Two Trees Forestry
Market update: September 2012
Instability in the market
The 2012 summer has seen weather, stumpage rates, and fuel prices all showing instability. Prices for timber that we sold early this summer were generally in line with the last few seasons, though fuel has risen steadily since July 1, after most of those contracts were signed. The early and dry spring enabled many loggers to keep working and thus didn't allow mills to draw down their winter stockpiles, thus we entered the summer logging season with seasonally reduced pulpwood demand. Now several months later we see relatively stable pine log markets, tight but moving pulp markets, and solid firewood and biomass chip markets.
However, unlike virtually any time in my memory, there are several products that we couldn't/wouldn't sell. We delayed three timber sales because they contained high volumes of spruce/fir pulpwood; contractors could not sell them as spruce/fir pulpwood and we chose not to market them as cheap softwood pulpwood. Similarly, red pine sawlogs were very difficult to sell last winter and again this summer. We have sold very little oak or other hardwood logs this summer, in part because of depressed pricing; that which we did sell demonstrated the post-2005 price decline.
One potentially long-term wrinkle has seen mills and stumpage buyers paying less for #2 pine logs, a common log that includes 2" knots. So far the consequence has been only slight, but that is a potential downward trend. Despite that we've sold most grade pine for $190 to $220/MBF and all grade and pallet pine logs combined for around $150/MBF. Both numbers are roughly similar to the past few years.
Within our general marketing area, the number of mills and yards has remained relatively stable. NewPage opened a pulpwood-buying facility in Richmond, to procure wood for its Rumford mill, but this spring TRG closed down a procurement yard in Pittston, for spruce and hardwood logs, after operating for only a couple of years. The TRG yard closure has caused loggers to truck wood quite a bit farther.
So as I look forward to fall and winter timber sales and the likely selling prices, I believe that oak and sugar maple log prices will remain below decadal averages, pine logs pricing will be heavily dependent on log grade and harvest-site operability considerations, and pulpwood, firewood, and biomass prices will remain stable. So, not a clarion call to harvest your mature timber, but still a reasonable time to strive to improve one's woodlot by removing the low-grade trees so that the potential log-quality trees can get bigger and better.