Southeast Texas, Southwest Lousiana Study
(April 2007)

Temple-Inland’s fee timberland is situated in two specific markets; Southeast Texas and Southwest Louisiana.  These markets are located in one of the most productive timber growing regions in the southern United States.  Some 47 manufacturing facilities rely on these wood basins for raw material; 29 lumber and plywood mills, five Oriented Strand Board (OSB) mills, six pulp mills and seven chip mills.  Combined, these facilities consume 25.6 million tons of raw material annually from the area.

Opportunities exist within these wood basins for large landowners to realize premiums above “ average market” prices.  Landowners can negotiate stumpage premiums through long-term supply agreements by identifying tracts close to specific mills; allowing the buyer to leverage incremental freight costs.  Other premiums can be realized by marketing higher quality timber and tracts with winter logging conditions.  As the market dynamic changes, so does the risk for the open market.  As more raw material continues to move through supply agreements, mills will put downward pressure on gatewood prices, forcing open market buyers to pay less for stumpage.  In addition, over supply may become an issue as raw material, previously held in captive supply, comes to market. 

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