The rippling effect of the Jay pulpmill explosion in April 2020 set the tone for wood sales throughout most of this past year, though as we progress toward winter, we are seeing some relief on the pulpwood side and a gratifyingly eager, if not anxious, group of pine and oak log buyers.
But first to recap. Pixelle’s pulpmill digester blew sky high a year and a half ago, which sent many logging contractors scurrying to Rumford and Skowhegan seeking access to those mills. As a result, loggers and landowners accepted less for their efforts and wood, more pulpwood-sized wood was chipped and sold to biomass plants, and some wood went uncut. The loss of the Jay mill (Pixelle announced that they would not rebuild the pulp side of the mill, though the paper side continues to run) was particularly damaging in central Maine, as it was the primary market for low-grade pine and oak, two of the most common species here in the coastal plain. The options for selling pine has been limited, though not entirely gone, as Robbins Lumber and SAPPI both purchase it as fuelwood, Irving Lumber buys low-grade ‘logs’, that better resemble pulpwood, the Rumford mill buys small quantities, and as mentioned, many contractors chipped it. Many loads of pine also sat in yards hoping for better markets/prices to develop. But as we head toward winter the Rumford mill has kicked up its pine purchases, which has at least temporarily soothed some contractors. Though none of the 12 to 15 contractors with whom we work with regularly went out of business, many thought about it. Elsewhere, that story played out differently with wood supply and demand out of balance and pulpwood prices below historic averages.
Though frustrated by the market, we worked around the demand shortage by focusing on those woodlots dominated by hemlock and hardwood, as the logs and pulpwoods generated there were selling best, though there are only so many of them.
On the upside, sawmills now seem downright desperate for logs and prices are rising. The hot real estate market and surprising demand for lumber during the pandemic sent lumber prices to lofty heights only to see supply of logs fail to keep pace. I’ll editorialize a bit here. Back then, the mills only paid what they had to to procure logs, even though the price gap between a comparable volume of lumber versus logs widened considerably. I get it; that’s the free market. Now, I have only some sympathy for the mills who helped create some of the economic imbalance that caused a number of contractors to quit. I now depart my soapbox.
Our phone rings periodically from buyers seeking logs. And while this year’s harvest volumes have recovered from the depths of last year, we have only recently seen better pricing, though it has been encouraging. We expect to see this trend proven, as we are offering, at auction, a considerable volume of pine to be cut on Winslow’s Town Forest – bids are due next week. So as we head into the winter we remain cautious but hopeful. And looking back, though some wood sold this summer for less than what it had in early 2020, the silvicultural improvements that are resulting from those harvests will have demonstrably positive impacts on our clients’ bottom lines in the years and decades ahead.