New wood markets will be developed

By William R. Ganser, Jr. Executive Vice President Southern Forest Products Association

tion to make sure things happen for us.

In that sense, the Southern Forest Products Association (SFPA) is helping to shape the destiny of southern pine lumber.

SFPA certain- ly pays attention to the forecasts of leading economists. In fact, we are a subscriber to the forecasts of Data Resources, Inc. (DRI), which predicts that housing starts will average 1.75 million units in 1986 and then rise to 1.86 million in 1987. And we are well aware of less rosy, sometimes dire predictions made by other analysts.

But we will not wait passively for such predictions to prove themselves on target or wide of the mark. That is why SFPA aggressively developed a five-year marketing plan to increase demand and create new uses for its members' products.

Our five-year plan aims to boost southern pine shipments by 1.4 billion board feet a year by 1990 through greater penetration of such markets as permanent wood foundations, exports, engineered systems and outdoor living/repair & remodeling. This incremental increase represents about $300 million in new sales.

The first year of this bold marketing program is behind us. And, although the program is still young, it is obvious that we have generated a great deal of momentum for southern pine lumber. Now we are into the second year of the program, with new advertising, literature and customer promotion that will add more marketing momentum.

So the actual number of housing starts recorded in 1986 will not be such a life-or-death factor as it has in the past. We are no longer putting all our promotional eggs in the housing basket. We are spreading out the demand nests for southern pine lumber, which will keep orders coming even if one or two of the marketplaces suffer a setback.

That is just one way SFPA is taking charge of the fate of southern pine.

Canadian lumber imports have been taking bigger and bigger bites of the softwood market share in the south. When all the window dressing is strip- ped away, it's plain to see that Canada's trade advantage is directly linked to subsidized timber prices.

SFPA supports free trade, but we think it is implicit in the definition of

Story at a Glance

SFPA will not be passive...ag. gressive marketing to swellde. mand and create new uses for southern pine...adverlising, lit. erature, promotions seek 1.4 billion bf increase per year.

free trade that it be fair. And what the Canadians are doing simply is not fair. So our association has joined several others as a member of the Coalition for Fair Lumber Imports, which seeks to persuade Canada to stop subsidizing timber prices or to have either a balancing duty or quota applied to softwood imported from our northern neighbor.

The destiny of southern pine is also threatened by the tax overhaul measure, which proposes to repeal needed timber tax incentives. Threatened with repeal are capital gains tax treatment for individuals and corporations, deductions for forest management expenses, and reforestation tax incentives.

Nothing less than the destiny of tomorrow's timber supply is at stake here, because without these incentives potential tree growers would do better by planting soybeans on their land. SFPA is vigorously lobbying to see that these time-tested incentives for timber remain in the nation's tax code.

Finally, and perhaps most importantly, SFPA sparked a candid appraisal of the quality of southern pine lumber. The industry went through some tough self-examination, and qrme away with a renewed commitment to product quality and a new emphasis on making lumber with consumer appeal to match changing end uses.

So, in marketing, Canadian imports, timber taxes and product quality, we have moved with steady purpose. If destiny is more choice than chance, the destiny of southern pine in 1986 and beyond is favored by fortune.