Forestry Challenges: Housing Flat, China Tariffs And Lumber Prices

Housing starts have remained steady at a level that isn’t enough to put any real pressure on prices for sawtimber-sized trees, while China has been a wild card for just about everyone in the forest industry, particularly the hardwood sector.

Marshall Thomas, president of F&W Forestry Services, Inc., discusses these challenges in his firm’s summer newsletter, along with the dropping lumber prices.

He notes that the effects that the retaliatory tariffs imposed by China are having on the wood products industry “emphasizes the fact that we are operating in a global economy and illustrates the impact that trade policy can have on local mills and markets.”

However, he also points out that the disconnect between lumber prices and pine sawtimber stumpage prices is now working in the favor of tree growers.

“The Random Lengths Framing Lumber Index went above $575 in June of last year, and then dropped as low as $319 last quarter,” Thomas writes. “Fortunately, Southern stumpage stayed true to its recent patterns, and has only dropped slightly—the lack of linkage between lumber prices and stumpage prices looked bad last year, but it looks better now.”

TO SEE THE FULL ARTICLE IN THE SUMMER 2019 F&W FORESTRY REPORT, SUBSCRIBE NOW