Wet Weather, Rising Home Construction Brighten Outlook for Timber Growers

ALBANY, GA, April 2014 — With help from wet weather and a modest recovery in new home construction, the outlook is finally turning brighter for tree growers in the South and other timber regions of the nation.

That’s the encouraging outlook for the forest-products sector of the U.S. economy from Marshall Thomas who heads F&W Forestry Services, Inc., one of the largest U.S. forest management and consulting firms based in Albany, Ga., in the heart of the nation’s southern pine belt.

“After years of depressing news for timber growers, all the economic indicators seem to be positive now—housing starts are up, building permits are up, interest rates are up slightly but still very low, and exchange rates are favorable,” Thomas writes in the spring issue of his company’s quarterly newsletter, The F&W Forestry Report.

“While this recovery, at least in our sector, has been frustratingly slow, it has at least been consistent—which means we should be able to expect slow but steady price increases for trees as we continue through the recovery—probably not reaching the highs of the 1990’s but perhaps at least returning to trend,” Thomas said.

Thomas said two factors other than demand for lumber and other wood products that influence U.S. timber markets are weather conditions and exchange rates of the U.S. versus the Canadian dollar. At the present time, the currency values of the two countries are about the same—with neither country having the big currency advantage that Canada has had in the recent past.

Weather patterns also influence timber prices because extreme wet conditions adversely affect timber harvesting operations. With a 50-50 chance that El Nino will bring wet conditions to the Southern U.S. in the coming months, timber prices stand to be further elevated.

“That leaves us in a pretty good situation,” Thomas writes.  “Over the long term (three to five years), we should see steadily rising prices for pine and hardwood sawtimber and we have a coin-toss chance that we will have some wet weather influences towards the end of this year into next winter.”

About F&W:

Established in 1962, F&W Forestry Services, Inc., of Albany, Ga., is one of the nation’s oldest and largest forest consulting and management firms.  The company handles timber sales and provides comprehensive forest management and consulting services to private and industrial landowners through a network of 19 offices in 12 states comprising the Southern pine belt, the Central and Appalachia regions, Upstate New York, and Oregon in the Pacific Northwest. It also manages private forestlands in South America with offices in Uruguay and Brazil.