Two Trees Forestry
Market update: June 2010
Red oak rebounding
Markets continue to be steady, though not exceptional. Rumors this spring of upward pressure on hardwood pulpwood prices, fell below my expectations, though loggers' willingness to pay well for firewood has sent the average price of low-grade hardwood higher. All spring we delayed auctioning a large volume of hardwood pulpwood, awaiting the anticipated price rise. When we finally put the sale out for bid, I was pleased that the winning price averaged more than $40/cord, though the average price offered by others was slightly below $20/cord. I had expected that the average, if truly up, would have been higher. Fortunately we got top dollar because the wood was to be sold as firewood.
Pine log and softwood pulpwood prices remain stable, with little change during the last year or so, with good demand. Recently, the mills were flooded with logs, and thus reduced purchases. Just as the weather became favorable for logging, the mills got flooded - same old story! We've had no trouble moving wood, though.
The most favorable price news has been for hardwood logs, notably red oak. Though it is always hard to know exactly how well oak will sell, until the loads are actually scaled and graded, our expectations are high. Most of our summer oak sales are just getting underway. Oak prices have been well below the highs that they rode during the early 2000s, but things are heading back in a positive direction at last.
Finally, the rules for the Federal Biomass Crop Assistance Program (BCAP), which ran temporarily this past winter, are being reviewed. The program helped boost landowner income for biomass chips from the $2/ton range to upwards of $10/ton. The program may resume this fall.