April 2011 — Exports of paper, pulp, and lumber to the Far East may help relieve depressed markets for U.S. timber growers resulting from the three-year housing slump.

Marshall Thomas, president of F&W Forestry Services, Inc., one of the nation’s largest forestry management firms, said generally dry weather contributed to weak markets in a large segment of the country’s commercial forests this past winter.  Dry weather usually results in an unrestricted supply of trees for mills.

But the housing slump is the real culprit behind depressed timber markets, Thomas writes in his company’s newsletter, The F&W Forestry Report.

“So far in 2011, there has been little change in the major housing indicators from 2010,” he writes.  “Housing starts remain flat, although some prognosticators are predicting some growth this year but probably not enough to put upward pressure on (timber) stumpage prices.”

The other major large-scale domestic market for trees—the pulp and paper industry—“seems steady,” Thomas said. But overseas “variables,” specifically in the Far East, “could have a positive impact on (U.S.) timber prices, both in the short and long term.”

“There could be an increase in demand from Japan for wood products—both for reconstruction from the terrible damage caused by the earthquake and tsunami and, in the near term, to replace lost paper production at the significant number of pulp and paper mills in the impact zone.” Thomas said.

Thomas said the monumental task of rebuilding Japan from the catastrophic disaster will require lumber and plywood that “almost certainly would come from the West Coast of North America.”

Even before the Japanese disaster, Thomas said lumber and wood exports to China from the U.S. and Canada were growing rapidly.

“Any surge in U.S. and Canadian lumber exports, even on the West Coast, could have a positive impact on timber prices in the East and Southeast,” he said.

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.