In September of 2013, U.S. Rep. Steve Daines co-sponsored a bill requiring a six-fold increase in timber cutting in Montana’s nine national forests. On the surface, this may seem like a simple issue of the federal government subsidizing an industry by providing low-cost raw materials, but it reveals that Daines is not willing and/or not able to look at the larger picture and see the impact of his actions.
First. Does Daines really think he can pass a cutting increase only in Montana? Any increase in federal timber cutting will include Montana, Idaho, Washington, Oregon and California.
Second. Yes, flooding the market with national forest timber will lower the cost of logs, allow mills to increase production and increase employment – for a very short time. Since there is not a corresponding increase in lumber demand, the increase in production will cause a serious glut in the lumber market, forcing mills to drastically lower prices to sell inventory. In order to equalize supply and demand, mills will have to cut production and lay off workers. Net result: lower prices, higher unemployment and more timber companies in financial danger.
Third. Daines is not recognizing that individuals and companies own timber land and manage their timber land to generating income by selling logs to lumber mills. By flooding the market with low-cost federal logs, Daines will destroy the value of their investment. Timber companies will lose money and balance sheets will be downgraded because Daines is not able to understand strategic analysis and develop comprehensive plans dealing with a total situation.
Its scary to think that Daines is dealing with complex national and international issues when he is not able to understand basic supply-and-demand economics.