Timber Price Movements in the US South during January/February 2016

During the January/February 2016 period, pine stumpage prices rose throughout the US South while hardwood prices saw little movement. On a Southwide basis, pine sawtimber realized the biggest increase (+3.5 percent) rising to $26.42/ton. Pine chip-n-saw and pine pulpwood both ticked upward as well (+3 percent and +1.7 percent respectively) while hardwood sawtimber and pulpwood prices held steady (both <1 percent).

 Pine

Pine sawtimber continued its rise from November/December 2015, climbing 3.5 percent on a Southwide average. The West-South saw the highest increase of 4.9 percent to $28.32/ton. The East-South rose 2.1 percent to $27.10/ton and the Mid-South moved up 3.4 percent to $23.84/ton. Strong housing starts data has been the primary driver of these higher prices during 1Q; starts in February rose 5.2 percent to a seasonally-adjusted annual rate (SAAR) of 1.178 million units, which was nearly 31 percent above the February 2015 rate of 900,000.

Pine chip-n-saw also notched a modest increase of 1.7 percent Southwide to $17.13/ton. The Mid-South remained flat moving <1 percent to $15.48/ton. The East-South jumped 2.9 percet to $19.25/ton, and the West-South moved up to $16.66/ton, a 1.9 percent gain.

Pine pulpwood prices continued their seasonal rise with a 3 percent increase during the January/February time frame. The West-South spiked to $9.28/ton (+7.8 percent) and the Mid-South surged 4.9 percent, while the East-South fell slightly to $13.86/ton (-1 percent).

Hardwood

Hardwood sawtimber prices flattened on a Southwide basis in January/February, gaining <1 percent on the whole. The Mid-South increased 1.3 percent to $29.98/ton, while the East-South slumped (-2.5 percent) to $25.02/ton. The West-South remained at $31.85/ton.

Hardwood pulpwood prices also remained relatively flat on a Southwide basis, falling less than 1 percent. The East-South was unchanged at $7.87/ton, while the Mid-South gained 1.9 percent ($9/ton). The West-South region tumbled -2.8 percent to $13.01/ton.

As we move through spring and into summer, we expect to see typical seasonality in prices. The hot, dry summer weather that is quickly approaching combined with steady housing numbers will likely cause pulpwood prices to dip over the next several months. Sawtimber prices will remain in a relatively strong position through the end of 2Q2016, only to succumb to seasonal pressures and a weakening economy as we move into latter half of the year.