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    Author(s): Henry Spelter
    Date: 2006
    Source: U.S.-Canada forest products trade : a bilateral technical symposium. [East Lansing, MI] : Michigan Agricultural Experiment Station, 2006. Special report (Michigan State University. Agricultural Experiment Station) ; 125. Research report from the Michigan State University Agricultural Experiment Station, East Lansing: Pages 213-219.
    Publication Series: Miscellaneous Publication
    PDF: Download Publication  (215 KB)

    Description

    North American log markets function on different principles -- a profit allowance for the wood processor plays a role in timber pricing in Canada, while in the United States, it is a byproduct of the give and take of arm’s-length market negotiations. The former is characterized by high elasticities of price transmission and, at times of market weakness, by low elasticities of product supply; the other, by the opposite of these benchmarks. This can result in asymmetric supply responses in weak markets to the detriment of U.S. producers. Whether this is a subsidy in the sense of conferring a direct financial contribution by the government or merely a different pricing mechanism is beclouded by the dearth of market-based transactions. The challenge in the lumber dispute, then, is to devise a system of pricing in Canada that is more transparent regarding the underlying valuation of timber.

    Publication Notes

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    • This article was written and prepared by U.S. Government employees on official time, and is therefore in the public domain.

    Citation

    Spelter, Henry. 2006. If the U.S. had Canada''s stumpage system. U.S.-Canada forest products trade : a bilateral technical symposium. [East Lansing, MI] : Michigan Agricultural Experiment Station, 2006. Special report (Michigan State University. Agricultural Experiment Station) ; 125. Research report from the Michigan State University Agricultural Experiment Station, East Lansing: Pages 213-219.

    Keywords

    Timber pricing, subsidy, elasticity of price transmission, forest products industry, economic aspects, Canada, statistics, lumber trade, timber, valuation, prices, softwoods

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https://www.fs.usda.gov/treesearch/pubs/31180