Timber Prices Drop in Storm’s Aftermath

The early December storm that ravaged the Pacific Northwest and devastated thousands of acres of forests will lower timber prices, an expert in the forest industry said Monday.

The crippled housing market has already shut down mills and lowered prices of delivered logs because of weakened demand for lumber, said Gordon Culbertson, Pacific Northwest region manager for price information provider Forest2Market. As landowners race to salvage downed trees, they will encounter the lowest log prices in many years.

“Landowners who were planning to harvest their timber when the housing market recovers will be forced to sell their downed trees now at reduced prices,” Culbertson said. “This will particularly hurt small woodland owners who were relying on their stands for retirement. They are concerned there may be a shortage of loggers and limited interest by mill buyers for the salvaged logs.”

The storm blew through the region on Dec. 3 with sustained winds of 50 mph and gusts that exceeded 100 mph. Preliminary estimates indicate the winds and torrential rains may have downed 1 billion board feet of timber in Washington, which is almost one-third of the state’s annual timber harvest. Oregon’s reported 270 million board feet is also a very significant volume of blow-down.

Hurricane-force winds uprooted trees, or worse, snapped them off and splintered the most valuable part of the tree. Downed trees and flood damage inundated many miles of logging roads, contributing to the losses suffered by forest owners.

“While most of the damage was limited to coastal areas, the destruction will be very costly for timberland owners, and it will affect prices throughout the Pacific Northwest,” Culbertson said.

Salvage efforts must occur rapidly to recover as much value as possible. Red alder, a valuable hardwood species, must be recovered quickly to prevent blue stain, which greatly diminishes its value.

The salvage effort for Western hemlock – the predominant species in the coastal area – and Douglas fir will continue into the summer when the dry season and lack of moisture risk turning timber on the ground into a total loss.

“These downed logs will start to hit the market immediately,” Culbertson said. “Mills want to purchase salvage logs as they are recovered, but strict standards for length and quality will be required as mills struggle with low lumber demand.”

State regulatory agencies in Oregon and Washington have indicated that they will staff additional personnel to assist landowners and expedite the harvest approval process to get the logs to mills before they are ruined.

Timber prices in the Pacific Northwest are expected to remain low throughout 2008, pending recovery of the housing market.