The struggling housing market has forced mill closures and lumber production cutbacks in eastern North Carolina and Virginia, and the regional drought has driven timber prices to their lowest levels in almost a year, an expert in the forest products industry said Tuesday.
Mill production in the region was down about 13 percent in 2007 compared to 2006, and two mills north of Durham, N.C., have shut down completely, said Daniel Stuber, operations manager for industry market information provider Forest2Market. The lumber market is weakening to the point that revenues for mills are falling short of production costs.
Further complicating the market is the regional drought. The lack of rain in 2007 allowed loggers to harvest trees for longer periods of time, which caused the supply of timber to swell. As a result, mills were able to stock their inventories, and the demand for timber weakened.
“Prices for standing timber are suffering,” Stuber said. “Mills aren’t aggressively bidding
Suz-Anne Kinney: +1 980 233 4021 or suz-anne.kinney@forest2market.com