Log Supply and Price Adjustment Mechanisms in Industrialized Economies: Impacts on Small-scale Forest Farmer

Log pricing and supply arrangements vary between countries. Some countries use open markets to determine log prices while others regulate supply and offer medium to long-term contracts to log buyers. A study of four industrialised countries - the United States, Canada, New Zealand and Australia - is undertaken to compare variations in log pricing methodologies and contract price adjustment mechanisms. Market concentration and market power is found to vary between these countries. Variations also exist in supply arrangements, contract term and price adjustment mechanisms both between countries and across regional jurisdictions within each country. The United States and New Zealand are strongly market oriented while Canada and Australia remain highly regulated. Both Canada and Australia use a weighted wood price index to adjust contract log prices. Policies are required in these regulated markets to encourage entry of small-scale suppliers if seller concentration is to be reduced and competitive market efficiency increased.