Early in 2014, Western log prices soared to levels not seen in nearly twenty years. Escalating softwood lumber prices and a strong appetite for Asian exports fueled competition to meet Western log consumption.
Moderate weather encouraged log suppliers to step up deliveries, quickly filling sawmill log yards to the brim. A Western Oregon third party organization who measures logs for buyer-seller transactions reports volumes for Q1 2014 are up nearly 20 percent over the corresponding period last year.
Douglas fir prices are now reversing direction in many areas. At the close of the first quarter, F2M log benchmark data indicated a 2.5 percent decline for Douglas fir logs is leading the way in Southwest Oregon. Chinese port facilities report an oversupply of softwood logs, and US domestic lumber prices have softened in recent weeks.
Maybe we are still recovering from extreme winter weather in the east or the resulting transportation slowdowns. However, I suspect mills and builders alike have oversupplied a still shaky housing market, and the supply pipeline is simply full.
Better spring weather may refresh home building demand, and historically healthy log prices will stimulate additional harvest of private timber. A likely correction in export values for China sales will push more whitewood into the domestic markets. Considering these implications of supply and demand, we have seen the highest prices for the year.
Gordon Culbertson
Forest2Market: July 14, 2023
