The Wood and Fiber Supply Chain Experts
Pacific Northwest Update
From the March 2010
Forest2Mill newsletter.
By: Gordon Culbertson
Inland Eastside log prices have remained subdued while prices west of
the Cascades have risen sharply. Douglas fir prices in the inland empire are up only 7% since
spring 2009; similar logs in the coastal region increased nearly 30% over the same period. Domestic
Douglas fir log prices converted on a common long-log-scale basis are now $30-50 per MBF higher
west of the Cascades.
Lumber and plywood price increases in January and February led Westside mill buyers to
escalate prices. Taking advantage of these higher product price levels, mills with low log
inventories have been securing logs for “real time” production. Competition for logs purchased by
exporters have cut deeply into domestic supplies as China and Korea sorts now include many common
quality logs historically destined for domestic building products.
Weather—specifically the early break-up during January—slowed inland Eastside logging
production to a standstill. Most logs were already delivered and in the deck before the recent
spike in lumber prices. Log exports of any consequence are absent in this area. Though mill
closures and consolidations in the inland region have been considerable, available timber supply is
still close to demand by existing mill capacity. If the present trend continues, inland log prices
will rise when logging production resumes in early April.
While it’s refreshing to see higher product prices, housing is projected to continue it’s
sluggish pace as very slow sales are reported. Shortage of wood throughout the supply chain spurred
recent price increases as buyers look to replenish low inventories. Current demand is very shallow,
however, and may be easily swamped by adding significant production.