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Betsy Bates

Making Sense Of Lumber Prices

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It seems the spike in lumber prices over the summer and early fall would have had a positive impact on timber stumpage prices paid to landowners for large pine sawtimber, but the correlation is not there, explains Marshall Thomas, president of F&W Forestry Services, in his company’s fall newsletter.

While sawmills cut back production at the start of the coronavirus pandemic in anticipation of greatly reduced demand, they did not foresee the huge demand for lumber from people sheltering at home and embarking on home improvement projects.  Furthermore, after a significant drop in new home construction at the beginning of the pandemic, the industry rebounded quickly, and this one-two punch had the effect of creating a huge lumber supply/demand imbalance. 

“Unfortunately, the supply/demand imbalance that exists with lumber doesn’t exist for the raw material:  trees,” Thomas writes.  “In the South, we are still suffering a supply hangover from the Conservation Reserve Program (CRP) trees planted in the late 1980s and early 1990s.”

Thomas also cautions policy makers to be careful about implementing new incentive programs that pay people to plant trees, such as the Trillion Trees Act.  Without qualifications and limitations, such programs could result in another oversupply of trees and harm private forest landowners already doing what they want to encourage them to do.

Betsy Bates

Florida forest landowners impacted by Hurricane Michael in Florida

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Registration for the Florida Timber Recovery Block Grant Program is now open for landowners whose forestland in Florida sustained damage from Hurricane Michael.

In November 2019, U.S. Secretary of Agriculture Sonny Perdue announced that the USDA is providing $381 million in block grants to Florida as part of assistance to agricultural and timber producers in states impacted by natural disasters. In June, officials in Florida came to an agreement with the USDA to administer the funding and on Aug. 21, the online application process became available.

To be eligible for the Florida Timber Recovery Block Grant Program, a producer must be the owner of record or the lessee who has the rights to the timber crop at the time of application of a minimum of 10 contiguous acres of nonindustrial private forest land located in one of the following counties: Bay, Calhoun, Franklin, Gadsden, Gulf, Hamilton, Holmes, Jackson, Jefferson, Leon, Liberty, Madison, Okaloosa, Suwannee, Taylor, Wakulla, Walton and Washington. Additionally, the producer must have stands of timber that sustained a minimum of 25 percent loss due to the hurricane.

To register for the program, visit FloridaDisaster.org/timber and click on the link at the top of the page that says “Timber Recovery Block Grant Registration Form.”

The deadline to register is Friday, November 20, 2020.

The program is managed by the Florida Division of Emergency Management together with the Florida Department of Agriculture and Consumer Services and the Florida Forest Service. For more information, contact [email protected]

Betsy Bates

Covid-19’s Certain—and Uncertain—Effects on Forestry Sector

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It is too soon to know the full impact of the COVID-19 pandemic on the forest products sector, but data is beginning to reveal mixed results.

“There were 700,000 tons of tissue manufactured in March, the highest monthly figure since pre-recession 2007.  But commercial and writing paper were down,” writes Marshall Thomas, president of F&W Forestry Services, Inc., in his company’s summer newsletter.  “Lumber production nosedived in March but is now recovering.”

Thomas noted that after starting off the year on a strong note, housing starts plummeted in April but then rose in May.  Sales of newly built homes followed a similar trend, with May numbers 12.7 percent above the same month a year ago.

“What we all need to know—and won’t until it’s over—is whether we will see a V-, U-, L-, or W-shaped recovery,” Thomas writes.  “Of course, we all want to see a V, meaning the drop will be fast and the recovery as fast, and there are some signs that may be the case, but we won’t know for a couple of years.”

TO SEE THE FULL ARTICLE IN THE SUMMER 2020 F&W FORESTRY REPORT, SUBSCRIBE NOW

Betsy Bates

Forest Industry Operating During Pandemic; Forestry Leader Urges Caution On Planting Trillion Trees

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It’s too soon to know what kind of impact the COVID-19 pandemic will have on U.S. timber markets, but the forestry sector has been designated as an essential industry and is therefore allowed to operate during the crisis, the head of one of the nation’s largest forest management firms writes in his company’s quarterly newsletter.

“Pulp mills for the most part are still operating with some forgoing planned downtime to continue production.  There have been some production curtailments at sawmills in the South due to the virus, while hardwood sawmills in the North are responding favorably to tariff relief on hardwood lumber,” reports Marshall Thomas, president of F&W Forestry Services, Inc.

Despite the coronavirus disruption, the first quarter of the year was a busy one for forestry, with significant attention focused on the global trillion trees tree-planting scheme and the introduction of the Trillion Trees Act in Congress.

Thomas lauded provisions of the federal legislation, particularly those that aim to improve timber markets and incentivize innovative building practices that utilize wood, which would result in increased carbon storage.  But he cautioned legislators against subsidizing commercial tree planting without restricting future harvest.

“The private sector can handle reforestation—what we need are markets,” Thomas writes.  “Let’s hope that planting incentives come with strings that prevent subsidized trees from being dumped into and ruining our Southern pine markets like the Conservation Reserve Program (CRP) did for pulpwood-sized trees in the early 2000’s and is currently doing to sawtimber-sized trees today.”

TO SEE THE FULL ARTICLE IN THE SPRING 2020 F&W FORESTRY REPORT, SUBSCRIBE NOW