Prices for stumpage sold by Two Trees Forestry as of August, 2023
These charts document stumpage that Two Trees Forestry has sold, with prices adjusted for inflation, since May 1997 in Maine, within the area roughly bounded by New Hampshire to the west, US Route 2 to the north, Belfast to the east, and Portland to the south. Several variables contribute to the range that contractors pay during any season including differences in their access to markets, logging costs, volumes harvested and whether we sold them the timber through an auction.
Rain, rain, and more rain. On the heels of a too-warm winter, this wet summer caused additional headaches for most loggers and many landowners. Nonetheless most have managed well enough, though hats off to them for their endurance. They have also had to confront the ever-changing markets, some good, some less so. Since the first of the year the pine sawlog market has been quite strong, high-end oak settled back some, and pulpwood prices have slid and such wood has been more challenging than normal to sell. The latter appears to relate to an abundance of warehoused paper and pulp and declining demand, some of which led to the shuttering of Nine Dragons’ Old Town pulpmill. Most especially, the demand for softwood pulpwood is way off. Hardwood pulpwood has done better, but markets for such low-grade hardwood has been bolstered considerably by the huge call from firewood processors and firewood-burning homeowners. But the best news has been the high demand and increased prices for pine sawlogs. As you may see on our stumpage price charts landowners are finally receiving high prices for their pine logs. As so many folks have seen and read, the price of pine lumber has been well above average since the Covid-related demand boost, while we on the ground hadn’t seen a corresponding price jump, until recently.
As a result, the impacts of the rain and market conditions have steered us to focus on lots underlain with well-drained gravel or solid ledge and those without huge percentages of small diameter hemlock or pine. An interesting result has been a several years-long trend of rising average value of each cord of wood sold from our clients’ land. What may seem a bit contradictory, given the pulpwood misfortunes since the 2020 Jay pulpmill explosion and closure, has been actualized by a higher than normal harvest of pine sawlogs and firewood-quality hardwoods, where the big price boost and respective product substitution have occurred.
But it’s important to recognize that stumpage prices, what the landowner receives, are not directly related to what the mills pay for wood. Stumpage is the difference between mill prices and what the logger needs to harvest and transport the wood to those mills; in other words, what they are willing to pay the landowner. Thus stumpage rates typically vary more widely than mill rates, and loggers often keep stumpage prices somewhat higher than perhaps warranted, as a sales strategy.
So the key question, as always, remains, is now a good time to harvest? The answer, as always, remains, perhaps. Most of the landowners, for whom we’ve cut wood this year, have felt that their expected return, coupled with their other interests, were sufficiently good to move forward with optimism, though damp soils seems a more limiting factor in whether any given sale actually moves ahead. We continue to encourage landowners to consider it, and if they do it becomes our task to sell their wood well – so far, so good.