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or so, but then also will decrease moderately, causing substantial real price increases. Overall, timber removals for hardwoods are projected to increase 44Vo from 1990 to 2010.

Increased harvests and decreased timber inventories will affect stumpage prices substantially. From 1990 to 2010, hardwood timber prices are projected to increase 243Vo, or 4.5Vo per year. Even ifnot entirely realized, significant price increases will make timber investments increasingly attractive.

Recent price increases

exceeding 10% per year are unlikely to continue in the long run.

This trend is already in Place. Between 1977 and 1986, southern average sawtimber prices remained almost constant while prices of other factors of production in the economy increased over 4Vo Per Year. The declining real hardwood price trend reflected a large and growing supply and a stable demand.

Between 1986 and 1993, however, hardwood stumpage prices increased an average of l2%o per year, while producer prices for other materials increased by less than 3Vo per year. This trend seems to reflect the relative scarcity of hardwood sawtimber.

While higher pulpwood demand and timber harvests could quickly lower favorable growth-to-removal ratios, environmental and social constraints on harvests could greatly reduce the actual inventory and the growth that can be used for wood products.

Over the next few decades, U.S. hardwood timber inventories should