Timber Prices Ease In Second Quarter But Outlook Is Encouraging

Prices received by tree growers eased modestly in the second quarter of 2015 from first quarter as home construction continued to make a recovery, the head of one of the nation’s largest forestry management firms reports.

Marshall Thomas, president of F&W Forestry Services that operates across the southern pine belt as well as the central and northeast forested regions of the U.S., said the pick-up in home construction and other demand factors were not enough to offset the seasonal decline in timber prices but the wet weather conditions forecasted for this fall and winter could result in a strong run-up in prices.

“Housing starts continued their slow rise, reaching an annualized average of 1.027 million units through May 2015. Of course, this is a long way from strong demand but compared to 500,000 starts a few years ago it looks pretty good.  Remember, the rule of thumb is that we don’t feel demand pressure on timber prices until we hit about 1.3 million starts,” Thomas writes in the summer edition of his firm’s newsletter, The F&W Forestry Report.

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