Rains Across U.S. Southern Region Bring Cheer to Tree Growers;
Will El Nino Signal End to Historic Drought?

ALBANY, GA., July 2012 — A spurt in spring and early summer rainfall across the U.S. Southeast and mid-South has brought rare cheer to forestland owners in those regions who hope for better demand and prices for their trees.

Marshall Thomas, president of F&W Forestry Services, a leading forest management firm in the U.S. with operations in all major forested areas and in South America, said he sees “a few beams of light shining through the gloom” that may signal better times ahead for the tree growers across the drought-stricken southern pine belt regions.

Writing in his company’s publication, The F&W Forestry Report, Thomas noted that Southern pulpwood production is close to a 10-year high, housing starts are up although still historically low, and new U.S. pellet plants concentrated across the Southern region are creating  new and expanding markets for  the region’s trees.

“Another glimmer of light is in the recent agreement reached by South Carolina and Virginia with China to resume log and lumber exports to that country,” Thomas said.  “While Southern lumber and log exports to China have not been large historically, there is real potential for the Chinese to take a lot of logs and lumber from us to help them meet their aggressive building plans.”

But perhaps the greatest hope for improved timber markets, Thomas said, is in the report from the National Weather Service that the drought-related La Nina climate system has “dissipated,” with a 50-50 chance that its weather opposite— El Nino—will emerge within the next six months.

“Oftentimes it takes a little rain to help tree markets find their potential, for buyers to feel enough pressure to pay their top price,” Thomas wrote.  “We haven’t had enough rain in a long time, South-wide, to put real pressure on our markets. Maybe…there is enough increased demand in our depressed markets for a little (or a lot) of rain to decrease supply enough so we can see how high prices can go.”

About F&W:

F&W Forestry Services, Inc., of Albany, Ga., is one of the nation’s oldest and largest forest consulting and management firms.  Established in 1962, F&W operates 19 offices in 12 states comprising the Southern pine belt, the Central and Appalachia region, Upstate New York, and Oregon in the Pacific Northwest. It also manages private forestlands in South America with offices in Uruguay and Brazil.

Despite Problems, Tree Growing ‘One of Best Investments Around’

 May 2012 — ALBANY, Ga., May 16—F&W Forestry Services President Marshall Thomas, looking beyond today’s depressed timber industry, is convinced growing trees “may be one of the best investments around.”

Writing in his company’s newsletter, The F&W Forestry Report, Thomas acknowledges a “sense of hopelessness” he gets from talking with foresters, landowners, and others in the forest industry. “This comes from six years of falling prices and from the dry weather and fires we have experienced recently,” especially across the southern pine belt that stretches from Virginia to East Texas.

“When things get this bad, sometimes it helps to back away and look at the facts and see if the pessimism is really warranted,” he writes. He notes that historic “trend line” prices for timber—“average” prices over time without the highs and lows under “normal” conditions—are “significantly higher” for all tree products and almost double current market prices for sawtimber.

Thomas also noted that the cost to landowners for reforesting a site after timber harvest is about the same now as 25 years ago—approximately $200 per acre—with improved site preparation, more effective use of herbicides, and far superior seedlings.

“If you already own the land, tree planting may be one of the best investments around.  In what other business do you find the most significant cost (reforestation) hovering at the levels of 25 years ago?”

About F&W:

F&W Forestry Services, Inc., of Albany, Ga., is one of the nation’s oldest and largest forest consulting and management firms.  Established in 1962, F&W operates 19 offices in 12 states comprising the Southern pine belt, the Central and Appalachia region, Upstate New York, and Oregon in the Pacific Northwest. It also manages private forestlands in South America with offices in Uruguay and Brazil.

Will China Log And Lumber Exports ‘Jump Start’ U.S. Timber Markets?

January 2012 — ALBANY, Ga., Jan. 20 —- The head of one of the nation’s largest forestry management firms believes a surge in U.S. log and lumber exports to the Far East may provide “a possible jump start to our southern pine economic engine” hard hit by the prolonged housing slump.

Marshall Thomas, president of F&W Forestry Services, Inc., which provides management and sales services to private, industrial, and institutional forestland owners throughout much of the U.S. and South America, said U.S. large-scale wood exports to China and other Far Eastern nations is providing some relief to housing-distressed timber markets.

However, Thomas said most forecasts for a recovery in domestic housing construction, the major market for U.S. lumber and other wood building products, “may be three years away” before reaching a 1.3 million housing start level.

“The U.S. historically has been a net importer of forest products, but the imports have come from Canada, our sister country in North America,” Marshall writes in his firm’s current newsletter, The F&W Forestry Report.  “With housing starts down the Canadians have been hurt as badly as we have.”

China has replaced the U.S. as Canada’s major lumber customer and the U.S. has now joined Canada in large-scale shipments to the Far East from ports in the Pacific Northwest, Thomas notes. The Chinese lumber demand is fueled by that country’s huge housing construction program with a target of 36 million dwelling units by 2015.  India may follow and Japan has barely begun to rebuild from its earthquake and tsunami disasters of last spring.

Thomas believes U.S. East Coast ports, especially those in the Southeast that have immediate access to the southern pine belt, may participate in the China and Far East lumber export boom with the coming enlargement of the Panama Canal. .

“The U.S. South is a long way from China and the Far East and shipping is somewhat limited by the Panama Canal, the size of which currently restricts the use of the largest, most efficient container ships and even larger ones to come,” he writes.  “Fortunately this restriction will be eased around 2014 due to the widening and deepening of the canal.”

“I don’t think the Chinese and other Far Eastern importers will be able to consume enough of our wood to drive prices to the levels of the late nineties,” Thomas said, “but I am hopeful that maybe they can consume enough to get supply more in line with domestic demand when it returns.

“We are still looking at possibly three to five year for a recovery, but maybe when it comes we will be able to thank the Chinese for making it more robust.”

About F&W:

F&W Forestry Services, Inc., of Albany, Ga., is one of the nation’s oldest and largest forest consulting and management firms.  Established in 1962, F&W operates 19 offices in 12 states comprising the Southern pine belt, the Central and Appalachia region, Upstate New York, and Oregon in the Pacific Northwest. It also manages private forestlands in South America with offices in Uruguay and Brazil.