This is the third in a series related to Forisk’s 2013 mid-year forecast of softwood stumpage prices in the United States.

The United States has more softwood trees than you can shake a stick at.  Forisk analysis of U.S. Forest Service data indicates the U.S. South has nearly 3.5 billion tons of standing pine grade and pulpwood inventory on private, operable timberlands.  That’s about 140 million truck loads.  In addition, Coastal Oregon and Washington, a region with 103 open softwood grade-consuming mills, has over 68 billion board feet (over 400 million tons) of standing softwood grade inventory on privately-owned timberlands.  And these numbers represent but a fraction of total U.S. forest stocks.

Forisk conducts research on the impact of local supply “events”, such as natural disasters, and trends, such as increased forest growth rates or plantation acreages, on timber markets.  For the near-term, states with the most severe pine grade “oversupplies” continue to show how stumpage prices became less sensitive to increases in demand in those states for which a quantitative basis exists for significant excess inventories.  This includes states, for example, such as Georgia and Mississippi and Arkansas.  While these estimates do not specify the situation in any given wood basket or for any given timberland property, they do support the evidence that supplies have affected stumpage markets selectively.

However, long-term supply analysis tells another story. Forward-looking price and supply projections highlight the impact of the recent economic recession on future forest supplies.  Reduced harvesting activities over the past five years resulted in fewer acres of replanted trees.  The implication is that over the next ten to fifteen years, wood baskets around the U.S. South may face a period of constrained wood supplies, and higher prices, until replanting rates and forest inventories recover.

To learn more about the 2013 Mid-Year Forisk Forecast or Forisk’s market-specific stumpage forecasts tailored to individual wood-using facilities or timberland ownerships, contact Brooks Mendell at bmendell@forisk.com, 770.725.8447.