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FOREST PRODUCTS COMPANY EXECUTIVE ISSUES FOURTH RECESSION WARNING TO PRESIDENT CLINTON

 CHICAGO, March 29 /PRNewswire/ -- An executive with a forest products company that recently announced the closing of one of its sawmills due to a lack of logs because of the Endangered Species Act today issued his fourth recession warning to President Clinton as the price of lumber soared to record highs.
 Quoting the National Association of Home Builders, Gerald M. Freeman, president of Stone Forest Industries, Inc. warned the president in a letter mailed today that lumber prices have risen a record 105 percent in the past five months.
 "This means that a 2,000 sq. ft. home will cost more than $120,000, or over $5,000 over the cost last fall," Freeman stated. "But the most alarming statistic is that almost 140,000 American households will not be able to afford the house that they were planning six months ago."
 Price Increases Accelerating
 "These price increases are accelerating," Freeman claims, "and will shut out countless more potential home owners before the building season starts in earnest this spring."
 During the 1991 and 1992 spring building seasons, lumber prices increased 32 percent and 45 percent respectively. These increases were spurred by a lack of lumber, and the housing market as well as the national economy fizzled as prices rose.
 Freeman said this year's lumber price increased are more severe than any in the past because harvest rates and raw material reserves are reaching new lows while demand is increasing.
 "About 160 sawmills in the Pacific Northwest have been auctioned and dismantled during the past few years," Freeman noted, "because of restrictive regulatory controls and timerland that has been lost to the Endangered Species Act." Freeman's company is presently terminating operations at its century-old Flagstaff, Ariz. sawmill.
 The National Home Builders Association estimates that the area legislated to protest the habitat of two spotted owls would provide enough lumber to build 5,670 homes. And the recent addition of the Mexican spotted owl to the "threatened" list "will create a more desperate situation," Freeman claims.
 Lumber Sales & Reserves Plummet
 The timber industry executive informed President Clinton that the Pacific Northwest's "traditional timber sales of 9.5 billion feet have fallen to less than 3 billion feet." And he noted that anticipated harvest rates of 3 billion feet fell to 1.5 billion feet in the region during 1991.
 Additionally, Freeman noted that federal timber sales in two of the nation's top lumber producing states, Washington and Oregon, plummeted from 6.01 billion board feet in fiscal 1990 to 484 million board feet in fiscal 1992.
 "Industry reserves that averaged 12.5 billion feet during 1982-1986 are now in the 1.6 billion foot range, and cannot possibly satisfy this year's demand," Freeman stated.
 He believes a recession is imminent because low mortgage rates and improving consumer confidence could increase housing starts by 25 percent this spring. "But soaring lumber prices could cause a home building fizzle and create another recession," Freemen informed President Clinton.
 Flexibility Needed in Endangered Species Act
 "In order to help alleviate these expected dynamics," Freeman concluded, "we suggest adherence to the nation's historic concept of multiple use of our forests, and more flexibility in the ill-conceived and costly regulations brought about by an imbalanced Endangered Species Act."
 Stone Forest Industries is a major supplier of construction lumber, plywood and veneer for the construction and furniture industries and pallet manufacturers.
 -0- 3/29/93 R
 /CONTACT: Chuck Phillips of Phillips Communications, 904-285-4555, or evenings, 904-285-5681, for Stone Forest Industries, Inc./


CO: Stone Forest Industries, Inc. ST: Illinois IN: PAP SU: ECO

JB-AW -- FL002A -- 0505 03/29/93 12:06 EST
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Date:Mar 29, 1993
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