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Estimated Interregional Flows of Hardwood and Softwood Lumber

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Abstract:

Hardwood and softwood lumber distribution patterns in the United States, either under actual or optimum conditions, are not well known. Without this basic information, it is difficult to discover how the lumber distribution system might be made more efficient. This study attempts to describe separately the distribution of hardwood and softwood lumber in 1958, under optimum conditions of minimum total transportation costs. The continental United States was divided into 29 regions, and regional demands, supplies, and resulting surpluses or deficits of hardwood and softwood lumber were estimated for each of these areas. The transportation rate structure used was developed from transportation cost functions based on actual rail rates. The general theory of equilibrium among spatially separated markets provided the framework upon which the analysis was based, and a linear programming transportation model was employed in estimating an optimum geographic set of price differentials and lumber flows. Major surplus areas for hardwood lumber occurred in the South and Southeast and in Michigan and Pennsylvania. Under optimum conditions about 2.8 billion board feet of hardwood lumber would have moved in interregional trade to satisfy regional demands at an estimated transportation cost of $78.6 million. For softwood lumber the major surplus areas were California, the Pacific Northwest, and the South Central and Southeastern regions. Under optimum conditions about 18.6 billion board feet (over one-half of total production) of softwood lumber would have moved in interregional trade at an estimated minimum cost of $578.4 million. To the extent that actual distribution patterns approach the optimum, this study also describes approximately the lumber flow patterns for 1958.

Document Type: Journal Article

Affiliations: Professor of Agricultural Economics, University of Illinois, Urbana

Publication date: 1963-07-01

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