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US South Pine Sawtimber Prices Expected to Decline in 2012, Recover in 2013-2014

Over the past three months, Dr. Tim Sydor, Forisk’s Director of Economic Analysis and Forecasting, has led our mid-year update of Forisk’s 2011-2020 timber forecast for the US South and Pacific Northwest.  The results show sawtimber prices for the US South weakening 2.7% in 2012 and then strengthening 2.9% into 2013.  Key factors include weak expectations for housing starts and low utilization rates at sawmills.  While sawtimber prices can increase temporarily from artificial shortages related to weather and logging capacity, long-term strengthening of sawtimber prices requires sawmill utilization to exceed 76%.  For 2012, Georgia, Louisiana, Mississippi and Texas are the only states with forecasted sawtimber stumpage prices exceeding $27/ton.  Alternately, delivered prices for Douglas-fir and hemlock in Oregon and Washington look to increase 6% and 4.9% in 2012 thanks to continued exports to China.

This research emphasizes the critical importance of assessing the relationship between timber prices and wood demand locally.  Forisk tracks 3,191 wood-using facilities in the United States.  This includes every open, closed and idled forest industry mill, and 462 operating and announced wood bioenergy projects.  The bottoms-up, market-specific approach proved effective in 2010; Forisk’s pine sawtimber forecast was within 4% of actual prices, and within $1.00 per ton at the state level.

For more information on Forisk’s forecasting in the South and Pacific Northwest, visit www.foriskstore.com and click “Stumpage Price Forecasts.” 

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