforestation within timber sale areas on federal forest lands.

Selected References
Cost of Silvicultural treatments from: Beuter, John, and Richard Gustafson. 1998. Evaluation of the management of state-owned forest land in Oregon. Duck Creek Associates, Inc. Corvallis, Or.