Supply-Demand Issues Hold Timber Markets Flat

The factors of supply and demand are at work in the timber markets, impacting stumpage (standing tree) prices paid to tree growers for timber products, from large lumber-size trees for home building and other construction projects to smaller pulpwood-size trees for the paper and packaging industry.

Marshall Thomas, president of F&W Forestry Services, Inc., one of the nation’s leading forestry management and consulting firms, wrote in his company’s quarterly newsletter, The F&W Forestry Report, that while the long term outlook for forestry remains good, in the short term tree growers should not expect much in the way of change from the timber markets.

“While housing starts continue to ease upward along with lumber prices during the third quarter, prices paid to landowners for pine sawtimber stayed flat—a condition that is unlikely to change until housing starts rise considerably,” Thomas said. “Even then, it is likely to take some real wet weather or another supply disturbance to put real pressure on pine sawtimber prices.”

Thomas also reports that while prices for pine pulpwood eased somewhat during the quarter, they “remain high enough to provide an economically viable alternative to sawtimber management in some regions.”

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