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Stumpage Market Trends in the US South: Timber Prices

Stumpage Market Trends in the US South: Timber Prices

This series focuses on the stumpage market trends we observed while analyzing the data collected in Forest2Market’s Timber Pricing Service from 2002-2014. This post--Part 4 in the series--highlights price trends.

Note: all prices reported in this post are average weighted prices for the entire US South (Virginia to Texas, Florida to Tennessee).

In 2014, stumpage prices increased for all roundwood products across the US South. Recovery in the US economy and strong export demand for hardwood sawlogs pushed prices higher.

Pulpwood prices have been volatile from year to year, but they have been volatile along a steadily increasing trendline (Figure 1). Since 2011, both pine and hardwood pulpwood have been on a tear. Over the last 13 years, on trend, pine pulpwood prices have increased 3.2% annually. In 2014, pine pulpwood increased 10% compared to 2013. For hardwood pulpwood, trend-line prices have increased 2.2%. In 2014, hardwood pulpwood increased 3% over 2013.

Pulpwood

The historic, 13-year trends for pine sawtimber and chip-n-saw reflect decreases of 4.7% and 3.9% annually (Figure 2). However, since bottoming out in 2011, pine sawtimber and chip-n-saw products have steadily increased in price. Four-year trends reflect a 0.3% annual increase in sawtimber and a 1.5% annual increase in chip-n-saw. In 2014, pine sawtimber was flat, increasing only $0.03 per ton over 2013’s average. Pine chip-n-saw, however, increased 8%.

Sawtimber

Hardwood sawtimber has been a bright spot in sawtimber markets. Demand, both domestically and for export logs, has kept prices relatively stable through the economic cycles. Prices have been range-bound between $25-$30 per ton and have increased at a rate of 1.3% annually since 2002. More recently, since 2012, prices have increased substantially. In 2014, prices increased $5.81 per ton, 18% over 2013’s average.

Going forward into 2015, we expect pulpwood prices will continue their climb. Demand increases from pulp and paper in addition to pellet mill projects will continue to place upward pressure on prices. Pine sawtimber and chip-n-saw will increase at a slow crawl as the US economy gains ground and housing—even with fits and starts—continues to slowly climb back. Hardwood sawtimber will be a wild card. As the dollar strengthens, it could hamper export demand and cause hardwood sawtimber prices to decline. For all roundwood products, continue to watch the oil market and diesel prices. Cheaper fuel will open up the market by allowing for longer hauls and more aggressive purchasing by wood suppliers.

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